12 IPOs raised $2.3 billion in the IPO market's busiest week of the year.
June 2018 also the set a record as the most active month for IPOs in three years. And as IPO Pro subscribers can see in our newly-released Second Quarter IPO Review: the 2Q18 saw more IPOs than any quarter in three years, driven by a flood of biotechs and high-flying tech deals. Year-to-date, IPO proceeds and deal flow are about 40% higher than this point last year. Coming up, the IPO pipeline is prepped for another big quarter, starting with more biotechs. See more in our 3Q 2018 US IPO Preview (IPO Pro only).
| 12 IPOs and 2 SPACs During the Week of June 25th, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 06/29 |
| Tricida (TCDA) | $222M | $836M | 12% | +37% | +57% |
| Late-stage biotech targeting conditions associated with chronic kidney disease. | |||||
| Neuronetics (STIM) | $94M | $326M | 13% | +63% | +57% |
| Sells a medical system that uses magnetic stimulation to relieve depression. | |||||
| BJ's Wholesale Club (BJ) | $638M | $2,307M | 6% | +29% | +39% |
| Leading warehouse club operator along the East Coast. | |||||
| Domo (DOMO) | $193M | $560M | 2% | +30% | +30% |
| Provides on-demand access to real-time business data. | |||||
| Lovesac (LOVE) | $56M | $213M | 14% | +50% | +30% |
| Sells premium couches and beanbag chairs. | |||||
| HyreCar (HYRE) | $13M | $58M | -9% | +2% | +1% |
| Operates a peer-to-peer car-sharing marketplace. | |||||
| EverQuote (EVER) | $84M | $533M | 13% | +0% | +1% |
| Operates an online auto insurance marketplace. | |||||
| HL Acquisitions (HCCHU) | $50M | $61M | 0% | +1% | +1% |
| Blank check company focused on acquiring a business in the hydrocarbon logistics and processing industry. | |||||
| New Frontier (NFC.U) | $250M | $353M | 0% | n/a | +1% |
| Chinese blank check company formed to acquire a healthcare, technology or education business. | |||||
| Uxin (UXIN) | $225M | $2,788M | -22% | +7% | +0% |
| Leading online used-car marketplace for businesses and consumers in China. | |||||
| Forty Seven (FTSV) | $113M | $513M | 7% | -6% | +0% |
| Developing anti-CD47 antibodies for various cancers. | |||||
| BrightView (BV) | $469M | $2,236M | -6% | -3% | +0% |
| Largest provider of commercial landscaping services in the US. | |||||
| Translate Bio (TBIO) | $122M | $614M | 0% | -11% | -3% |
| Early-stage biotech developing mRNA therapies for genetic diseases. | |||||
| Neon Therapeutics (NTGN) | $100M | $474M | 0% | -6% | -21% |
| Developing a targeted immunotherapy platform for various cancers. | |||||
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BJ's Wholesale Club (BJ) popped 29% on its return to the public market - highly unusual for a consumer staples LBO - and traded up another 8% on Friday. It raised $638 million at an IPO market cap of $2.3 billion. The East Coast-focused warehouse club operator was taken private in 2011 at a $2.8 billion valuation and has since paid out its PE sponsors nearly 3x their initial investment in dividends. Burdened with $2.2 billion in debt (3.9x pro forma net debt/EBITDA), BJ’s has sacrificed topline growth to grow profits, expanding adjusted EBITDA margin 50 bps to 4.3% in the FY17. Although improving, 1QFY18 same store sales growth remains sluggish at 2% (ex. gas sales) compared to warehouse club peers of 3-4%. Still, investors appeared attracted to its cash flow and steep valuation discount to Costco.
BrightView (BV) raised $469 million in the week's second-largest offering. It priced at the low end and finished the week near its offer price. KKR-backed BrightView is the leading landscaping company in the US, though the company also suffers from low organic growth, a high debt load and unpredictable revenue streams in its snow business.
The price was right: Business analytics unicorn Domo (DOMO) priced its IPO at $21, slightly above the midpoint but still well below its last private round of about $126. It then popped 30%. With huge losses, questions over customer churn, and a CEO with 86% voting power, Domo was right to come cheap. Its fully diluted IPO market cap was $560, well below high-growth SaaS peers on price-to-sales. This is a very good sign for every high-growth SaaS company looking to IPO.
Uxin (UXIN), a leading online used-car marketplace in China, slashed its IPO price and shares to raise $225 million, almost half of its goal. The company broke issue, but finished the week slightly above its offer price. While Uxin has fast growth in a massive market, it also spends heavily on marketing (98% of revenue) as it goes up against well-funded competitors.
