The IPO Buzz: Get Ready for GitLab & AvidXchange

GitLab, Inc. (GTLB proposed), a code-sharing software unicorn founded in Ukraine, raised the price range of its IPO early today to $66 to $69 – up from $55 to $60 initially –  reflecting its status as a hot deal. But it’s not the only game in town. AvidXchange Holdings, Inc. (AVDX proposed), which provides accounts payable software for middle-market companies and their suppliers, is also in demand. GitLab and AvidXchange share the IPO marquee as “the deals of the week.” (Editor’s Note: This column was updated Tuesday evening with the pricing of the AvidXchange IPO at $25 – the top of its range – and with an increase in the IPO’s size to 26.4 million shares.)

Bankers expect to raise about $2.25 billion from this week’s IPO Calendar, which counts nine deals – seven IPOs and two SPACs – so far.

The IPO market got off to a quiet start this week.  Some IPO professionals took a long holiday weekend, thanks to the Columbus Day  holiday on Monday. The U.S. Securities and Exchange Commission was closed Monday for the federal holiday.

After the SEC went back to work this morning, GitLab increased its IPO price range, Cingulate (CING proposed) downsized its IPO, and five more companies filed pricing terms. Enfusion, Inc. (ENFN proposed), MiNK Therapeutics (INKT proposed), Portillo’s (PTLO proposed) and Vita Coco Water (COCO proposed) set terms for their IPOs, while P10, Inc. (PX proposed) filed terms for its NYSE uplift from the OTC market. MiNK Therapeutics jumped onto this week’s IPO Calendar. Enfusion, Portillo’s and Vita Coco Water promptly climbed on to next week’s IPO Calendar. P10s uplift offering is also set for next week.

This Week’s IPOs and SPACs

Let’s take a look at this week’s IPO Calendar, organized by pricing and trading dates.

Priced Tuesday morning – to trade Tuesday:

Gesher I Acquisition Corp. (GIACU proposed) is a Tel Aviv-based SPAC that priced its IPO on Tuesday morning, Oct. 12, to start trading today on the NASDAQ. This is a SPAC IPO of 10 million units at $10 each.

EarlyBirdCapital is the sole book-runner.

Gesher I Acquisition Corp. plans to focus on Israeli companies that do business in Asia, Europe or North America. In Hebrew, Gesher means “bridge.” This special-purpose acquisition company (SPAC), also known as a blank check company, is incorporated in the Cayman Islands.

Priced Tuesday night – to trade Wednesday:

Two deals are expected to price Tuesday night – the highly anticipated AvidXchange (AVDX proposed) IPO and a SPAC, Rose Hill Acquisition (ROSEU proposed).

AvidXchange Holdings, Inc. (AVDX proposed) increased its IPO size at pricing on Tuesday night, Oct. 12, 2021, by selling 26.4 million shares, up from 22 million shares, and pricing the stock at $25 – the top of its $23-to-$25 range. The company had raised the price range on the deal last Friday (Oct. 8, 2021) to $23 to $25 – up from $21 to $23 – in an S-1/A filing.

Goldman Sachs, J.P. Morgan, BofA Securities and Barclays are the joint book-runners of the AvidXchange deal.

AvidXchange provides accounts payable (AP) automation software and its AvidPay Network to serve middle-market companies and their suppliers. The prospectus says that AvidXchange defines middle market as companies with annual revenues ranging from $5 million to $1 billion.

AvidXchange is not profitable. The company reported a net loss of $142.6 million on revenue of $214.4 million for the last 12 months.

Rose Hill Acquisition (ROSEU proposed) is a Latin America-focused SPAC that expects to price its IPO on Tuesday night, to start trading Wednesday on the NASDAQ. (As of 8:15 p.m. EDT, there was no pricing announcement from Rose Hill Acquisition and its banker.)

Cantor is the sole book-runner.

The Rose Hill deal consists of 12.5 million units at $10 each to raise $125.0 million.

Pricing Wednesday night to trade Thursday:

Three IPOs are on the pricing roster for Wednesday night, Oct. 13, to trade Thursday, Oct. 14: GitLab (GTLB proposed) plus IHS Holding, Ltd. (IHS proposed) and Lucid Diagnostics (LUCD proposed). Let’s delve into the details.

GitLab, Inc. (GTLB proposed) is going public after being on IPO “watch lists” since early 2018. The company, which says it pioneered the DevOps Platform, is a unicorn that co-founder Dmitriy Zaporozhets started in his home in Ukraine – “a house without running water,” as the founders’ letter notes. (A unicorn is a private company with a market cap of at least $1 billion or more.)

Early Tuesday morning, GitLab upped the ante on its IPO by raising the price range by 17.4 percent to $66 to $69 – up from $55 to $60 initially – and keeping the number of shares at 10.4 million. If priced at the new $67.50 mid-point, the IPO would raise $702 million.

GitLab would have a market valuation of about $9.65 billion, based on mid-point pricing.

Goldman Sachs, J.P. Morgan and BofA Securities are the joint book-runners.

Software developers use GitLab’s cloud-based software to share code and collaborate – resulting in faster software updates and lower operating costs. Its corporate clients include multinational companies and government agencies.

“The DevOps Platform accelerates our customers’ ability to create business value and innovate by reducing their software development cycle times from weeks to minutes,” the prospectus says.

The company’s entire workforce works remotely. So GitLab does not have a principal corporate office address.

GitLab’s customers include Goldman Sachs, Siemens, the European Space Agency and Ticketmaster. GitLab competes with  Microsoft’s GitHub and Atlassian (TEAM).

