IPOs are multiplying like rabbits after the market's long Easter weekend; seven companies filed terms on Monday to price during the final week of April. The month's 10 IPOs already make it the most active year-to-date, but if all eight deals on the US IPO calendar price, April would be busier than all but one month (Oct 2016; 19 IPOs) in the past seven quarters. That should continue, as deal flow typically heats up in the summer. Likewise, Friday, April 28 could be the most active day since June 2015 with five companies going public. Rising activity is supported by higher initial filing activity in March and April as a diverse group of companies have joined the US IPO pipeline.
The only deal scheduled for this week, Select Energy Services (WTTR) aims to raise $175 million at a $1.1 billion market cap, and become the only public pure-play provider of pre-fracking water services. Backed by PE firm Crestview, Select has a broad portfolio of water rights and it is coming at a discount to recent oilfield services companies ProPetro (PUMP) and Keane Group (FRAC), which may be appropriate in light of the sector's recent trading.
Bookrunners: Credit Suisse, FBR, Wells Fargo, BofA, Citi, J.P. Morgan.
Of the seven deals scheduled for next week, four (Cloudera, Carvana, Floor & Decor, Zymeworks) have a proposed IPO float of less than 10% of their diluted market caps after any insider buying.
Cloudera (CLDR), which provides a Hadoop-based data management platform, set terms for a $195 million IPO at a diluted market cap of $2.2 billion, down from the $4.1 billion valuation Intel gave it in mid-2014 (Intel plans to buy 10% of IPO shares). With soaring losses and rapid growth, Cloudera is set to be the year's fourth tech "unicorn" to go public; the prior three priced above the range and popped 38-46%.
Bookrunners: Morgan Stanley, J.P. Morgan, Allen & Co., BofA, Citi, Deutsche Bank.
Carvana (CVNA), a high-growth online used car retailer, plans to raise $225 million at a market cap of $2.1 billion. Owned by its founder and CEO (investing $20 million on the IPO), Carvana grew sales by 180% in 2016, while operating losses have also ballooned.
Bookrunners: Wells Fargo, BofA, Citi, Deutsche Bank.
Floor & Decor (FND), a fast-growing warehouse-style retailer of hard flooring, set terms to raise $150 million at a market cap of $1.7 billion. LBO'd by Ares and Freeman Spogli, FND's 2016 revenue rose 34% to $1.1 billion. The stock prices of peers Restoration Hardware (RH) and Lumber Liquidators (LL) appeared to find a floor in 2016, and are up 51% and 39%, respectively, year-to-date.
Bookrunners: BofA, Barclays, Credit Suisse, UBS, Goldman, Jefferies, Piper Jaffray, Wells Fargo
Emerald Expositions Events (EEX) plans to raise $295 million (33% insider selling) at a market cap of $1.4 billion. LBO'd by Onex in 2013, the company has made a string of acquisitions to become the dominant US operator of B2B trade shows.
Bookrunners: BofA, Barclays, Goldman, Citi, Credit Suisse, Deutsche Bank, RBC
NCS Multistage Holdings (NCSM) filed terms at a range of $15-$18 as it seeks $157 million at a market value of $783 million. Backed by Advent, the provider of well completion equipment and services saw revenue decline in 2016, but it is poised to benefit from higher spending on energy production in the US and Canada, similar to recent oil & gas IPOs, this week's IPO Select Energy, and a number of recent energy filers.
Bookrunners: Credit Suisse, Citi, Wells Fargo, J.P. Morgan, Simmons, Raymond James, RBC, TPH.
China Rapid Finance (XRF), which operates an online marketplace in China for peer-to-peer loans, plans to raise $105 million at a market cap of $586 million. Net revenue and net income declined in each of the past two years; however, loan volume tripled. Close peer Yirendai (YRD) is up 139% from its December 2015 IPO.
Bookrunners: Morgan Stanley, Credit Suisse, Jefferies.
Zymeworks (ZYME), an early-stage biotech developing antibodies for cancer, is looking to raise $65 million by offering 4.5 million shares at a range of $13-$16, with a proposed market cap of $361 million. Insiders, including Eli Lilly and Celgene, plan to take down 64% of the offering. Four biotechs have IPO'd in 2017, and three are up 30% or more. The Vancouver-based company will list on the NYSE and the TSX.
Bookrunners: Citi, Barclays, Wells Fargo
