No IPOs priced during the shortened holiday week, closing out 2017 at 160 IPOs ($36 billion in total proceeds). Despite the quiet week, the IPO market continues to improve; the Renaissance IPO Index (IPOUSA), the underlying index for the Renaissance IPO ETF (IPO), outperformed US equity benchmarks, returning 37% this year vs. 22% for the S&P 500.
Since publishing our Renaissance Capital's 2017 US IPO Annual Review, average IPO returns have crept over 26%, making 2017 the second best year for total IPO returns over the last 10 years, trailing only the 41% rally seen in 2013. Performance was driven by the Industrials (+41%), Health care (+35%) and Technology (+31%) sectors, while Consumer Staples (-41%), Telecom (-35%) and Energy (+5%) underperformed.
| 7 Filings During the Week of December 25, 2017 | |||
| Issuer Business |
Deal Size ($mm) |
Sector | Lead Underwriter |
| PagSeguro Digital (PAGS) | $100 | Technology | Goldman Sachs Morgan Stanley BofA Merrill Lynch |
| Brazilian online and mobile payment processing firm. |
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| Gates Corporation (GTES) | $500* | Industrials | Citi Morgan Stanley UBS Investment Bank |
| Global Manufacturer of power transmission belts and fluid power products. |
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| Menlo Therapeutics (MNLO) | $98 | Health Care | Jefferies Piper Jaffray Guggenheim Securities |
| Late-stage biotech developing therapies for dermatological indications. |
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| Solid Biosciences (SLDB) | $100 | Health Care | J.P. Morgan Goldman Sachs Leerink Partners |
| Developing gene therapies to treat Duchenne muscular dystrophy (DMD). |
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| ARMO Biosciences (ARMO) |
$86 | Health Care | Jefferies Leerink Partners BMO Capital Markets |
| Developing immunotherapies targeting various cancers and solid tumors. |
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| resTORbio (TORC) |
$85 | Health Care | BofA Merrill Lynch Leerink Partners Evercore ISI |
| Developing novel therapies to improve immune function in the elderly. |
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| DFB Healthcare Acquisitions (DFBH.RC) |
$250 | SPAC (Health Care) | Goldman Sachs Deutsche Bank |
| Blank check company led by the former CEO of Universal American. |
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| *Deal size is RC estimate | |||
PagSeguro (PAGS), a Brazilian online and mobile payment processing platform being spun out of Brazilian Internet company Universo Online (UOL), filed to raise up to $100 million.
Gates Industrial (GTES), filed to raise up to $100 million; however, the deal size is likely a placeholder for an IPO that could exceed $500 million. In August 2017, it was reported that the company was looking for a valuation of at least $7 billion.
Four clinical-stage biotechs filed to raise a combined $369 million, as biotechs led the best performing IPOs of 2017, securing four of the top five spots and generating an average total return of 44%.
Blank check company DFB Healthcare Acquisitions (DFBH.RC) filed to raise up to $250 million; the SPAC will be led by Richard Barasch, the former CEO of Universal American.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 37.1% year-to-date, ahead of the S&P 500, which is up 22.4%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Snap (SNAP) and Invitation Homes (INVH). The Renaissance International IPO Index is up 36.2% year-to-date, while the ACWX is up 27.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and ASR Nederland.
