There was a notable surge in L.A. companies testing the public market at the end of June – and not one of them was a tech unicorn.

YogaWorks Inc. in Culver City and downtown-based RBB Bancorp last week filed documents with the Securities and Exchange Commission declaring their intent to go public, while Hollywood’s Film Finances Inc. began trading on the London Stock Exchange on June 30.

Each of the three IPOs is fairly modest in size – under $100 million – but could be the start to a brisk final six months of 2017 for initial offerings, according to Ernst & Young Partner Scott Porter.

“Some analysts would say maybe we should have seen more IPOs in the first half of the year, so there’s a great opportunity right now,” Porter said. “My sense is that people are more focused and more committed to seeing the process through.”

The global IPO market has been hot: There were 772 public flotations raising more than $83 billion in the first half of this year. Those numbers represent year-over-year gains of 70 percent and 90 percent, respectively, according to Ernst & Young’s report.

L.A.’s IPO dollar volume also rose, but the gain came almost entirely from Snap Inc.’s $3.4 billion offering in March. The only other L.A.-area company to go public in the first half of the year was Brentwood-based addiction treatment company Catasys Inc., which raised $15 million in April.

Porter said company valuations are leveling out, however, and a host of tech companies want to take advantage of the strong 2017 IPO market. That could boost L.A.’s second-half numbers.

“Everyone out there is testing the waters,” he said. “Valuations seem to make more sense right now. As they become more reasonable, there’s more upside and that’s what investors want.”

Big stretch?

The YogaWorks filing did catch certain fitness industry watchers by surprise, despite the positive environment described by Porter, due to its timing.

“In short, I was shocked to see the (IPO filing),” said Brian Smith, a managing director in Piper Jaffray’s consumer investment banking wing.

YogaWorks is just three years removed from an acquisition by Boston private equity shop Great Hill Partners, which paid $45.6 million in July 2014. The company has been growing aggressively – mostly through buyouts of other yoga studios – which has helped revenue but left YogaWorks bleeding cash. The company had 2016 revenue of more than $55 million, up from $48.5 million the previous year, according to its SEC registration, but lost $9.5 million last year and $9.2 million in 2015.


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