In a week that could see ten IPOs, only one is a biotech.
Next week, there are profitable, cash-flow positive companies; there are tech companies ranging from payment processing to email security; there are two companies that aim for customers in the great outdoors; and there are various others. Next week is unusual in that it has ten deals and only one is a biotech. Several companies filed this week; next week is the last week to file if you want to get the IPO done by Christmas.
Hip to be square
Jack Dorsey’s Square (SQ), one of the most highly-anticipated IPOs of the fourth quarter, expects to raise $324 million next week at a market cap of $4.5B, below its last private round. The company has been unprofitable to date. The company had a deal with Starbucks that ultimately failed and will phase out by next year. Square started as a payment processor, but has recently gotten into e-commerce (Square Store), online/mobile payments (Square Cash) and restaurant and food delivery (Caviar). Investors may be skeptical of Dorsey’s dual role as CEO of Twitter and Square.
Will investors swipe right?
Match Group (MTCH), a spinoff from IAC, controls four of the five most recognized brands in the online dating industry (Match.com, Tinder, OkCupid and PlentyOfFish), along with 41 other brands, with 59 million combined monthly active users in 38 countries. Match has completed 25 acquisitions since the start of 2009 (including PlentyOfFish for $575 million in October 2015) and expects to continue pursuing acquisitions. The company is set to raise $433 million, which it intends to use to repay related-party indebtedness to IAC.
For the outdoorsmen (and women)
Duluth Holdings (DLTH) hopes to raise $100 million to fund the expansion of its retail presence. The company believes that its concept can support 100 US store locations. Its durable products are sold under the Duluth Trading brand and includes Longtail T shirts, Buck Naked underwear and Fire Hose work pants. The company uses storytelling and humor in its national ad campaigns that feature Giant Angry Beaver, Buck Naked Guy and Grab-Happy Grizzly. It is coming public during a major retail sell-off, so it could face pricing pressure despite its above-average margins and strong brand.
Formed through the rollup of two companies in 2007, Truck Hero (TRUK) has since acquired another seven to become a leading provider of pickup truck accessories in North America. Most of its products are priced between $100 and $5,500, with the average truck bed cover retailing for $700, and its products are mostly sold for vehicles that are over one year old. TA Associates bought a majority stake in a 2014 transaction that valued the company at $613 million. Next week, the company expects to raise $200 million at a market cap of $710 million.
Doing the German conga
Germany-based congatec (CONG) is a fabless provider of high performance embedded computing solutions, primarily in the fast-growing industrial automation and medical end markets. The company has achieved faster- han-industry top-line growth at an 18% CAGR from 2012-2014 while maintaining profitability. congatec expects to raise $60 million next week at a market cap of $263 million.
This MIME looks to make some noise
Founder-led and VC-backed Mimecast (MIME) hopes to raise $85 million next week. The company provides next-generation, cloud-based email security and archiving software solutions. It boasts a 97% customer retention rate and 36% top-line constant currency CAGR FY13-15. It aims to replace cumbersome point and on-premise solutions with its fully integrated, comprehensive software suite.
Noble Midstream is the primary midstream services provider for parent Noble Energy (NBLX) in the Denver- ulesburg Basin in Colorado. It looks to raise $250 million next week, and it plans to distribute all available cash quarterly; at the expected offer price of $20 per share, Noble Midstream's $0.3125 quarterly dividend represents an annual yield of 6.25%. It is the first oil and gas IPO since PennTex Midstream in June.
The only biotech next week, Axsome Therapeutics (AXSM), is developing an oral formulation of an existing therapy for pain and osteoarthritis. It looks to raise $51 million. Chinese manufacturer Sole Elite Group (SOLE) and Andina Acquisition Corp II (ANDAU) hope to price their IPOs next week.
| Renaissance Capital's IPO Calendar - Week of 11/16/2015 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Lead Manager(s) |
| Match Group Dallas, TX |
MTCH Nasdaq |
$433 | $12.00 - $14.00 33,333,332 |
J.P. Morgan Allen & Company BofA Merrill Lynch |
| Leading online dating company being spun off from IAC. | ||||
| Square San Francisco, CA |
SQ NYSE |
$324 | $11.00 - $13.00 27,000,000 |
Goldman Sachs Morgan Stanley J.P. Morgan |
| Mobile payment service provider for small businesses. | ||||
| Noble Midstream Partners LP Houston, TX |
NBLX NYSE |
$250 | $19.00 - $21.00 12,500,000 |
Barclays Baird J.P. Morgan |
| MLP formed by Noble to own oil and gas gathering assets in Colorado's DJ basin. | ||||
| Truck Hero Ann Arbor, MI |
TRUK NYSE |
$200 | $17.00 - $19.00 11,111,112 |
J.P. Morgan Baird BofA Merrill Lynch |
| Roll-up manufacturer and distributor of branded pickup truck accessories. | ||||
| Duluth Holdings Belleville, WI |
DLTH Nasdaq |
$100 | $14.00 - $16.00 6,666,667 |
William Blair Baird Raymond James |
| Sells Duluth brand work and outdoor apparel via its website, catalog and stores. | ||||
| Mimecast London, United Kingdom |
MIME Nasdaq |
$85 | $10.00 - $12.00 7,750,000 |
Goldman Sachs Barclays Jefferies |
| Provides cloud-based email archiving and security solutions. | ||||
| congatec Holding Deggendorf, Germany |
CONG Nasdaq |
$60 | $10.00 - $12.00 5,454,988 |
Stifel Needham & Co. |
| German fabless provider of embedded computer-on-module solutions. | ||||
| Axsome Therapeutics New York, NY |
AXSM Nasdaq |
$51 | $11.00 - $13.00 4,250,000 |
Ladenburg Thalmann & Co. |
| Developing an oral formulation of an existing therapy for pain and osteoarthritis. | ||||
| Andina Acquisition Corp II New York, NY |
ANDAU Nasdaq |
$40 | $10.00 - $10.00 4,000,000 |
EarlyBird Capital, Inc. |
| Blank check company formed to acquire South American businesses. | ||||
IPO Pipeline Update: Software, subprime and surgical devices
Six companies filed for IPOs this past week including profitable, high-growth software company Atlassian, subprime lender Elevate Credit, high-growth medical device maker Surgiquest and three others.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 7% year-to-date, compared to -1% for the S&P 500. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Citizens Financial Group (CFG) and Hilton Worldwide (HLT). The Renaissance International IPO Index is down 3% year-to-date, compared to -5% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include Recruit Holdings and Samsung C+T.
