Five IPOs and 17 SPACs went public this past week. While new filing activity has slowed as the election approaches, four IPOs and four SPACs submitted initial filings.
Leading security software provider McAfee (MCFE) priced slightly below the midpoint to raise $740 million at a $9.4 billion market cap. Taken private by Intel in 2011, McAfee provides integrated antivirus and security software to over 600 million devices. While it generates strong margins, enterprise revenue is in long-term decline, and the company is highly levered post-IPO despite using the proceeds to pay down debt. McAfee finished down 6%.
IT infrastructure platform Datto (MSP) priced at the high end to raise $594 million at a $4.4 billion market cap. With over 17,000 customers, Datto providers integrated tools for MSPs to provide security and continuity to their clients. Datto is highly profitable and has increasing gross margins, though declining device revenue has weighed on revenue growth. Datto finished up 7%.
UK-based Abcam (ABCM) priced below the as-converted close of its shares on the AIM (ABC) to raise $157 million at a $4.0 billion market cap. The company provides life science researchers with reagents and other tools to use for experimentation and diagnostic testing. Profitable but slow-growing, Abcam operates across 15 locations around the world. Abcam finished up 13%.
Preclinical biotech Foghorn Therapeutics (FHTX) priced mid-range to raise $120 million at a $628 million market cap. Foghorn’s lead candidates, FHD-286 and FHD-609, are both targeting hematologic cancers, and the company plans to file INDs for them in the 4Q20 and 1H21, respectively. Foghorn finished up 13%.
Mortgage service provider Guild Holdings (GHLD) priced below the range to raise $98 million at a $918 million market cap. Guild Holdings is a relationship-based retail mortgage lender that originated over $27.8 billion in mortgages in 2019. Despite strong performance in the 1H20, COVID-related forbearances are weighing on cash flow and servicing income. Guild finished down 1%.
Seventeen SPACs raised $3.8 billion this past week. The pack was led by media and entertainment SPAC Horizon Acquisition II (HZON.U) raising $500 million. Zillow founder led SPAC Supernova Partners Acq.(SPNV.U) raised $350 million. H.I.G Capital’s SPAC H.I.G. Acquisition (HIGA.U) raised $325 million. North American technology focused SPAC DPCM Capital (XPOA.U) raised $300 million. HPS Investment Partner’s SPAC Altimar Acquisition (ATACU), ICT industry focused SPAC Cerberus Telecom Acq. (CTACU), and digital media and leisure industries SPAC Tekkorp Digital Acq. (TEKKU) each raised $250 million. Energy transition and sustainability SPAC Rice Acquisition (RICEU) raised $215 million.
Mobile experiential entertainment SPAC Acies Acquisition (ACACU), global decarbonization SPAC Decarbonization Plus Acquisition (DCRBU), fintech focused SPAC Lefteris Acquisition (LFTRU), and financially distressed business targeted SPAC Good Works Acquisition (GWACU) each raised $200 million. Healthcare and biopharma SPAC Sarissa Capital Acq. (SRSAU) raised $175 million. Healthcare industry focused SPAC BCLS Acquisitions (BLSA), and financial and real estate sector SPAC Yellowstone Acquisition (YSACU) each raised $125 million. Healthcare focused SPAC Helix Acquisition (HLXA), and healthcare and biotech focused SPAC Eucrates Biomedical Acq. (EUCRU) each raised $100 million.
| 22 IPOs During the Week of October 19th, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 10/23 |
| Foghorn Therapeutics (FHTX) | $120M | $628M | 0% | +13% | +13% |
| Preclinical biotech developing gene therapies for hematologic cancers and solid tumors. | |||||
| Abcam (ABCM) | $157M | $3,952M | 6% | +13% | +13% |
| Sells biological reagents and tools for research, drug discovery, and diagnostics. | |||||
| Datto (MSP) | $594M | $4,435M | 6% | +0% | +7% |
| Sells a hybrid IT infrastructure platform to managed service providers. | |||||
| Helix Acquisition (HLXA) | $100M | $129M | 0% | +5% | +6% |
| Blank check company formed by Cormorant Asset Management targeting healthcare. | |||||
| BCLS Acquisition (BLSA) | $125M | $161M | 0% | +2% | +3% |
| Blank check company formed by Bain Capital Life Sciences targeting the healthcare industry. | |||||
| Sarissa Capital Acq. (SRSAU) | $175M | $219M | 0% | +2% | +2% |
| Blank check company formed by Sarissa Capital focused on healthcare and biopharma. | |||||
| Supernova Partners Acq. (SPNV.U) | $350M | $425M | 0% | +1% | +1% |
| Blank check company formed by the co-founder of Zillow and other entrepreneur and investment veterans. | |||||
| Yellowstone Acquisition (YSACU) | $125M | $163M | 0% | +0% | +0% |
| Blank check company formed by Boston Omaha Corp. targeting the financial and real estate sectors. | |||||
