After four weeks without a single IPO, the US IPO market is back from its annual August pause. Four deals are on the IPO calendar to raise $690 million in the week ahead, including:
• The first energy IPO in over a year, an MLP with a 7.5% annualized yield
• A VC-backed tech company (2016's tech IPO class is up over +100% on average)
• A large Bermuda bank and wealth manager with a 5.4% annualized yield
• A small but fast-growing regional bank in Tennessee
• The week could also see offerings from a small biotech and SPAC
| Renaissance Capital's IPO Calendar - Week of 9/12/2016 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Lead Managers |
| The Bank of N.T. Butterfield & Son Hamilton, Bermuda |
NTB NYSE |
$250 | $22 - $25 10,638,298 |
Goldman Sachs Citi |
| Bank and wealth manager operating in Bermuda and the Cayman Islands. | ||||
| Noble Midstream Partners LP Houston, TX |
NBLX NYSE |
$250 | $19 - $21 12,500,000 |
Barclays Baird |
| MLP formed by Noble to own oil and gas gathering assets in Colorado's DJ basin. | ||||
| FB Financial Nashville, TN |
FBK NYSE |
$100 | $16 - $18 5,882,352 |
J.P. Morgan UBS Investment Bank |
| Tennessee bank with 45 branches and $2.9 billion in assets. | ||||
| Everbridge Burlington, MA |
EVBG Nasdaq |
$90 | $11 - $13 7,500,000 |
Credit Suisse BofA Merrill Lynch |
| Provides mass messaging and critical communications services to enterprises. | ||||
| M I Acquisitions New York, NY |
MACQU Nasdaq |
$50 | $10 - $10 5,000,000 |
Chardan Capital Markets |
| Blank check company formed to acquire a technology, media or telecom company. | ||||
| AzurRX Biopharma Brooklyn, NY |
AZRX Nasdaq |
$12 | $6 - $8 1,700,000 |
WallachBeth Capital Network 1 Financial |
| Developing non-systemic biologics for gastrointestinal disorders. | ||||
2016's first energy IPO hopes a 7.5% yield will get it the royal treatment
Noble Midstream Partners LP (NBLX) is the first energy company to attempt an IPO since its last attempt in November 2015. The last US oil and gas IPO was PennTex Midstream Partners LP (PTXP; -12%). Noble will test investors' hunger for yield (7.5% at the midpoint) and aversion to energy growth stories.
Building bridges: VC-backed Everbridge sets the tone for tech
Everbridge (EVBG) plans to raise $90 million (17% insider selling) at a market cap of $329 million, kicking off a series of tech IPOs anticipated in the coming weeks. Backed by ABS Ventures, Everbridge offers a platform for organizations to send mass communications during critical situations (e.g. cyber attacks, earthquakes, etc.). Operating in a more than $2.5 billion market, it grew sales by 30% in the 1H16 to $36 million. However, with cash flows top-of-mind, IPO investors may focus on the company's now-negative adjusted EBITDA (-6%).
Buying into Bermuda
The Bank of N.T. Butterfield & Son (NTB) plans to raise $250 million (44% insider selling) at a market cap of $1.3 billion. Backed by The Carlyle Group and Wellington, Butterfield Bank has captured more than one-third of the deposit share in Bermuda and the Cayman Islands, balanced by a large asset management and trust services business. While it offers a 5.4% yield at the midpoint, its total revenue growth was just 2% in 2015 ($379 million) and tax havens have recently faced scrutiny from US regulators.
FB Financial (FBK) is set to raise $100 million at a market cap of $421 million. The Tennessee bank's pro forma net income grew at a +33% CAGR from 2011-2015. Two Tennessee banks went public in 2015, outperforming the the year's financial IPOs: Franklin Financial Network (FSB) trades 77% above its March 2015 IPO price, while Avenue Financial (AVNU) was acquired at a 79% premium to its February 2015 IPO price.
Two micro-cap IPOs
AzurRx Biopharma (AZRX), a gastrointestinal biotech, is again on the IPO calendar this week, but with new terms: It recently reduced its share offering by 21%, and now intends to raise $12 million at a market cap of $74 million. M I Acquisitions (MACQU), a blank check company led by a 28-year-old CEO, plans to raise $50 million.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 2% year-to-date, while the S&P 500 is up 4%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is up 1% year-to-date, compared to +4% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A.
