Two companies plan to raise a combined $300 million this week.Offering low sales growth but high cash flow, Atkore International continues a series of LBO'd companies hitting public markets as it benefits from positive cyclical and supply trends. High-growth, high-loss Chinese internet company China Online Education (51 Talk) is the third tech IPO of the year, setting the stage for a pick up in the sector.
On the Fast Track: Electrical Raceway Tubing Manufacturer to raise $252 million
Atkore International Group (ATKR) – Spun out of Tyco, this manufacturer of electrical raceway tubing and mechanical products plans to raise $252 million (100% insider). The third IPO by CD&R this year (after SiteOne SITE and US Foods USFD) is also the third to benefit from rising US construction (after SiteOne and GMS GMS). With 85% of sales from products currently holding the #1 or #2 US market shares, Atkore has grown through six acquisitions and looks to drive growth through further M&A. Due to plummeting raw material costs, organic sales growth decreased 6% to $1.6 billion in the last twelve months, but in turn EBITDA margins grew more than 50% to 13.9%.
Speaking the Language: Chinese online learning platform looks to raise much needed cash
China Online Education (51Talk) (COE) – The third tech IPO of the year, this provider of online, one-on-one English language instruction in China plans to raise $46 million, in addition to a concurrent private placement from venture backers DCM and Sequoia. Currently estimated at $3 billion, China’s online English learning market is growing fast at 54% but is becoming increasingly crowded. 51Talk’s sales spiked 196% to $24 million last year, however its heavy spending on marketing and R&D has resulted in a cash burn of $20 million.
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Renaissance Capital's IPO Calendar - Week of 6/6/2016 |
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Issuer |
Symbol |
Deal Size |
Price Range |
Lead Manager(s) |
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Atkore International Group |
ATKR |
$252 |
$20 - $22 |
Credit Suisse |
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Sells electrical circuitry raceways and metal frames used in commercial construction. |
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China Online Education (51Talk) |
COE |
$46 |
$18 - $20 |
Morgan Stanley |
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China-based online English language education platform. |
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