U.S. IPO Week Ahead: Back-To-Back Record Activity With 12 IPOs Set To Price

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Includes: AMRH, ASNS, BXG, JT, LEVB, MOLC, MPMH, SAIL, SCPH, SEND, SFIX, WSPT
by: Renaissance Capital IPO Research

Following the busiest week of 2017 with ten IPOs coming to market, the following week will be another record breaker with 12 IPOs scheduled to raise a combined $2.1 billion. The week will be led by suburban office REIT Workspace Property Trust (WSPT), looking to raise $527 million; the deal was initially expected to price this past week, but got postponed at the last minute. Other notable deals include online personal styling service Stitch Fix (NASDAQ:SFIX), Chinese wealth management platform Jianpu Technology (NYSE:JT), automated email platform SendGrid (NYSE:SEND) and specialty chemical producer MPM Holdings (MPMH).

Issuer
Business
Symbol
Exchange
Deal Size ($m)
Market Cap ($m)
Price Range
Shares Filed
Bookrunners
Workspace Property Trust
Horsham, PA
WSPT
NYSE
$527
$1,038
$12.00-15.00
39,000,000
Goldman Sachs,
J.P. Morgan,
BofA Merrill,
6 more...
Recently formed REIT focused on suburban office properties.
SendGrid
Denver, CO
SEND
NYSE
$112
$724
$13.50-15.50
7,700,000
Morgan Stanley,
J.P. Morgan
Provides a cloud-based platform for emails and marketing campaigns.
Arsanis
Waltham, MA
ASNS
Nasdaq
$50
$186
$15.00-17.00
3,125,000
Citi,
Cowen & Company,
Piper Jaffray
Developing antibodies designed to prevent serious infectious diseases.
Jianpu Technology
China
JT
NYSE
$214
$1,654
$8.50-10.50
22,500,000
Goldman Sachs,
Morgan Stanley,
J.P. Morgan
Provides a wealth management platform in China.
MPM Holdings
Waterford, NY
MPMH
NYSE
$350
$1,443
$23.00-25.00
14,583,333
J.P. Morgan,
Goldman Sachs,
Credit Suisse,
4 more...
Restructured global producer of specialty silicones and other chemical additives.
Bluegreen Vacations
Boca Raton, FL
BXG
NYSE
$110
$1,270
$16.00-18.00
6,198,648
Stifel,
Credit Suisse,
BofA Merrill,
1 more...
Sells timeshares and manages resorts in the US.
Cañuelas Mill
Argentina
MOLC
NYSE
$302
$926
$14.00-17.00
19,500,000
J.P. Morgan,
UBS Investment,
HSBC Corporation,
1 more...
Leading Argentine food company offering branded flour, oil and biscuits.
SailPoint Technologies
Austin, TX
SAIL
NYSE
$200
$926
$9.00-11.00
20,000,000
Morgan Stanley,
Citi,
Jefferies,
1 more...
Provides identity governance software to enterprises.
scPharmaceuticals
Burlington, MA
SCPH
Nasdaq
$96
$276
$14.00-16.00
6,400,000
Jefferies,
Leerink Partners,
BMO Capital
Commercializing an injectable version of an intravenous drug for heart failure.
Stitch Fix
San Fancisco, CA
SFIX
Nasdaq
$190
$1,953
$18.00-20.00
10,000,000
Goldman Sachs,
J.P. Morgan,
Barclays,
1 more...
Online personal styling service and clothing retailer.
Level Brands
Charlotte, NC
LEVB
NYSE
$10
$45
$6.00-6.00
1,700,000
Joseph Gunnar
Launching consumer lifestyle brands inspired by Kathy Ireland.

VC-Backed High Growth

Founder-led and backed by Baseline and Benchmark, Stitch Fix has generated over $1 billion in sales through its on-demand and subscription clothing offerings. However, customer and revenue growth decelerated significantly in FY17, and plans for increased market spend and further expansion into lower-margin lines will pressure margins. We note that the company's established apparel e-commerce peers have not traded well over the last three months, and are concerned by recent management turnover combined with insider selling.

