Three small IPOs raised a combined $123 million this week, along with three blank check companies.
SaaS unicorn Qualtrics (XM) had been the week's headliner, but it was acquired for $8 billion by SAP just days before its offering. That price tag, a massive premium to proposed valuation, made it the largest-ever VC-backed SaaS acquisition. Despite market volatility, fast-growing and profitable software providers like Qualtrics will see a warm reception from IPO buyers and corporate suitors. Another pre-IPO software provider, cybersecurity company Cylance (CYLA.RC), was acquired by Blackberry for $1.4 billion.
| 3 IPOs and 3 SPACs During the Week of November 12th, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 11/16 |
| Vapotherm (VAPO) | $56M | $237M | -7% | +14% | +21% |
| Provides noninvasive breathing aids to treat respiratory distress. | |||||
| Eton Pharmaceuticals (ETON) | $22M | $113M | 0% | +4% | +2% |
| Developing liquid formulations of various approved drugs. | |||||
| AMCI Acquisition (AMCIU) | $200M | $250M | 0% | +0% | +0% |
| Blank check company formed by coal industry veteran Hans Mende. | |||||
| Boxwood Merger (BWMCU) | $200M | $253M | 0% | +0% | +0% |
| Macquarie-backed blank check company led by the former COO of engineering services firm AECOM. | |||||
| Weidai (WEI) | $45M | $700M | 0% | +0% | +0% |
| Provides an auto-secured loan platform for small businesses in China. | |||||
| FinTech Acquisition III (FTACU) | $300M | $380M | 0% | +0% | +0% |
| Blank check company formed by management of The Bancorp to acquire a financial technology business. | |||||
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The week's largest IPO was medical device maker Vapotherm (VAPO), which priced at the low end to raise $56 million at a $237 million market cap. It finished the week up over 20%. Vapotherm targets a $1+ billion opportunity with its product for respiratory distress, but remains unprofitable with lumpy growth.
Weidai (WEI) raised $45 million at a $700 million market cap, the third pre-bought Chinese fintech in a row to go public in the US. The company disclosed that several investors had taken down 89% of the deal. Like the other two (PT and CNF), Weidai traded flat on its debut.
Generic drug developer Eton Pharmaceuticals (ETON) raised $22 million and traded about flat.
In addition to Qualtrics, four other companies did not complete their planned IPOs: Centrexion Therapeutics (postponed), Taiwan Liposome Company (pushed back), Uranium Trading Corp. (pushed back), and Alzheon (pushed back).
The blank check bonanza continues, as three more SPACs priced offerings this past week. The year's 43 blank check IPOs have raised $9.2 billion, by far the biggest year since 2007 (58 SPACs, $10.7 billion).
FinTech Acquisition III (FTACU) raised $300 million in an upsized offering. Led by former Bancorp CEO Betsy Cohen and her son Daniel, the duo was also behind two other successful blank checks (FNTE and CCN). Boxwood Merger (BWMCU) raised $200 million in a downsized offering; the Macquarie-backed SPAC is led by the former COO of AECOM and is going after an industrials business. AMCI Acquisition (AMCIU) raised $100 million, led by Executive Chairman Hans Mende of American Metals & Coal International (AMCI).
Five companies and one SPAC filed this past week, indicating that December see moderate IPO activity. News also broke on Wednesday that American jean maker Levi Strauss was readying an $800 million offering at a $5 billion valuation.
| 6 Filings During the Week of November 12th, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Beyond Meat (BYND) | $100M | Consumer Staples | Goldman |
| Engineers and sells plant-based alternative proteins. | |||
| CF Finance Acquisition (CFFAU) | $250M | SPAC | Cantor Fitz. |
| Blank check company formed by the CEO of Cantor Fitzgerald. | |||
| Cibus (CBUS) | $100M | Consumer Staples | Morgan Stanley |
| Developing gene-editing technology for the global seed industry. | |||
| Silvergate Capital (SI) | $50M | Financials | Barclays |
| California commercial bank with a focus on digital currency businesses. | |||
| Virgin Trains USA (VEL) | $100M | Industrials | Barclays |
| Owns and operates an express passenger rail system in Florida. | |||
| Synthorx (THOR) | $100M | Health Care | Jefferies |
| Preclinical biotech developing immunotherapies for solid tumors and autoimmune disorders. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 11/15/18, the Renaissance IPO Index was down 5.9% year-to-date, while the S&P 500 had a gain of 3.9%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include VICI Properties (VICI) and Spotify (SPOT). The Renaissance International IPO Index was down 17.3% year-to-date, while the ACWX was down 10.2%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include innogy and Siemens Healthineers.
Renaissance Capital had Pre-IPO Research available on these IPOs prior to pricing.
