US IPO Week Ahead: 10 IPOs expected to price, led by PagSeguro's $1.8 billion deal

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Ten deals are expected to price next week, raising a combined $3.1 billion in proceeds, as this month gears up to be the busiest January in over eight years in terms of proceeds raised ($3.1 billion raised to date). The week will be headlined by payment services provider  PagSeguro Digital , which is expected to raise $1.8 billion in the largest IPO this year, followed by Blackstone-backed  Gates Industrial , which is expected to raise $750 million. Seven biotechs, including three micro-caps, are also set to price, looking to raise a total of $469 million. 

U.S. IPO Calendar
Deal Size
Market Cap
Price Range
Shares Filed
Entera Bio ( ENTX )
Jerusalem, Israel
$10 - $12
Developing oral formulations of treatments for a thyroid condition and osteoporosis.
PagSeguro ( PAGS )
São Paulo, Brazil
$17.50 - $20.50
Morgan Stanley
Provides online and in-store payment services for small businesses in Brazil.
Eyenovia ( EYEN )
New York, NY
$10 - $12
Roth Cap.
Developing micro-formulations of common eye therapies.
Gates Industrial (GTES)
Denver, CO
$18 - $21
Morgan Stanley
Global manufacturer of power transmission belts and fluid power products.
Menlo Therapeutics (MNLO)
Redwood City, CA
$14 - $16
Piper Jaffray
Developing treatments for moderate to severe skin itch and chronic cough.
Solid Biosciences (SLDB)
Cambridge, MA
$16 - $18
JP Morgan
Developing a gene therapy to treat Duchenne muscular dystrophy (DMD).
Adial Pharmaceuticals (ADIL)
Charlottesville, VA
$9 - $11
Joseph Gunnar
Developing a targeted therapy for alcohol use disorder based on an approved drug.
ARMO Biosciences (ARMO)
Redwood City, CA
$14 - $16
Leerink Partners
Developing immunotherapies targeting various cancers and solid tumors.
Las Vegas, NV
$16 - $18
Credit Suisse
Deutsche Bank
Apollo-backed supplier of electronic slot machines in Native American casinos.
resTORbio (TORC)
Boston, MA
$14 - $16
Leerink Partners
Developing a kinase inhibitor to treat respiratory infections in elderly patients.

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Spun out of Brazilian Internet giant Universo Oline (UOL),  PagSeguro Digital ( PAGS ) is looking to raise $1.8 billion, surpassing this week's $1.5 billion IPO from  ADT  (ADT), making it the largest deal of 2018. The payment solutions provider has grown its top-line by 123% in the 9mo17 and has ample room for future growth in the large underserved micro-merchant and SME market ($558 billion TPV). 

Blackstone-backed  Gates Industrial (GTES) plans to raise $751 million in its IPO as a means to pay down debt (4.1x net debt/adj. EBITDA post-IPO). The company sells products that are essential to the functioning of industrial equipment and have a high cost of failure, which supports its strong free cash flow generation. Although sales growth ex-FX stagnated from 2014 to 2016 as a result of weakness in its end markets, YTD growth has been strong as the company stands to benefit from a cyclical turn in industrial spending.

Electronic slot machine supplier  PlayAGS  (AGS) is expected to raise $174 million in its upcoming IPO as the company seeks to reduce leverage (4.3x LTM net debt/adj. EBITDA post-IPO). Acquired by Apollo in 2013 for a reported $240 million, PlayAGS has grown through acquisitions and is now getting a boost to organic revenue through a strong cabinet upgrade cycle (24% revenue increase in the 9mo17). 

Seven biotechs are set to price next week, including micro-caps  Entera Bio ( ENTX ),  Eyenovia ( EYEN ) and  Adial Pharmaceuticals (ADIL). Dermatological biotech  Menlo Therapeutics (MNLO) is expected to raise $85 million. Lead candidate, serlopitant, was licensed from Merk in 2012 and is currently in a 484-patient Phase 2 trial for atopic dermatitis, with data expected in the 2Q18. The company is also enrolling patients in two Phase 2 trials for psoriasis and chronic refractory cough, and is expected to begin two Phase 3 trials for prurigo nodularis in the 1H18.  Solid Biosciences (SLDB), an early-stage biotech developing therapies for Duchenne muscular dystrophy (DMD), plans to raise $100 million. Solid's lead candidate, SGT-001, is a gene transfer therapy and recently began enrolling patients for its Phase 1/2 trial, with preliminary data expected in the 1H19. Late-stage immuno-oncology company  ARMO Biosciences  (ARMO) is looking to raise $100 million to fund the development of its immunotherapies that target various cancers and solid tumors. Lead product candidate, pegilodecakin, has been advanced into late-stage clinical development for the treatment of pancreatic ductal adenocarcinoma (PDAC) and non-small cell lung cancer (NSCLC). resTORbio  (TORC), a respiratory tract infection biotech, is expected to raise $85 million in the upcoming week. The company is developing a kinase inhibitor to treat respiratory tract infections in the elderly and its lead candidate is currently in a Phase 2b clinical trial, with top-line data expected in the 2H18. 

IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 2.1% year-to-date and the S&P 500 is up 5.1 % . Renaissance Capital's IPO ETF ( IPO ) tracks the index, and top ETF holdings include Snap  (SNAP) and US Foods  (USFD). The Renaissance International IPO Index is up 5.1% year-to-date, while the ACWX is up 5.5%. Renaissance Capital's International IPO ETF ( IPOS ) tracks the index, and top ETF holdings include Orsted (DONG Energy)  and  ASR Nederland .

The article US IPO Week Ahead: 10 IPOs expected to price, led by PagSeguro's $1.8 billion deal originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital, the Renaissance IPO ETF (symbol: IPO) or the Global IPO Fund (symbol: IPOSX) , may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: News Headlines , IPOs
Referenced Symbols: IPO , IPOS , ENTX , PAGS , EYEN

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