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U.S. IPO Week Ahead: The Largest Canadian IPO Ever Leads A 9-IPO Week

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Includes: CAN, CNSP, CNTG, DFNSU, DNK, ETNB, GFL, GRTX, KRKR, MCMJU, QK, SI, SRACU, TELA, UBER
by: Renaissance Capital IPO Research
Summary

In the week ahead, nine IPOs and one SPAC are set to raise $2.6 billion, 75% of which is from GFL Environmental.

GFL is joined by a California bank, three biotechs, two diagnostic/medical device companies, and two Chinese issuers.

Six of the deals have insider buying.

In the week ahead, nine IPOs and one SPAC are set to raise $2.6 billion, 75% of which is from GFL Environmental (GFL). GFL is joined by a California bank, three biotechs, two diagnostic/medical device companies, and two Chinese issuers. Six of the deals have insider buying.

In what would be the largest Canadian IPO ever, GFL Environmental plans to raise $1.9 billion at a $6.9 billion market value ($9.5 billion enterprise value) in a dual listing on the NYSE and the TSX. The Vaughan, Ontario-based company is the fourth largest diversified waste management firm in North America, serving over 4 million customers across Canada and 23 US states, and is coming to market as investor taste is shifting toward defensive names.

Focused on crypto businesses, California bank Silvergate Capital (NYSE:SI) plans to raise $52 million at a $267 million market value. The company has $2.2 billion in total assets, $1.9 billion in total deposits, and $222 million in total equity. The cryptocurrency space is beginning to heat up, with mining equipment makers Canaan (CAN) and Bitmain Technologies submitting public and confidential filings, respectively.

Three biotechs are on the calendar for the week ahead. Phase 3 oncology biotech Galera Therapeutics (NASDAQ:GRTX) plans to raise $75 million at a $400 million market cap. The company is developing a therapy for radiotherapy-induced mucositis and expects to report data from its current trial in the 1H21. 89bio (NASDAQ:ETNB), a Phase 1 biotech developing therapies for NASH and other metabolic diseases, plans to raise $70 million. While recent NASH/metabolic biotechs have performed poorly, early stage NASH biotech Akero Therapeutics (NASDAQ:AKRO) is up 45% from its June IPO. Micro-cap biotech CNS Pharmaceuticals (NASDAQ:CNSP), which is in the early stages of developing therapies for brain cancer, plans to raise $10 million.

German genetic testing provider Centogene (NASDAQ:CNTG) plans to raise $60 million, half of which is covered by insiders. TELA Bio (NASDAQ:TELA), which sells soft tissue implants used in hernia repair and reconstructive surgery, plans to raise $60 million as well.

Two Chinese issuers are attempting US IPOs at a time when Chinese IPOs have generally not performed well. Q&K International Group (NASDAQ:QK), which renovates and sub-leases apartments in Chinese cities, plans to raise $49 million at an $854 million market cap; the company originally planned to raise $94 million but cut its share offering by nearly half on Friday. Q&K is one of three recent Chinese real estate companies to seek a US listing, joined by Fangdd Network Group (NASDAQ:DUO) which IPO'd this past week (+0%) and Phoenix Tree Holdings (DNK) on file to raise an estimated $300 million. Along with Q&K, fast-growing Chinese news site 36KR Holdings (NASDAQ:KRKR) plans to raise $58 million at a $676 million market cap.

Cannabis SPAC Stable Road Acquisition (NASDAQ:SRACU) plans to raise $150 million, and may be joined by Merida Merger I (NASDAQ:MCMJU) and Gabelli's LGL Systems Acquisition (NASDAQ:DFNSU).

10 companies' lock-ups are expiring this week, including Uber's (NYSE:UBER), which will be the second largest of a VC-backed IPO, ever.

U.S. IPO Calendar

Issuer
Business

Deal Size
Market Cap

Price Range
Shares Filed

Top
Bookrunners

Q&K International
Shanghai, China

$49M
$854M

$17 - $19
2,700,000

Morgan Stanley
CICC

Renovates and sub-leases apartments in Chinese cities.

89bio
San Francisco, CA

$70M
$210M

$15 - $17
4,375,000

BofA
Leerink

Phase 1 biotech developing therapies for NASH and other metabolic diseases.

36KR Holdings
Beijing, China

$58M
$676M

$14.50 - $17.50
3,600,000

Credit Suisse
CICC

Online media publisher focused on New Economy companies in China.

Centogene
Rostock, Germany

$60M
$310M

$14 - $16
4,000,000

Leerink
Evercore ISI

Provides genetic tests for rare disease diagnostics and drug development.

Galera Therapeutics
Malvern, PA

$75M
$400M

$14 - $16
5,000,000

BofA
Citi

Phase 3 biotech developing treatments for radiotherapy-induced oral mucositis.

GFL Environmental
Vaughan, Canada

$1,927M
$6,909M

$20 - $24
87,572,496

JP Morgan
BMO

North America's fourth-largest diversified waste management firm.

Silvergate Capital
La Jolla, CA

$52M
$267M

$13 - $15
3,744,307

Barclays
KBW

California commercial bank with a focus on digital currency businesses.

CNS Pharmaceuticals
Houston, TX

$10M
$77M

$4 - $5
2,125,000

Benchmark

Early stage biotech developing therapies for brain cancer and other CNS tumors.

Stable Road Acquisition
Venice, CA

$150M
$193M

$10
15,000,000

Cantor Fitz.

Blank check company focused on companies within the cannabis industry.

TELA Bio
Malvern, PA

$60M
$165M

$14 - $16
4,000,000

Jefferies
Piper Jaffray

Sells soft tissue implants used in hernia repair and reconstructive surgery.

