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US IPO Week Ahead: A pivotal week with 8 IPOs


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Eight deals are on the calendar for the week ahead looking to raise a combined $2.6 billion. Headlining the week is DellEMC spin-off  Pivotal Software , which provides a platform for enterprises to manage cloud-based apps. The company is expected to raise $555 million and is coming public on the heels of three very successful enterprise tech IPOs:  Zscaler (ZS: +72% from IPO price),  Dropbox (DBX: +43%) and most recently,  Zuora (ZUO: +47%). 

U.S. IPO Calendar
Issuer
Business
Deal Size
Market Cap
Price Range
Shares Filed
Top
Bookrunners
GrafTech International ( EAF )
Brooklyn Heights, OH
$850M
$6,800M
$21 - $24
37,777,776
JP Morgan
Credit Suisse
Vertically-integrated manufacturer of graphite electrodes used in steelmaking.
Mereo BioPharma ( MREO )
London, United Kingdom
$70M
$412M
$17.62
3,973,229
Cowen
BMO
Developing rare disease drug candidates acquired from large pharmas.
MorphoSys ( MOR )
Planegg, Germany
$200M
$3,008M
$24.12
8,300,000
Goldman
JP Morgan
Licensing antibodies to pharmas and developing its own therapy for lymphoma.
Surface Oncology (SURF)
Cambridge, MA
$84M
$405M
$13 - $15
6,000,000
Goldman
Cowen
Developing next-generation cancer therapies to boost the immune system.
Vrio (VRIO)
Dallas, TX
$609M
$4,031M
$19 - $22
29,684,000
Goldman
JP Morgan
Leading Latin American satellite TV service being spun out of AT&T.
FirstCaribbean Bank (FCI)
Warrens, Barbados
$226M
$1,235M
$22 - $25
9,600,000
Barclays
UBS
CIBC-owned bank operating in Barbados, the Bahamas and the Cayman Islands.
Level One Bancorp (LEVL)
Farmington Hills, MI
$28M
$211M
$27 - $29
1,000,000
Raymond James
KBW
Michigan-based commercial bank with $1.3 billion in assets.
Pivotal Software (PVTL)
San Francisco, CA
$555M
$4,274M
$14 - $16
37,000,000
Morgan Stanley
Goldman
DellEMC spin-off providing a platform to streamline cloud software development.


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Spun out by DellEMC, cloud software company  Pivotal Software  (PVTL) is targeting $555 million at a $4.3 billion valuation. Pivotal boasts a blue-chip customer base with 158% dollar-based net expansion on subscriptions. That said, the company has heavy losses and competes against large legacy application providers including IBM and Oracle. 

Vrio  (VRIO), AT&T's Latin American satellite television service, is looking to raise $609 million at a $4 billion valuation. Vrio holds the #1 or #2 position in most of its markets and has invested $1 billion in infrastructure upgrades since 2011, which should drive margin expansion. However, the company's growth hinges on expanding its lower-priced prepaid offering. 

A third spin-off, CIBC-owned  FirstCaribbean International Bank  (FCI) is targeting a $1.2 billion valuation. CIBC is selling all the IPO shares and will receive the full $226 million in expected proceeds. FirstCaribbean operates 62 branches located primarily in the Bahamas, Barbados, and the Cayman Islands with 20%+ market share of loans and deposits in these markets. However, its home market of Barbados has been hit by several sovereign debt downgrades. The company plans to pay a quarterly dividend of $0.375/share (6.4% pro forma yield).  

GrafTech International ( EAF ), a leading manufacturer of graphite electrodes (GEs), is coming public at an estimated $6.8 billion market cap. PE owner Brookfield, which bought the company in 2015 for an estimated $700 million, is selling the entire deal and will receive the full $850 million of expected proceeds. GrafTech stands to benefit from a cyclical upturn in GE pricing and has enhanced revenue visibility by securing three- to five-year take-or-pay contracts.

MorphoSys ( MOR ), a German-listed biotech, plans to raise $200 million at a $3 billion valuation, making it the largest biotech to list in the US in the last decade. Its lead candidate, MOR208, is an anti-CD19 antibody for diffuse large B cell lymphoma (DLBCL). The company recently disclosed positive interm data from an ongoing Phase II study.

AIM-listed Mereo BioPharma Group ( MREO ) is targeting $70 million at a $412 valuation. The company is focused on in-licensing mid-stage rare disease drug candidates from large pharmas. Its lead candidate, BPS-804, is in a Phase 2b trial for adults with brittle bone disease and is expected to begin a Phase 2b/3 trial for children in the 2H18.

Surface Oncology (SURF) is expected to raise $84 million at a $405 million valuation. The biotech has a strategic partnership with Novartis to develop a broad portfolio of next-generation therapies that target a variety of cancers using biological pathways critical to the immunosuppressive tumor microenvironment (TME). Its lead candidate, SRF231, an antibody that promotes phagocytosis (tumor destruction by macrophages) by inhibiting protein CD47, recently began dosing patients for a Phase 1 trial.

Level One Bancorp  (LEVL) is targeting $28 million at a $211 million valuation. With 10 branches and $1.3 billion in assets, this Michigan-based bank serves mainly mid-sized businesses with a focus on commercial and industrial and commercial real estate lending. Every bank IPO since 2017 trades above its offer price.

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 -0.7 % . Renaissance Capital's IPO ETF ( IPO ) tracks the index, and top ETF holdings include Spotify (SPOT) and  Snap (SNAP). The Renaissance International IPO Index is up 5.0% year-to-date, while the ACWX is up 0.4%. Renaissance Capital's International IPO ETF ( IPOS ) tracks the index, and top ETF holdings include Orsted (DONG Energy) and Samsung BioLogics .

The article US IPO Week Ahead: A pivotal week with 8 IPOs 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's Renaissance IPO ETF (symbol: IPO) , Renaissance International ETF (symbol: IPOS) , or separately managed institutional accounts 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 , EAF , MREO , MOR



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