The US IPO market is expected to remain active in the week ahead with eight IPOs slated to raise $4.6 billion. The diverse group features three billion-dollar deals, with issuers from diagnostics, software, solar equipment, and more.
Carlyle-backed Ortho Clinical Diagnostics (OCDX) plans to raise $1.5 billion at a $4.9 billion market cap. The company is a pure-play in vitro diagnostics business, providing diagnostic testing solutions to the clinical lab and transfusion medicine communities. The company is profitable on an EBIT basis and had a revenue retention rate of 99% in 2019. It will be leveraged post-IPO at 5.1x net debt/LTM adj. EBITDA.
Acquired by SAP ahead of its proposed 2018 IPO, Qualtrics International (XM) plans to raise $1.2 billion at a $12.6 billion market cap. The company provides a customer and employee experience management platform to its sticky customer base of over 12,000 organizations. Qualtrics has demonstrated growth, though it operates in a highly competitive space with low barriers to entry, and it will continue to be controlled by SAP post-IPO.
Oaktree-backed solar equipment supplier Shoals Technologies Group (SHLS) plans to raise $1.0 billion at a $3.6 billion market cap. Profitable with strong growth, the company designs and manufactures products used in large solar energy projects primarily to connect panels to inverters. While it expects international expansion will help maintain growth, the company has a limited sales track record abroad.
Israel-based ZIM Integrated Shipping Services (ZIM) plans to raise $306 million at a $2.1 billion market cap. ZIM states that it is a global, asset-light container liner shipping company with leadership positions in niche markets. As of September 30, 2020, it operated a global network of 66 weekly lines, calling at 310 ports in more than 80 countries. The company plans to issue dividends worth up to 50% of annual net income.
Residential mortgage producer Home Point Capital (HMPT) plans to raise $250 million (100% secondary) at a $3.0 billion market cap. Home Point Capital utilizes a wholesale mortgage origination channel to connect with nearly 5,000 broker partners, allowing it to serve roughly 300,000 customers. In the 12 months ended 9/30/20, the company had total loan originations of $46.3 billion, representing an annualized growth rate of 133% since 2018.
Brazilian asset manager Vinci Partners Investments (VINP) plans to raise $236 million at a $944 million market cap. Vinci Partners' strategies include private equity, public equities, real estate, credit, infrastructure, hedge funds, and investment products. As of 9/30/20, the firm’s AUM was $8.7 billion.
Southeastern Grocers (SEGR) plans to raise $134 million (100% secondary) at a $725 million market cap. The company operates 420 stores under several banners and is estimated to be the sixth largest conventional supermarket operator in the US. Its median comparable store sales growth was 22% for March through September 2020, and revenue growth accelerated to 17% in the 9mo20. It plans to issue a quarterly dividend (2.75% annualized yield).
Indoor farming services provider Agrify (AGFY) plans to raise $25 million at a $115 million market cap. Highly unprofitable and fast growing, the company claims to differentiate itself with a bundled solution of equipment, software, and services that is turnkey, end-to-end, fully integrated and optimized for precision growing.
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business |
Deal Size Market Cap |
Price Range Shares Filed |
Top Bookrunners |
| Shoals Technologies Group (SHLS) Portland, TN |
$1,000M $3,586M |
$19 - $21 50,000,000 |
Goldman JP Morgan |
| Leading US provider of electrical balance-of-system products for solar projects. | |||
| Ortho Clinical (OCDX) Raritan, NJ |
$1,505M $4,851M |
$20 - $23 70,000,000 |
JP Morgan BofA |
| Carlyle-backed global provider of in vitro diagnostic products. | |||
| Qualtrics (XM) Provo, UT |
$1,181M $12,585M |
$22 - $26 49,223,056 |
Morgan Stanley JP Morgan |
| Experience management software provider being spun out of SAP. | |||
| Vinci Partners (VINP) Rio de Janeiro, Brazil |
$236M $944M |
$16 - $18 13,873,474 |
JP Morgan Goldman |
| Alternative asset manager in Brazil. | |||
| ZIM Shipping (ZIM) Haifa, Israel |
$306M $2,139M |
$16 - $19 17,500,000 |
Citi Goldman |
| Israeli container shipping company with over 320K TEU capacity. | |||
| Home Point Capital (HMPT) Ann Arbor, MI |
$250M $2,974M |
$19 - $21 12,500,000 |
Goldman Wells Fargo |
| Wholesale residential mortgage producer and servicer. | |||
| Southeastern Grocers (SEGR) Jacksonville, FL |
$134M $725M |
$14 - $16 8,900,000 |
BofA Goldman |
| Southeastern US supermarket chain operating under Winn-Dixie and other banners. | |||
| Agrify (AGFY) Burlington, MA |
$25M $115M |
$8 - $10 2,777,778 |
Maxim Roth Cap. |
| Provides turnkey indoor farming solutions. | |||
| Growth Capital Acq. (GCACU) New York, NY |
$125M $156M |
$10 12,500,000 |
Maxim |
| Blank check company formed by Greek shipping executives targeting an emerging growth company. | |||
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Street research is expected for Medirom Healthcare Technologies (MRM) on Monday, 1/25.
Lock-up periods will be expiring for eight companies. On Monday, 1/25: Vertex (VERX). On Tuesday, 1/26: Absolute Software (ABST), AlloVir (ALVR), and Li Auto (LI). On Wednesday, 1/27: Goedeker’s (GOED), Fathom Holdings (FTHM), Vasta Platform (VSTA), and Vital Farms (VITL).
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 1/21/21, the Renaissance IPO Index was up 8.4% year-to-date, while the S&P 500 was up 2.6%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and Peloton (PTON). The Renaissance International IPO Index was up 5.3% year-to-date, while the ACWX was up 5.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and China Feihe.
