This week the IPO market could see a high-yield REIT, a high-growth software provider and a small biotech.
After strong performance from last week's four billion-dollar IPOs - including the year's largest first-day pop (Aduro Biotech, +147%) - new filing activity appears poised to pick up.
NSA: an IPO to monitor
National Storage Affiliates Trust (NSA) is the year's second IPO after Jernigan Capital (JCAP; +7%) focused on the self-storage market (the third including data storage provider Box). This REIT is the sixth-largest owner/operator of self-storage properties in the US, and plans to offer a dividend above that of its closest peers, including Public Storage (PSA) and Extra Space Storage (EXR). NSA is set to be the year's fifth REIT to go public, already matching the total count from last year.
The API IPO: SaaS is back
Apigee's (APIC) deal suggests that the IPO market's technology drought may be over. The market for third-party API development is still in its early stages, and Apigee's heavy losses and large competitors could turn off investors. Yet the company also boasts high billings growth with expanding margins, large blue chip customers and a play on mobile, big data and Internet of Things. High-growth enterprise SaaS companies have historically provided impressive first-day returns. However, all six tech IPOs of 2015 trade below their first-day close, and adtech company MaxPoint Interactive (MXPT) is the year's worst-performer, down 32%.
Apigee is the latest IPO to be pitched at a valuation below its last private round. If unrealized gains begin translating into realized losses, the IPO market's "reality check" could impact the massive valuations we've seen in private fundraising rounds.
Viking Therapeutics (VKTX) plans to make its second run at a US IPO this week. Since its original attempt in September, the Ligand Pharmaceuticals-backed biotech has slashed its proposed market cap by 60% and changed its lead candidate, which is set to begin Phase 2 trials later this year.
| Renaissance Capital's IPO Calendar - Week of April 20, 2015 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Top 2 bookrunners |
| National Storage Affiliates Trust Greenwood Village, CO |
NSA NYSE |
$320 | $15 - $17 20,000,000 |
Jefferies Morgan Stanley |
| REIT focused on consolidating regional self-storage businesses. | ||||
| Apigee San Jose, CA |
APIC NASDAQ |
$87 | $16 - $18 5,115,000 |
Morgan Stanley J.P. Morgan |
| Provides a cloud-based platform for businesses to design, deploy and scale APIs. | ||||
| Viking Therapeutics San Diego, CA |
VKTX NASDAQ |
$20 | $7 - $9 2,500,000 |
Laidlaw & Company |
| Developing drugs to speed hip fracture recovery and treat various metabolic disorders. | ||||
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IPO pipeline update
The recent bump in e-commerce-related IPOs (Etsy, WoWo, GoDaddy) has been matched by new e-commerce companies added to the pipeline. Shopify (SHOP) filed for a $100 million IPO and Chinese brand e-commerce outsourcer Baozun (BZUN) filed to raise $200 million. Solar energy power provider LightBeam Electric (LEC) also filed, while PennTex Midstream (PTXP), Fortress Transportation (FTAI), Philadelphia Energy Solutions, Enviva Partners and Black Stone Minerals all updated filings.
IPO market snapshot
The Renaissance IPO Index, a market cap weighted basket of newly public companies that is designed to represent the US IPO market, has traded up over 10% year-to-date, compared to 1% for the S&P 500. This suggests that the IPO market remains open to new issuance. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Twitter (TWTR), Alibaba (BABA), Hilton (HLT), Voya Financial (VOYA) and Ally Financial (ALLY). To find out if this is the best ETF for you, visit our IPO investing page.
