IPO Watch: 2011

(Story updated with more IPO news)
NEW YORK (TheStreet) -- U.S. IPOs could find themselves back in the limelight this year after spending the bulk of 2010 being overshadowed by Asian public offerings.

In 2010, about two-thirds of global capital raised from IPOs came from the Asia-Pacific region, according to Greenwich, Conn.-based IPO investment firm Renaissance Capital. China, Hong Kong, India and Japan were particularly strong in this regard. In contrast, North America lost share in the global IPO market, falling below 20% -- weighed down by the emerging market players and a resurgence in European IPOs, Renaissance Capital noted.

"Excluding GM, North America's market share would have been a paltry 10%," Renaissance Capital noted in a report.

Overall, global IPO proceeds in 2010 rose to within 12% of 2007 peak levels, or $235 billion, according to Renaissance Capital.

This year, U.S. IPOs could really heat up, while Chinese offerings could fall. "Chinese issuance may moderate due to government policies designed to temper inflations," said the Renaissance report. "However, we expect that in 2011, U.S. IPOs will step up in activity," given increasing clarity on tax rates, the Federal Reserve's quantitative easing efforts to encourage more investments in the equity market and the possibility of a more pro-business federal government.

U.S. small cap tech, consumer and health care IPOs could accelerate, according to Renaissance. Year-to-date, the global IPO market has raised $6.2 billion in proceeds, an improvement of 18.2% from last year, according to Renaissance. "We think global issuance should exceed the levels of 2010," Renaissance Capital principal Kathy Smith told TheStreet.

Smith said global IPO issuances in 2010, excluding restricted China A shares, was $175 billion. By comparison, 2011 issuances could reach $200 billion, she said.

On Jan. 27, online social network site LinkedIn announced its intention to go public. Around the same time, online discount coupon site Groupon and blogging site Twitter received significant cash infusions, as did social networking site Facebook from Goldman Sachs.

"All this buzz is raising one big question for investors -- not should or will other firms follow suit on going public, but how soon," Richard Peterson, a director with Standard & Poor's, said in a recent report.

Here, then, is TheStreet's gallery of 2011's upcoming IPOs and their outcomes...

Kinder Morgan

IPO Filing Date: Nov. 23, 2010

Expected IPO Date: Feb 7, 2011

Amount of Proceeds Sought: $2.2 billion

Expected Offering Price: $26 to $29

Expected Number of Shares to Be Sold: 80 million

Use of Proceeds: All of the common stock being sold is being sold by existing investors. Kinder Morgan will not receive any proceeds from the offering.

Expected Ticker Symbol: KMI ( KMI) (NYSE)

Lead Underwriters: Goldman Sachs and Barclays Capital

Co-Managers: Bank of America Merrill Lynch, Citi, Credit Suisse, Deutsche Bank Securities, J.P. Morgan, Wells Fargo Securities, Madison Williams, Morgan Keegan, Raymond James, RBC Capital Markets and Simmons & Company International

About the Company: Kinder Morgan is an energy company with stakes in a number of energy companies.

Kinder Morgan is owned by private-equity groups Carlyle Group, Riverstone Holdings, Highstar Capital and Goldman Sachs ( GS) funds.

The most important cash generator for Kinder Morgan is Kinder Morgan Energy Partners ( KMP).

The IPO corresponds to Kinder Morgan's master limited partnership interest in Kinder Morgan Energy. Kinder Morgan owns the general partner and about 11% of the limited partner interest of Kinder Morgan Energy Partners.

KMP's operations are conducted through its subsidiaries, which are grouped in five business segments: products pipelines, natural gas pipelines, carbon dioxide used for increasing the production of oil, terminals and Kinder Morgan Canada.

With the completion of the offering, common stock owned by the public will represent about a 13.5% interest in Kinder Morgan, or about 15.5% if the underwriters fully exercise their option to buy additional shares of common stock.

