U.S. IPO Week Ahead: 3 IPOs Feature Biggest Bank Since 2014 And A High-Growth Retailer

|
Includes: FHB, HOME, MTFB
by: Renaissance Capital IPO Research

Three companies are on the IPO calendar to raise over $600 million in the first week of August. First Hawaiian (NASDAQ:FHB) plans to raise $464 million in the largest US bank IPO since Citizens Financial Group (NYSE:CFG) was spun out of RBS in September 2014. Offering fast growth and high margins, At Home Group (NASDAQ:HOME) will be the first big-box retailer since Ollie's Bargain Outlet (NASDAQ:OLLI) in July 2015.

That's a first: First Hawaiian goes public in largest US bank IPO since 2014

Being spun out of BNP Paribas (OTCQX:BNPQF), First Hawaiian is #1 in Hawaii by assets, loans, deposits and net income. While the low interest rate environment has eaten into spreads and net income ($215 million) has been flat or down for three years, its efficiency ratio has consistently come in under 50%. The bank plans an initial dividend of 3.6% - above that of key peer Bank of Hawaii (NYSE:BOH).

IPO HOME

At Home Group is set to raise $130 million to pay down debt ($407 million post-IPO; 3.4x LTM adj. EBITDA). LBO'd in 2011, the home décor retailer operates 115 large-format stores and plans to open an additional 22 per year moving forward, with a long-term potential of 600 US locations (5x current footprint). Sales have grown at a 3-year CAGR of 20%, with nine consecutive quarters of positive comp store sales growth. Selling unbranded and private label products (70% of SKUs) has led to strong EBITDA margins (18% in LTM), but those margins have declined in each of the past three years.

Motif Bio (Pending:MTFB), a UK-listed biotech, plans to raise $35 million in order to complete Phase 3 trials for iclaprim, an antibiotic for multi-drug resistant bacteria.

Renaissance Capital's IPO Calendar - Week of 8/1/2016
Issuer
Business
Symbol
Exchange
Deal Size
$mil
Price Range
Shares Filed
Lead Managers
First Hawaiian
Honolulu, HI
FHB
Nasdaq
$464 $21 - $23
21,086,956
Goldman Sachs
BofA Merrill Lynch
BNP Paribas
Hawaii-based spin-off from BNP with 62 branches and $19 billion in assets.
At Home Group
Plano, TX
HOME
NYSE
$130 $14 - $16
8,667,000
BofA Merrill Lynch
Goldman Sachs
Jefferies
Operates 115 home décor stores in the South and Midwest.
Motif Bio
New York, NY
MTFB
Nasdaq
$35 $12.42
2,800,000
SunTrust Robinson Humphrey
Ladenburg Thalmann
Late-stage biotech developing antibiotics for multi-drug resistant bacteria.
Click to enlarge

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. After five weeks of ourperformance, the US IPO Index tied the S&P 500 this week as both indices fell 0.1%. Year-to-date, the IPO Index is down 3% year-to-date, while the S&P 500 up 6%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (NYSE:BABA), Synchrony Financial (NYSE:SYF) and Citizens Financial Group. The Renaissance International IPO Index rose 3% this week for a YTD return of -4%, compared to the ACWX, which increased 1% this week for a YTD return of +2%. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Recruit Holdings, NN Group and Aena S.A.