U.S. IPO Weekly Recap: The Year’s Busiest Slow Week

Six companies and five SPACs entered the public market raising about $2 billion. The week’s deals mostly included uplistings, cross-listings, and micro-caps, with biotech Revolution Medicines (NASDAQ:RVMD) soaring in the standout IPO of the week. Luxury shoemaker Cole Haan (CLHN) submitted an initial filing this week. The Renaissance Capital IPO Market Index is up 11.2% YTD compared to the S&P’s 4.4%, a strong sign for issuance in March.

Revolution Medicines priced at the high end of the upwardly-revised range, raising $238 million at a $1 billion market cap. The Third Rock-backed biotech is developing cancer therapies based on RAS pathway protein inhibitors. It popped of 70% on its first day, continuing the trend of early-stage biotechs outperforming in the IPO market. Revolution Medicines finished up 66.5%.

Canadian trucking company TFI International (TFII) raised $200 million in its US debut at a $2.9 billion market cap. Already listed in Toronto, the company rose 7% on its first day listed in the US and finished up 8.8%.

Huize Holdings (NASDAQ:HUIZ), a Chinese online insurance marketplace, priced within the range to raise $55 million at a market cap of $572 million. The mostly pre-bought deal saw 60% of its offering purchased by just four outside investors. The company finished up 6%.

Three micro-cap deals priced this week. Trxade Group (MEDS), an online marketplace for pharmaceutical companies, raised $5 million at a market cap of $51 million. Healthy fast-casual restaurant chain Muscle Maker (NASDAQ:GRIL) raised $8 million at a market cap of $37 million and asset monitoring provider Duos Technologies (NASDAQ:DUOT) raised $8 million at a market cap of $19 million. Muscle Maker and Duos Technology will be excluded from our 2020 stats as they have market caps smaller than $50 million at the time of their IPO.

Five SPACs priced this week, led by the largest SPAC ever: Churchill Capital III (CCXX.U) which raised $1 billion at a market cap of $1.2 billion. The blank check company is led by former Citi executive Michael Klein, whose original SPAC Churchill Capital acquired Clarivate Analytics (NYSE:CCC) in 2019,
and is up 118% since its IPO. Three of this week’s SPACs were Chinese, CITIC Capital Acquisition (CCAC.U; raised $240 million), Yunhong International (ZGYHU; $60 million), and Newborn Acquisition (NBACU; $50 million). Greenrose Acquisition (NASDAQ:GNRSU) raised $150 million and is targeting the cannabis industry.

9 IPOs During the Week of February 10th, 2020

Issuer
Business

Deal
Size

Market Cap
at IPO

Price vs.
Midpoint

First Day
Return

Return
at 02/14

Revolution Medicines

$238M

$1,033M

13%

+70%

+67%

Phase 1/2 oncology biotech developing RAS pathway inhibitors.

TFI International

$200M

$2,915M

0%

+7%

+9%

Provides trucking and logistics services in North America.

Huize

$55M

$572M

1%

-5%

+1%

Operates an online insurance marketplace in China.

Greenrose Acquisition

$150M

$191M

0%

n/a

+1%

Blank check company targeting the cannabis industry.

Newborn Acquisition

$50M

$65M

0%

+1%

+1%

Blank check company led by Chinese fund managers targeting businesses in the US and Asia (ex-China).

Trxade Group

$5M

$51M

0%

+0%

+0%

B2B online marketplace for pharmaceutical companies.

Yunhong International

$60M

$75M

0%

+0%

+0%

Blank check company targeting consumer or lifestyle assets in Asia.

Churchill Capital III

$1,000M

$1,200M

0%

n/a

+0%

Third blank check company founded by dealmaker and former Citi executive Michael Klein.

CITIC Capital Acquisition

$240M

$290M

0%

n/a

+0%

Blank check company formed by CITIC Capital targeting the energy efficiency and technology businesses in China.

Shoemaker Cole Haan filed for what we estimate to be a $200 million IPO on the Nasdaq. The company was bought in 2013 by private equity firm Apax Partners, which will see all the proceeds of the deal. Mortgage lender Alpha Investment (OTCPK:ALPC) filed to raise $15 million. Phase 2 biotech Imara (IMRA) filed to raise $86 million. Fortive’s mobility infrastructure carve-out Vontier (VNT) filed to raise what we estimate to be $1 billion. Two SPACs filed; Flying Eagle Acquisition (FEAC.RC) filed to raise $500 million and healthcare SPAC LifeSci Acquisition (LSACU) filed to raise $50 million.

6 Filings During the Week of February 10th, 2020

Issuer
Business

Deal
Size

Sector

Lead
Underwriter

Cole Haan

$200M

Consumer Discretionary

BofA

Premium manufacturer of shoes and other luxury accessories.

Imara

$86M

Health Care

Morgan Stanley

Phase 2 biotech developing small molecule therapies for rare genetic disorders.

LifeSci Acquisition

$50M

SPAC

Chardan

Blank check company targeting healthcare industry.

Vontier

$1,000M

Energy

Goldman

Carve-out of Fortive’s mobility infrastructure services unit.

Alpha Investment

$15M

Financials

Aegis Cap.

Mortgage lender backed by Omega Commercial Finance.

Flying Eagle Acquisition

$500M

SPAC

Goldman

Sixth blank check company formed by SPAC veteran Jeff Sagansky and former MGM CEO Harry Sloan.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 2/6/20, the Renaissance IPO Index was up 11.2% year-to-date, while the S&P 500 had a gain of 4.7%. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (NYSE:UBER) and Spotify (NYSE:SPOT). The Renaissance International IPO Index was up 5.7% year-to-date, while the ACWX was down 0.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Adyen and Xiaomi.

Original Post

Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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