Today - Friday, April 24, 2015
- Reuters reports Nutanix, a fast-growing maker of integrated server/storage systems for companies adopting hyperscale data center architectures (beloved by many Internet firms), is in talks to hire underwriters for an IPO that could value it at over $2.5B.
- Nutanix was valued at over $2B in a $140M 2014 funding round. To a large extent, its systems are aimed at companies that want the cost, integration, scalability, and deployment time benefits of hyperscale data centers, but (unlike Google, Facebook, or Amazon) don't want to take a do-it-yourself approach to hardware and management software.
- As of last August, Nutanix had over 800 customers; its client list includes Starbucks, the U.S. Army, Best Buy, Honda, Yahoo Japan, and eBay. Last year, VMware launched a rival platform (known as EVO:RAIL) that leverages its vSphere server virtualization platform and has been adopted by OEMs such as EMC, Dell, and Fujitsu.
- After pricing its 5.11M-share IPO at $17 (in the middle of a $16-$18 range), API management software vendor Apigee (Pending:APIC) opened at $20 but gradually sold off to close at $16.68, down 1.9%.
- Apigee, whose platform helps companies develop, secure, publish, monitor, and (if they wish) monetize APIs for their apps, is currently worth $485M. For the 6 months ending Jan. 31, the company had revenue of $32.6M (+39% Y/Y) and a net loss of $26.8M. Intel (bought API management software firm Mashery in 2013) is a notable rival.
- Prospectus, IPO analysis
- Burlington, MA-based CoLucid Pharmaceuticals (Pending:CLCD) is set for its IPO of 5.36M shares of common stock at $13 - 15.
- The clinical stage biopharmaceutical firm is developing a small molecule for the acute treatment of migraine headaches. Lasmiditan, currently in Phase 3 development in an oral tablet form, is a 5-HT1F receptor agonist that blocks the pain transmission without the side effects of the class of migraine therapies called triptans. The 5-HT1F receptor is a serotonin subtype that lacks the vasoconstrictive properties of other serotonin receptors, which can cause adverse cardiac events in patients with cardiovascular or cerebrovascular disease. Top-line data from a Phase 3 study, called SAMURAI, is expected in Q3 2016. A second Phase 3 evaluating an IV formulation of lasmiditan should commence in H1 2016.
- The company licensed lasmiditan from Eli Lilly.
- 2014 financials ($M): Operating expenses: 2.3 (+43.8%); Net Loss: (3.0) (-34.6%); CF Ops: (0.8) (+49.3%).
- Migraine-related tickers: (OFIX +0.4%)(TEVA +1.8%)(AVNR)(RDHL +0.5%)(PTX -3%)(ALDR -0.8%)(ENDP -0.8%)(JNJ +0.6%)(AMGN -0.7%)(DEPO +1.2%)(AGN)
- Cambridge, MA-based blueprint Medicines (Pending:BPMC) is set for its IPO of 7,187,500 shares of common stock at $15 - 17.
- The biopharmaceutical firm focuses on genomically-defined diseases driven by abnormal kinase activation. Kinases are enzymes that play an essential role in cell behavior. Its drug development platform combines the company's genomics expertise with a novel library of kinase inhibitors against ~200 kinases. It identifies drug targets by sequencing unexplored cancers and mining public data with new genome analysis algorithms.
- One of its lead product candidates is BLU-285, which targets KIT Exon 17 and PDGFRalphaD842V, abnormally active receptor tyrosine kinase mutants that play key roles in cancer and proliferative disorders. It will be initially developed for the treatment of systemic mastocytosis, a disorder in which the body produces too many mast cells, and defined subtypes of gastrointestinal stromal tumor. Another product candidate, BLU-554, which targets the kinase FGFR4, is being developed for a defined subset of patients with hepatocellular carcinoma. Both products will enter Phase 1 development after the company files the INDs with the FDA mid-year.
- 2014 financials ($M): Operating expenses: 39.7 (+89.0%); Net Loss: (40.3) (-92.8%); CF Ops: (35.4) (-86.3%).
Tuesday, April 21, 2015
- Brazilian steakhouse chain Fogo De Chao (FOGO) files for a $75M IPO.
- The company operates 26 restaurants in the U.S. and nine in Brazil.
- Revenue of $262.28M and net income of $6.99M was reported for the fiscal year ending December 28, 2014.
- A restaurant contribution margin of 32.5% from Fogo stands out in relation to the industry average.
- SEC Form S-1
9:14 AM| Comment!
Friday, April 17, 2015
- ETSY is now down 10% from a post-IPO opening trade of $31.00, and 22% from a Thursday high of $35.74. Shares remain up 74% from their $16 IPO price.
