Eight companies and two SPACs entered the public market this week. Health and tech companies Health Catalyst, Castle Biosciences, and Livongo dominated while solar energy installer Sunnova and sporting events company Wanda Sports Group fell flat.
| 10 IPOs During the Week of July 22nd, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 07/26 |
| Health Catalyst (HCAT) | $182M | $1,043M | 21% | +51% | +47% |
| Provides a data analytics platform and services to healthcare organizations. | |||||
| Castle Biosciences (CSTL) | $64M | $288M | 7% | +34% | +44% |
| Sells genetic tests used to diagnose skin cancers. | |||||
| Livongo (LVGO) | $355M | $3,146M | 30% | +36% | +36% |
| Provides a chronic condition management platform to self-insured employers. | |||||
| ProSight Global (PROS) | $110M | $609M | -18% | +22% | +17% |
| Specialty property & casualty insurer backed by Goldman Sachs and TPG. | |||||
| Blue Hat Interactive (BHAT) | $8M | $140M | 0% | +15% | +15% |
| Chinese producer of interactive games and toys that use augmented reality. | |||||
| Switchback Energy Acq. (SBE.U) | $300M | $375M | 0% | +0% | +0% |
| Blank check company formed by NGP and former RSP Permian executives to acquire an energy firm. | |||||
| Fellazo (FLLCU) | $50M | $65M | 0% | -1% | +0% |
| Blank check company targeting the health food and supplements industry in Asia. | |||||
| Vista Oil & Gas (VIST) | $93M | $822M | -2% | -2% | -2% |
| Oil and gas E&P operating in Mexico and Argentina. | |||||
| Sunnova (NOVA) | $168M | $997M | -29% | -6% | -5% |
| Provides residential solar energy systems and services. | |||||
| Wanda Sports (WSG) | $190M | $1,153M | -41% | -36% | -36% |
| Sports events, media, and marketing platform of China's Wanda Group. | |||||
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Health Catalyst (HCAT), which provides a data analytics platform and services to healthcare organizations, had a first day pop of 51% and a total return of 47%, making it the top performer of the week, after pricing above its upwardly revised range. Despite heavy losses and so-so margins, Health Catalyst succeeded by offering fast growth in a massive market.
Castle Biosciences (CSTL), which sells genetic tests used to diagnose skin cancers, raised $64 million by offering 4 million shares at $16, the high end of the range. The biotech grew its revenue 138% in the 1Q19 and had an 82% gross margin, and it finished the week up 44%.
Livongo (LVGO), which provides a chronic condition management platform to self-insured employers, priced at $28, 30% above its original midpoint and above its upwardly revised range, to raise $355 million and command a post-IPO market cap of $3.1 billion. Propelled by its demonstrated growth (157% in the 1Q19) and large client base (20% of the Fortune 500), Livongo finished the week up 36%.
After revising its terms down, Sunnova Energy International (NOVA) priced at $12 (-29% vs original midpoint), raising $168 millionand finishing the week down 5%. Already a complex model, competitor SunRun added fuel to the fire when it claimed that Sunnova provided misleading metrics in its S-1 days before pricing.
Global sporting events owner Wanda Sports Group (WSG) hit a snag as it entered the public market. Wanda first slashed its valuation by nearly 40% and then submitted back-to-back filings, disclosing and then downwardly amending indications of interest. The company priced at $8 (-41% vs original midpoint), opened at $6, and traded down to $5.16, a 36% loss on its first day and the third-worst IPO debut of the past decade.
Specialty property & casualty insurer ProSight Global (PROS) raised $110 million by offering 7.9 million shares at $14, well below the range. The insurance company, which is backed by Goldman Sachs and TPG Capital, returned 22% on its first day and finished the week up 17%.
International companies Vista Oil & Gas (VIST) and Blue Hat Interactive (BHAT) entered the US public market this week. Mexican E&P Vista Oil & Gas raised $93 million by offering 10 million shares, including ADSs, at $9.25, slightly below the as-converted last close of its shares on the BVM. The company had a first day return of -2%. Blue Hat Interactive, a Chinese producer of interactive games and toys that use augmented reality, raised $8 million by offering 2 million shares at $4 and had a first day return of 15%.
Two blank check companies went public this week. Switchback Energy Acquisition (SBE.U), an energy SPAC led by NGP and former RSP Permian executives, raised $300 million. Fellazo (FLLCU), a blank check company targeting the Asian health food and supplements industry, raised $50 million.
| 3 Filings During the Week of July 22nd, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| 9F (JFG) | $150M | Technology | Credit Suisse |
| Online consumer lending platform in China. | |||
| Telemynd (PSYC) | $8M | Health Care | Aegis Cap. |
| Operates a telemedicine and analytics platform for mental health services. | |||
| Envista (NVST) | $1,000M | Health Care | JP Morgan |
| Dental supplies and equipment unit being carved out of Danaher. | |||
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Three companies submitted initial filings this week.
9F (JFG), an online consumer lending platform in China, filed for a $150 million IPO. Telemynd (PSYC), which operates a telemedicine and analytics platform for mental health services, filed for an $8 million IPO. Envista (NVST), the dental supplies and equipment unit being carved out of Danaher, filed for a $100 million IPO, which is likely a placeholder for a deal we estimate could raise $1 billion.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 7/25/19, the Renaissance IPO Index was up 41.7% year-to-date, while the S&P 500 had a gain of 21.2%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Elanco (ELAN). The Renaissance International IPO Index was up 13.0% year-to-date, while the ACWX was up 14.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