| Eucrates Biomedical Acq. (EUCRU) | $100M | $129M | 0% | +0% | +0% |
| Blank check company formed by Vedanta Management targeting data-driven healthcare and biotech businesses. | |||||
| Horizon Acquisition II (HZON.U) | $500M | $625M | 0% | +0% | +0% |
| Second blank check company formed by Todd Boehly of Eldridge Industries targeting the media and entertainment industries. | |||||
| Rice Acquisition (RICEU) | $215M | $265M | 0% | +0% | +0% |
| Blank check company led by former Rice Energy execs targeting the energy transition and sustainability space. | |||||
| DPCM Capital (XPOA.U) | $300M | $363M | 0% | +0% | -1% |
| Blank check company targeting North American technology businesses. | |||||
| Guild Holdings (GHLD) | $98M | $918M | -17% | +0% | -1% |
| Provides personalized mortgage services and loan origination. | |||||
| Cerberus Telecom Acq. (CTACU) | $250M | $334M | 0% | -1% | -1% |
| Blank check company formed by Cerberus Capital Management targeting the ICT industry. | |||||
| H.I.G. Acquisition (HIGA.U) | $325M | $406M | 0% | -1% | -1% |
| Blank check company formed by H.I.G. Capital. | |||||
| Tekkorp Digital Acq. (TEKKU) | $250M | $313M | 0% | -1% | -1% |
| Blank check company formed by Tekkorp Capital targeting the digital media and leisure industries. | |||||
| Good Works Acquisition (GWACU) | $150M | $190M | 0% | -1% | -1% |
| Blank check company targeting a business experiencing financial distress or restructuring. | |||||
| Decarbonization Plus Acq. (DCRBU) | $200M | $250M | 0% | -1% | -1% |
| Third blank check company formed by Riverstone targeting businesses advancing global decarbonization. | |||||
| Acies Acquisition (ACACU) | $200M | $250M | 0% | -1% | -1% |
| Blank check company targeting live, location-based, and mobile experiential entertainment. | |||||
| Lefteris Acquisition (LFTRU) | $200M | $256M | 0% | -1% | -1% |
| Blank check company formed by co-founder of Vestigo Ventures and a former E*TRADE executive targeting fintech. | |||||
| Altimar Acquisition (ATACU) | $250M | $313M | 0% | -1% | -1% |
| Blank check company formed by HPS Investment Partners. | |||||
| McAfee (MCFE) | $740M | $9,386M | -2% | -7% | -6% |
| Leading provider of antivirus and endpoint security software. | |||||
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Four IPOs and four SPACs submitted initial filings this past week. US supermarket chain Southeastern Grocers (SEGR) filed to raise an estimated $500 million. Lab services provider Sotera Health (SHC) filed to raise $100 million. Phase 1 immuno-oncology biotech Compass Therapeutics (CMPX) filed to raise $50 million. CNS pharma developer Vallon Pharmaceuticals (VALL.RC) filed to raise $17 million.
Tishman Speyer’s real estate SPAC TS Innovation Acquisitions (TSIAU) filed to raise $300 million. Atlas Merchant Capital’s SPAC Concord Acquisition (CND.U) filed to raise $250 million. Betsy Cohen’s sixth SPAC FinTech Acquisition V (TFVU) filed to raise $215 million. Resilience Capital and Directional Aviation’s SPAC Zanite Acquisition (ZNTEU) filed to raise $200 million.
| 8 Filings During the Week of October 19th, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Concord Acquisition (CND.U) | $250M | SPAC | Cowen |
| Blank check company formed by Atlas Merchant Capital targeting financial services and FinTech. | |||
| FinTech Acquisition V (TFVU) | $215M | SPAC | Cantor Fitz. |
| Sixth blank check company formed by management of The Bancorp to acquire a fintech business. | |||
| Sotera Health (SHC) | $750M | Health Care | JP Morgan |
| Provides lab services to the medical device and pharma industries. | |||
| TS Innovation Acq, (TSIAU) | $300M | SPAC | BofA |
| Blank check company formed by Tishman Speyer targeting the real estate industry. | |||
| Vallon Pharmaceuticals (VALL.RC) | $17M | Health Care | ThinkEquity |
| Biopharmaceutical company developing abuse-deterrent prescription drugs for CNS disorders. | |||
| Zanite Acquisition (ZNTEU) | $200M | SPAC | BTIG |
| Blank check company formed by Resilience Capital and Directional Aviation. | |||
| Compass Therapeutics (CMPX) | $50M | Health Care | Citi |
| Phase 1 immuno-oncology biotech developing novel protein and antibody therapies. | |||
| Southeastern Grocers (SEGR) | $500M | Consumer Staples | BofA |
| Southeastern US supermarket chain operating under Winn-Dixie and other banners. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 10/22/20 , the Renaissance IPO Index was up 76.7% year-to-date, while the S&P 500 was up 6.9%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Zoom Video (ZM) and Uber (UBER). The Renaissance International IPO Index was up 36.6% year-to-date, while the ACWX was down 3.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank Corp.