Principal stockholders include Khosla Ventures, GV 2017 (a Google Ventures fund) and ICONIQ Capital, the prospectus says.

GitLab’s revenues are growing, but the company is not profitable. For the last 12 months, GitLab reported a net loss of $216.6 million on revenue of $196.4 million.

IHS Holding Ltd. (IHS proposed) is the largest independent operator of mobile telecom towers in Africa. The London-based company’s IPO is also on Wednesday night’s IPO pricing roster, with trading set to start on Thursday.

The IHS deal is an IPO of 22.5 million shares at $21 to $24 each to raise $506.3 million, if priced at the $22.50 mid-point.

Goldman Sachs, J.P. Morgan, Citi, RBC Capital Markets, Barclays and Absa Group are the joint book-runners.

Based in London, IHS Holding is one of the world’s largest independent owners, operators and developers of shared telecom infrastructure in emerging markets. The company has mobile towers in five countries in Africa – Nigeria, Cote d’Ivoire (Ivory  Coast), Cameroon, Rwanda and Zambia. HIS also has mobile towers in three countries in Latin America – Brazil, Colombia and Peru – and in one country in the Middle East – Kuwait.

“That’s a good business,” a veteran IPO trader says.

IHS Holding Ltd. is profitable. The company earned net income of $47 million on revenue of $1.5 billion for the last 12 months.

Lucid Diagnostics, Inc. (LUCD proposed) is focused on diagnosing esophageal cancer. The company’s small-cap IPO – 5 million shares at $14 to $16 each – is also set for pricing Wednesday night and a Thursday trading debut. If priced at $15 mid-point, Lucid’s IPO would raise $75 million.

Cantor and Canaccord Genuity are the joint book-runners of Lucid’s IPO.

Based in New York, Lucid Diagnostics is a commercial-stage medical device tech company dedicated to diagnosing esophageal cancer and pre-malignant conditions in the esophagus via is DNA test and tissue-sample collection device.

Lucid Diagnostics is NOT profitable. The company reported a net loss of $14.57 million on zero revenue for the last 12 months.

Thursday night pricing for Friday trading:

Three healthcare IPOs are set for pricing Thursday night, Oct. 14, to start trading on Friday the 15th: Cingulate Inc. (CING proposed), a clinical biopharma deal carried over from last week; MiNK Therapeutics (INKT proposed), a cancer biotech, and Paragon 28 (FNA proposed), an orthopedic device maker that specializes in the foot and ankle. Let’s delve into the details.

Cingulate, Inc. (CING proposed) reduced the size of its small-cap IPO early today in an S-1/A filing dated Oct. 12, 2021: 4.44 million shares, down from 4.55 million shares, at $8 to $10 – down from $10 to $12 initially. If priced at the $9 mid-point of the new lower range, Cingulate’s IPO would raise about $40 million.

Oppenheimer & Co. is the book-runner.

Cingulate, based in Kansas City, Kansas, is focused on a hot biotech area – treating ADHD (Attention Deficit Hyperactivity Disorder). The company is developing its proprietary Precision Timed Release (PTR) drug delivery platform technology with two stimulant drugs to treat ADHD  in three patient segments: children ages 6-12; adolescents ages 13-17 and adults (age 18+).

The goal is to provide once daily dosing through timed release delivery of the drug – as an alternative to the standard treatment of taking two pills a day. Phase 3 clinical trial results are expected in late 2022 for one of Cingulate’s leading drug candidates.

Cingulate, like many biotechs, has not generated any revenue yet. It reported a net loss of $7.44 million on no revenue for the last 12 months.

MiNK Therapeutics (INKT proposed) is a cancer biotech IPO that launched Tuesday morning after the company filed pricing terms today with the SEC.

This is an IPO of only 4 million shares at $12 to $14. If priced at the $13 mid-point, MiNK Therapeutics would raise $52 million.

Evercore ISI and William Blair are the joint book-runners of the MiNK Therapeutics IPO.

Based in New York, MiNK Therapeutics is developing invariant natural killer T-cell (INKT) therapies for cancer and other immune-mediated diseases.

Paragon 28 (FNA proposed) is an orthopedic surgery device and instruments company whose proposed stock symbol “FNA” tells you what it’s all about – the foot and ankle. The company makes implantable hardware, biologic products that dissolve in the body and surgical instruments to repair foot and ankle injuries and conditions.

This is an IPO of 7.8 million shares at $15 to $17 each. Paragon 28 would raise $125 million, if its IPO is priced at the $16 mid-point.

BofA Securities and Piper Sandler are the joint book-runners.

Paragon 28, based in Englewood, Colorado, makes surgical implants, disposables and surgical instruments to fix fractures and other painful conditions affecting the foot and ankle.

Fixing feet and ankles, as it turns out, is a money maker. Paragon 28 earned net income of $2.4 million on revenue of $134.2 million for the last 12 months.

Next Week

Four deals – three IPOs and one NYSE uplift –  landed on next week’s IPO Calendar this morning after they filed pricing terms with the SEC. The IPOs represent a variety of sectors:

Enfusion, Inc. (ENFN proposed) provides software (SaaS) to investment management professionals.

Portillo’s (PTLO proposed) is a Chicago restaurant chain known for its big Chicago hot dogs and Italian beef sandwiches.

Vita Coco Water (COCO proposed) is a leading coconut water brand.

The NYSE uplift offering P10, Inc. (PX proposed) – supplies private market solutions for alternative asset managers.

Stay tuned.

For more information, please check the IPO Calendar and click on a company’s name, which will take you to the IPO Profile and a link to the prospectus.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.