About 95% of the distributions Kinder Morgan received from subsidiaries for both the nine months ended Sept. 30, 2010 and the year ended Dec. 31, 2009 were attributable to the Partnership. A decline in the Partnership's revenues or increases in its general and administrative expenses, principal and interest payments for existing and future debt, tax expenses, working capital requirements or other cash needs would limit the amount of cash the partnership could distribute to Kinder Morgan, which would materially reduce the amount of cash available for shareholder dividends.

For the year ended Dec. 31, 2009, Kinder Morgan reported that total revenue fell about 41% to $7.19 billion from $12.09 billion in 2008, while net income improved to $496 million vs. loss of $3.60 billion the year before.

Competitors:

Kinder Morgan's product pipelines compete against those owned and operated by major oil companies, other independent products pipelines, trucking and marine transportation firms and railcars.

IPO Scorecard:

Actual IPO Date: Feb. 10, 2011

Actual Proceeds Raised: $2.9 billion

Actual Offering price: $30

Actual Number of Shares Sold: 95.5 million

First Day Closing Price: $31.05

Share Price as of Midday Feb. 11: $31.65, up 5.5%

IPO First Day Return: 3.5%

Summit Hotel Properties

IPO Filing Date: Aug. 9, 2010

Expected IPO Date: Feb. 7, 2011

Amount of Proceeds Sought: $264.5 million

Expected Offering Price: $10.50 to $12.50

Expected Number of Shares to Be Sold: 23 million

Use of Proceeds: To eliminate certain debt covenants, to fund improvements at its hotels and for general corporate and working capital purposes, including potential hotel acquisitions.

Expected Ticker Symbol: INN ( INN) (NYSE)

Lead Underwriters: Deutsche Bank Securities, Baird and RBC Capital Markets

Co-Managers: KeyBanc Capital Markets, Morgan Keegan

About the Company: Summit Hotel Properties is a hotel investment company that was recently organized to continue and expand the existing hotel investment business of its predecessor, Summit Hotel Properties, LLC.

The predecessor focused on upscale and midscale hotels. Summit Hotel Properties said it wants to continue its predecessor's business of acquiring, owning, renovating, repositioning and aggressively managing hotel assets throughout the U.S.

The majority of Summit's hotels operate under franchise brands owned by Marriott International ( MAR), Hilton Worldwide, InterContinental Hotels Group ( IHG) and Hyatt ( H) Hotels and Resorts. Since Jan. 1, 2007, Summit has invested about $305 million in acquisitions and upgrades at its hotels.

About $10 million of net proceeds from the initial public offering will be used to make additional improvements to Summit's hotels.

The company posted total revenue of $121.2 million in 2009 compared with $135.1 million in 2008 and $113.9 million in 2007.

Summit Hotel Properties reported net loss of $15.1 million in 2009 compared with net income of $13.1 million in 2008 and $14 million in 2007.

One of the company's key business risks is that it has a significant amount of debt. Furthermore, certain debt covenants that Summit Hotel has agreed upon may reduce the operational flexibility of the company and its subsidiaries, increasing default risks.

IPO Scorecard:

Actual IPO Date: Feb. 9, 2011

Actual Proceeds Raised: $ 254 million

Actual Offering price: $9.75

Actual Number of Shares Sold: 26 million

First Day Closing Price: $9.69

IPO First Day Return: -0.6%

Gevo

IPO Filing Date: Aug. 12, 2010

Expected IPO Date: Feb. 7, 2011

Amount of Proceeds Sought: $100.1 million

Expected Offering Price: $13 to $15

Expected Number of Shares to Be Sold: 7.2 million

Use of Proceeds: All or a portion of the proceeds would be used to obtain access to ethanol facilities through acquisitions and joint ventures, and to retrofit facilities to produce isobutanol alcohol. The company may also use a portion of the proceeds to fund working capital and for other general corporate purposes, including paying off certain long-term debt obligations and the costs associated with being a public company.

Expected Ticker Symbol: GEVO ( GEVO) (NASDAQ)

Lead Underwriters: UBS Investment Bank, Piper Jaffray, Citi

Co-Managers: Simmons & Company International

About the Company: Gevo is a renewable chemicals and biofuels company aiming to commercialize alternatives to petroleum-based products through a combination of synthetic biology and chemical technology.

