Week Ahead: 2 Large And Levered IPOs Take Center Stage To Raise $1 Billion

|
Includes: ADSW, AVXS, NORT, OTG, PTI, SCCI
by: Renaissance Capital IPO Research

Two large and levered IPOs are scheduled to raise a combined $1 billion this week.

On-the-go IPO
"Known as the company that put iPads in airports", founder led OTG EXP (NASDAQ:OTG) is looking to fuel its capital intensive growth strategy and pay down debt through its planned $553 million IPO (17% of proceeds to CEO). For the thirty-nine weeks ended September 27, 2015, revenue grew 43% to $285 million, primarily due to new concession locations. Post-IPO, the company will be levered 4x LTM adj. EBITDA.

Don't trash this offering
Vertically integrated provider of solid waste collection, recycling and disposal, Advanced Disposal Services (NYSE:ADSW) is planning to raise $450 million (58% insider) to pay down debt from its 2006 LBO. Post-IPO, the company will be levered 5.3x LTM adj. EBITDA.

Two more biotech pricings
Early-stage biotech AveXis (NASDAQ:AVXS) is developing gene therapies for the rare but lethal genetic disorder spinal muscular atrophy (SMA Type 1) and plans to raise $85 million. Preclinical biotech Proteostasis Therapeutics (NYSE:PTI) is developing combination therapeutics for the treatment of cystic fibrosis and plans to raise $50 million.

Renaissance Capital's IPO Calendar - Week of 2/8/2016

Issuer
Business

Symbol
Exchange

Deal Size
$mil

Price Range
Shares Filed

Top 2
Bookrunners

OTG EXP
New York, NY

OTG
Nasdaq

$553

$16.00 - $18.00
32,500,000

Morgan Stanley
Credit Suisse

Airport concession operator with over 220 locations primarily around NYC.

Advanced Disposal Services
Ponte Vedra, FL

ADSW
NYSE

$450

$20.00 - $22.00
21,428,572

Deutsche Bank
Credit Suisse

Vertically integrated provider of solid waste collection, recycling and disposal services.

AveXis
Bannockburn, IL

AVXS
Nasdaq

$85

$19.00 - $21.00
4,250,000

Goldman Sachs
Jefferies

Early-stage biotech developing gene therapy for spinal muscular atrophy.

Proteostasis Therapeutics
Cambridge, MA

PTI
Nasdaq

$50

$12.00 - $14.00
3,850,000

Leerink Partners
RBC Capital Markets

Developing combination therapeutics that use amplifier molecules to modulate proteins.

Mapi-Pharma
Ness Ziona, Israel

MAPI
Nasdaq

$50

$15.00 - $17.00
3,125,000

JMP Securities

Developing extended-release formulations of existing drugs and generics.

Click to enlarge
Click to enlarge

IPO Pipeline update
Cancer Prevention Pharmaceuticals (NYSE:CPP) set terms for a $25 million IPO. Blank check company Colony Global Acquisition (CCACU) filed and set terms to raise $300 million. Nordic Realty Trust (NASDAQ:NORT) and Shimmick Construction (NASDAQ:SCCI) are still day-to-day.

The IPO market's mid-February pause is coming up as companies typically use this time to update their year end numbers and also avoid pricing during the week of President's Day.

IPO Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 20% year-to-date, compared to -8% for the S&P 500. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Synchrony Financial (NYSE:SYF), Alibaba (NYSE:BABA) and Citizens Financial Group (NYSE:CFG). The Renaissance International IPO Index is down 9% year-to-date, compared to -8% for ACWX. Renaissance Capital's International IPO ETF (NYSEARCA:IPOS) tracks the index, and top ETF Holdings include NN Group and Recruit Holdings.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital, the Renaissance IPO ETF (IPO), the Renaissance International IPO ETF (IPOS), or the Global IPO Fund (MUTF:IPOSX), may have investments in securities of companies mentioned.