After disappointing debuts from tech unicorns and biotechs, a highly profitable billion-dollar consumer staples company is set to lead up to four IPOs raising $660 million in the week ahead.
Post spinoff BellRing Brands (BRBR) is on track to be the largest deal of the week with plans to raise $525 million at a $2.2 billion market cap ($3.0 billion enterprise value). The company sells ready-to-drink protein shakes, powders, and nutrition bars primarily through its core brands Premier Protein, Dymatize, and PowerBar. Revenue growth slowed to 5% in the 1H19 from 16% y/y, but gross margin and EBITDA margin improved over 3 points to 37% and 24%, respectively.
French biotech Innate Pharma (IPHA), which is developing antibody therapies for cancer, plans to raise $80 million at a $586 million market cap. The company’s pipeline consists of one FDA approved product, Lumoxiti, which is a tumor antigen targeting antibody, as well as several candidates in Phase 2. Backed by Novo Nordisk and AstraZeneca, the company has traded on the Euronext Paris since 2006.
Eco-conscious packaging maker Karat Packaging (KRAT) plans to raise $40 million at a $162 million market cap. From its origins as the first US-based bubble tea chain, the company now produces single-use packaging for customers like Applebee's Grill & Bar, Chipotle Mexican Grill, and Panda Express, among others. The company grew revenue 25% in 2018 and has maintained positive EBIT and EBITDA since 2017.
Micro-cap online fitness apparel retailer Hylete (HYLT) plans to raise $15 million at a $71 million market cap. Hylete sells direct to consumer through its website, with plans to expand to brick and mortar stores. The company previously completed private Reg A+ offerings in both 2017 and 2018.
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business |
Deal Size Market Cap |
Price Range Shares Filed |
Top Bookrunners |
| BellRing Brands (BRBR) St. Louis, MO |
$525M $2,231M |
$16 - $19 30,000,000 |
Morgan Stanley Citi |
| Spin-off of Post's active nutrition unit selling protein shakes, bars, and powders. | |||
| Innate Pharma (IPHA) Marseille, France |
$80M $586M |
$7.50 10,666,666 |
Citi Leerink |
| Commercial-stage French biotech developing antibody therapies for cancer. | |||
| Karat Packaging (KRAT) Chino, CA |
$40M $162M |
$7 - $9 5,000,000 |
National Sec. |
| Produces environmentally-friendly single-use food packaging. | |||
| Hylete (HYLT) Solana Beach, CA |
$15M $71M |
$8 - $10 1,666,667 |
Maxim WestPark Capital |
| Designs and sells fitness apparel online. | |||
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The following IPOs are expected to price this week:
BellRing Brands (BRBR), the spin-off of Post's active nutrition unit selling protein shakes, bars, and powders, plans to raise $525 million by offering 30.0 million shares at a price range of $16.00 to $19.00. At the midpoint of the proposed range, BellRing Brands would command a market value of $2.2 billion. BellRing Brands, which was founded in 2017, booked $860 million in sales over the last 12 months. The St. Louis, MO-based company plans to list on the NYSE under the symbol BRBR. Morgan Stanley is the lead bookrunner on the deal.
Hylete (HYLT), which designs and sells fitness apparel online, plans to raise $15 million by offering 1.7 million shares at a price range of $8.00 to $10.00. At the midpoint of the proposed range, Hylete would command a market value of $71 million. Hylete, which was founded in 2012, booked $12 million in sales over the last 12 months. The Solana Beach, CA-based company plans to list on the NYSE American under the symbol HYLT. Maxim Group is the lead bookrunner on the deal.
Innate Pharma (IPHA), a commercial-stage French biotech developing antibody therapies for cancer, plans to raise $80 million by offering 10.7 million shares at a price of $7.50, the as-converted last close of its shares on the Euronext Paris (IPH). At the midpoint of the proposed range, Innate Pharma would command a market value of $586 million. Innate Pharma, which was founded in 1999, booked $130 million in revenue over the last 12 months. The Marseille, France-based company plans to list on the Nasdaq under the symbol IPHA. Citi is the lead bookrunner on the deal.
Karat Packaging (KRAT), which produces environmentally-friendly single-use food packaging, plans to raise $40 million by offering 5.0 million shares at a price range of $7.00 to $9.00. At the midpoint of the proposed range, Karat Packaging would command a market value of $162 million. Karat Packaging, which was founded in 2000, booked $201 million in sales over the last 12 months. The Chino, CA-based company plans to list on the Nasdaq under the symbol KRAT. National Securities is the lead bookrunner on the deal.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 10/10/19, the Renaissance IPO Index was up 21.1% year-to-date, while the S&P 500 had a gain of 17.2%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and VICI Properties (VICI). The Renaissance International IPO Index was up 13.8% year-to-date, while the ACWX was up 10.7%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