Gevo aims to produce and sell isobutanol alcohol, which can be used as a specialty chemical or fuel stock. Isobutanol alcohol can also be converted into butenes, which can be used in the production of plastics, fibers, rubber, other polymers and hydrocarbon fuels.

The company said it's currently in talks with several ethanol plant owners to buy their plants or enter joint ventures to retrofit the plants for isobutanol production. The company aims to begin initial commercial production of its isobutanol products in the first half of 2012.

Gevo generated revenue of $660,000 in 2009, an improvement from $208,000 in 2008 and $275,000 in 2007.

However, its net loss worsened in 2009 to $19.9 million, from $14.5 million in 2008 and $7.2 million in 2007.

Competitors: In the gasoline blend stock market, Gevo competes with Codexis, Novozymes, Danisco, Genencor, Royal DSM, BP ( BP) and Range Fuels.

In the production of cellulosic biofuels, key competitors include Shell ( RDS.A) Oil, BP, DuPont ( DD)-Danisco, Cellulosic Ethanol, Abengoa Bioenergy, Archer Daniels Midland ( ADM), KL Energy ( KLEG), AE Biofuels ( AEBF) and others.

Gevo said its business could suffer if any of these competitors succeed in producing competing products with greater efficiency and is more successful at marketing their products and reaching supply agreements with major customers.

IPO Scorecard:

Actual IPO Date: Feb. 9, 2011

Actual Proceeds Raised: $107 million. Net proceeds to be $95.7 million after deducting underwriting and other estimated expenses related to the offering.

Actual Offering price: $15

Actual Number of Shares Sold: 7.2 million

First Day Closing Price: 16.44

IPO First Day Return: 9.6%

China Century Dragon Media

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IPO Filing Date: May 14, 2010

Expected IPO Date: Jan. 31, 2011

Amount of Proceeds Sought: ~7.4 million

Expected Offering Price: $5.25

Expected Number of Shares to Be Sold: 1.4 million

Use of Proceeds: One-fifth of the proceeds would be used to invest in the company's advertising business to obtain more advertising time; two-fifths would be used to obtain advertising time and cooperation rights on regional TV stations; two fifths of the proceeds would go towards general corporate purposes.

Expected Ticker Symbol: CDM ( CDM) (NYSE AMEX)

Co-Managers: WestPark Capital, Joseph Gunnar, I-Bankers Securities

About the Company: China Century Dragon Media is a television advertising company in China that offers blocks of advertising time on channels offered by China Central Television (CCTV).

CCTV is the People's Republic of China's state television broadcaster and China's largest TV network.

China Century Dragon Media buys advertising time on nationally broadcast CCTV television channels, which the company then repackages and sells to its customers.

Risks to the business include the company's dependence on CCTV and ability to continue obtaining advertising time slots on CCTV. All of China Century's revenue comes from the company's advertising business in China -- putting the business at risk in the event of economic downturns.

The company doesn't have long-term contracts with its customers, so they can terminate their relationship with the company at any time.

In 2009, China Century Dragon posted revenue of $74.5 million compared with $44.7 million in 2008 and $17.1 million in 2007.

Net income was $9 million in 2009 compared with $4.6 million in 2008 and $1.2 million in 2007.

Competitors: China Century Dragon Media said it faced "intense" competition for CCTV-related advertising business from a number of Chinese competitors, such as Walk-On Advertising, Vision CN Communications, Charm Communications ( CHRM) and China Mass Media Corp. ( CMM). China Century Dragon said these rivals may have competitive advantages, such as significantly greater financial, marketing or other resources, or stronger market reputation.

IPO Scorecard:

Actual IPO Date: Feb. 8, 2011

Actual Proceeds Raised: $6 million

Actual Offering price: $5.25

Actual Number of Shares Sold: 1.2 million

First Day Closing Price: $5.30

IPO First Day Return: 1%

AcelRx Pharmaceuticals

IPO Filing Date: Nov. 12, 2010

Expected IPO Date: Feb. 7, 2011

Amount of Proceeds Sought: ~$75 million

Expected Offering Price: $12 to $14

Expected Number of Shares to Be Sold: ~ 5.8 million

Use of Proceeds: To fund phase 3 development of lead, post-surgery pain treatment product ARX-01; working capital; and other general corporate purposes.

