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The U.S. initial-public-offerings market is gearing up for a busy fall, with at least six companies launching roadshows on Tuesday as traders returned to their desks following the Labor Day holiday weekend.
With the broader equity markets at record levels and a robust pipeline of private unicorns, or companies valued at more than $1 billion, “many long-awaited names will finally take the leap to public markets, supported by the busiest month of August for new filings in over a decade,” said Bill Smith, founder and chief executive of Renaissance Capital, a provider of institutional research and IPO exchange-traded funds.
“That said, fall IPO activity is unlikely to match the summer’s frantic pace,” Smith wrote in commentary. “August filings were down from prior months, and the year’s weak IPO aftermarket returns serve as a headwind, evidenced by several postponements at the end of July.”
Still, as of Sept. 1, there were 115 U.S. IPOs publicly on file, of which 81 have updated filings since June 1, suggesting they are actively working up deals. The list includes names like eyeglass maker Warby Parker
WRBY,
— planning a direct listing — and restaurant payment processor Toast
TOST,
as well as Authentic Brands Inc.
AUTH,
parent of retailers Forever 21 and Nine West and owner of Sports Illustrated and the holder of the brand name and rights to such legendary stars as Marilyn Monroe and Elvis Presley, plus eco-friendly shoe maker Allbirds
BIRD,
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Assuming the stock market holds up, Renaissance is expecting 90 to 110 U.S. IPOs by year-end, raising $30 billion. Adding to the long list, Renaissance has identified 28 candidates among private companies that have filed confidentially, chosen underwriters or otherwise made noises that a deal is pending.
“The pipeline contains an especially strong backlog of tech unicorns, consumer brands, and biotechs,” said Smith.
The biggest deal launch Tuesday based on terms set earlier in the session was that of Thoughtworks
TWKS,
a Chicago-based technology consulting firm company that will go public at a valuation of up to $6.1 billion.
The company, which expects to change its name to Thoughtworks from Turing Holding Corp. with the IPO, said a total of 36.84 million shares will be offered in the IPO, split between the company and selling shareholders.
The deal is expected to price at between $18 and $20 a share. The stock is expected to list on the Nasdaq under the ticker symbol “TWKS.” Goldman Sachs and JPMorgan are the lead underwriters. The company recorded net income of $79.3 million on revenue of $803.4 million in 2020, after income of $28.4 million on revenue of $772.2 million in 2019.
The second biggest deal is expected to come from On Holding AG
ONON,
a Swiss sneaker and sporting apparel maker with a line co-developed by tennis player Roger Federer. On has applied to list 31.1 million shares priced at $18 to $20 each on the New York Stock Exchange, under the ticker symbol “ONON.”
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Goldman Sachs, Morgan Stanley and Morgan Stanley are lead underwriters in a syndicate of nine banks on the deal. Proceeds are to be used for general corporate purposes.
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The company had net income of 3.8 million ($4.1 million) Swiss francs in the six months through June 30, after a loss of 33.1 million francs in the year-earlier period, according to its IPO documents. Sales came to 315.5 million francs, up from 170.9 million.
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Also from Switzerland, sports betting site Sportrader Group AG
SRAD,
plans to offer 19 million shares priced at $25 to $28 each, or a valuation of up to $31 billion. The company has applied to list on Nasdaq under the ticker “SRAD.” JPMorgan, Morgan Stanley, Citigroup and UBS are lead underwriters in a syndicate of 13 banks working on the deal.
Proceeds will be used for working capital and to spur growth. The company had a net profit of $29.9 million in the first six months of the year, on revenue of $321 million, according to its filing documents.
Dutch Bros Inc., an operator of drive-through shops that serve hot and cold drinks mostly in western states, is planning to offer 21.1 million shares priced at $18 to $20 each in its IPO, valuing the company at up to $3.3 billion.
BofA Securities, JPMorgan and Jefferies are lead underwriters in a syndicate of 13 banks working on the deal. The company has applied to list on the New York Stock Exchange under the ticker symbol “BROS.”
Proceeds are to be used to purchase additional Class A shares — the company is planning to have four classes of stock with differing voting rights. The company had a net loss of $13.6 million, or 32 cents a share, in the first six months of the year, narrower than the loss of $16.5 million, or 38 cents a share, posted in the year-earlier period. Revenue fell to $227.9 million from $327.4 million.
Definitive Healthcare Corp.
DH,
a Massachusetts-based provider of healthcare commercial intelligence, is planning to offer 15.56 million shares in its PO, which is expected to price between $21 and $24 a share. At that pricing, the company could be valued at up to $3.55 billion.
The stock is expected to list on the Nasdaq exchange under the ticker symbol “DH.” The company listed 11 underwriters for the IPO, led by Goldman Sachs and JPMorgan.
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Funds managed by Advent International Corp. are the company’s largest shareholders, as they are expected to beneficially own 73.2% of the Class A shares outstanding after the IPO. The company recorded a net loss of $25.5 million on revenue of $76.8 million over the six months through June 30, after a loss of $25.3 million on revenue of $54.6 million in the same period a year ago.
Rounding out the list, ForgeRock
FORG,
a California-based identity security platform, is looking to raise up to $264 million with an offering of 11 million shares priced between $21 and $24 a share. That pricing would value the company a valuation of up to $1.91 billion.
The stock is expected to list on the NYSE under the ticker symbol “FORG.” Morgan Stanley and JPMorgan are the lead underwriters. The company recorded a net loss of $41.8 million on revenue of $127.6 million in 2020, after a loss of $36.9 million on revenue of $104.5 million in 2019.
The six deals have launched into a relatively strong IPO market with the Renaissance IPO ETF
IPO,
up about 10% over the past three months, while the S&P 500
SPX,
has gained 7%.
