The IPO market is scheduled to have its busiest week yet. As many as six companies could go public this week and raise a combined $555 million, including the first venture capital-backed tech IPO of the year.
Optical network IPO helps VC tech see the light
Acacia Communications (ACIA), which sells optical components that connect network data centers "at the speed of light," hits the IPO market as the year's first VC-backed tech offering. Backed by Matrix Partners and Commonwealth Capital, Acacia has achieved profitability and lightning-fast growth in reaching $239 million in 2015 sales. Although customer concentration is high and top customer ZTE was recently slapped with trade restrictions, Acacia believes that end-customer demand for its products should drive continued sales.
Landscaping LBO: The IPO market's "hedge"
SiteOne Landscape Supply (SITE) is the week's largest IPO, set to price its $210 million deal (100% insider) on Wednesday. Carved out of John Deere by LBO firm CD&R, SiteOne positions itself as the one site (477 locations) that professional landscapers go for irrigation units, fertilizer, nursery goods and various other supplies. While exposed to new housing starts, SiteOne boasts solid 7% organic growth.
Maker of Zig-Zag rolling papers: Invest in a "joint venture"
Turning Point Brands (TPB) aims to raise $76 million to lighten its heavy load of high-yield and related-party debt. With almost $200 million in sales, Turning Point sells Zig-Zag branded rolling papers and cigar wraps as well as chewing tobacco and moist snuff. The profitable company has been hampered by anemic sales growth (-2% in 2015), but is pitched at a modest discount to its peers, which, unlike Turning Point, pay a dividend.
Freedom from fungus: Viamet leads three biotechs
Viamet Pharmaceuticals (VMET) is the week's big biotech play; the company aims to raise $86 million (47% insider). Viamet targets common nail fungus (32 million cases in the US) and recurrent vaginal yeast infections (1 million).
Blockbuster biosimilar biotech Oncobiologics (ONS) had planned to raise $60 million (33% insider) in the past week, but pricing is now set as day-to-day. Cancer Prevention Pharmaceuticals (CPP), which first set terms in February, again pushed back its $25 million offering (20% insider).
| Renaissance Capital's IPO Calendar - Week of 5/9/2016 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Lead Manager(s) |
| SiteOne Landscape Supply Roswell, GA |
SITE NYSE |
$210 | $20 - $22 10,000,000 |
Deutsche Bank Goldman Sachs |
| National distributor of commercial and residential landscape supplies. | ||||
| Acacia Communications Maynard, MA |
ACIA Nasdaq |
$99 | $21 - $23 4,500,000 |
Goldman Sachs BofA Merrill Lynch |
| Provides low-power, high-speed interconnect modules for optical networks. | ||||
| Viamet Pharmaceuticals Durham, NC |
VMET Nasdaq |
$86 | $14 - $16 5,700,000 |
Morgan Stanley Goldman Sachs |
| Biotech developing small molecule metalloenzyme inhibitors to treat fungal diseases. | ||||
| Turning Point Brands Louisville, KY |
TPB NYSE |
$76 | $13 - $15 5,400,000 |
Cowen & Co FBR Capital |
| Sells tobacco products in the US under the Zig-Zag and Stoker's brands. | ||||
| Oncobiologics Cranbury, NJ |
ONS Nasdaq |
$60 | $11 - $13 5,000,000 |
Jefferies Barclays |
| Developing treatments for colorectal cancer risk factors. | ||||
| Cancer Prevention Pharma Tucson, AZ |
CPP NYSE MKT |
$25 | $12 - $14 1,923,076 |
Aegis Capital |
| Developing treatments for colorectal cancer risk factors. | ||||
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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, while the S&P 500 is up 0.6%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down -3.1% year-to-date, compared to -0.4% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A. To find out if this is the best ETF for you, visit our IPO Investing page.
