August 2015 kicks off with ten IPOs on the calendar for this week - more IPOs than all of August 2014 - after a slower than average July.
Based on the number of broken and postponed IPOs last week, however, some of the ten will likely face heavy pushback on valuation. The two fast growing and highly profitable consumer deals - Amplify Snack Brands and Planet Fitness - should have no such problem.
With a late Labor Day this year, the week ahead could be the last busy week in the IPO market until mid-September. Of the ten, four have a market cap of over $1 billion, and four are smaller than $150 million. By sector, half are health care, including four biotechs, along with a residential solar company, an oil refinery and a small REIT.
Can Planet Fitness lift? Will SkinnyPop pop?
These two companies benefit from the increasing number of Americans who want to own a gym membership and enjoy lower-fat snacks. They could give IPO investors (and their private equity backers) a healthy return this week. Recent consumer IPO Blue Buffalo (BUFF), which also had high growth, strong margins and a health angle, trades 40% above its offer price.
Acquired by TSG Consumer Partners in 2012, Planet Fitness (PLNT) is one of the largest gyms in the US with over 7 million members and over 1,000 locations. Its franchise model provides it with attractive cash flow and superior growth. As it covers the planet in low-cost gyms with Judgement Free Zones, the company estimates the US can support 4,000 locations in total. However, TSG will receive all of the IPO proceeds while leaving the company with a heavy debt burden.
Amplify Snack Brands (BETR) has experienced explosive sales growth at best-in-class margins as its allergen-free, non-GMO, gluten-free popcorn SkinnyPop flies off the shelves. It has quickly become the #2 player in the ready-to-eat popcorn market, yet Amplify still has ample room for growth. Of note, PE backer TA Associates came in just one year ago, issued dividends to insiders, and plans to sell 100% of the deal. It now hopes to prove that SkinnyPop is not a one-hit wonder as the company begins marketing its recently-acquired tortilla brand, Paqui.
IPO investors may go nuts for this peanut allergy biotech
Aimmune Therapeutics (AIMT) plans to raise $125 million and the biotech's market cap is set at $625 million. Backed by well-respected investors such as Longitude Capital, RA Capital, Foresite, Aisling, Fidelity, and Jeff Bezos, Aimmune demonstrated positive results in Phase 2 trials and was granted Fast Track designation by the FDA. Close peer DBV Technologies (DBVT), which has begun Phase 3 trials for a peanut allergy patch, has gained 101% since its October 2014 US IPO.
SunRun (RUN) is the second-largest residential solar company next to SolarCity. Backers include Foundation Capital, Accel, Canyon and Sequoia. Residential solar installations continue to grow at a 25%+ CAGR, but solar tax credits are set to be cut in 2017. Solar energy stocks have suffered from low oil and gas prices, though SunRun should benefit from SunEdison's (NYSE: SUNE) recent acquisition of Vivint Solar (VSLR) at $0.50 more than its October 2014 IPO price.
Owned by Carlyle and Energy Transfer Partners, Philadelphia Energy Solutions (PESC) operates the largest oil refinery in the Eastern US (tenth largest in the US). It can now process crude-by-rail through its new terminal, which it holds through PES Logistics (PESL) - expected to IPO in the coming months.
The breast IPO of 2015
GC Aesthetics (GCAA) has come back from its predecessors' bankruptcy as a major breast implant maker in Europe and South America, particularly Brazil. 2014 breast implant IPO Sientra (SIEN) - also backed by OrbiMed - is up 55% from its offer price.
Four microcap IPOs: three biotechs and a REIT
Zynerba Pharmaceuticals (ZYNE) is a preclinical biotech developing a gel and a patch for delivering its cannabinoid-based therapies. Perceptive Advisors plans to purchase $12 million on the IPO. With a proposed market cap of $128 million, investors may believe that it could follow the path of close peer GW Pharma (GWPH), which has more than quattuordecupled in size since its May 2013 offering.
