U.S. IPO Weekly Recap: 4 IPOs Price As Hawaii's Top Bank Gains 8%

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Includes: ABS, ATMR, CWH, FHB, GEMP, HOME, VVV
by: Renaissance Capital IPO Research

Four IPOs raised almost $700 million this week. Coming in first was First Hawaiian with an 8% gain; the state's largest bank raised $485 million in the largest banking IPO since 2014. Meanwhile, high-growth retailer At Home Group was not a home run, trading up just 2%.

While new IPO filings have yet to pick up, market conditions appear ripe for sustained deal flow in the remainder of the year. The S&P 500 hit another all-time high on Friday, and the VIX Volatility Index dropped below 12, reaching its lowest point in 2016.

First Hawaiian makes waves
First Hawaiian (NASDAQ:FHB) raised $485 million by pricing at the high end of the range, the first bank to do so in over two years. Hawaii's largest bank by assets, deposits, loans and net income traded up 8% as investors valued it about in line with its closest competitor, Bank of Hawaii (NYSE:BOH). The bank came public with an annual yield of 3.5%, potentially a strong selling point in a low-interest rate environment.

Nothing to write home about: Fast-growing retailer trades up 2%
At Home Group
(NASDAQ:HOME) priced its $150 million IPO at the midpoint and opened up 8%, broke issue, and finished Friday with a 2% gain. LBO'd by AEA Investors, the big-box retailer offers discounted home furnishings and decor through 115 stores. A robust private label selection has supported strong EBITDA margins above 18%, and it plans to continue a rapid unit expansion of 22 new stores per year. Despite its discount to public peers, investors may have been cautious with the IPO as the broader retail sector struggles, along with At Home's slower comp growth.

Cholesterol-lowering biotech IPO goes lower
Originally set to go public in June, Gemphire Therapeutics (Pending:GEMP) completed a $30 million IPO by offering fewer shares at a lower price. It then dropped 12% on its debut. Gemphire ended the first quarter with just $2 million in cash, and hopes to enter an already-crowded market for cholesterol-lowering drugs.

Atomera (ATMR) raised $24 million at a market cap of $87 million, closing up 7% on its first day. The pre-revenue company is developing a silicon technology for improving transistors.

IPO Pricings Week of August 1st, 2016
Issuer
Business
Deal Size
($mm)
Market Cap
($mm)
Price vs.
midpoint
First-day
return
Return
at 8/5
First Hawaiian $485 $3,221 +5% +5% +8%
Hawaii-based spin-off from BNP with 62 branches and $19 billion in assets.
At Home Group $130 $336 0% 0% +2%
Operates 115 home décor stores in the South and Midwest.
Gemphire Therapeutics $30 $96 -17% -8% -8%
Developing a novel nonstatin therapy to treat high cholesterol.
Atomera $24 $87 0% +8% +8%
Developing an additive silicon technology to enhance CMOS-type transistors.
Click to enlarge

IPO Pipeline update
Just one company submitted an initial filing this past week, Bermuda-based Bank of N.T. Butterfield & Son (Pending:NTB), which we estimate could raise $250 million. Like First Hawaiian, N.T. Butterfield is the market leader on its island (39% of local deposits), and it supplements interest revenue with a large wealth management business ($106 billion in AUA/AUM). Several large companies recently submitted updated filings ahead of their IPOs, including industrial manufacturers JELD-WEN ((JWEN); est. $500mm deal size) and Mauser Group ((Pending:MSR); est. $300mm), and retailers Camping World ((NYSE:CWH); $200mm), Valvoline ((NYSE:VVV); est. $800mm) and Albertsons Companies ((NYSE:ABS); $1,600mm).

IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 3% year-to-date, while the S&P 500 is up 7%. 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 (NYSE:CFG). The Renaissance International IPO Index is down 4% year-to-date, compared to +4% for ACWX. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A.