After two slow weeks, IPO pricing activity picked up with four companies raising a combined $466 million. Investors remain discerning despite the increased activity; a Cellectis spinoff and a mortgage REIT both priced below their midpoints, and a yoga studio chain postponed its offering. The week was marked by two large price pops, with pet heath products distributor PetIQ and gene-edited crop developer Calyxt both trading up over 40% on the first day. No companies entered the pipeline, but a bone disease biotech launched, adding volume to the calendar.
| 4 IPOs During the Week of July 17th, 2017 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap at IPO ($mm) |
Price vs. midpoint |
First day return |
Return at 7/21 |
| TPG RE Finance Trust (TRTX) | $220 | $1,214 | -2.4% | -2.1% | -1.7% |
| TPG-managed mortgage REIT focused on commercial real estate debt. |
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| PetIQ (PETQ) | $100 | $331 | +6.7% | +45.8% | +45.8% |
| Distributes and manufactures flea and tick, Rx and wellness products for dogs and cats. |
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| Kala Pharmaceuticals (KALA) | $90 | $389 | 0.0% | +23.3% | +27.3% |
| Late-stage biotech developing nanoparticle therapies for ocular inflammation. |
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| Calyxt (CLXT) | $56 | $224 | -51.5% | +40.6% | +35.1% |
| Developer of gene-edited crop traits spun out of Cellectis. |
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TPG RE Finance Trust (TRTX), a TPG-managed mortgage REIT focused on commercial real estate debt, raised $220 million by offering 11 million shares at the $20 low end. The New York, NY-based company came to market at a 1.03x P/B, in line with key peers. It has traded down -2% this week.
PetIQ (PETQ), a growing distributor and manufacturer of flea and tick, Rx and wellness products for dogs and cats, raised $100 million by offering 6.25 million shares (upsized from 5.67 million) at the $16 high end. The Eagle, ID-based company traded up 46% in its debut on Friday.
Kala Pharmaceuticals (KALA), a late-stage biotech developing nanoparticle therapies for ocular inflammation, priced its $90 million IPO at the $15 midpoint. Insiders indicated for $25 million (28% of the deal) in shares on the IPO. The Waltham, MA-based company traded up 27% this week. 2017 biotech IPOs average a total return of 13.2% with 11 of 18 (61%) trading above issue.
Calyxt (CLXT), a developer of gene-edited crop traits spun out of Cellectis, raised $56 million, pricing at the $8 low end of its slashed range. The New Brighton, MN-based company traded up 35% this week after pricing 52% below its original midpoint.
One SPAC also priced this week. Federal Street Acquisition (FSACU), a blank check company formed by Thomas H. Lee Partners to acquire a healthcare business, raised $400 million. Federal Street's offering continues the recent surge of SPAC IPOs; it is the sixth blank check company to price since June 1.
Stuck in a downward dog: YogaWorks postpones IPO
YogaWorks (YOGA), the second largest yoga studio chain in the US with 50 locations, postponed its IPO on Thursday. The Culver City, CA-based company planned to raise $65 million by offering 5.0 million shares at $12 to $14, with PE sponsor Great Hill Partners indicating an interest in buying up to $10 million on the IPO.
IPO Pipeline Update: No additions this week
While no companies joined the pipeline this week, there were several updated filings. Clementia Pharmaceuticals (CMTA), a clinical stage biotech focused on treating bone diseases, set terms for a $115 million IPO. Gadsden Growth Properties (GADS), a newly-formed REIT focused on distressed retail and hotel properties, updated its filing, suggesting that its IPO could be on the horizon. CCMP-backed chemical producer PQ Group (PQG) also updated its filing, adding two directors.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 24.2% year-to-date, ahead of the S&P 500, which is up 10.4%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Ferrari (RACE) and First Data (FDC). The Renaissance International IPO Index is up 20.2% year-to-date, while the ACWX is up 16.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include ABN AMRO Group and Worldpay.
