Four IPOs are on the calendar to raise a combined $1.0 billion in the week ahead. Each deal targets over $100 million and represents a different sector, a sign of a healthy IPO market.
Growth-starved IPO investors will finally whet their appetite with tech unicorn MuleSoft and parka maker Canada Goose. Continuing trends we've seen so far in 2017, the week's largest deals come from industrial manufacturer Ardagh Group and fracking company ProPetro.
| IPO Investing | IPO Center | IPO Pro | IPO Intelligence |
| Scheduled U.S. IPOs - Week of 03/13/17 | |||
| ProPetro Holding (PUMP) - Midland, TX Deal Size: $350 mil Exchange: NYSE Lead Manager: Goldman Sachs Provides hydraulic fracturing services for the oil and gas industry. |
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| Canada Goose Holdings (GOOS) - Canada Deal Size: $300 mil Exchange: NYSE Lead Manager: CIBC Makes and sells technical high-end down-filled outerwear. |
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| Ardagh Group (ARD) - United Kingdom Deal Size: $300 mil Exchange: NYSE Lead Manager: Citi Global provider of metal and glass containers for consumer packaged goods. |
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| MuleSoft (MULE) - San Francisco, CA Deal Size: $169 mil Exchange: NYSE Lead Manager: Goldman Sachs Provides an API-based application integration platform to enterprise customers. |
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Amid stubborn tech unicorns, MuleSoft bucks the trend
Expect MuleSoft's (MULE) $169 million IPO to get the most attention this week. The tech unicorn offers a platform for data integration to enterprise customers like Unilever, McDonald's and Spotify. It boasts almost $200 million in annual revenue, growing 70% in 2016. While its -17% operating margin is a risk, MuleSoft has achieved near-breakeven cash flow. A familiar tack for tech IPOs, it plans to float under 10% of its diluted market cap.
In 2016, the three VC-backed tech companies with $1+ billion IPO valuations produced the year's best first-day pops (+103% on average). Though Snap (SNAP) has recently dominated headlines, MuleSoft's IPO serves as a better indicator for the long list of high-growth enterprise software companies waiting to go public. Next up: Data analytics provider Alteryx (AYX) is eligible to launch on Monday.
Bain hatches a golden goose
Canada Goose (GOOS) expects to raise C$300 million ($223 million) in a dual-listed IPO on the NYSE and TSX. With its highly successful US launch and online roll-out, the high-end parka maker has seen explosive growth in sales and margins since Bain Capital invested in 2013. It now hopes to expand beyond North America while entering new product lines. Its meteoric rise also risks making it a fad in the competitive market for outerwear. However, last year's sole consumer growth equity IPO, e.l.f. Beauty (ELF; +63%) has outperformed.
Industrials and Energy: Cash flow & oil flow
Ardagh Group (ARD) is raising $300 million, just under 7% of its diluted market value of $4.3 billion. Based in Europe, the Chairman-owned company holds a top position in glass and metal packaging. While organic sales growth was -4% in 2016, the company produces plenty of cash to begin paying down its enormous debt load. Fracking company ProPetro (PUMP) plans to raise $350 million in the week's largest IPO. The company launched on Tuesday, right before oil fell below $50, contributing to energy being the year's worst-performing sector (-12%); January fracking IPO Keane Group (FRAC) is down 18%. However, ProPetro could benefit from its location in the Permian Basin, debt-free balance sheet and 100% fleet utilization.
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.