- With the craft/vintage goods marketplace still trading for nearly 16x 2014 sales, valuation concerns have been easy to find. Wedbush, which launched coverage with a Neutral rating before the IPO, notes Etsy traded as high as 84x 2015E EBITDA, a level declared to be "well beyond the high end of any comparable group."
- Wedbush's $14 target is equal to 23x 2016E EBITDA (in-line with Alibaba). Aside from valuation, the firm is worried about seller practices drawing more scrutiny. "We have identified several examples of sellers sourcing from Alibaba (contrary to Etsy guidelines and sometimes at markups exceeding 30,000%) and possible trademark infringement."
- It's also concerned about Etsy's long-term market size. "We believe Etsy benefits from the difference in what individuals expect to receive for their work time versus their free time, as well as the lack of overhead, resulting in lower prices ... However, we believe this arbitrage is only possible in limited categories of goods, thus capping Etsy's ultimate growth."
- Bulls have focused on Etsy's strong top-line growth (56% in 2014), cult following, and healthy mobile exposure (36% of 2014 GMS and 53% of visits). SA author M Nunez, after going through the S-1: "I feel the key word for this company is uniqueness, it has done a phenomenal job creating a true ecosystem of buyers and sellers of unique products and has been able to capitalize on that in a significant way."
12:37 PM| Comment!
- Following along a string of asset-unloading, Telecom Italia (NYSE:TI) is planning an IPO of its Inwit wireless-tower unit that could raise €730M (about $785M), Bloomberg reports.
- Unit chief Oscar Cicchetti met with i-bankers at Banca IMI, Mediobanca, Deutsche Bank and UBS on Thursday, sources said. Inwit owns about 11,500 sites.
- The move would be of a piece with similar planning at Abertis and Telefonica (which is looking at a sale of its German towers).
- If TI's towers unit sells 40% of its business on the Milan exchange it would be valued at €1.8B.
Thursday, April 16, 2015
10:54 AM| 7 Comments
- Trading in Party City (Pending:PRTY) starts off at $20.50 to mark a 20.6% jump from where the IPO was priced.
- Investor interest in the retail chain is reported to be very high.
- The company is expected to retire some debt with the IPO proceeds.
- Previously: Party City IPO to launch tomorrow (Apr. 15 2015)
- Previously: Party City IPO priced at $17
Wednesday, April 15, 2015
- Blaze Pizza is considering an IPO in the future as it looks to position itself as the 5th largest pizza chain in the U.S. after the big four - Pizza Hut, Domino's, Little Caesars, and Papa John's.
- The company thinks it could grow its fast-casual concept to 2K domestic units and 1K international outlets.
- On an average revenue per unit basis, Blaze ranks well-ahead of its pizza peers.
- Bloomberg notes that early backing from sports stars Lebron James and Maria Shriver has helped spread the word on Blaze.
- Blaze's sales rose 450% to $33M last year.
- Virtu Financial (Pending:VIRT) has priced shares for its upcoming IPO at $19, the top of a $17-$19 range, Bloomberg reports.
- The firm is offering 16.5M shares, which would mean a raise of $313.5M and a valuation of more than $2.5B.
- Virtu had kiboshed IPO plans last spring in the wake of Michael Lewis' Flash Boys book critiquing high-frequency traders, but started planning again in the fall and issued a prospectus last week.
- Previously: Virtu restarts IPO process (Apr. 06 2015)
- ETSY has priced its 16.7M-share IPO at the high end of its $14-$16 range. The online craft/vintage goods marketplace is valued at $1.78B, or 9x 2014 sales. Shares begin trading tomorrow.
- Etsy is raising $213M by selling 13.3M new shares. Existing holders are selling 3.3M-5.8M, depending on whether a 2.5M-share overallotment option is picked up. 5% of shares have been set aside for Etsy merchants and small investors.
- Prospectus, prior Etsy coverage, IPO analysis
- IPO specialists think Party City (Pending:PRTY) could provide investors some value at the expected pricing range of $15 to $17.
- Specialty retailers such as Dave & Busters and Burlington Stores have held up well since their public launch, they note.
- The company's same-store sales growth of 5.8% easily topped the pace of sector rivals and new distribution channels look promising.
- The catch for investors is buying in at a low share price before a rallies catches on.
- Another consideration: New Party City investors won't hold a lot of sway at the company with P-E firms Thomas H. Lee Partners and Advent International estimated to hold 75% of the shares with a mission that may differ from main street investors.
- SA contributors Don Dion and APBK Capital have a deeper dive into how or if to play the Party City IPO.
- Party City SEC Form S-1
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