Three deals are set to raise a combined $310 million in the week ahead. Two energy companies are coming to market, the sector's first IPO attempts since mid-May, when oil prices were on their way to hitting an 18-month low. Prices have since recovered +15%, and a large backlog of energy IPOs remains waiting in the pipeline.
Beyond this week, IPO activity should remain low to absent. Since 2012, the last two weeks of August have averaged just 1.4 deals. Nothing is currently on the calendar for the remainder of the month, however, we expect IPO activity to pick up again after Labor Day.
| IPO Calendar | |||
| Issuer Business |
Deal Size($m) Market Cap($m) |
Price Range Shares Filed |
Top Bookrunners |
| Zealand Pharma (ZEAL) Denmark |
$75 $582 |
$19.30 3,900,000 |
Morgan Stanley Goldman Sachs |
| Developing peptide-based treatments for type 2 diabetes. | |||
| Contura Energy (CTRA) Bristol, TN |
$150 $802 |
$23.00 - 27.00 6,000,000 |
Citi Jefferies Credit Suisse |
| Coal producer formed out of Alpha Natural Resources' restructuring. | |||
| Ranger Energy Services (RNGR) Houston, TX |
$85 $240 |
$16.00 - 18.00 5,000,000 |
Credit Suisse Simmons & Co. Wells Fargo |
| Provides well services for E&P companies in the Permian Basin. | |||
Zealand Pharma (ZEAL), a Danish pharma listed on the Nasdaq Copenhagen, is targeting $75 million at a $582 million valuation in a deal underwritten by Morgan Stanley and Goldman Sachs. Its portfolio of peptide-based drugs consists of two approved treatments for type 2 diabetes that are licensed to Sanofi, a potentially-large collaboration with Boehringer Ingelheim, and two wholly-owned candidates. While its own candidates have recently shown some promising results, adoption has been slow for the Sanofi drugs, while its Boehringer collaboration is still early-stage.
Contura Energy (CTRA), a leading US producer of both thermal and met coal, is looking to raise $150 million at a $802 million valuation. Contura was formed in 2016 from Alpha Natural Resources' 2015 bankruptcy and operates six mine complexes with total reserves of over 1.3 billion short tons. Contura has several growth opportunities through idle mines, but met coal prices are extremely volatile. Further, Insiders are selling 100% of the deal and received a $100 million dividend in July. Contura will be the third coal company to go public this year, following Ramaco Resources (METC; -47% from IPO) in February and Warrior Met Coal (HCC; +27% from IPO) in April.
Ranger Energy Servies (RNGR), a provider of well services for E&P companies in the Permian Basin, is targeting $85 million at a $240 million valuation. Formed by PE firm CSL in 2014, Ranger is a play on the increasing popularity of horizontal fracking wells. Post-IPO, it will own one of the largest and youngest fleets of high-spec rigs. Insiders plan to buy up to $30 million on the IPO (35% of the deal). However, the business is highly cyclical and depends on a stabilization in commodity prices to generate onshore E&P capex.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 23.6% year-to-date, ahead of the S&P 500, which is up 10.6%. 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 21.4% year-to-date, while the ACWX is up 17.9%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include ABN AMRO Group and Worldpay.
To find out if this is the best ETF for you, visit our IPO Investing page.