Currently listed in Australia (up 20% in the past month), Hepatitis C biotech Benitec Biopharma (BNTC) joins other DNA/RNA interference biotech IPOs backed by RA Capital (ProNAi (DNAI) and Dicerna (DRNA)); the last two have done well on the first day but traded down from there. Listed in Israel, Intec Pharma (NTEC), had been on the calendar last week. It could be the year's third foreign-listed biotech developing a reformulation of an existing therapy for Parkinson's disease, after June IPOs Biotie (BITI; +20%) and Cynapsus (CYNA; +16%). Neither of these foreign-listed biotech has disclosed insider buying.
Riverbanc Multifamily Investors (RMI), which had also been scheduled for last week, is a recently-formed apartment REIT backed by Ellington and New York Mortgage Trust (Nasdaq: NYMT).
| Renaissance Capital's IPO Calendar - Week of August 3 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Top 2 bookrunners |
| Sunrun San Francisco, CA |
RUN Nasdaq |
$251 | $13 - $15 17,900,000 |
Credit Suisse Goldman Sachs |
| Second-largest residential solar company in the US. | ||||
| Philadelphia Energy Solutions Philadelphia, PA |
PESC NYSE |
$250 | $15 - $18 15,151,515 |
BofA Merrill Lynch Credit Suisse |
| Carlyle-backed owner of a crude oil refinery and rail terminal in Philadelphia. | ||||
| Amplify Snack Brands Austin, TX |
BETR NYSE |
$225 | $14 - $16 15,000,000 |
Goldman Sachs Jefferies |
| TA Associates-backed seller of fast-growing SkinnyPop brand popcorn. | ||||
| Planet Fitness Newington, NH |
PLNT NYSE |
$203 | $14 - $16 13,500,000 |
J.P. Morgan BofA Merrill Lynch |
| Franchised low-cost gym chain with over 1,000 locations in the US. | ||||
| Aimmune Therapeutics Brisbane, CA |
AIMT Nasdaq |
$125 | $14 - $16 8,333,333 |
BofA Merrill Lynch Credit Suisse |
| Developing an oral immunotherapy to desensitize peanut allergies. | ||||
| GC Aesthetics Dublin, Ireland |
GCAA Nasdaq |
$75 | $13 - $15 5,350,000 |
BofA Merrill Lynch Deutsche Bank |
| Provider of silicone breast implants in Latin America and EMEA. | ||||
| RiverBanc Multifamily Investors Charlotte, NC |
RMI Nasdaq |
$74 | $19 - $20 3,800,000 |
Baird Keefe Bruyette Woods |
| REIT formed to own debt and equity interests in apartment communities. | ||||
| Benitec Biopharma Balmain, Australia |
BNTC Nasdaq |
$65 | $13.06 5,000,000 |
BMO Capital Markets |
| Developing gene therapies for hepatitis C based on RNA interference. | ||||
| Zynerba Pharmaceuticals Devon, PA |
ZYNE Nasdaq |
$42 | $13 - $15 3,000,000 |
Jefferies Piper Jaffray |
| Preclinical biotech developing cannabinoid-based therapies for osteoarthritis and epilepsy. | ||||
| Intec Pharma Jerusalem, Israel |
NTEC Nasdaq |
$38 | $8.36 4,500,000 |
Maxim Group Roth Capital |
| Developing an improved delivery method of carbidopa/levodopa for Parkinson's disease. | ||||
Find out why institutional investors rely on Renaissance Capital's Pre-IPO Research for these IPOs.
Follow us on Twitter (@IPOtweet) for IPO news as it happens and register for our updates on the IPO market.
IPO pipeline update: SoulCycle rides into the pipeline
Three companies submitted initial filings last week. SoulCycle (SOUL.RC), a cycling-focused fitness chain spun out of Equinox, plans to raise $100 million. Without franchising, SoulCycle may not have Planet Fitness' scale, but it matches the company it terms of growth (+53% year-over-year) and profitability (35% EBITDA margin). Building materials company GMS (GMS), which was LBO'd by AEA Investors, submitted a filing to raise $200 million. Filing activity should pick up in about two weeks as companies prepare for post-Labor Day offerings.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has traded up 5.2% year-to-date, compared to 2.2% 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 over 3.9% year-to-date, compared to less than 2.5% for the ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include Altice and Recruit Holdings. To find out if this is the best ETF for you, visit our IPO Investing page.