Expected Ticker Symbol: ACRX ( ACRX) (NASDAQ)

Lead Underwriters: Piper Jaffray ( PJC)

Co-Managers: Canaccord Genuity, Cowen and Company ( COWN), JMP Securities ( JMP)

About the Company: AcelRx is a drug company that focuses on developing and commercializing pain treatment therapies.

Currently it has three products in the pipeline, but not yet on the market. The lead product is post-surgery pain treatment product ARX-01. Its ARX-02 product treats pain in cancer patients and its ARX-03 product treats pain and anxiety caused by painful physician procedures.

The company aims to bring its products to market amid a burgeoning, global post-surgical pain market. According to AcelRx, the post-operative pain market in the U.S., Europe and Japan is expected to reach $6.5 billion by 2018.

Given that the company isn't selling any products yet, it hasn't generated any revenue since it was founded in Jul. 2005. AcelRx has experienced significant net losses every year since its inception. It could fail as a business if the company doesn't successfully commercialize its products.

Competitors: The main competitor against the company's ARX-01 product is the widely-used IV PCA pump. Leading manufacturers of IV PCA pumps include Hospira ( HSP), CareFusion ( CFN), Baxter International ( BAX) and Smiths Medical ( SMGZY).

Potential competitors for ARX-01 that are currently also being developed include Ionsys, which was originally developed by Johnson & Johnson ( JNJ) subsidiaries.

Potential competitors for the company's ARX-02 product include Actiq and Fentora, made by Cephalon ( CEPH); Onsolis, made by BioDelivery Sciences International ( BDSI), and Abstral, made by ProStrakan Group ( PKNGF).

IPO Scorecard:

Actual IPO Date: Feb. 11

Actual Proceeds Raised: $40 million

Actual Offering price: $5

Actual Number of Shares Sold: 8 million

First Day Closing Price: $4.55

IPO First Day Return: -9

Imperial Holdings

IPO Filing Date: Aug. 12. 2010

Expected IPO Date: Feb. 7, 2011

Amount of Proceeds Sought: ~ $183 million

Expected Offering Price: $10 to $12

Expected Number of Shares to Be Sold: ~ 16.7 million shares

Use of Proceeds: To fund future premium finance transactions with equity financing instead of debt.

Expected Ticker Symbol: IFT ( IFT) (NYSE)

Lead Underwriters: FBR Capital Markets ( FBCM), JMP Securities and Wunderlich Securities

About the Company: Imperial Holdings, a specialty finance company with a focus on providing premium financing for individual life insurance policies and purchasing structured settlements, reported total income decline of 17.7% to $60.4 million in 2010, from $73.4 million a year ago.

The company was founded in Dec. 2006, and focuses on providing premium financing for individual life insurance policies issued by insurance companies generally rated A+ or better by Standard & Poor's or A or better by A.M.

"Difficult conditions in the credit and equity markets have adversely affected and may continue to adversely affect the growth of our business, our financial condition and results of operations," the company said in an SEC filing.

Competitors: Imperials' main competitors in the premium finance industry are CMS, Inc, Insurative Premium Finance and Madison One. Competitors also include Coventry First, Life Partners Holdings ( LPHI) and ViaSource Funding. "It is possible that a number of our competitors may be substantially larger and may have greater market share and capital resources than we have."

IPO Scorecard:

Actual IPO Date: Feb. 7, 2011

Actual Proceeds Raised: $179.2 million

Actual Offering price: $10.75

Actual Number of Shares Sold: 16.7 million

First Day Closing Price: $10.81

IPO First Day Return: 0.6%

Zuoan Fashion

IPO Filing Date: Jan. 4. 2011

Expected IPO Date: Feb. 7, 2011

Revised on Feb. 10, 2011: Feb. 11, 2011

Amount of Proceeds Sought: ~$79 million

Revised on Feb. 10, 2011: ~ $42 million

Expected Offering Price: $10.50 to $12.50

Revised on Feb. 10, 2011: ~ $7

Expected Number of Shares to Be Sold: ~ 6.9 million

Revised on Feb. 10, 2011: ~ 6 million

Use of Proceeds: To open flagship stores in China with a current plan to open 50 flagship stores by 2012.

