Updated Monday 5/18
The largest US IPO since February, a SPAC, and a medical device company IPO are on the calendar for the week ahead.
SelectQuote (SLQT), an online platform for comparing and purchasing insurance, plans to raise $450 million at a $3.0 billion market cap. The deal marks the largest IPO by a US company since PPD's (PPD) $1.6 billion deal in early February. SelectQuote is profitable with strong growth, though its cash flow significantly lags earnings and it relies heavily on agent headcount to drive sales. Close peer and 2018 IPO EverQuote (EVER) has performed well in current market conditions, up 44% since the start of the year.
B. Riley Financial's second eponymous SPAC, B. Riley Principal Merger II (BMRG.U), plans to raise $200 million at a $256 million market cap. The company hasn't identified a particular industry or geography of focus but plans to use its proceeds to target a business with an enterprise value between $400 million and $1 billion. B. Riley Financial's previous SPAC, B. Riley Principal Merger, completed its acquisition of Alta Equipment (ALTG) in February 2020. Alta Equipment last closed at $5.60, 44% below its $10 offer price.
High growth medical device manufacturer Inari Medical (NARI) plans to raise $110 million at a $797 fully diluted market cap. The company's minimally invasive devices for venous diseases launched commercially in the 3Q18 and booked $71 million in revenue for the 12 months ended March 31, 2020. The pandemic has negatively impacted Inari's procedure volume, although it still saw an increase in procedures from the 4Q19 to the 1Q20.
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business |
Deal Size Market Cap |
Price Range Shares Filed |
Top Bookrunners |
| B. Riley Merger II (BMRG.U) New York, NY |
$200M $257M |
$10 20,000,000 |
B. Riley FBR |
| Second blank check company formed by diversified financial services firm B. Riley Financial. | |||
| Inari Medical (NARI) Irvine, CA |
$110M $797M |
$14 - $16 7,333,000 |
BofA Morgan Stanley |
| Makes minimally invasive medical devices for venous diseases. | |||
| SelectQuote (SLQT) Overland Park, KS |
$450M $2,997M |
$17 - $19 25,000,000 |
Credit Suisse Morgan Stanley |
| Provides a platform for consumers to compare and buy insurance online. | |||
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While it has not set an offer date yet, clinical stage oncology biotech Lantern Pharma (LTRN) could potentially price next week and raise $25 million at a $108 million market cap. The biotech is using its AI platform to redevelop abandoned drugs; its lead candidate is in-licensed from BioNumerik and previously failed five Phase 3 trials for lung cancer and breast cancer.
Lock-up periods will be expiring for three companies in the week ahead. On Tuesday, 5/19: Canaan (CAN) and SiTime (SITM). On Wednesday, 5/20: Alpine REIT (PINE). Street Research is expected for ORIC Pharmaceuticals (ORIC) on Tuesday, 5/19.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 5/14/20, the Renaissance IPO Index was up 7.8% year-to-date, while the S&P 500 was down 11.7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and DocuSign (DOCU). The Renaissance International IPO Index was up 0.1% year-to-date, while the ACWX was down 20.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and Adyen.
