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

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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 (NASDAQ: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.

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.