Markets
Tim Keating

Keating Debunks the Myth of the IPO Window

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When investment bankers tell executives of emerging growth companies that the time is not right to go public because the IPO “window” is “closed,” they are saying more about their appetite and capacity to do the deal than they are about market conditions. That’s the conclusion drawn in a recent white paper released by Keating Investments’ president Tim Keating that analyzed IPO closing dates over the past 12 ½ years and found that IPOs are regularly closed during 41 out of 52 weeks of the year, or 79% of the time. The paper, “IPO Window: Open 79% of the Time,” is the latest in a series of essays Keating has penned in recent months challenging the conventional wisdom of the emerging growth capital markets, ranging from the lack of equity research for newly public companies to the supposed value a bulge-bracket investment bank brings to an initial offering. Keating analyzed 1,626 IPOs over 652 weeks from January 1, 2001 to June 30. In the average year at least one IPO was closed in 41 out of the 52 possible weeks.

Markets

Growth Equity Gets Its Own Sector – and Performs Better

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Venture capital and private equity research group Cambridge Associates has declared growth equity as a distinct asset class, with distinct differences in investment strategy, asset quality and return profile warranting its recognition alongside the two other long-established alternative investment classes. In its most recent market commentary the research firm argues that the growth equity market is distinguished from the venture and private equity markets not only by its investment style and targets, but by its returns. The firm’s analysis of 260 U.S. growth equity investments made between 1992 and 2008 shows growth equity investments besting venture returns in three, five and ten year holding periods, and equaling or exceeding private equity returns after three and five year holds. “It outperformed venture capital over the crucial 10-year window by nearly six points,” the firm notes. Growth equity investments likewise outperformed the Russell 3000 in all but one year of the 17-year research period.

News

Clinton Group Registers New SPAC for $143.75M IPO

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Private equity and alternative investment fund manager Clinton Group is sponsoring a second special purpose acquisition company (SPAC) on the heels of its successful $420 million acquisition of EveryWare Global (EVRY) in late May. Since Clinton Group’s ROI Acquisition Corp. I closed the reverse merger with the Ohio-based cookware manufacturer shareholders have enjoyed a 30% rise in its shares over ROI’s $10 initial offering price. ROI Acquisition II plans to raise $143.75 million to place into trust while it pursues a merger target. SPAC has not disclosed a preference, but given the track records and experience of the Clinton Group execs heading up the blank check company, the same team that managed ROI I, consumer goods and services valued between $300 and $600 million are likely to play a role.

Deals
Tecnoglass

SPAC Andina to Acquire Colombian Building Glass Manufacturers for $243M

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Andina Acquisition Corp., a special purpose acquisition company (SPAC) headed by lottery systems magnate Lorne Weil, will purchase two Colombian architectural glass manufacturers for $243 million in stock and assumption of debt. Andina raised $38..3 million in its March 2012 IPO, managed by EarlyBirdCapital and Morgan Joseph TriArtisan. Andina is acquiring Tecnoglass S.A. and C.I. Energia SA ES, both of Barranquilla, Colombia. Collectively the companies had $158 million in sales revenue in 2012, a 40% increase over the previous year. EBITDA rose 69% to $22 million.