Week Ahead: Will 2016 See Its First IPO?

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Includes: AMQ, BGNE, ELVT, NORT, SCCI
by: Renaissance Capital IPO Research

With the postponement of Elevate Credit's offering this week, there still has not been an IPO in 2016.

This coming week could see the IPO of AmeriQuest and Nordic Realty Trust, both of which are scheduled to price next week. The delayed Shimmick Construction deal or the postponed Elevate Credit IPO could also be completed.

On an IPO Quest
Cloud-based fleet services provider AmeriQuest (Pending:AMQ) is set to raise $74 million at a market cap of $268 million. The company aims to digitize inefficient, paper-based B2B processes and offers a robust suite of end-to-end financial process automation software and procurement solutions. The company has been profitable since inception with 30% EBITDA margins, and transaction volume grew 63% in 2014 to $12.2 billion. However, investors may question the poor and inconsistent free cash flow conversion and year-to-date declines in procurement and operating lease revenue.

Formed by C-QUADRAT Investment, Nordic Realty Trust (NASDAQ:NORT) is a REIT formed to own office and industrial properties in Norway, Sweden and Denmark. The company has letters of intent for $162 million in properties and a $620 million pipeline, with a focus on government tenants. CEO Bjarne Eggesbø previously formed Polar Star Realty, a REIT with similar aspirations that failed to go public in December 2014. Next week, Nordic Realty Trust expects to raise $75 million at a market cap of $81 million.

Elevate comes down
Online non-prime lender Elevate Credit (NYSE:ELVT) postponed its $76 million IPO this week, even with $11 million in insider buying on the proposed deal. The delay likely reflects broad market conditions, especially poor recent trading among its peers. OnDeck (NYSE:ONDK), LendingClub (NYSE:LC) and OneMain Holdings (NYSE:OMF) are all down roughly 30% over the last month.

California construction company Shimmick Construction (NASDAQ:SCCI) failed to price its $75 million IPO (33% insider) again this week, and deal timing is still day-to-day. Shimmick believes it is at the precipice of an expansionary cycle in public construction spending, but peer companies have yet to recover from recent sell-offs.

Renaissance Capital's IPO Calendar - Week of 1/25/2016
Issuer
Business
Symbol
Exchange
Deal Size
$mil
Price Range
Shares Filed
Lead Manager(s)
Nordic Realty Trust
New York, NY
NORT
Nasdaq
$75 $15.00
5,000,000
Wunderlich Securities
Newly organized REIT formed to acquire office and industrial properties in Norway.
Shimmick Construction Company
Oakland, CA
SCCI
Nasdaq
$75 $11.00 - $13.00
6,250,000
FBR Capital Markets
Provides heavy civil construction services to public agencies in California.
AmeriQuest
Cherry Hill, NJ
AMQ
Nasdaq
$74 $11.00 - $13.00
6,153,846
Raymond James
Stephens Inc.
Provides a suite of cloud-based B2B services for the transportation industry.

IPO Pipeline Update: Three companies set terms, one submitted an initial filing
Chinese immuno-oncology biotech BeiGene (NASDAQ:BGNE) set terms on Tuesday to raise $127 million; it could be the first biotech IPO of 2016. Mapi-Pharma (NASDAQ:MAPI), which is developing extended-release formulations of existing drugs, set terms for a $50 million IPO. KLR Energy Acquisition (KLREU) filed and set terms this week for an IPO to raise $130 million. Microcap water utility Global Water Resources (NASDAQ:GWRS) filed on Tuesday for an IPO to raise $6 million.

IPO Market Snapshot
In 2015, 170 companies raised $30 billion. By January 22 last year, four IPOs had priced, compared to none so far in 2016. The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 12.6% year-to-date, compared to -7% for the S&P 500. Renaissance Capital's IPO ETF (NYSEARCA: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 4.1% year-to-date, compared to -8% for ACWX. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include NN Group and Recruit Holdings.

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