Last week, 12 companies submitted new IPO filings, the most active week since May 2018. Two more filings hit on Monday. Monthly filings currently stands at 20, the same as the full month of April 2018. Excluding the eight deals on the IPO calendar for this week, the visible IPO pipeline contains 80 names looking to raise roughly $27 billion.
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Launch Schedule
The week ahead has eight deals raising $2.5 billion, before the IPO market takes a break during the week of April 22. However, several deals can launch next Monday and price the week of April 29, including social gaming spinoff SciPlay (SCPL), fast growing device maker TransMedics (TMDX), and neurological biotech Trevi Therapeutics (TMDX). Plant-based burger maker Beyond Meat (BYND)) also looks ready to launch its roadshow, along with a few potential billion-dollar IPOs, such as Chinese e-commerce site Yunji (YJ), radio station giant iHeartMedia (IHRT.RC), and revenue cycle software provider Change Healthcare (CHNG). Most of the recent surge of filings hit this past Friday, meaning they are able to launch roadshows as early as Monday, April 29, and price in mid-May. Given the number of filings, we expect May activity to surpass last year's 21 offerings, becoming the most active May since 2013 (30).
The 12 IPO filings
Uber (UBER) led the pack, filing for an IPO that we anticipate could raise up to $10 billion, the largest US IPO since 2014. The world's #1 ridesharing company has a dominant position in its global markets, and tripled its sales over the past two years to $11.3 billion. However, it had a -$3 billion operating loss in 2018, while competition has weighed on gross margins. Close comp Lyft (LYFT) finished Monday at $56.11, a new low and 22% below its offer price.
Two employee-owned Industrials companies filed, a government contractor and a vehicle components maker. The week's second-largest filer, Parsons (PSN), booked $3.6 billion in revenue with a 6% adj. EBITDA margin. The company provides technology systems services to the US government/DoD (54% of adj. EBITDA) and infrastructure engineering and support services to primarily government customers (46%). Wisconsin-based Mayville Engineering (MEC) works with various commercial and industrial vehicle OEMs to fabricate components. It recorded $524 million in LTM sales, with an 11% adj. EBITDA margin.
One high-growth Chinese company filed, So-Young International (SY), providing an online platform for users to compare and purchase plastic surgery services. Backed by Matrix Partners China, So-Young grew revenue by 138% to $92 million in 2018, with a 12% adj. EBITDA margin.
Five biotechs filed on Friday, all aiming to raise $86 million. These included Flagship-backed liver disease biotech Axcella Health (AXLA), RTW/Novo-backed late stage heart rate biotech Milestone Pharmaceuticals (MIST), Pfizer-backed novel Alzheimer's drug developer Cortexyme (CRTX), Orbimed-backed immuno-oncology biotech NextCure (NXTC), and diabetic cardiomyopathy biotech Applied Therapeutics (APLT).
Two regional banks filed, one in West Texas and one in Louisiana. Lubbock, TX-based South Plains Financial (SPFI), operating as City Bank, had $21 million in 2018 net income with $2.7 billion in assets at year-end. Alexandria, LA-based Red River Bancshares (RRBI) booked $23 million in net income and ended with $1.9 billion of assets.
One small wireless radio services provider, Ondas Holdings (ONDS), filed for a NYSE uplisting; in 2018, the company booked $0.2 million of revenue with a net loss of -$12 million.
In addition to the 12 new filings, two blank check companies also joined the pipeline, including a $350 million offering from Diamond Eagle Acquisition (DMDEU.RC), Jeff Sagansky's fifth SPAC.
Two filings on Monday
On Monday, small software company, ConversionPoint (CPTI) filed to raise $40 million, and small mobile phone hardware maker Sonim Technologies (SONM) filed to raise $58 million.
| 12 IPOs and 2 SPACs File During the Week of April 8th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Applied Therapeutics (APLT) | $86M | Health Care | Citi |
| Phase 2 biotech developing therapies for diabetic cardiomyopathy. | |||
| Axcella Health (AXLA) | $86M | Health Care | Goldman |
| Developing therapeutics and dietary products for amino acid dysregulation. | |||
| Cortexyme (CRTX) | $86M | Health Care | BofA ML |
| Phase 1b biotech developing therapies for Alzheimer’s disease. | |||
| Mayville Engineering (MEC) | $100M | Industrials | Baird |
| Provides end-to-end manufacturing services to OEM customers. | |||
| Milestone Pharmaceuticals (MIST) | $86M | Health Care | Jefferies |
| Phase 3 biotech developing therapies for heart rate conditions. | |||
| NextCure (NXTC) | $86M | Health Care | Morgan Stanley |
| Clinical-stage biotech developing cancer immunotherapies. | |||
| Ondas Holdings (ONDS) | $46M | Communication Services | |
| Provides a wireless radio system for broadband networks. | |||
| Parsons (PSN) | $500M | Industrials | Goldman |
| Provides technology-driven defense, intelligence, and infrastructure solutions. | |||
| South Plains Financial (SPFI) | $50M | Financials | KBW |
| West Texas commercial bank with 21 full-service locations. | |||
| AGBA Acquisition (AGBAU) | $40M | SPAC | Maxim |
| Blank check company targeting the services sector in China. | |||
| Diamond Eagle Acquisition (DMDEU.RC) | $350M | SPAC | |
| Fifth blank check company formed by entertainment veteran Jeff Sagansky. | |||
| Uber (UBER) | $10,000M | Technology | Morgan Stanley |
| Operates the world's largest on-demand ridesharing network. | |||
| Red River Bancshares (RRBI) | $30M | Financials | FIG Partners |
| Louisiana commercial bank with 24 locations across the state. | |||
| So-Young International (SY) | $150M | Technology | Deutsche Bank |
| China-based online marketplace for plastic surgery services. | |||
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