The second week of June is busy, as promised. Led by SaaS companies Adaptive Insights and Avalara, seven companies are scheduled to raise a combined $1.4 billion in the week ahead.
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business |
Deal Size Market Cap |
Price Range Shares Filed |
Top Bookrunners |
| Far Point Acquisition (FPAC.U) Wilmington, DE |
$500M $625M |
$10 50,000,000 |
Credit Suisse BofA ML |
| Blank check company formed by former NYSE Group President Tom Farley and Third Point to acquire a fintech business. | |||
| Adaptive Insights (ADIN) Palo Alto, CA |
$115M $705M |
$13 - $15 8,200,000 |
Morgan Stanley BofA ML |
| Provides cloud-based software for financial planning. | |||
| Charah Solutions (CHRA) Louisville, KY |
$125M $515M |
$16 - $18 7,352,941 |
Morgan Stanley BofA ML |
| Provides remediation and maintenance services to coal and nuclear power plants. | |||
| U.S. Xpress Enterprises (USX) Chattanooga, TN |
$343M $947M |
$18 - $20 18,056,000 |
BofA ML Morgan Stanley |
| Mid-sized trucking company in the eastern US. | |||
| Avalara (AVLR) Seattle, WA |
$150M $1,400M |
$19 - $21 7,500,000 |
Goldman JP Morgan |
| Cloud-based sales tax and compliance solutions provider. | |||
| Puxin (NEW) Beijing, China |
$133M $1,714M |
$17 - $20 7,200,000 |
Citi Deutsche Bank |
| Provides K-12 after-school tutoring services in China. | |||
| Verrica Pharmaceuticals (VRCA) West Chester, PA |
$75M $385M |
$14 - $16 5,000,000 |
BofA ML Jefferies |
| Developing a drug-device that administers cantharidin for warts and skin diseases. | |||
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Adaptive Insights (ADIN), a provider of cloud-based financial planning software, is targeting $115 million a $705 million market value. The Bessemer and Northwest-backed company grew revenue 32% in the 1Q18 and operates within the growing Enterprise Performance Management market, which is estimated to expand at a 6% CAGR through 2021. While dollar-based net retention is lower than peers, recent high-growth SaaS IPOs have been well received.
Avalara (AVLR), a provider of cloud-based sales tax and compliance solutions, is aiming to raise $150 million at a $1.4 billion valuation. The company grew revenue 25% organically in the 1Q18 and boasts 109% net revenue retention. Recent SaaS IPOs Pluralsight (PS), Carbon Black (CBLK), and DocuSign (DOCU) average a 68% from their offer prices. That said, Avalara’s high sales and marketing spend and unclear differentiation are key risks.
Charah Solutions (CHRA) provides remediation and maintenance services to coal and nuclear plants and is targeting $125 million at a $515 million market value. While there is a fundamental tailwind of rising environmental compliance costs for coal plants, Charah Solutions is highly leveraged and has a small client base, with its top two clients making up 81% of revenue for 2017.
U.S. Xpress Enterprises (USX), the fifth largest operator in the US trucking industry, is aiming to raise $343 million at a $960 million market value. The industry is currently seeing a strong pricing rebound due to steady economic growth, and the company’s operating revenue grew 15% to $383 million in the 1Q18. That said, U.S. Xpress has historically been a less efficient operator than its peer. April 2017 trucking IPO Schneider National (SNDR) was well received, and has which has returned 54% since its 2017 IPO.
Puxin (NEW) is the third largest provider of K-12 after-school tutoring services in China and is targeting $133 million at a $1.7 billion market value. The company has been rapidly expanding its footprint through acquisitions since 2014, taking advantage of the highly fragmented market. While Puxin grew revenue 192% in 2017, its margins are below those of its peers.
Verrica Pharmaceuticals (VRCA), a clinical stage drug-device company developing treatments for warts and skin diseases, is targeting $75 million at a $385 million market value. The company is focusing on highly contagious and primarily pediatric diseases, and recently initiated Phase 3 trials for lead candidate VP-102 for the treatment of molluscum. Verrica expects to report top-line results in the first half of 2019.
Fintech SPAC Far Point Acquisition (FPAC.U) is looking to raise $500 million at a $625 million market value. The blank check company is led by CEO Thomas Farley, former president of the NYSE Group of Intercontinental Exchange.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 8.5% year-to-date, while the S&P 500 is up 3.9%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and US Foods (USFD). The Renaissance International IPO Index is down -1.4% year-to-date, while the ACWX is down -.4%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and ASR Nederland.