Expected Ticker Symbol: ZA ( ZA) (NYSE)

Lead Underwriters: Cowen and Company

Co-Managers: RBC Capital Markets ( RY), Samsung Securities (Asia) and Janney Montgomery Scott

About the Company: Zuoan is a leading casual menswear fashion company in China.

Citing a Frost & Sullivan report, the company said its "Zuoan"-branded products ranked second in China's casual menswear market, with 5.4% market share, based on retail sales data from 2009. The company currently sells products through a distribution network covering 27 of China's 32 provinces and municipalities and through direct store sales.

Zuoan's revenue rose about 60% to RMB693.1 million, $103.6 million, in 2009 and RMB598.3 million in 2008, from RMB434.5 million in 2007.

One of the main risks the company potentially faces is its dependence on the Zuoan brand. If the company fails to promote this brand successfully, it could hurt its business significantly.

Zuoan, or "left bank" in Chinese, refers to the fashionable Left Bank area of Paris.

The IPO will be an initial public offering of the company's American depositary shares.

Competitors: Zuoan's biggest competitors include international brands such as Jack & Jones and local brands such as Mark Fairwhale and Jeep.

IPO Scorecard:

Actual IPO Date: Feb. 14

Actual Proceeds Raised: $42 million

Actual Offering price: $7

Actual Number of Shares Sold: 6 million (American Depositary Shares)

First Day Closing Price: $7.04

IPO First Day Return: -0.6%

Kips Bay Medical

IPO Filing Date: Apr. 8. 2010

Expected IPO Date: Feb. 10, 2011

Amount of Proceeds Sought: ~$25 million

Expected Offering Price: $8 to $10

Expected Number of Shares to Be Sold: ~ 2.75 million

Use of Proceeds: To seek regulatory approval to market its eSVS Mesh product in the U.S. and overseas. The company said the product can improve bypass procedures for heart patients.

Expected Ticker Symbol: KIPS ( KIPS) (NASDAQ)

Lead Underwriters: Rodman & Renshaw ( RODM) and Newbridge Securities

Co-Managers: Caris & Company

About the Company: Kips Bay Medical is a medical device company currently in development stage.

The company is focusing on developing, manufacturing and commercializing its eSVS MESH product for coronary artery bypass surgeries. The company said the product can improve the long-term results of these surgeries.

The company began shipping its eSVS MESH in European Union markets in Jun. 2010 and the United Arab Emirates in Oct. 2010, but hasn't generated significant revenues yet. The U.S. Food and Drug Administration is currently reviewing Kips' application for the product. If granted, Kips Bay would be able to begin U.S. clinical trials for the project.

The company expects enrollment in the clinical trials to begin in the first half of 2011.

Kips Bay experienced net losses of $3.3 million and $10.1 million in the year ended Dec. 31, 2009 and the nine months ended Oct. 2, 2010, respectively. The company's net loss for the nine months ended Oct. 2 included a non-cash charge of $2.3 million due to a modification in an investor stock purchase option and a $5 million charge in connection with its first milestone payment to Medtronic ( MDT), one year after the first sale of its eSVS MESH. The two have an intellectual property agreement over the product.

One of the biggest risks about Kips Bay is its limited history. The company expects more losses in the future.

Competitors: Kips Bay said there are at least two companies that develop mesh devices for coronary procedures, but none of their products directly compete with Kips'. These companies include Swiss company Alpha Research and Germany company B. Braun.

IPO Scorecard:

Actual IPO Date: Feb. 10

Actual Proceeds Raised: $17 million

Actual Offering price: $8

Actual Number of Shares Sold: 2.1 million

First Day Closing Price: $7.93

IPO First Day Return: -0.9

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-- Written by Andrea Tse in New York.

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