U.S. IPO Week Ahead: 10 Deals Expected With Energy Leading The Way

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Includes: BIOX, CDLX, EOLS, HMI, IPSC, MOTS, QES, TFIG, VCTR, WHD
by: Renaissance Capital IPO Research

January's record-breaking activity is spilling over into February. Ten companies are targeting a combined $1.8 billion. Headlined by three energy companies, deals include an Argentine ag-tech, a Turkish Burger King franchisee, a Chinese wearables manufacturer, an asset manager, a Botox biotech, a medical device company and the year's first US tech company.

U.S. IPO Calendar

Issuer
Business

Deal Size
Market Cap

Price Range
Shares Filed

Top
Bookrunners

Bioceres
Rosario, Argentina

$130M
$497M

$10 - $12
11,818,182

Jefferies
Piper Jaffray

Sells biologic agrochemicals and develops seed productivity traits in Argentina.

TFI TAB Food
Istanbul, Turkey

$220M
$1,187M

$9 - $11
22,000,000

Morgan Stanley
Credit Suisse

Exclusive franchisee for Burger King and other QSRs in Turkey and China.

Cactus
Houston, TX

$375M
$1,311M

$16 - $19
21,428,572

Citi
Credit Suisse

Manufactures wellheads and pressure control equipment for US E&Ps.

Evolus
Irvine, CA

$65M
$313M

$12 - $14
5,000,000

Cantor Fitz.
Mizuho

Preparing to launch a biosimilar version of Botox.

Huami
Hefei, China

$110M
$662M

$10 - $12
10,000,000

Credit Suisse
Citi

Chinese manufacturer of wearable devices partnered with Xiaomi.

Quintana
Houston, TX

$125M
$435M

$12 - $15
9,259,259

BofA ML
Simmons

Provides diversified well services to onshore oil and gas E&Ps.

Victory Capital
Brooklyn, OH

$211M
$1,399M

$17 - $19
11,700,000

JP Morgan
BofA ML

Multi-boutique asset management firm with $62 billion in AUM.

Cardlytics
Atlanta, GA

$76M
$288M

$13 - $15
5,400,000

BofA ML
JP Morgan

Provides a banking-based advertising channel to consumer products marketers.

IPSCO Tubulars
Houston, TX

$500M
$1,307M

$20 - $23
23,255,813

BofA ML
Morgan Stanley

US steel pipe supplier for E&Ps being spun out of Russia's TMK.

Motus GI
Tirat Carmel, Israel

$30M
$121M

$6 - $8
4,250,000

Piper Jaffray
Oppenheimer

Developing a medical device to assist with intraprocedural colonoscopy cleaning.

The rebound in oil prices has pumped up the energy sector for IPOs. While they operate in a highly cyclical and competitive industry, investors appear bullish with the year's three offerings each up over 10%. Fracking equipment company Cactus (NYSE:WHD) is targeting $375 million at a $1.3 billion valuation. The PE-backed company has grown its wellhead market share to 27% and plans to pay down debt on the offering.

Diversified well services company Quintana Energy Services (NYSE:QES) aims to raise $125 million at a $435 million market value. In the 9 months of 2017, the company saw revenue grow 73% to $237 million and adjusted EBITDA turn positive (7% margin).

IPSCO Tubulars (IPSC), the US subsidiary of Russia's TMK, provides steel pipes to E&Ps. IPSCO saw revenue pop 125% to $730 million in the 9 months of 2017 and net income turn positive to $23 million from a loss of $150 million. The company aims to raise $500 million at a $1.3 billion market cap.

Argentine ag-tech Bioceres (BIOX) is targeting $130 million at a $497 million market value. Originally formed to focus on researching crop traits, the company acquired an established agro-chemical business in 2016, boosting pro forma revenue to over $120 million in its most recent fiscal year. Bioceres has developed a robust product pipeline, partnering with major players such as Dow AgroSciences, Momentive and Syngenta, and expects to bring its drought-resistant soybean and wheat seeds to market in the next few years.

TFI TAB Gida (TFIG), the master franchisee of Burger King in Turkey and China, aims to raise $220 million at a $1.2 billion market value. From 2014 to 2016, the company has opened an average of 200 net new stores per year with 12.5% average same-store sales growth. It now has over 1,800 restaurants system-wide and plans to open 75 new restaurants in Turkey and 225 in China in each of 2018 and 2019.

Chinese wearables manufacturer Huami (NYSE:HMI) is targeting $110 million at a $662 million market value. While Huami is China's leading supplier of fitness bands, the company relies heavily on its relationship with Xiaomi, a financial backer and its top customer (>80% of 9-month 2017 sales). Huami is the first Chinese company of 2018 to list on a US exchange, and could mark the beginning of an active year. This week, a Nasdaq executive said the exchange expects China listings to jump 25-30% in 2018.

Victory Capital Holdings (NASDAQ:VCTR), a multi-boutique asset management firm, is targeting a $211 million IPO at a $1.4 billion valuation. With nine independently managed franchises and ETF platform VictoryShares, Victory Capital plans to grow through select acquisitions and investments in technology to expand its platform.

Cardlytics (NASDAQ:CDLX) aims to raise $76 million at a $288 million market cap. The company has developed a compelling targeted marketing platform using data on consumer transactions from over 2,000 financial institutions. While it is the leader in banking-based marketing, it relies heavily on data from Bank of America, which was 51% of MAU and commands a 63% revenue split. We note that the company's post-IPO funding will be equal to its market cap.

Evolus (NASDAQ:EOLS), which is being spun out of parent Alphaeon, is developing a biosimilar for Botox. To date, the company has successfully completed Phase III trials and could see an approval in mid-to-late 2018. Evolus is expected to be the seventh biotech IPO of 2018, and earlier this week a Nasdaq executive suggested that that number could soon double based on listing applications.

Motus GI Holdings (NASDAQ:MOTS) is developing a medical device for intraprocedural colonoscopy cleaning. The company aims to raise $30 million at a $121 million market value, and plans to initiate a clinical trial in 2018 for approval in 2019.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. After the week's market sell-off, the Renaissance IPO Index has returned -0.8% year-to-date and the S&P 500 is up 3.3%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Snap (NYSE:SNAP) and US Foods (NYSE:USFD). The Renaissance International IPO Index is up 5.1% year-to-date, while the ACWX is up 3.1%. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and ASR Nederland.