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US IPO Week Ahead: LINE hopes to send a positive message to the market
Analyst IPO Market Commentary
After two weeks that saw just two companies raise $180 million, two large, profitable companies are expected to price their US IPOs in the first full week of July, raising as much as $1.5 billion. One is an international company, a 5-year old Japanese mobile messaging app with secular growth that plans to dual-list in Tokyo and New York. The other is nearly 100% domestic, a 70-year old defensive play with positive cash flow and a dividend yield, but little, if any, growth.
With these two deals kicking off the third quarter, an uptick in and diversification of filing activity in the last month, and the VIX Volatility Index closing at its lowest level in over a month (closed Friday at 13.2), we expect the IPO market to perk up with more deal launches in July.
Get in LINE for the biggest tech IPO of 2016
), the long-awaited carve-out from Korea’s Naver, looks to raise $1.1 billion next week at a market cap of $7.0 billion by offering 22 million ADSs on the NYSE and 13 million shares on the Tokyo Stock Exchange. LINE, the leading Japanese mobile messaging app, has 218 million monthly active users in Japan, Taiwan, Thailand and Indonesia. Although the company faces competition from Facebook (FB) and Tencent Holdings (HK: 0700), it is still the dominant messaging app in Japan.
The company is set to price on Monday, July 11; due to listing rules in Tokyo, trading will not begin until Thursday in the US and Friday in Japan. At the current midpoint (the final midpoint will be set on Monday), LINE looks to be the largest tech IPO of 2016 and the largest US-listed tech IPO since Alibaba raised $22 billion in 2014.
Hungry for yield? Try AdvancePierre
AdvancePierre Foods Holdings
) plans to raise $400 million on the NYSE next week at a market cap of $1.7 billion and an enterprise value of $2.8 billion. Backed by Oaktree, the company operates in the stable foodservice sector and has leading market share in its key product groups, making and distributing over 2,600 SKUs of ready-to-eat sandwiches and sandwich components, entrees and snacks. Its largest customers include national food distributors Sysco (SYY) and recent IPO US Foods (USFD). It expects to price next Thursday, July 14.
Renaissance Capital's IPO Calendar - Week of
$28.50 - $32.50
Leading Japanese mobile messaging application being carved out of Naver.
AdvancePierre Foods Holdings
Blue Ash, OH
$20.00 - $23.00
Largest US supplier of ready-to-eat food to restaurants, retailers and schools.
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 6% year-to-date, while the S&P 500 up 4%. Renaissance Capital's
(NYSE: IPO) tracks the index, and
top ETF holdings
include Alibaba (
), Synchrony Financial (
) and Citizens Financial Group (
). The Renaissance International IPO Index is down 9.4% year-to-date (as of Thursday's close), compared to -2.1% (also as of Thursday) for ACWX. Renaissance Capital’s International
(NYSE: IPOS) tracks the index, and
top ETF holdings
include Recruit Holdings, NN Group and Aena S.A.
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