Fitbit leads this week's 11 companies looking to raise over $1.7 billion through US initial public offerings.
Fitbit (NYSE:FIT) flexes its muscle with the week's largest IPO; the deal size is set at $448 million, though it could raise more based on investor demand. Fitbit has been the clear market leader with an 85% share of US wearable fitness tracking devices in the first quarter. While it must now contend with the Apple Watch, there may be enough room for both products given the projected growth rate for wearable devices. In 1Q15, revenue grew 209% to $337 million, though its first quarter in 2014 included a major product recall. The last consumer electronics IPO was GoPro (NASDAQ:GPRO), also a market leader, which gained 31% on its first day and is now up 139% from the offer price.
Fitbit soars above IPO price; valuation at $6.2B
- Fitbit (Pending:FIT) opened at $30.40 and is now at $30.16, 51% above its $20 IPO price.
- The world's biggest wearables maker (at least ahead of the Apple Watch launch) is valued at $6.2B, or 8.3x 2014 sales and 47x net income. Given recent growth (Q1 sales were up 209% Y/Y), the forward P/S ratio could be around 4-5, and the forward P/E closer to 20.
- Prospectus, IPO analysis
- Prior Fitbit coverage
Software for hard bodies
Mindbody (Pending:MB) provides back-end software for the management of over 40,000 wellness businesses, yet its market opportunity could be 100x that. However, it should remain unprofitable in the near term as it invests heavily in sales and marketing. The founder-led company is backed by Bessemer, Catalyst, IVP and J.P. Morgan, which plans to invest $10 million on the IPO. The most recent SaaS IPO, Shopify (Pending:SHOP), popped 51% on its IPO and now trades 81% above its offer price.
Mindbody (Pending:MB) provides back-end software for the management of over 40,000 wellness businesses, yet its market opportunity could be 100x that. However, it should remain unprofitable in the near term as it invests heavily in sales and marketing. The founder-led company is backed by Bessemer, Catalyst, IVP and J.P. Morgan, which plans to invest $10 million on the IPO. The most recent SaaS IPO, Shopify (Pending:SHOP), popped 51% on its IPO and now trades 81% above its offer price.
FOGO to go public
Fogo de Chão (Pending:FOGO) is set to raise $75 million this week. The upscale Brazilian steakhouse operates 37 locations primarily in Brazil and the US. Its restaurants achieve high average unit volumes as well as a high contribution margin due to its labor-efficient tableside service. The 10 restaurant IPOs since 2013 have an average first-day pop of 68%, and last week's fast casual chain Wingstop (NASDAQ:WING) popped 61%. However, the last full-service restaurant to go public was Del Frisco's in 2012, which traded flat on its debut.
Fogo de Chão (Pending:FOGO) is set to raise $75 million this week. The upscale Brazilian steakhouse operates 37 locations primarily in Brazil and the US. Its restaurants achieve high average unit volumes as well as a high contribution margin due to its labor-efficient tableside service. The 10 restaurant IPOs since 2013 have an average first-day pop of 68%, and last week's fast casual chain Wingstop (NASDAQ:WING) popped 61%. However, the last full-service restaurant to go public was Del Frisco's in 2012, which traded flat on its debut.
First Solar/Sunpower JV MLP 8point3 offers $0.83
8point3 Energy Partners LP (Pending:CAFD) was formed by First Solar (NASDAQ:FSLR) and Sunpower (NASDAQ:SPWR) to own solar energy projects, primarily utilities in California. The company has little track record with its assets, but benefits from long-term agreements and a sizable pipeline of drop-down assets. It plans to offer an annual dividend of $0.83, or a 4.3% yield at the midpoint.
8point3 Energy Partners LP (Pending:CAFD) was formed by First Solar (NASDAQ:FSLR) and Sunpower (NASDAQ:SPWR) to own solar energy projects, primarily utilities in California. The company has little track record with its assets, but benefits from long-term agreements and a sizable pipeline of drop-down assets. It plans to offer an annual dividend of $0.83, or a 4.3% yield at the midpoint.
Three biotechs: cystic fibrosis add-on, Parkinson's reformulation and cardiovascular gene therapy
Celyad (Pending:CYAD), which trades in Europe, is the week's largest initial US public offering from a biotech. The Belgian company has completed enrollment for a Phase 3 trial for its gene therapy targeting ischemic heart failure. Nivalis Therapeutics (NASDAQ:NVLS) plans to raise $60 million (42% from insiders) to develop a cystic fibrosis therapy that complements Vertex's soon-to-be approved Orkambi treatment. The biotech boasts a large market and well-regarded investors Wellington and Deerfield, but investors would be betting on one early-stage drug candidate that largely relies on another therapy. Cynapsis Therapeutics (Pending:CYNA), which is currently listed in Canada, has begun Phase 3 trials for its under-the-tongue strip formulation of the approved drug apomorphine for Parkinson's disease. Last week's Parkinson's biotech, Biotie Therapies ((Pending:BITI); +29%), was also already traded outside the US.
Celyad (Pending:CYAD), which trades in Europe, is the week's largest initial US public offering from a biotech. The Belgian company has completed enrollment for a Phase 3 trial for its gene therapy targeting ischemic heart failure. Nivalis Therapeutics (NASDAQ:NVLS) plans to raise $60 million (42% from insiders) to develop a cystic fibrosis therapy that complements Vertex's soon-to-be approved Orkambi treatment. The biotech boasts a large market and well-regarded investors Wellington and Deerfield, but investors would be betting on one early-stage drug candidate that largely relies on another therapy. Cynapsis Therapeutics (Pending:CYNA), which is currently listed in Canada, has begun Phase 3 trials for its under-the-tongue strip formulation of the approved drug apomorphine for Parkinson's disease. Last week's Parkinson's biotech, Biotie Therapies ((Pending:BITI); +29%), was also already traded outside the US.
