Private equity was behind this week's two IPOs: both priced down and broke issue, finishing the week near the IPO price. These deals were quick turnarounds for their backers, each had bought the companies in the past 3 years.
| 2 IPOs Priced During the Week of March 6 | |||||
| Issuer Business |
Deal Size ($mm) |
IPO Market Cap ($mm) |
Price vs. midpoint |
First day return |
Return at 3/10 |
| J.Jill (JILL) |
$152 | $569 | -13% | -3% | 0% |
| Sells its own brands women's apparel and accessories directly and through 275 stores. |
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| Presidio (PSDO) | $233 | $1,322 | -7% | +2% | +2% |
| Reseller of IT products and solutions to middle-market businesses. |
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J.Jill (JILL), which sells women’s apparel, raised $152 million for PE backer TowerBrook after pricing below the range on Wednesday. It fell 3% on its first day, but recovered slightly on Friday. While management has successfully executed its omni-channel strategy, a shrinking retail environment raises concerns industry-wide.
Presidio (PSDO), a value-added IT reseller, priced a $233 million IPO at the low end of the range and closed Friday up 2%. Performance is reflective of concerns over its organic growth, offset by its strong free cash flow performance. Its private equity backer, Apollo, is receiving more than half the proceeds through debt repayment.
Matlin & Partners Acquisition (MPACU), a distressed asset SPAC formed by David Matlin, also raised $300 million on Thursday.
BeyondSpring (BYSI), a cancer biotech, raised $3 million, less than 1% of its $453 million market cap. Existing shareholders invested $51 million separately.
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| 3 IPO Filings During Week of March 6 | |||||
| Issuer Business |
Deal Size ($mm) |
Sector | LTM Sales |
EBIT% | |
| Warrior Met Coal (HCC) |
$300 (est.) | Energy | $369 | -17% | |
| Metallurgical coal producer and exporter with 7 million tons of operating capacity. |
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| Tocagen (TOCA) | $86 | Health Care | $0 | n/a | |
| Developing gene therapies for the treatment of brain cancer. |
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| NCS Multistage (NCSM) | $100 | Energy | $98 | -18% | |
| Provides well completion equipment and services in Canada and the US. |
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Warrior Met Coal (HCC), a metallurgical coal producer, filed for an estimated $300 million IPO with proceeds going to its private equity backers; the only public pure-play met coal producer, Ramaco Resources (METC), is down 22% from its February IPO.
Gene therapy biotech Tocagen (TOCA) filed to raise $86 million; three 2017 biotech IPOs have averaged a 28% return.
Oilfield equipment maker NCS Multistage Holding (NCSM) filed to raise $100 million. Oilfield services has had a flurry of activity recently with three IPO filings in February and this new filing makes two so far in March.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 8.6% year-to-date, while the S&P 500 is up 6.0%. 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 6.2% year-to-date, while the ACWX is up 5.9%. 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.