EverQuote (EVER) priced above the range, raising $84 million at a $533 million market cap. Insiders sold 33% of the deal. The stock opened up 14%, but finished its first day with a gain of only 0.1%, a relatively disappointing debut for an above-the-range pricing. Difficult to value, the unprofitable online insurance marketplace was coming off one quarter of strong sales growth, following just 3% growth in 2017.
Forty Seven (FTSV) priced a slightly upsized IPO, raising $113 million at the high end of the $14 to $16 range ($30 million from insiders). It broke issue and fell 6% on its first day, before recovering to its $16 offer price on Friday. Founded by CD47 pioneers who first discovered the pathway at Stanford, the company has $150 million in VC backing to date. That said, the immuno-oncology space remains highly competitive with numerous competitors targeting CD47, including Celgene.
Translate Bio (TBIO) upsized its IPO to raise $122 million at the $13 midpoint ($50 million from insiders), at a $614 million valuation. The stock plummeted 11% on its first day, then traded up 10% on Friday. While its recent collaboration with Sanofi lends credence to its mRNA technology, the cystic fibrosis biotech is still very early-stage and faces competition from other drug candidates further along in the clinic.
Tricida (TCDA) upsized its IPO to raise $222 million above the range ($45 million from insiders) and traded up 57% for the week. Backed by OrbiMed, Tricida’s sole candidate, TRC101, met both primary and secondary endpoints in its Phase 3 pivotal trial and could become the first FDA approved treatment for the 90% of CKD-related metabolic acidosis patients who cannot tolerate existing alkali supplementations (estimated 600,000 patient market).
Neon Therapeutics (NTGN) priced its $100 million IPO at the $16 midpoint ($35 million from insiders). Its stock finished the week down 16%, make it one of the quarter's worst-performing IPOs. Using research and a bioinformatics platform developed by scientists at Broad and Dana-Farber institutes, Neon is in the early stages of developing personalized cancer treatments through collaborations with Merck and Bristol Myers. That said, these treatments are expensive and complex to administer.
Peer-to-peer car-sharing platform HyreCar (HYRE) raised $13 million in the week's smallest IPO, and finished with a 1% gain.
Fast-growing premium furniture company Lovesac (LOVE) priced an upsized IPO above the range to raise $56 million at a $213 million market cap (1.9x LTM sales). The company popped 50%, before settling to a gain of 30% by week-end.
Two blank check companies completed US public offerings this past week, as well: China's New Frontier Corp. (NFC.U) raised $250 million and energy SPAC HL Acquisitions (HCCHU) raised $50 million.
One IPO postponed this week: Drybulk shipper GoodBulk (GBLK) had planned to raise $140 million.
IPO Pipeline Update: More filings pile into the pipeline
| 10 Filings During the Week of June 25th, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Aurora Mobile (JG) | $200M | Technology | Goldman (Asia) |
| Data collecting and analytics platform servicing app developers in China | |||
| Berry Petroleum (BRY) | $100M | Energy | Goldman |
| California-based onshore oil production company | |||
| Endava (DAVA) | $75M | Technology | Morgan Stanley |
| Provides outsourced IT development services. | |||
| Greenland Acquisition (GLACU) | $40M | SPAC | Chardan |
| Blank check company formed to acquire a Chinese technology-enabled service business. | |||
| Opera Limited (OPRA) | $115M | Technology | CICC |
| Leading desktop and mobile web browser. | |||
| Tenable Holdings (TENB) | $100M | Technology | Morgan Stanley |
| Provides continuous network monitoring and enterprise security solutions. | |||
| Walnut Street Group (WSG.RC) | $1,000M | Technology | Credit Suisse |
| Chinese e-commerce company operating the Pinduoduo mobile platform. | |||
| Bionano Genomics (BNGO) | $35M | Health Care | Roth Cap. |
| Developing the Saphyr system for next-generation genome mapping. | |||
| Liquidia Technologies (LQDA) | $58M | Health Care | Jefferies |
| Drug manufacturer developing dry powder therapies for pulmonary arterial hypertension | |||
| Aquestive Therapeutics (AQST) | $69M | Health Care | BMO |
| Drug manufacturer developing oral film formulations of CNS disease therapies. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 5.5% year-to-date, while the S&P 500 is up 2.5%. 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 -6.0% year-to-date, while the ACWX is down -4.7%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Delivery Hero and innogy.
