Two companies and two SPACs entered the public market this week, while Karat Packaging (KRAT) postponed and withdrew its $40 million IPO. Two companies and one SPAC submitted initial filings.
Post spin-off BellRing Brands (BRBR) priced its $480 million IPO well below the range to command a $1.8 billion market cap (-17% v. original midpoint). BellRing came to market at a discount to its peers, but with strong growth (16% y/y) and solid margins (36% LTM gross, 23% LTM EBITDA), it gave investors a break from the high-growth large-loss tech deals that have underperformed. It finished the week up 17%.
French cancer biotech Innate Pharma (IPHA) priced its US IPO at a discount to its last close on the Euronext Paris (IPH), raising $69 million at a $438 million market cap (-22% v. original reference price). The company has a commercial candidate, a third line therapy for a rare indication, and is collaborating with AstraZeneca on its lead clinical candidate. Despite the current challenging environment for biotechs, Innate Pharma finished the week up 12%.
Italy-focused SPAC Galileo Acquisition (GLEO.U) raised $120 million, and Union Acquisition II (LATNU), which is targeting businesses in Latin America, raised $175 million.
In other IPO news, Endeavor Group Holdings (EDR) officially withdrew its IPO. The company cited market conditions when it postponed its plans to go public last month. Additionally, April IPOs Pinterest’s (PINS) and Zoom Video Communications’ (ZM) lock-up periods expired this past week; both deals traded down.
| 4 IPOs During the Week of October 14th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 10/18 |
| BellRing Brands (BRBR) | $480M | $1,845M | -20% | +18% | +17% |
| Spin-off of Post's active nutrition unit selling protein shakes, bars, and powders. | |||||
| Innate Pharma (IPHA) | $69M | $438M | -27% | +10% | +12% |
| Commercial-stage French biotech developing antibody therapies for cancer. | |||||
| Union Acquisition II (LATNU) | $175M | $219M | 0% | +1% | +1% |
| Blank check company targeting businesses in Latin America | |||||
| Galileo Acquisition (GLEO.U) | $120M | $146M | 0% | n/a | +0% |
| Blank check company targeting Italian businesses with North American growth strategies. | |||||
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Medical device company TELA Bio (TELA), which develops soft tissue reinforcement materials, filed for a $69 million IPO, and real estate financing company Velocity Financial (VEL) filed to raise $100 million.
| 3 Filings During the Week of October 14th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Juniper Industrial Holdings (JIH.U) | $300M | SPAC | UBS |
| Blank check company targeting a North American industrial company. | |||
| Velocity Financial (VEL) | $100M | Financials | Wells Fargo |
| Mortgage lender focused on residential rental and small commercial properties. | |||
| TELA Bio (TELA) | $69M | Health Care | Jefferies |
| Medical device company focused on soft tissue reinforcement materials. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 10/17/19, the Renaissance IPO Index was up 23.7% year-to-date, while the S&P 500 had a gain of 21.5%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Roku (ROKU). The Renaissance International IPO Index was up 18.8% year-to-date, while the ACWX was up 14.2%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
