Fitbit leads this week's 11 companies looking to raise over $1.7 billion through US initial public offerings.
A good FIT
Fitbit (FIT) flexes its muscle with the week's largest IPO; the deal size is set at $448 million, though it could raise more based on investor demand. Fitbit has been the clear market leader with an 85% share of US wearable fitness tracking devices in the first quarter. While it must now contend with the Apple Watch, there may be enough room for both products given the projected growth rate for wearable devices. In the 1Q15, revenue grew 209% to $337 million, though its first quarter in 2014 included a major product recall. The last consumer electronics IPO was GoPro (GPRO), also a market leader, which gained 31% on its first day and is now up 139% from the offer price.
Software for hard bodies
MINDBODY (MB) provides back-end software for the management of over 40,000 wellness businesses, yet its market opportunity could be 100x that. However, it should remain unprofitable in the near term as it invests heavily in sales and marketing. The founder-led company is backed by Bessemer, Catalyst, IVP and J.P. Morgan, which plans to invest $10 million on the IPO. The most recent SaaS IPO, Shopify (SHOP), popped 51% on its IPO and now trades 81% above its offer price.
FOGO to go public
Fogo de Chão (FOGO) is set to raise $75 million this week. The upscale Brazilian steakhouse operates 37 locations primarily in Brazil and the US. Its restaurants achieve high average unit volumes as well as a high contribution margin due to its labor-efficient tableside service. The 10 restaurant IPOs since 2013 have an average first-day pop of 68%, and last week's fast casual chain Wingstop (WING) popped 61%. However, the last full-service restaurant to go public was Del Frisco's in 2012, which traded flat on its debut.
First Solar/Sunpower JV MLP 8point3 offers $0.83
8point3 Energy Partners LP (CAFD) was formed by First Solar (NASDAQ: FSLR) and Sunpower (NASDAQ: SPWR) to own solar energy projects, primarily utilities in California. The company has little track record with its assets, but benefits from long-term agreements and a sizable pipeline of drop-down assets. It plans to offer an annual dividend of $0.83, or a 4.3% yield at the midpoint.
Three biotechs: cystic fibrosis add-on, Parkinson's reformulation and cardiovascular gene therapy
Celyad (CYAD), which trades in Europe, is the week's largest initial US public offering from a biotech. The Belgian company has completed enrollment for a Phase 3 trial for its gene therapy targeting ischemic heart failure. Nivalis Therapeutics (NVLS) plans to raise $60 million (42% from insiders) to develop a cystic fibrosis therapy that complements Vertex's soon-to-be approved Orkambi treatment. The biotech boasts a large market and well-regarded investors Wellington and Deerfield, but investors would be betting on one early-stage drug candidate that largely relies on another therapy. Cynapsis Therapeutics (CYNA), which is currently listed in Canada, has begun Phase 3 trials for its under-the-tongue strip formulation of the approved drug apomorphine for Parkinson's disease. Last week's Parkinson's biotech, Biotie Therapies (BITI; +29%), was also already traded outside the US.
Three microcap IPOs: Lactose tolerance, Chinese construction and solar assets
With backing from Javelin Venture Partners, Ritter Pharmaceuticals (RTTR) plans to use the $20 million in expected IPO proceeds to advance its lactose intolerance drug into a Phase 2b/3 trial. Yulong Eco-Materials (YECO) is back on the calendar this week as the Chinese brick maker expects to raise $15 million and list on the NASDAQ. Backed by oil billionaire Ray Hunt, Principal Solar (PSWW) could uplist from the OTC Pink market to the NASDAQ as it sets in motion plans to acquire its solar energy assets. It had been on our IPO calendar for last week.
| Renaissance Capital's IPO Calendar - Week of June 15, 2015 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Top 2 bookrunners |
| Fitbit San Francisco, CA |
FIT NYSE |
$448 | $14 - $16 29,850,000 |
Morgan Stanley Deutsche Bank |
| Offers wearable fitness devices that track daily activities. | ||||
| Univar Downers Grove, IL |
UNVR NYSE |
$420 | $20 - $22 20,000,000 |
Deutsche Bank Goldman Sachs |
| North America's leading chemicals distributor backed by CVC and CD&R. | ||||
| 8point3 Energy Partners LP San Jose, CA |
CAFD NASDAQ |
$400 | $19 - $21 20,000,000 |
Goldman Sachs Citi |
| Solar energy yieldco formed by First Solar and SunPower. | ||||
| MINDBODY San Luis Obispo, CA |
MB NASDAQ |
$100 | $13 - $15 7,150,000 |
Morgan Stanley Credit Suisse |
| Offers cloud-based business management software for fitness and beauty SMBs. | ||||
| Celyad Belgium |
CYAD NASDAQ |
$99 | $70.98 1,400,000 |
UBS Investment Piper Jaffray |
| Belgian biotech developing gene therapies for cardiovascular diseases and cancer. |
||||
| Fogo de Chão Dallas, TX |
FOGO NASDAQ |
$75 | $16 - $18 4,411,764 |
Jefferies J.P. Morgan |
| Operates 37 Brazilian steakhouses offering high-quality, fire-roasted meats. | ||||
| Cynapsus Therapeutics Toronto, Canada |
CYNA NASDAQ |
$64 | $14.18 4,500,000 |
BofA Merrill Lynch |
| Developing a sublingual formulation of an approved therapy for Parkinson's disease. | ||||
| Nivalis Therapeutics Boulder, CO |
NVLS NASDAQ |
$60 | $13 - $15 4,285,714 |
Cowen & Company Stifel |
| Developing a complementary small molecule therapy for cystic fibrosis. | ||||
| Principal Solar Dallas, TX |
PSWW NASDAQ |
$25 | $9 - $11 2,500,000 |
Northland Securities |
| Roll-up planning to acquire 150 MW of solar energy projects in North Carolina. | ||||
| Ritter Pharmaceuticals Los Angeles, CA |
RTTR NASDAQ |
$20 | $10 - $12 1,820,000 |
Aegis Capital Chardan Capital |
| Developing an oral therapy that reduces the symptoms of lactose intolerance. | ||||
| Yulong Eco-Materials Pingdingshan, China |
YECO NASDAQ |
$15 | $6.25 - $7.25 2,250,000 |
Axiom Capital Northland Securities |
| Chinese producer of fly-ash bricks and concrete used in construction. | ||||
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IPO pipeline update: 11 new companies added to the pipeline
Eleven IPOs initially filed last week, six of which are microcap companies planning to raise less than $50 million. All-natural pet food maker Blue Buffalo (BUFF) filed to raise $500 million; the company grew sales 28% in 2014 and now has nearly $1 billion in annual sales. LBO'd Dutch drug manufacturer Patheon (PTHN) filed for an IPO that could raise as much as $700 million. Other notable new deals include DNA interference biotech ProNAi Therapeutics (DNAI) and security software provider Rapid7 (RPD). Eight IPOs set terms on Monday morning, including TransUnion (TRU) and Alarm.com (ALRM).
IPO market snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has traded up 8% year-to-date, compared to 2% for the S&P 500. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Hilton Worldwide (HLT) and Twitter (TWTR). The Renaissance International IPO Index has traded up 11% year-to-date, compared to 7% for the ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include Altice and Deutsche Annington. To find out if this is the best ETF for you, visit our IPO Investing page.
