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U.S. IPO Weekly Recap: Health And Tech Shine As Week's 5 IPOs Close Friday Up 20% Or More

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Includes: AIRB, BRBR, DDOG, IGMS, KRAT, NVST, PING, WE, XGN
by: Renaissance Capital IPO Research
Summary

Five health and tech companies went public this week, and each finished the week up at least 20%.

Three companies and one SPAC submitted initial filings.

The leader of the pack was Datadog, which priced above the upwardly revised range to raise $648 million and command a market cap of $8.7 billion.

Five health and tech companies went public this week, and each finished the week up at least 20%. One SPAC also IPO'd. Three companies and one SPAC submitted initial filings.

After weeks of nonstop news coverage, The We Company (WE) delayed its IPO to the 4Q19. Another mega IPO, Airbnb (AIRB), announced it would seek public markets in 2020.

The leader of the pack was Datadog (NASDAQ:DDOG), which priced above the upwardly revised range to raise $648 million and command a market cap of $8.7 billion (+32% vs. original midpoint). With strong growth (97% y/y) and a loyal customer base (146% dollar-based retention in 2018), the company is a solid contender in the highly competitive market for IT monitoring software. Despite coming to market at a premium valuation to the peer median, investors were willing to throw Datadog a bone given its growth and near-profitability; it finished the week up 34%.

Envista (NYSE:NVST) priced within the range to raise $589 million and command a $3.4 billion market cap. The company, spun off from Danaher, has the second largest market share in its $23 billion market, despite single-digit growth. Envista priced at a clear discount to its peers and finished the week up 31%.

Ping Identity (NYSE:PING) priced its $188 million deal at the midpoint to be valued at $1.2 billion, a discount to its cybersecurity peers. The company has lumpy sales growth, but it's profitable (22% LTM adjusted EBITDA margin) with a large market opportunity. Backed by Vista Equity (its first IPO), Ping Identity finished the week up 29%.

IGM Biosciences (NASDAQ:IGMS) popped 52% on its first day, the highest of the week, before coming down to end the week with a 34% gain. The company raised $175 million (70% bought by insiders) to command a $492 million market cap, and it finished the week up 34%.

Exagen (NASDAQ:XGN) priced its $50 million IPO at the bottom of the range and finished the week up 21%.

6 IPOs During the Week of September 16th, 2019

Issuer
Business

Deal
Size

Market Cap
at IPO

Price vs.
Midpoint

First Day
Return

Return
at 09/20

Datadog

$648M

$8,707M

32%

+39%

+34%

Provides a monitoring and analytics platform for companies' technology stacks.

IGM Biosciences

$175M

$492M

0%

+52%

+34%

Phase 1/Preclinical immuno-oncology biotech developing engineered antibodies.

Envista

$589M

$3,402M

-2%

+27%

+31%

Dental supplies and equipment unit being carved out of Danaher.

Ping Identity

$188M

$1,200M

0%

+34%

+29%

Provides an enterprise security platform focused on identity access management.

Exagen

$50M

$181M

-7%

+33%

+21%

Sells blood tests that can diagnose, prognose, or monitor autoimmune diseases.

Apex Technology Acq. (APTXU)

$305M

$381M

0%

+2%

+2%

Blank check company targeting a software or internet technology business.


BellRing Brands (NYSE:BRBR), the spinoff of Post's active nutrition unit, filed for an estimated $300 million IPO. Eco-friendly packaging maker Karat Packaging (KRAT) filed for a $50 million IPO, and French antibody biotech Innate Pharma (NASDAQ:IPHA) filed for a $100 million IPO. BI Acquisition (BIACU) filed to raise $200 million to acquire a raw materials business.

4 Filings During the Week of September 16th, 2019

Issuer
Business

Deal
Size

Sector

Lead
Underwriter

BellRing Brands

$300M

Consumer Staples

Morgan Stanley

Spinoff of Post's active nutrition unit selling protein shakes, bars, and powders.

BI Acquisition

$200M

SPAC

Deutsche Bank

Blank check company targeting the metals, mining, and natural resources sector.

Innate Pharma

$100M

Health Care

Citi

Commercial-stage French biotech developing antibody therapies for cancer.

Karat Packaging

$50M

Materials

National Sec.

Produces environmentally-friendly food packaging and consumables.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 9/19/19, the Renaissance IPO Index was up 31.4% year-to-date, while the S&P 500 had a gain of 19.9%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (NYSE:SPOT) and Roku (NASDAQ:ROKU). The Renaissance International IPO Index was up 13.0% year-to-date, while the ACWX was up 12.8%. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.