The IPO market is back in session. The first unicorn of the year, Zscaler ( ZS ), headlines the week ahead featuring four companies that are targeting a combined $386 million. A strong debut could nudge forward a number of other software unicorns, with Dropbox ( DBX ) and China's iQIYI ( IQ ) eligible to launch during the week. Spotify SPOT will host its investor day on Thursday, March 15. Other deals scheduled to price this week include a biotech, a bank and a blank check company.
U.S. IPO Calendar
Deal SizeMarket Cap
Price RangeShares Filed
Arcus Biosciences (RCUS)Hayward, CA
$13 - $157,100,000
Clinical-stage biotech developing cancer immunotherapies.
Zscaler ( ZS )San Jose, CA
$10 - $1210,000,000
Provides a cloud-based network security service for enterprises.
Bridgewater Bancshares (BWB)Bloomington, MN
$10.50 - $12.506,700,000
Minnesota-based community bank focused on commercial real estate lending.
Opes Acquisition (OPESU)Mexico City, Mexico
Blank check company formed by Axis Capital Management to acquire a Mexican business.
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Cybersecurity provider Zscaler ( ZS ) aims to raise $110 million, valuing the company at nearly $1.4 billion. Zscaler is the industry leader in cloud-based security solutions, the fastest-growing segment of the $1.6 billion Secure Web Gateway market. The company has the makings of a strong tech IPO with high growth, manageable losses and a reasonable valuation (7.7x LTM sales). Insiders have indicated on $5 million of the IPO.
Arcus Biosciences (RCUS) is targeting $99 million at a $600 million market value. Insiders have indicated on $40 million (40% of the deal) on the IPO. The clinical stage immuno-oncology company has strong backing and an experienced management team, which sold their previous preclinical drug to Bristol-Myers Squibb for $1.25 billion in 2015. While risks include the need for substantial additional funding and emerging competition in the space, Arcus is approaching numerous milestones in 2018 and 2019. Immuno-oncology peer ARMO BioSciences (ARMO) is also up nearly 200% since its January 2018 IPO.
Bridgewater Bancshares (BWB) aims to raise $77 million at a $344 million valuation. The founder-led Minnesota community bank provides loans to small business entrepreneurs and high-net-worth individuals across the Twin Cities MSA. Bridgewater has grown assets at a 28% CAGR since 2013 to over $1.6 billion, and grew net interest income 29% to $54 million in 2017.
Opes Acquisition (OPESU), a SPAC targeting a Mexican business, aims to raise $100 million at a $129 million market value. The company is led by José and Gonzalo White, the co-founders of sponsor Axis Capital Management.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has returned 6.1% year-to-date and the S&P 500 is up 4.2 % . 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 4.4% year-to-date, while the ACWX is down 1.6%. 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: Year's first unicorn leads a pickup in activity with 4 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, the Renaissance IPO ETF (symbol: IPO) or the Global IPO Fund (symbol: IPOSX) , may have investments in securities of companies mentioned.