A billion-dollar IPO and two SPACs entered the market this past week, and four IPOs and five SPACs submitted initial filings. The VIX volatility index is still at record-high levels and the turbulent market environment shows no signs of steadying just yet.
Waste giant GFL Environmental (GFL) upsized its share offering and priced below the range to raise $1.4 billion at a $6.9 billion market cap on the NYSE and the TSX. The company raised an additional $775 million through a concurrent tangible equity unit offering. Following its postponement in October, GFL reportedly again faced valuation pushback, given current market conditions as well as its high debt load. The offering proceeds will give the company greater balance sheet flexibility, but it remains highly levered (5.4x net debt/LTM adj. EBITDA). GFL broke issue on its first day of trading and finished the week down 10%.
LifeSci Acquisition (LSACU), a SPAC formed by healthcare-focused boutique investment bank LifeSci Capital, raised $60 million to acquire a healthcare business. Jeff Sagansky and Harry Sloan’s sixth SPAC Flying Eagle Acquisition (FEAC.U) raised $600 million to become the year’s second largest blank check company to date.
| 3 IPOs During the Week of March 2nd, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 03/06 |
| Flying Eagle Acquisition (FEAC.U) | $600M | $725M | 0% | +4% | +4% |
| Sixth blank check company formed by SPAC veteran Jeff Sagansky and former MGM CEO Harry Sloan. | |||||
| LifeSci Acquisition (LSACU) | $60M | $73M | 0% | +3% | +3% |
| Blank check company formed by LifeSci Capital targeting the healthcare industry. | |||||
| GFL Environmental (GFL) | $1,425M | $6,902M | -14% | -12% | -10% |
| North America's fourth-largest diversified waste management firm. | |||||
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Following a wave of filings in the week prior, four IPOs and five SPACs submitted initial filings. Grocery giant Albertsons (ACI) refiled for an estimated $2 billion IPO. Oncology biotechs Zentalis Pharmaceuticals (ZNTL) and Ayala Pharmaceuticals (AYLA) filed for $100 million and $50 million IPOs, respectively, and ENT biotech Lyra Therapeutics (LYRA) filed to raise $58 million.
Fortress Investment Group’s Fortress Value Acquisition (FVAC.U) filed to raise $300 million. Business sector-focused SPAC CC Neuberger Principal Holdings I (PCPL.U) Live Oak Acquisition (LOAK.U), led by the former CEOs of FBR and Nuveen, filed to raise $200 million. Collective Growth Corp (CGROU), led by former Canopy Growth executives and targeting the cannabis industry, filed to raise $150 million, and Roth Capital and Craig-Hallum’s Roth CH Acquisition (ROCHU) filed to raise $75 million.
| 9 Filings During the Week of March 2nd, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Albertsons (ACI) | $2,000M | Consumer Staples | BofA |
| US grocer operating under Albertsons, Safeway, and other banners. | |||
| Ayala Pharmaceuticals (AYLA) | $50M | Health Care | Citi |
| Phase 2 biotech developing small molecule therapies for aggressive cancers. | |||
| CC Neuberger Principal I (PCPL.U) | $300M | SPAC | Goldman |
| SPAC targeting the financial, technology, and business services sectors. | |||
| Fortress Value (FVAC.U) | $300M | SPAC | Deutsche Bank |
| Blank check company formed by executives at Fortress Investment Group. | |||
| Lyra Therapeutics (LYRA) | $58M | Health Care | BofA |
| Phase 2 biotech targeting ear, nose, and throat diseases. | |||
| Zentalis Pharmaceuticals (ZNTL) | $100M | Health Care | Morgan Stanley |
| Phase 1/2 oncology biotech focusing on small molecule therapies. | |||
| Roth CH Acquisition (ROCHU) | $75M | SPAC | Roth Cap. |
| Blank check company formed by executives at Roth Capital and Craig-Hallum. | |||
| Collective Growth Corp (CGROU) | $150M | SPAC | Cantor Fitz. |
| Blank check company led by former Canopy Growth execs targeting the cannabis industry. | |||
| Live Oak Acquisition (LOAK.U) | $200M | SPAC | Jefferies |
| Blank check company led by the former CEOs of FBR and Nuveen targeting a growth business. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 3/5/20, the Renaissance IPO Index was up 1.7% year-to-date, while the S&P 500 was down 6.4%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and Spotify (SPOT). The Renaissance International IPO Index was up 3.7% year-to-date, while the ACWX was down 9.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Adyen and SoftBank.
