Three companies raised a combined $2.4 billion, bringing total proceeds raised this January to $3.1 billion. Apollo-backed ADT (ADT) traded down 11.5%, the worst debut for a billion-dollar IPO from a US company in the past 10 years. Cold-storage REIT Americold Realty Trust (COLD) and SCF-backed Nine Energy Service (NINE) both priced at the high end and traded up over 10%. Consumer SPAC One Madison (OMAD.U) raised $300 million and traded flat on Friday.
| 4 IPOs During the Week of January 15th, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 01/19 |
| Nine Energy Service (NINE) | $161M | $536M | 7% | +13% | +13% |
| SCF-backed provider of well completion and production services. | |||||
| Americold Realty (COLD) | $725M | $2,265M | 7% | +11% | +11% |
| World's largest cold-storage REIT backed by Yucaipa Companies. | |||||
| One Madison (OMAD.U) | $300M | $413M | 0% | +0% | +0% |
| Consumer-focused blank check company led by the former CEO of HRG Group. | |||||
| ADT (ADT) | $1,470M | $10,777M | -22% | -12% | -12% |
| Apollo-backed provider of monitored security services for homes and businesses. | |||||
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Security provider ADT (ADT) priced its $1.5 billion IPO at $14, well below the original $17-$19 range. The Apollo-backed company came public at a $20 billion enterprise value, 12% below its originally targeted EV, and traded down -12%. Since Apollo acquired it in 2016, ADT has successfully reduced customer attrition and increased margins. However, the poor trading is likely linked to below-market growth (~3% annually) and its premium valuation compared to peers.
Nine Energy Service (NINE) raised $161 million after pricing at the $23 high end of the range and traded up 13% on its first day. Pitched at a discount to public peers, the well completion and production services company was formed by SCF through a series of acquisitions, and comes to market amid greater optimism in the energy sector. Liberty Oilfield Services (LBRT) came public on January 12 and popped 28% in its debut. Seven energy companies are in the 90-day active pipeline, including fracking equipment company Cactus (WHD) and oilfield services provider Quintana Energy Services (QES), which both filed updates this past week.
Americold Realty Trust (COLD) raised $725 million in an upsized IPO, pricing at the $16 high end of the range and trading up 11% in its debut. The company had originally planned to sell 24 million shares (all primary) but added insider selling and additional primary shares to more than double the size of its deal. As the only publicly traded cold-storage REIT, Americold benefits from its position in a fragmented industry with high barriers to entry.
US IPO Pipeline Update
One company and two SPACs submitted initial filings this week. Online grocery reseller Tal Consolidated (TCL) filed to raise $18 million. Blank check company Mudrick Capital Acquisition (MUDS.U), formed by distressed debt investor Jason Mudrick, filed to raise $200 million. Leo Holdings (LHC.U), a blank check company formed by UK-based Lion Capital to acquire a consumer business, filed to raise $300 million.
| 3 Filings During the Week of January 15th, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Leo Holdings (LHC.U) | $300M | SPAC | Citi |
| Blank check company formed by Lion Capital executives to acquire a consumer business. | |||
| Tal Consolidated (TCL) | $18M | Technology | Joseph Gunnar |
| Resells groceries online through Amazon and directly on taldepot.com. | |||
| Mudrick Capital Acq. (MUDS.U) | $200M | SPAC | Cantor Fitz. |
| Blank check company formed by distressed debt investor Jason Mudrick to acquire a post-bankruptcy business. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 2.1% year-to-date and the S&P 500 is up 5.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Snap (SNAP) and US Foods (USFD). The Renaissance International IPO Index is up 5.1% year-to-date, while the ACWX is up 5.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and ASR Nederland.
