A slow year worldwide for IPOs has received a December boost, as Athene (NYSE: ATH), a retirement services provider backed by Apollo Global Management, sold 27 million shares for $40 each ahead of its public market debut Friday. The offering raised about $1.1 billion and reportedly valued the company at $8 billion, making Athene just the second PE-backed American company this year (after US Foods) to top $1 billion raised in an IPO, according to the PitchBook Platform.
In all, fewer than 30 companies in the US with PE-backing have traversed the IPO gauntlet during 2016, a noticeable decline from the 41 last year and a massive change from the 77 PE-backed IPOs recorded in 2014. A convergence of factors—including market volatility and a growing trend of companies staying private for longer—have led to fewer businesses testing the waters.
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Those PE-backed companies that have gone public, though, have fared well. In fact, as an asset class, they’ve performed much better than the S&P 500, demonstrating 20% growth so far in 2016 compared to mere 4.3% growth for the stock index. Cotiviti, SiteOne Landscape Supply and e.l.f. Cosmetics stand out as some of the businesses to see their values skyrocket once publicly traded.
Early returns for Athene hold similar promise. The company, which manages annuity products and provides other financial services for retirement programs, closed Friday trading at $44.05 per share, a 10% uptick from its IPO price.
Article by Kevin Dowd, PitchBook