U.S. IPO Week Ahead: Cybersecurity Firm Carbon Black Leads In 8 IPO Week

|
Includes: ASLN, BCML, CBLK, INSP, PRT, ROAD, STXB, UBX
by: Renaissance Capital IPO Research

Eight companies are scheduled to raise a combined $743 million in the week ahead. Top cybersecurity provider Carbon Black (NASDAQ:CBLK) headlines the week, as yet another high-growth tech IPO enters the public arena on the heels of DocuSign (DOCU: +37% from IPO price) and Smartsheet (SMAR: +30%).

Issuer
Business

Deal Size
Market Cap

Price Range
Shares Filed (mm)

Top
Bookrunners

PermRock Royalty Trust (NYSE:PRT)
Midland, TX

$125M
$243M

$19-21
6.3

Wells Fargo
Goldman Sachs

Trust formed by NGP's Boaz Energy to own Permian Basin royalty interests.

ASLAN Pharmaceuticals (NASDAQ:ASLN)
Singapore

$60M
$283M

$8.05
7.5

Leerink Partners
Piper Jaffray

Singapore biotech developing cancer therapies using the HER pathway.

Inspire Medical Systems (NYSE:INSP)
Maple Grove, MN

$75M
$305M

$14-16
5.0

BofA Merrill Lynch
Goldman Sachs

Sells an implanted device for treating sleep apnea.

Unity Biotechnology (NASDAQ:UBX)
Brisbane, CA

$85M
$787M

$16-18
5.0

Goldman Sachs
Morgan Stanley

Preclinical biotech developing therapies to reduce the effects of aging.

BayCom (NASDAQ:BCML)
Walnut Creek, CA

$50M
$215M

$21-23
2.3

FIG Partners
D.A. Davidson

California bank with 17 full-service branches at over $1.2 billion in assets.

Carbon Black
Waltham, MA

$128M
$1,265M

$15-17
8.0

Morgan Stanley
J.P. Morgan

Provides endpoint security software to large enterprises.

Construction Partners (NASDAQ:ROAD)
Dothan, AL

$180M
$788M

$15-17
11.3

Baird
Raymond James

Vertically-integrated provider of road construction and paving in the Southeast.

Spirit of Texas Bancshares (NASDAQ:STXB)
Conroe, TX

$40M
$211M

$20-22
1.9

Stephens Inc.
KBW

Texas community bank with 15 branches at over $1 billion in assets.

Carbon Black, which provides a comprehensive suite of next-gen endpoint security solutions, aims to raise $128 million at a $1.3 billion valuation. The company has grown its top line at a 51% CAGR from 2015 to 2017 and expects to continue growing at 25%+ as it shifts focus to its cloud-based offering. That said, losses are high due to high sales and marketing spend.

Preclinical biotech Unity Biotechnology is expected to raise $85 million at a $787 million valuation. The company is focused on anti-aging therapies with one therapy expected to enter Phase 1 trials in the 2Q18. It has raised $222 million from VCs including Arch, Venrock, WuXi and Mayo.

Construction Partners, a vertically-integrated civil infrastructure company in the Southeast, aims to raise $180 million at a $788 million valuation. Management believes its scale and vertical integration are key competitive advantages over local operators, and expects to reach $1 billion in revenue by 2022. That said, the highway construction industry is highly cyclical and private equity sponsor SunTx is selling 40% of the deal.

Sleep apnea device company Inspire Medical Systems seeks to raise $75 million at a $305 million valuation. Its Inspire implant received premarket approval from the FDA in 2014 and has been commercially available in certain European markets since 2011. Insiders intend to purchase $15 million (20% of deal size) on the IPO.

Singapore cancer biotech ASLAN Pharmaceuticals is expected to raise $60 million at a $283 million valuation. The company is currently listed on the Taipei Exchange (TPEx: 6497) and focuses on diseases that are both highly prevalent in Asia and that have orphan indications in the US and Europe. Its lead candidate is being studied in a global pivotal clinical trial for biliary tract cancer and expects to report top line data in 2019.

Texas community bank Spirit of Texas Bancshares aims to raise $40 million at a $211 million valuation. Total assets grew at a 2-year CAGR of 10.5% between 2015 and 2017 to $1 billion as of 2017 year-end. It primarily operates in the Houston, Dallas/Fort Worth and Bryan/College Station metropolitan areas.

California bank BayCom is targeting $50 million at a $215 million valuation. The company operates 17 full-service branches and has completed five whole-bank acquisitions since 2010. As of December 31, 2017, assets totaled $1.25 billion.

PermRock Royalty Trust aims to raise $125 million at a $243 million valuation. The trust was formed in 2013 to own royalty interests in oil and gas properties operated by Boaz Energy II, a successful family-run E&P backed by Natural Gas Partners. The perpetual trust plans to make month distributions beginning on May 30, 2018, planning a 12% pro forma yield during its first 12 months.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has returned 1.5% year-to-date, while the S&P 500 is down -0.1%. Renaissance Capital's IPO ETF (NYSEARCA:IPO) tracks the index, and top ETF holdings include Spotify (NYSE:SPOT) and Snap (NYSE:SNAP). The Renaissance International IPO Index is up 1.7% year-to-date, while the ACWX is up 0.6%. Renaissance Capital's International IPO ETF (NYSEARCA:IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) (OTCPK:DNNGY) and Samsung BioLogics.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.