Four companies raised a combined $1.2 billion in the first active week of 2018. Fracking services provider Liberty Oilfield Services upsized its offering and traded up 28%, the best first day pop for an energy IPO since 2014. On the other hand, Industrial REIT Industrial Logistics Properties Trust priced its $480 million IPO well below the range and traded down 3%. Continuing a theme of 2017, two blank check companies also priced this week.
Recent IPO performance has remained strong: IPOs over the past 90 days
have averaged a return of 21%, including +11% in the aftermarket.
| 4 IPOs During the Week of January 8th, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 01/12 |
| Liberty Oilfield Services (LBRT) | $216M | $2,009M | 13% | +28% | +28% |
| Provides hydraulic fracturing services for the oil and gas industry. | |||||
| Nebula Acquisition (NEBU.U) | $250M | $313M | 0% | 1% | 1% |
| Blank check company formed by True Wind Capital to acquire a technology business. | |||||
| Platinum Eagle Acquisition (EAGLU) | $300M | $375M | 0% | 0% | 0% |
| Fourth blank check company formed by entertainment veteran Jeff Sagansky. | |||||
| Industrial Logistics (ILPT) | $480M | $1,560M | -19% | -3% | -3% |
| RMR-managed industrial REIT spun out of Select Income REIT. | |||||
Hydraulic fracking company Liberty Oilfield Services (LBRT) raised $216 million by offering 12.7 million shares (upsized from 10.7 million) at $17, above the $14 to $16 range, and traded up 28% on its market debut. Liberty had previously attempted to go public in May 2017, before postponing due to unfavorable market conditions. This time around, the company benefited from renewed investor interest in energy IPOs driven by stabilizing oil prices.
Externally managed by The RMR Group, Industrial Logistics Properties Trust (ILPT) priced its $480 million IPO at $24, well below the range of $28 to $31, and traded down 3% on its first day. Spun-out of motivated seller Select Income REIT (Nasdaq: SIR) as a means to tackle its debt, Industrial Logistics owns an initial portfolio of 266 properties located in Oahu, Hawaii (60% of annualized rental revenue) and across 24 other mainland states. Even at the improved annual yield of 5.5%, investors may have been wary of potential conflicts of interest with RMR and SIR.
Blank check companies Platinum Eagle Acquisition (EAGLU) and Nebula Acquisition (NEBU.U) raised $300 million and $250 million this week, respectively. Platinum Eagle's CEO Jeff Sagansky previously co-founded and managed three other blank check companies, which went on to acquire or form WilScot Corp (WSC), Videocon d2h (VDTH) and Global Eagle Entertainment (Nasdaq: ENT).
Filings Update: 10 Public Filings
Ten companies companies, including one SPAC, filed to go public this week, notably boutique asset manager Victory Capital (VCTR), Chinese wearable device manufacturer Huami (HMI), marketing analytics provider Cardlytics (CDLX) and two energy companies Cactus (WHD) and Vista Proppants (VPRL).
| 10 Filings During the Week of January 8th, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Biofrontera (BFRA) | $22M | Health Care | Benchmark |
| Sells treatments for skin conditions caused by sun damage. | |||
| Cactus (WHD) | $100M | Energy | Citi |
| Sells wellheads and pressure control equipment used in onshore oil and gas wells. | |||
| Cardlytics (CDLX) | $75M | Technology | BofA ML |
| Provides marketing analytics to advertisers based on consumer payment activity. | |||
| Crescent Funding (CFUNU) | $250M | SPAC | UBS |
| Blank check company formed by Crescent Capital to acquire a business in the financial services sector. | |||
| Huami (HMI) | $150M | Consumer Discretionary | Credit Suisse |
| Chinese manufacturer of wearable devices partnered with Xiaomi. | |||
| IPSCO Tubulars (IPSC) | $100M | Energy | BofA ML |
| US subsidiary of Russian pipe-maker TMK. | |||
| Vista Proppants (VPRL) | $100M | Energy | Citi |
| Leading provider of frac sand solutions in Texas and Oklahoma. | |||
| Victory Capital (VCTR) | $250M | Financials | JP Morgan |
| Multi-boutique asset management firm with $59 billion in AUM. | |||
| Evolus (EOLS) | $75M | Health Care | Cantor Fitz. |
| Preparing to launch a biosimilar version of Botox. | |||
| Bioceres (BIOX) | $100M | Materials | Jefferies |
| Sells biologic agrochemicals and develops seed productivity traits in Argentina. | |||
PCW News Update
News broke this past week that tech unicorn Dropbox had filed confidentially, targeting a 1H18 IPO. That follows the prior week's news of a confidential filing from Spotify.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 2.0% year-to-date and the S&P 500 is up 3.6%. 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 3.3% year-to-date, while the ACWX is up 3.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and Celltrion Healthcare.