The following IPOs are expected to price this week:

36KR Holdings, an online media publisher focused on New Economy companies in China, plans to raise $58 million by offering 3.6 million ADSs at a price range of $14.50 to $17.50. At the midpoint of the proposed range, 36KR Holdings would command a market value of $676 million. 36KR Holdings, which was founded in 2010, booked $429 million in revenue over the last 12 months. The Beijing, China-based company plans to list on the Nasdaq under the symbol KRKR. Credit Suisse, CICC, and AMTD Global Markets are the joint bookrunners on the deal. Insiders intend to purchase $20 million of the IPO (35% of the deal).

89bio, a Phase 1 biotech developing therapies for NASH and other metabolic diseases, plans to raise $70 million by offering 4.4 million shares at a price range of $15.00 to $17.00. At the midpoint of the proposed range, 89bio would command a market value of $210 million. 89bio was founded in 2018. The San Francisco, CA-based company plans to list on the Nasdaq under the symbol ETNB. BofA Securities, SVB Leerink, and RBC Capital Markets are the joint bookrunners on the deal. Insiders intend to purchase up to $40 million of the IPO (57% of the deal).

Centogene, which provides genetic tests for rare disease diagnostics and drug development, plans to raise $60 million by offering 4.0 million shares at a price range of $14.00 to $16.00. At the midpoint of the proposed range, Centogene would command a market value of $310 million. Centogene, which was founded in 2006, booked $45 million in revenue over the last 12 months. The Rostock, Germany-based company plans to list on the Nasdaq under the symbol CNTG. SVB Leerink and Evercore ISI are the joint bookrunners on the deal. Please note: Insiders intend to purchase up to $30 million of the IPO (50% of the deal).

CNS Pharmaceuticals, an early stage biotech developing therapies for brain cancer and other CNS tumors, plans to raise $10 million by offering 2.1 million shares at a price range of $4.00 to $5.00. At the midpoint of the proposed range, CNS Pharmaceuticals would command a market value of $77 million. CNS Pharmaceuticals was founded in 2017. The Houston, TX-based company plans to list on the Nasdaq under the symbol CNSP. The Benchmark Company is the sole bookrunner on the deal.

Galera Therapeutics, a Phase 3 biotech developing treatments for radiotherapy-induced mucositis, plans to raise $75 million by offering 5.0 million shares at a price range of $14.00 to $16.00. At the midpoint of the proposed range, Galera Therapeutics would command a market value of $400 million. Galera Therapeutics was founded in 2012. The Malvern, PA-based company plans to list on the Nasdaq under the symbol GRTX. BofA Securities, Citi, and Credit Suisse are the joint bookrunners on the deal. Insiders intend to purchase up to $40 million of the IPO (53% of the deal).

GFL Environmental, North America's fourth-largest diversified waste management firm, plans to raise $1.9 billion by offering 87.6 million shares at a price range of $20.00 to $24.00. At the midpoint of the proposed range, GFL Environmental would command a market value of $6.9 billion. GFL Environmental, which was founded in 2007, booked $2.6 billion in revenue over the last 12 months. The Vaughan, Canada-based company plans to list on the NYSE under the symbol GFL. J.P. Morgan, BMO Capital Markets, Goldman Sachs, and seven others are the joint bookrunners on the deal. Please note: Dual listing on the NYSE and TSX.

Q&K International Group, which renovates and sub-leases apartments in Chinese cities, plans to raise $94 million by offering 2.7 million ADSs at a price range of $17.00 to $19.00. At the midpoint of the proposed range, Q&K International Group would command a market value of $854 million. Q&K International Group, which was founded in 2012, booked $1.2 billion in revenue over the last 12 months. The Shanghai, China-based company plans to list on the Nasdaq under the symbol QK. Morgan Stanley and CICC are the joint bookrunners on the deal. Insiders Crescent Capital, Newsion Venture Capital, and Youzhen intend to purchase up to $45 million of the IPO (48% of the deal).

Silvergate Capital, a California commercial bank with a focus on digital currency businesses, plans to raise $52 million by offering 3.7 million shares at a price range of $13.00 to $15.00. At the midpoint of the proposed range, Silvergate Capital would command a market value of $267 million. Silvergate Capital, which was founded in 1988, booked $90 million in revenue over the last 12 months. The La Jolla, CA-based company plans to list on the NYSE under the symbol SI. Barclays, Keefe Bruyette Woods, Sandler O'Neill, and one other are the joint bookrunners on the deal.

Stable Road Acquisition Corp., a blank check company focused on companies within the cannabis industry, plans to raise $150 million by offering 15.0 million shares at $10.00 to command a market value of $193 million. Stable Road Acquisition Corp. was founded in 2019. The Venice, CA-based company plans to list on the Nasdaq under the symbol SRACU. Cantor Fitzgerald is the sole bookrunner on the deal.

TELA Bio, which sells soft tissue implants used in hernia repair and reconstructive surgery, plans to raise $60 million by offering 4.0 million shares at a price range of $14.00 to $16.00. At the midpoint of the proposed range, TELA Bio would command a market value of $165 million. TELA Bio, which was founded in 2012, booked $11 million in sales over the last 12 months. The Malvern, PA-based company plans to list on the Nasdaq under the symbol TELA. Jefferies and Piper Jaffray are the joint bookrunners on the deal. Insiders intend to purchase up to $10 million of the IPO (16% of the deal).

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 10/31/19, the Renaissance IPO Index was up 27.7% year-to-date, while the S&P 500 had a gain of 21.2%. 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 18.5% year-to-date, while the ACWX was up 15.1%. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.

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