Led by digital lending platform GreenSky and global merchant acquirer EVO Payments, eight companies are scheduled to raise a combined $1.3 billion in the week ahead. GreenSky and EVO are joined by three biotechs, a bioprosthetic device company and two small Chinese deals.
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business |
Deal Size Market Cap |
Price Range Shares Filed |
Top Bookrunners |
| Ambow Education (AMBO) Beijing, China |
$6M $85M |
$3.50 - $4.50 1,500,000 |
Benchmark |
| Provides education, test prep and IT career training services in China. | |||
| EVO Payments (EVOP) Atlanta, GA |
$210M $1,157M |
$14 - $16 14,000,000 |
JP Morgan BofA ML |
| Global merchant acquirer and full-service payment processor. | |||
| CLPS (CLPS) Shanghai, China |
$11M $70M |
$5 - $5.50 2,000,000 |
Benchmark |
| Provides professional IT services to financial firms in China. | |||
| GreenSky (GSKY) Atlanta, GA |
$750M $4,156M |
$21 - $23 34,090,908 |
Goldman JP Morgan |
| Operates a digital lending platform that facilitates merchant financing. | |||
| Kiniksa Pharmaceuticals (KNSA) Lexington, MA |
$126M $905M |
$17 - $19 7,000,000 |
Goldman JP Morgan |
| Developing therapies for inflammatory and autoimmune conditions. | |||
| Scholar Rock (SRRK) Cambridge, MA |
$75M $350M |
$13 - $15 5,360,000 |
Jefferies Cowen |
| Biotech targeting growth factor inhibition for spinal muscular atrophy. | |||
| Iterum Therapeutics (ITRM) Chicago, IL |
$80M $200M |
$14 - $16 5,333,333 |
Leerink Partners RBC |
| Developing oral and IV antibiotics for drug-resistant bacterial infections. | |||
| Hancock Jaffe Labs (HJLI) Irvine, CA |
$8M $71M |
$6 - $8 1,142,857 |
Network 1 |
| Developing bioprosthetic devices for cardiovascular surgeries. | |||
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GreenSky (GSKY) is targeting $750 million at a $4.2 billion market value. The point-of-sale digital lending platform has experienced fast growth and believes it can maintain EBITDA margins of 40%+. To date, it has boasted efficient S&M spend with a 5-month payback period, and 100%+ dollar-based retention. That said, gross margin has been declining, in part due to mix shift of loans, and insiders are selling the entire deal.
EVO Payments (EVOP), a global merchant acquirer, is aiming to raise $210 million at a $1.2 billion valuation. The company grew 16% organically in 2017 and benefits from secular trends including rising card penetration in Poland and Mexico, as well as the increased use of tech-enabled payment solutions by SMEs in the US. That said, its international expansion will require higher capex going forward, and free cash flow turned negative in 2017.
Kiniksa Pharmaceuticals (KNSA), which is developing therapies for inflammatory and autoimmune conditions, is targeting $126 million at a $905 million valuation. The company has raised $320 million to date and is led by the executives behind Synageva, which Alexion acquired in 2015 for $8.4 billion. It acquired its two lead candidates from Regeneron and MedImmune, which has allowed it to begin trials in Phase 2. The company expects to produce data in 2018, and to begin Phase 3 trials soon after.
Scholar Rock Holding (SRRK) aims to raise $75 million at a $350 million market cap. The company’s lead candidate targets growth factor inhibition for spinal muscular atrophy. It received orphan designation from the FDA in March 2018 and expects to begin Phase 1 trials this month. A Phase 2 trial is expected for the 1Q19. While the company’s scientific co-founder, Tim Springer, is well regarded, Scholar Rock is still very early stage and will eventually have to convince physicians of its drug’s superiority to available treatments.
Iterum Therapeutics (ITRM) is developing oral and IV antibiotics for bacterial infections, and aims to raise $80 million at a $200 million market cap. The company licensed sulopenum from Pfizer in 2017 and believes its oral and intravenous formulations could be successful treatment alternatives for patients with uUTIs, cUTIs and complicated and antibiotic-resistant infections at elevated risk of treatment failure. Iterum plans to initiate Phase 3 trials in the 2H18 with top-line results expected in the 2H19.
Hancock Jaffe Labs (HJLI) is developing various implantable devices for cardiovascular disease, including the Bioprosthetic Heart Valve, the Bioprosthetic Coronary Artery Bypass Graft (CoreoGraft), and the Bioprosthetic Venous Valve (VenoValve). The company targets $8 million at a $71 million valuation.
Chinese education, test prep and IT career training company Ambow Education (AMBO) is targeting $6 million at a market value of $85 million. In 2010, Ambow raised $107 million in a US IPO, but allegations of financial impropriety in 2012 led to a court-ordered provisional liquidation. The stock currently trades by appointment on the OTC markets under the symbol AMBOY.
Another Chinese deal, CLPS (CLPS), offers professional IT services to financial firms. The company aims to raise $11 million, valuing it at $70 million. CLPS generated $31 million in revenue in 2017, and serves a growing list of financial firms from the US, Europe, Australia and Hong Kong with China-based IT centers.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has returned 2.8% year-to-date, while the S&P 500 is up 1.5%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Snap (SNAP). The Renaissance International IPO Index is down -1.2% year-to-date, while the ACWX is up 0.4%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and Samsung BioLogics.
