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US IPO Week Ahead: 7-IPO week led by mega REIT and world's largest for-profit school

The 2017 IPO market continues keeps up the pace in the week ahead, with seven deals on the IPO calendar . Blackstone's home-rental REIT, Invitation Homes , aims to raise $1.5 billion in the largest US IPO since October 2015. The week's other two big deals, LBO Laureate Education and spinoff IC Power , focus on Latin American education and electricity, and like Invitation carry high debt. The IPO market on track to raise $4.9 billion over just two weeks (Jan 19 - Feb 2); compare that to $6.2 billion in the entire first half of 2016.

Renaissance Capital's IPO Calendar - Week of 1/30/2017
IssuerBusiness SymbolExchange Deal Size$mil Price RangeShares Filed Lead Managers
Invitation HomesDallas, TX INVHNYSE $1,502 $18 - $2177,000,000 Deutsche BankJ.P. Morgan
Blackstone-backed REIT that owns a portfolio of single-family homes in the US.
Laureate EducationBaltimore, MD LAURNasdaq $537 $17 - $2029,000,000 Credit SuisseMorgan Stanley
World's largest for-profit higher education company.
IC PowerLima, Peru ICPNYSE $350 $12 - $1525,900,000 BofA Merrill LynchCredit Suisse
Generates and distributes power in Peru and other Latin American markets.
Braeburn PharmaceuticalsPrinceton, NJ BBRXNasdaq $150 $18 - $217,692,308 J.P. MorganBofA Merrill Lynch
Commercializing a long-acting implant for treatment of opioid addiction.
Kimbell Royalty Partners LPFort Worth, TX KRPNYSE $100 $19 - $215,000,000 Raymond JamesRBC Capital Markets
Owns 3.7 million acres of oil and gas mineral interests across the US.
Ramaco ResourcesLexington, KY METCNasdaq $81 $12 - $156,000,000 Credit SuisseJefferies
Recently-formed metallurgical coal provider with reserves in Appalachia.
VisterraCambridge, MA VISTNasdaq $50 $12 - $143,850,000 Leerink PartnersStifel
Developing vaccines for influenza A, Dengue, Zika and multiple myeloma.

An open invitation from Blackstone

The big deal this week is Invitation Homes (INVH), one of the largest owner of single-family homes in the US. Formed by Blackstone in 2012, this REIT has spent the last five years buying properties at distressed prices, mainly in Florida and California. Competing closely with American Homes ( AMH ) and Silver Bay ( SBY ), Invitation now plans to grow its quarterly dividend by paying down its pile of debt, starting with the $1.5 billion IPO.

Graduation day: KKR's Laureate Education is back

Formerly Sylvan Learning, Laureate Education (LAUR) is going public in a $500 million IPO about 10 years after its KKR-led buyout in 2007. It operates the largest for-profit education system with over 1 million students enrolled worldwide, with the majority in Latin America. Laureate is in growing markets and the beleaguered education sector has rebounded recently, but it still must deal with regulatory uncertainties, a heavy debt burden and volatile exchange rates.

Peruvian power

IC Power (ICP), which is being spun out of Kenon Holdings ( KEN ), plans to raise $350 million. The company has taken on massive debt to build its diverse portfolio of power facilities in Peru and other Latin American countries. While low energy prices caused sales to decline 6% in 2015 ($1.3 billion), it generates high cash flow and recent developments and acquisitions give it enough capacity (3.9 GW) to grow in its emerging markets.

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Two recently-formed plays on coal and oil/gas

Ramaco Resources (METC) hopes to raise $81 million and become Appalachia's low-cost provider of metallurgical coal, which is used to make steel. Ramaco stands to benefit from a sharp spike in metallurgical coal prices in 2016, following a five-year decline alongside the global glut of steel. Now that the glut in steel. Kimbell Royalty Partners LP (KRP) was formed in 2015 by a group of Texas-based owners of oil and gas mineral interests. Like 2015 IPO Black Stone Minerals LP (BSM; -3%), Kimbell's royalty rights give it a high-margin income stream, while the MLP highlights its attractive location in the Permian Basin.

Implant for addictions

Braeburn Pharmaceuticals (BBRX) aims to raise $150 million to fund the commercial launch of its 6-month implant for managing opioid addiction, which could replace daily oral therapies. Founding VC Apple Tree Partners plans to invest $50 million on the IPO (33% of deal) and $40 million in a private placement. The one holdover from last week, vaccine biotech Visterra (VIST), will again attempt to price its $50 million IPO; insiders have indicated on 53%.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 4.9% year-to-date, while the S&P 500 is up 2.5%. Renaissance Capital's IPO ETF ( IPO ) tracks the index, and top ETF holdings include First Data (FDC) and TransUnion (TRU). The Renaissance International IPO Index is up 3.6% year-to-date, while the ACWX is up 4.3%. Renaissance Capital's International IPO ETF ( IPOS ) tracks the index, and top ETF holdings include Aena and ABN Amro . To find out if this is the best ETF for you, visit ourIPO Investing page .

The article US IPO Week Ahead: 7-IPO week led by mega REIT and world's largest for-profit school 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.


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

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