Backed by Foundry and Bessemer Venture Partners, SendGrid is a play on the increasing importance of effective B2C email communication. The company's self-service sales model has enabled it to expand margins and reach profitability on a revenue base of under $100 million; however, a ramp-up in S&M will likely hold back near-term margins.

Acquired by Thoma Bravo in 2014, founder-led SailPoint offers a leading, next-generation identity and access management solution to large enterprises. Unlike many recent tech IPOs, SailPoint has grown rapidly at 30%+, while maintaining profitability (12% LTM EBITDA margin). The company stands to benefit from the rising risk of security breaches and growing compliance requirements, and management expects to top line growth to continue at 25-30%.

Chinese and Argentine ADRs

Chinese wealth management platform Jianpu Technology will be the 14th Chinese ADR IPO this year, following three Chinese IPOs last week: after-school math tutoring services provider Four Seasons (FEDU: +5.3% from IPO price), mobile search engine Sogou (SOGO: +6.5%) and peer-to-peer online platform PPDAI Group (PPDF: +0.6%).

Leading Argentine food company Cañuelas Mill will be the third Argentine ADR IPO in the 2H17, following Loma Negra (LOMA: +12.2% from 10/31/17 IPO) and Despegar.com (DESP: +10.2% from 9/19/17 IPO), taking advantage of positive investor sentiment toward the country under a new market-friendly government. The company plans to raise $302 million (50% insider selling) to reduce its high debt load and find liquidity for the Navilli family owners.

Specialty Real Estate

Led by former Mack-Cali (NYSE:CLI) executives, Workspace Property Trust is a recently formed pure-play suburban office REIT. Management believes it will benefit from industry fundamentals like Millennials moving to the suburbs and sees a large consolidation opportunity, being the only publicly traded REIT to focus exclusively on the suburban office space.

Taken private by BBX Capital (NYSE:BBX) in 2013, Bluegreen Vacations is a leading timeshare company that caters to the underpenetrated Millennial/Gen X demographic through its flexible points-based platform. The company has been shifting towards a capital-light model by forming relationships with third-party developers and selling timeshares on commission and earning management fees for operating their resorts (60%+ of 2016 sales). That said, the company is subject to several outstanding legal issues with existing owners and employees, and BBX is selling 42% of the deal.

Biotechs

Injectable drug developer scPharmaceuticals plans to raise $96 million. Its lead product candidate, Furoscix, is a subcutaneous formulation of furosemide delivered via a patented infusor for worsening heart failure in an outpatient setting. The pre-revenue company filed an NDA for Furoscix with the FDA in August 2017 and has also filed INDs to deliver injectable versions of IV-delivered antibiotics.

OrbiMed-backed Arsanis plans to raise $50 million; insiders intend to purchase up to $20 million (40%) of the IPO. Its lead product candidate, ASN100, is a monoclonal antibody in Phase 2 trials for the prevention of Staphylococcus aureus pneumonia in high-risk, mechanically ventilated patients.

QTCB-listed AMERI Holdings (NASDAQ:AMRH) is seeking to raise $12 million in a Nasdaq uplisting. The outsourced IT services provider booked $47 million in sales during the LTM with a -14% EBITDA margin.

Level Brands plans to raise $10 million in a best efforts Reg A+ IPO and is excluded from RC's IPO stats. The company booked $3.6 million in sales during the LTM with a -27% EBITDA margin.

IPO Market Snapshot

The Renaissance IPO Indices are market cap-weighted baskets of newly public companies. The Renaissance IPO Index is up 32.1% year to date, ahead of the S&P 500, which is up 15.3%. Renaissance Capital's IPO ETF (NYSEARCA:IPO) tracks the index, and top ETF holdings include First Data (NYSE:FDC) and Square (NYSE:SQ). The Renaissance International IPO Index is up 26.4% year to date, while the ACWX is up 22.1%. Renaissance Capital's International IPO ETF (NYSEARCA:IPOS) tracks the index, and top ETF holdings include Japan Post (OTCPK:JPHLF) and ABN AMRO Group (OTCPK:ABNRY).

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.