U.S. IPO Weekly Recap: 4 Small IPOs Price Ahead Of August Doldrums

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Includes: AMAL, ETON, INTR, MESA, MQAI, PCB, PSAV, RTLR, SPAQ.U, VCNX
by: Renaissance Capital IPO Research

The IPO market's very active summer 2018 has wrapped up. This week, four small IPOs got in before the annual August pause. Each priced below the midpoint to raise a combined $307 million. A regional airline, two regional banks, and biotech averaged a 0% return. Top performer Amalgamated Bank (NASDAQ:AMAL) finished with a mere 6% gain, and the other three were negative. Trading was poor, but that came as no surprise to our institutional research clients (the deals didn't screen out particularly well on IPO Pro's MUSCLE Method, either).

Blank check IPOs are as strong as ever. Led by executives from Apollo Global Management, Spartan Energy Acquisition (SPAQ.U) raised $480 million - 20% more than expected - in the year's third-largest SPAC offering.

In IPO pipeline news, we saw two companies submit initial filings: Diamondback MLP Rattler Midstream (RTLR; $100 million deal size) and medical device developer MaxQ AI (MQAI; $8 million). Two companies also officially withdrew: Aircraft lessor Intrepid Aviation (INTR), which recently announced a tie-up with Amadeo Capital, and event A/V services firm PSAV (PSAV), which was acquired by Blackstone.

4 IPOs and 1 SPAC During the Week of August 6th, 2018

Issuer
Business

Deal
Size

Market Cap
at IPO

Price vs.
Midpoint

First Day
Return

Return
at 08/10

Amalgamated Bank

$104M

$499M

-3%

+6%

+6%

Union-owned commercial bank based in New York.

Spartan Energy Acq.

$480M

$580M

0%

+1%

+1%

Blank check company led by Apollo executives focused on acquiring an energy business.

Pacific City Financial (NASDAQ:PCB)

$48M

$326M

-5%

+0%

+0%

California commercial bank primarily serving Korean-American communities.

Mesa Air Group (NASDAQ:MESA)

$116M

$426M

-20%

-2%

-2%

Regional US air carrier with a fleet of 145 aircraft.

Vaccinex (NASDAQ:VCNX)

$40M

$169M

-11%

-5%

-4%

Developing antibody therapies to combat cancer and neurological diseases.

Amalgamated Bank, a union-owned commercial bank based in New York, raised $104 million by offering 6.7 million shares (100% secondary) at $15.50, slightly below the midpoint of the $15 to $17 range. At pricing, the company commanded a market cap of $499 million. The stock finished the week with a 5% gain. Amalgamated Bank listed on the Nasdaq under the symbol AMAL. Barclays, J.P. Morgan and Keefe Bruyette Woods acted as lead managers on the deal.

Pacific City Financial, a California commercial bank primarily serving Korean-American communities, raised $48 million by offering 2.4 million shares at the $20 low end for a fully diluted market value of $326 million. The stock traded flat on its Friday debut. Pacific City listed on the Nasdaq under the symbol PCB. Keefe Bruyette Woods, Raymond James and Sandler O'Neill acted as lead managers on the deal.

Mesa Air Group, a regional airline providing contract-based flying for United and American Airlines, raised $116 million by offering a downsized 9.6 million shares at $12, well below the $14 to $16 range. It wasn't enough: Mesa broke issue, trading down 3.3% on its IPO. At pricing, the Phoenix, AZ-based company commanded a fully diluted market value of $426 million and an enterprise value of $1.2 billion. Mesa listed on the Nasdaq under the symbol MESA. Raymond James and BofA Merrill Lynch acted as lead managers on the deal.

Vaccinex, which is developing antibody therapies to combat Huntington's disease, MS and cancer, raised $40 million by offering 3.3 million shares at $12, the low end of the $12 to $15 range. It fell 5% on day one, then finished the week with a -8% loss. At the IPO price, the Rochester, NY-based company commanded a fully diluted market value of $169 million. Insiders had indicated plans to purchase $30 million of the IPO (75% of the deal). Vaccinex listed on the Nasdaq under the symbol VCNX. Oppenheimer & Co. and BTIG acted as lead managers on the deal.

6 Filings During the Week of August 6th, 2018

Issuer
Business

Deal
Size

Sector

Lead
Underwriter

Eton Pharmaceuticals (NASDAQ:ETON)

$21M

Health Care

National Sec.

Former Imprimis Pharmaceuticals subsidiary developing multiple candidates.

Gores Holdings III (NASDAQ:GRSHU)

$375M

SPAC

Deutsche Bank

Blank check company formed by The Gores Group.

Weidai (NYSE:WEI)

$100M

Technology

Morgan Stanley

Provides an auto-secured loan platform for small businesses in China.

MaxQ AI

$8M

Health Care

ViewTrade

Clinical-stage medical device company developing an AI-based medical imaging platform.

Longevity Acquisition (NASDAQ:LOACU)

$40M

SPAC

Cantor Fitz.

Blank check company focused on acquiring a business in China.

Rattler Midstream

$100M

Energy

Credit Suisse

Crude oil and natural gas midstream services unit being spun out of Diamondback.