The 2017 IPO market continues its torrid pace with seven deals on the IPO calendar. Blackstone's home-rental REIT, Invitation Homes, aims to raise $1.5 billion in the largest US IPO since October 2015. The week's other two big deals, LBO Laureate Education and spinoff IC Power, focus on Latin American education and electricity, and like Invitation carry high debt. The IPO market is on track to raise $4.9 billion over just two weeks (Jan 19 - Feb 2); compare that to the $6.2 billion raised in the entire first half of 2016.
| Renaissance Capital's IPO Calendar - Week of 1/30/2017 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Lead Managers |
| Invitation Homes Dallas, TX |
INVH NYSE |
$1,502 | $18 - $21 77,000,000 |
Deutsche Bank J.P. Morgan |
| Blackstone-backed REIT that owns a portfolio of single-family homes in the US. | ||||
| Laureate Education Baltimore, MD |
LAUR Nasdaq |
$537 | $17 - $20 29,000,000 |
Credit Suisse Morgan Stanley |
| World's largest for-profit higher education company. | ||||
| IC Power Lima, Peru |
ICP NYSE |
$350 | $12 - $15 25,900,000 |
BofA Merrill Lynch Credit Suisse |
| Generates and distributes power in Peru and other Latin American markets. | ||||
| Braeburn Pharmaceuticals Princeton, NJ |
BBRX Nasdaq |
$150 | $18 - $21 7,692,308 |
J.P. Morgan BofA Merrill Lynch |
| Commercializing a long-acting implant for treatment of opioid addiction. | ||||
| Kimbell Royalty Partners LP Fort Worth, TX |
KRP NYSE |
$100 | $19 - $21 5,000,000 |
Raymond James RBC Capital Markets |
| Owns 3.7 million acres of oil and gas mineral interests across the US. | ||||
| Ramaco Resources Lexington, KY |
METC Nasdaq |
$81 | $12 - $15 6,000,000 |
Credit Suisse Jefferies |
| Recently-formed metallurgical coal provider with reserves in Appalachia. | ||||
| Visterra Cambridge, MA |
VIST Nasdaq |
$50 | $12 - $14 3,850,000 |
Leerink Partners Stifel |
| Developing vaccines for influenza A, Dengue, Zika and multiple myeloma. | ||||
An open invitation from Blackstone
The big deal this week is Invitation Homes (INVH), one of the largest owners of single-family homes in the US. Formed by Blackstone in 2012, this REIT bought properties at distressed prices, mainly in Florida and California. Competing closely with American Homes (NYSE: AMH) and Silver Bay (NYSE: SBY), Invitation plans to grow its quarterly dividend by paying down its pile of debt, starting with the $1.5 billion IPO.
Graduation day: KKR's Laureate Education is back
Formerly Sylvan Learning, Laureate Education (LAUR) is going public in a $500 million IPO about 10 years after being taken private in 2007. It operates the world's largest for-profit education system with over 1 million students. The beleaguered for-profit education sector has rebounded recently, and Laureate's focus on emerging markets has fueled growth, but it still faces regulatory uncertainties, heavy debt and volatile exchange rates.
Peruvian power
A spinoff from Kenon Holdings (NYSE: KEN), IC Power (ICP) is raising $350 million. It has taken on massive debt to build a diverse portfolio of power facilities in Peru and other Latin American countries. While low energy prices pressured sales in 2015 (-6% to $1.3 billion), it generates high cash flow and a recent capacity expansion (to 3.9 GW) gives it room to grow, according to its thorough prospectus.
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Two recently-formed plays on coal and oil/gas
Ramaco Resources (METC) hopes to raise $81 million and become Appalachia's low-cost provider of metallurgical coal, which is used to make steel. Ramaco stands to benefit from a sharp spike in metallurgical coal prices in 2016, following a five-year decline alongside the global glut of steel. Formed in 2015, Kimbell Royalty Partners LP (KRP) plans to raise $100 million to buy its initial assets. The MLP owns oil and gas mineral interests, entitling it to a high-margin income stream if drilling ramps up in Permian Basin.
Implant for addictions
Braeburn Pharmaceuticals (BBRX) aims to raise $150 million to fund the commercial launch of its 6-month implant for managing opioid addiction, which could replace daily oral therapies. Founding VC Apple Tree Partners plans to invest $50 million on the IPO (33% of deal) and $40 million in a private placement. The one holdover from last week, vaccine biotech Visterra (VIST), will again attempt to price its $50 million IPO; insiders have indicated on 53%.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 4.9% year-to-date, while the S&P 500 is up 2.5%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include First Data (FDC) and TransUnion (TRU). The Renaissance International IPO Index is up 3.6% year-to-date, while the ACWX is up 4.3%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Aena and ABN Amro.To find out if this is the best ETF for you, visit our IPO Investing page.
