Seven IPOs and one SPAC plan to raise $2.1 billion in the week ahead, led by tax software provider Vertex (VERX).
A handful of companies could join the IPO calendar in the coming week, including leading mortgage lender Rocket Companies (RKT), cloud hosting service provider Rackspace (RXT), and health center chain Oak Street Health (OSH).
Vertex (VERX), which provides tax software for businesses, plans to raise $317 million at a $2.0 billion market cap. The family-owned company has a track record of profitability and strong cash flow generation, and it has achieved growth at scale. However, the company plans to increase spending to accelerate growth, and the IPO proceeds will go to debt to fund an insider dividend.
Vital Farms (VITL), the largest producer of pasture-raised eggs in the US, plans to raise $125 million at a $692 million market cap. The company operates through a network of 200 family farms and has become the leading US brand of pasture-raised eggs and butter and the second largest US egg brand by retail dollar sales. Fast-growing and profitable, Vital Farms offers 20 retail SKUs across more than 13,000 stores.
Vasta Platform (VSTA), which provides K-12 curriculum solutions in Brazil, plans to raise $306 million at a $1.4 billion market cap. A spin-off from Brazilian private educational group Cogna (B3: COGN3), Vasta has demonstrated growth and profitability, and it has become one of the three largest players in Brazil's educational publishing market.
Li Auto (LI), which manufactures luxury electric SUVs in China, plans to raise $855 million at a $7.9 billion market cap. The company states that it is the first to successfully commercialize extended-range electric vehicles in China. It started the volume production of its first model, Li ONE, in November 2019 and has delivered over 10,400 units as of June 30, 2020.
Phase 2 viral disease biotech AlloVir (ALVR) plans to raise $251 million at a $1.0 billion market cap. An ElevateBio portfolio company, its lead candidate is beginning a pivotal Phase 2 trial for high-risk hematopoietic stem cell transplant and solid organ transplant patients following Phase 1 results that showed a 93% response rate. The company is also developing candidates for influenza and COVID-19.
Colud-based real estate brokerage Fathom Holdings (FTHM) plans to raise $20 million at a $102 million market cap. The company believes that agents can increase their income by 25% by joining the company by keeping a higher percentage of commission.
Holdover 1847 Goedeker (GOED), which operates an e-commerce platform for appliances and home goods, plans to raise $10 million at a $58 million market cap. Goedeker's has evolved from a brick and mortar operation to a nationwide omni-channel retailer, with over 90% of sales placed online. The unprofitable company saw revenue decline both in 2019 and the 1Q 2020 due to supply chain issues.
ACE Equity Partners’ SPAC ACE Convergence Acquisition (ACEV.U) plans to raise $200 million at a $250 million market cap. The blank check company plans to target a business in the the IT infrastructure software and semiconductor sector.
|U.S. IPO Calendar|
King of Prussia, PA
|$14 - $16
|Provides comprehensive tax software for businesses.|
|ACE Convergence Acq. (ACEV.U)
|Blank check company formed by ACE Equity Partners and industry veterans targeting a tech business.|
|$16 - $18
|Phase 2 biotech developing allogeneic T cell therapies for viral diseases.|
|Li Auto (LI)
|$8 - $10
|Manufactures smart electric SUVs in China.|
|Vasta Platform (VSTA)
São Paulo, Brazil
|$15.50 - $17.50
|Brazilian provider of K-12 school curriculum solutions being spun out of Cogna.|
|Vital Farms (VITL)
|$15 - $17
|Largest US producer of pasture-raised eggs and butter.|
|Fathom Holdings (FTHM)
|$7 - $9
|Cloud-based full-service real estate brokerage.|
|$9 - $11
|Operates an e-commerce platform for appliances and home goods.|
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Street research is expected for three companies on Monday, 7/27: Dun & Bradstreet (DNB), Accolade (ACCD), and Lemonade (LMND).
Lock-up periods will be expiring for six companies. On Sunday, 7/26: Sundial Growers (SNDL). On Tuesday, 7/28: AnPac Bio-Medical Science (ANPC), Black Diamond Therapeutics (BDTX), and One Medical (ONEM). On Wednesday, 7/29: Arcutis Biotherapeutics (ARQT), Reynolds Consumer Products (REYN), and Beam Therapeutics (BEAM).
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 7/23/20, the Renaissance IPO Index was up 36.8% year-to-date, while the S&P 500 was up 0.2%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Zoom Video (ZM) and Uber (UBER). The Renaissance International IPO Index was up 29.1% year-to-date, while the ACWX was down 6.2%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Xiaomi and Meituan-Dianping.The article US IPO Week Ahead: Chinese EVs and US tax software lead a diverse 7 IPO week 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.