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Posted: June 01, 2014

Taking stock in Colorado

Resurgence of IPOs a reflection of improved economy

Gigi Sukin

The year 2001 saw many companies — conceived on proverbial cocktail napkins, fueled by investors hungry for a piece of the action — ultimately done in by their inability to generate cash faster than they burned it. Seven years later, the Great Recession hit. The result: The number of Colorado companies traded on major exchanges declined from roughly 150 to around 100 by the latter part of the decade.

But as the dust settled, 2012 represented the hopeful turning of a new leaf with initial public oferings from Natural Grocers by Vitamin Cottage Inc. (NGVC), National Bank Holdings Corp. (NBHC) and WhiteWave Foods Co., (WWAV).

Snowballing into 2013, seven IPOs raised roughly $4 billion for Colorado-based companies.

“We’ve seen amazing momentum in terms of business growth in the last year,” said Ken Lund, executive director for the Colorado Office of Economic Development and International Trade (OEDIT). “You can tell just by looking at the number of cranes in the air.”

For this past year, the leader of the pack was Antero Resources Corp., (AR) a Denver-based petroleum company that raised $1.57 billion with its October IPO. Others include Envision Healthcare (EVHC), RE/MAX Holdings Inc., (RMAX) Noodles & Co., (NDLS) Rally Software (RALY), and QEP Midstream Partners (QEP).

With low volatility in the market, businesses and their backers have been more inclined to launch offerings. Moreover, the state’s roster of publicly traded firms has been bolstered by companies relocating to Colorado in recent years, including DaVita HealthCare Partners Inc. (DVA) and Arrow Electronics Inc. (ARW).

Lund also cites Colorado’s improved international access as a selling point for companies. However, he notes there is still progress to be made to open Colorado to the global business community.

Durango-based Mercury Payment Systems Inc., an electronic payment processing technology provider, registered to raise $100 million in its IPO at the end of March. The offering was a “placeholder” and Renaissance Capital, which tracks IPOs, estimates the company could raise between $200 million and $300 million.

What does the event mean for the small southwestern city? “Outside capital is looking at Colorado, and more specifically Durango, as a place they’re willing to invest,” Lund said. “Global markets vote with dollars.”

Durango is also home to Rocky Mountain Chocolate Factory (RMCV) — No. 83 on the ColoradoBiz 2014 Top 100 Public Companies list.

“I would say that I think we’re poised in the state over the next one, three, five, 20 years to align to a point that we become one of the hot global destinations,” Lund said.

Gigi Sukin is an Associate Editor at ColoradoBiz. She can be reached at gsukin@cobizmag.com.

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