The IPO market should end the first quarter with a bang as GoDaddy (Pending:GDDY) goes public during the shortened holiday week.
GoDaddy to go public
GoDaddy aims to raise $396 million at a market cap of $3 billion, or an enterprise value of about $4 billion. Acquired by KKR, Silver Lake and TCV for $2.25 billion in 2011, this domain name registrar behemoth manages about a fifth of the world's Internet domains. GoDaddy plans to continue a mix shift toward higher-margin website building services while managing its debt. 25 LBOs have IPO'd in the past twelve months, averaging a +2% first-day pop and +28% thereon.
A "tech-style" IPO: Kornit Digital
Kornit Digital (Pending:KRNT) is an Israel-based provider of digital equipment and inks used to print designs on t-shirts and other textiles. The profitable company is growing fast (30% CAGR since 2012) and expanding its margins through ink sales while the market for digital printers expands rapidly.
ViewRay (Pending:VRAY) had planned to go public last week but delayed the IPO. Backed by OrbiMed, Aisling Capital and Fidelity, it markets the only approved MRI-guided radiation therapy system, but in 2014, had negative gross margins and less than $10 million in sales. Early-stage medical device companies have had a challenging time in the IPO market this quarter, and Valeritas (Pending:VLRX) was the latest to postpone its offering last week.
Wowo (Pending:WOWO) has been drumming up interest for its $60 million "best efforts" IPO since February, and now appears ready to price. Last week, microcap Chinese consumer goods manufacturer Tantech Holdings (NASDAQ:TANH) - also marketed as a best efforts offering - priced at the low end of the range and popped 100%, albeit on low trading volume.
| Renaissance Capital's IPO Calendar - Week of 3/30/2015 | ||||
| Issuer Business | Symbol Exchange | Deal Size $mil | Price Range Shares Filed | Top 2 bookrunners |
| GoDaddy Scottsdale, AZ | GDDY NYSE | $396 | $17 - $19 22,000,000 | Morgan Stanley J.P. Morgan |
| Leading provider of web registration and hosting services with 59 million domains. | ||||
| Kornit Digital Rosh Ha'Ayin, Israel | KRNT NASDAQ | $99 | $13 - $15 7,100,000 | Barclays Citi |
| Sells digital printing equipment and inks for the printed textile industry. | ||||
| Wowo Beijing, China | WOWO NASDAQ | $60 | $9 - $11 6,000,000 | Axiom Capital |
| Operates an online mall connecting Chinese merchants and consumers. | ||||
| ViewRay Oakwood Village, OH | VRAY NASDAQ | $52 | $12 - $14 4,000,000 | Cowen & Company Stifel |
| Markets the first and only FDA-approved MRI-guided radiation therapy system. | ||||
IPO pipeline update
There were no additions to the IPO calendar last week; few companies launch before a shortened holiday week. Blueprint Medicines (BPMC) was the most notable new filer, given the biotech's $100 million proposed deal size and its lead bookrunner Goldman Sachs, as the underwriter has led just two biotech IPOs since 2013: FibroGen (FGEN; +66%) and Atara Biotherapeutics (ATRA; +233%). Last week also saw updated filings from LBO'd retailer Party City (Pending:PRTY), custom chip designer eASIC (Pending:EASI) and high frequency trading firm Virtu Financial (Pending:VIRT).
There were no additions to the IPO calendar last week; few companies launch before a shortened holiday week. Blueprint Medicines (BPMC) was the most notable new filer, given the biotech's $100 million proposed deal size and its lead bookrunner Goldman Sachs, as the underwriter has led just two biotech IPOs since 2013: FibroGen (FGEN; +66%) and Atara Biotherapeutics (ATRA; +233%). Last week also saw updated filings from LBO'd retailer Party City (Pending:PRTY), custom chip designer eASIC (Pending:EASI) and high frequency trading firm Virtu Financial (Pending:VIRT).
IPO market snapshot
The Renaissance IPO Index, a market cap weighted basket of newly public companies that is designed to represent the US IPO market, has traded up over 6% year-to-date, compared to 0% for the S&P 500. This suggests that the IPO market remains open to new issuance heading into the 2Q 2015. Renaissance Capital's IPO ETF (NYSEARCA:IPO) tracks the index, and top ETF holdings include Twitter (NYSE:TWTR), Alibaba (NYSE:BABA), Hilton (NYSE:HLT), Ally Financial (NYSE:ALLY) and Voya Financial (NYSE:VOYA).
The Renaissance IPO Index, a market cap weighted basket of newly public companies that is designed to represent the US IPO market, has traded up over 6% year-to-date, compared to 0% for the S&P 500. This suggests that the IPO market remains open to new issuance heading into the 2Q 2015. Renaissance Capital's IPO ETF (NYSEARCA:IPO) tracks the index, and top ETF holdings include Twitter (NYSE:TWTR), Alibaba (NYSE:BABA), Hilton (NYSE:HLT), Ally Financial (NYSE:ALLY) and Voya Financial (NYSE:VOYA).
IPO UP-DATE
GoDaddy prices IPO at $20; valuation above $3B
- GoDaddy's (Pending:GDDY) IPO price is above a $17-$19 range, and good for a $3.02B valuation (1.8x 2014 bookings).
- The Web hosting/domain name service provider begins trading tomorrow. Not counting a 3.3M-share overallotment option, it's set to raise $440M. Earlier today, the WSJ took a look at GoDaddy's efforts to overhaul its edgy image.
- Prospectus, IPO analysis
- Prior GoDaddy coverage
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