U.S. IPO Week Ahead: 3 REITs, 3 SPACs And A Billion-Dollar IPO From Altice

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Includes: ATUS, FSPR, GPMT
by: Renaissance Capital IPO Research

Seven deals are on the IPO calendar to raise a combined $2.3 billion in the week ahead. Cable operator Altice USA (NYSE:ATUS) aims to raise $1.35 billion in the year's third-largest US IPO while three REITs and three blank check companies make up the rest.

US IPO Calendar

Issuer
Business

Symbol
Exchange

Deal Size($m)
Market Cap($m)

Price Range
Shares Filed

Pricing
Date

Bookrunners

Bison Capital Acquisition
China

BCACU
Nasdaq

$50
$66

$10
5,000,000

Mon
6/19

EarlyBirdCapital

Chinese blank check company formed by a former partner at NEA.

Constellation Alpha Capital
West Palm Beach, FL

CNACU
Nasdaq

$125
$160

$10
12,500,000

Mon
6/19

Cowen & Co.

Blank check company formed to acquire an Indian healthcare business.

Hennessy Capital Acquisition III
Wilson, WY

HCAC.U
NYSE MKT

$225
$281

$10
22,500,000

Wed
6/21

Credit Suisse
Stifel

Blank check company formed by Daniel Hennessy to acquire a US industrial manufacturer.

Altice USA
Bethpage, NY

ATUS
NYSE

$1,350
$21,375

$27-31
46,551,724

Wed
6/21

J.P. Morgan
Morgan Stanley
Citi

US arm of multinational Dutch cable company Altice.

Safety, Income and Growth
New York, NY

SAFE
NYSE

$205
$364

$19-21
10,250,000

Wed
6/21

BofA Merrill
J.P. Morgan
Barclays

Commercial REIT formed by iStar (NYSE:STAR) to acquire, manage and finance ground net leases.

Four Springs Capital Trust
Lake Como, NJ

FSPR
NYSE

$101
$217

$17-19
5,600,000

Thu
6/22

RBC Capital
SunTrust

Commercial REIT with 48 properties across 21 states.

Granite Point Mortgage Trust
New York, NY

GPMT
NYSE

$205
$886

$20 - 21
10,000,000

Thu
6/22

J.P. Morgan
Morgan Stanley
Citi

Pine River-managed mortgage REIT focused on commercial real estate debt.

The Optimum IPO: Altice USA targets $1.35 billion

Altice USA plans to raise $1.35 billion at a $21 billion market cap, making it the largest IPO since Snap (NYSE:SNAP). Spun out of Netherlands-based Altice N.V., this company offers cable television and broadband internet under the Optimum and Suddenlink brands in the US. While recent cable IPO WideOpenWest (NYSE:WOW) is up just 3.5% from the offer price, Altice USA has demonstrated impressive EBITDA expansion, which rose from about 31% in 2015 to 41% in the most recent quarter. It also deserves credit for growing revenue in the face of cord cutting, though high debt levels and fiber optic competitors represent key risks.

Commercial REIT hat trick

Three commercial REITs plan to price IPOs. Safety, Income and Growth (NYSE:SAFE) is going after $205 million at a market cap of $364 million. Spun out of iStar, it will own the ground under hotels and other commercial properties. These ground net leases (GNLs) are senior to other property claims, providing some assurance for its targeted 3% yield, but the company has disclosed numerous conflicts of interest with iStar, while management is not exclusively dedicated to Safety. Targeting a $101 million IPO at a $217 million market cap, Four Springs Capital Trust (FSPR) owns a diverse portfolio of 48 properties in 21 states. Granite Point Mortgage Trust (NYSE:GPMT), a commercial mortgage REIT managed by Pine River Capital, aims to raise $205 million at a market cap of $886 million.

Three blank checks: US industrials, Indian healthcare, China

Three blank check companies are scheduled to price, adding to an already active year for SPACs, in which 11 IPOs have raised $3.8 billion. Daniel Hennessy's Hennessy Capital Acquisition III (NYSEMKT:HCAC.U) is the week's largest, targeting $225 million. It follows his prior acquisitions of trucking company Daseke (NASDAQ:DSKE) and school bus maker Blue Bird (NASDAQ:BLBD). Constellation Alpha Capital (NASDAQ:CNACU), managed by Rajiv Shukla, aims to raise $125 million and targets an Indian healthcare company. China-based Bison Capital Acquisition (NASDAQ:BCACU), managed by former NEA partner Peixin Xu, is raising $50 million. We do not count SPACs toward our IPO stats.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 20.8% year-to-date, ahead of the S&P 500, which is up 8.6%. Renaissance Capital's IPO ETF (NYSEARCA:IPO) tracks the index, and top ETF holdings include Ferrari (NYSE:RACE) and TransUnion (NYSE:TRU). The Renaissance International IPO Index is up 14.5% year-to-date while ACWX is up 13.8%. Renaissance Capital's International IPO ETF (NYSEARCA:IPOS) tracks the index, and top ETF holdings include Worldpay (OTC:WPYGY) and ABN Amro (OTCPK:ABNRY).