The IPO Buzz: Healthcare Rules a $4.4 Billion Week

Healthcare deals dominate this week’s IPO Calendar. Sotera Health Co. (SHC proposed) and Maravai LifeSciences Holdings, Inc. (MRVI proposed) are expected to raise $2.3 billion – or a little more than half of the $4.4 billion in estimated IPO volume from 11 deals scheduled so far this week. (We’ll have more on these deals in a moment.)

There’s strong interest in both Sotera Health Co., which provides sterilization and lab testing services to the medical device and pharmaceutical industries, and Maravai LifeSciences Holdings Inc., which owns companies that manufacture the nucleic acids, reagents and proteins used in biotech and pharmaceutical research and drug development.

Part of their appeal stems from what they are not, the IPO experts say. These companies are not pharmaceutical companies or biotech firms so they’re not dependent on the FDA to approve their products.

Early Monday morning, another healthcare IPO landed on this week’s roster when Olema Pharmaceuticals (OLMA proposed) filed terms.

Telos Corp. (TLS proposed), a cyber-security software company whose clients include the CIA and the FBI, is also attracting some early buzz.  Wall Street likes the sector and the company’s revenue growth.

Wall Street was on alert for the public S-1 filing by Airbnb, the household name in the home-bookings business. Airbnb’s filing could come as early as Monday. Airbnb’s fellow unicorn DoorDash (DASH proposed) filed its public S-1 document last week with the SEC – and Wall Street’s pulse picked up. Both Airbnb and DoorDash have filed confidential documents with the SEC to register their intent to go public.

“Everybody’s waiting for Airbnb,” one veteran IPO professional said. “That and DoorDash should attract a lot of interest. These two will be public by the end of November.”

Airbnb gave Wall Street what it wanted by filing its public S-1 with the SEC late Monday afternoon. The Airbnb filing disclosed a $1 billion placeholder amount for the IPO’s estimated proceeds, but the Airbnb deal is likely to be much larger than that. No terms were filed. The Wall Street Journal noted that the Airbnb IPO filing showed it was profitable in the third quarter, even after the COVID-19 pandemic forced the company to make deep cuts to its staff and other expenses.

The Week Ahead

Eleven deals – seven traditional IPOs and four SPACs – are set for pricing so far this week. The lineup includes Aspire Real Estate Investors, Inc. (ASPI proposed), an affordable housing REIT organized and backed by Avanath Capital Management and MacFarlane Partners, two of the biggest African-American-owned real estate investment companies in the United States; NeoGames S.A. (NGMS proposed), a company that provides technology for state lotteries,  and Yatsen Holding Limited (YSG proposed), one of China’s biggest online cosmetics retailers. Pine Island Acquisition (PIPP.U proposed), a special-purpose acquisition company, or SPAC, is also scheduled for pricing this week.

Let’s take a look at this week’s 11 IPOs, organized by pricing and trading date.

Monday night pricing for Tuesday trading:

Aspire Real Estate Investors, Inc. (ASPI proposed) says it believes that it will be the first publicly traded real estate investment trust (REIT) to focus on affordable housing and workforce housing in Opportunity Zones, as defined in the 2017 tax law. The company is based in Irvine, California.

This is an IPO of 15.0 million shares at $20 each to trade on the New York Stock Exchange. Morgan Stanley, B. Riley Securities, Wells Fargo Securities; BMO Capital Markets and Keybanc Capital Markets are the joint book-runners.

Dragoneer Growth Opportunities Corp. II   (DGNS proposed), based in San Francisco, will focus on target companies in the software, Internet, media, consumer/retail, healthcare IT and financial services/FinTech sectors. The prospectus points out Dragoneer’s “long track record of successfully identifying category and industry leaders,” citing some of the company’s previous investments in the private markets, including Alibaba (IPO 2014), DoorDash (just filed its public S-1 for an IPO), Snowflake (IPO 2020), Spotify (direct list 2018) and Uber (IPO 2019).

This is an IPO of 20 million Class A ordinary shares at $10 each to trade on the NASDAQ. Citigroup, Credit Suisse and Morgan Stanley are the joint book-runners. Note: This an offering of Class A ordinary shares – and not the units typically offered in a blank-check or SPAC IPO.

Pine Island Acquisition (PIPP.U proposed) is a blank-check company that intends to focus its search for targets in the defense, government service and aerospace sectors. Pine Island Capital Partners, a private equity firm founded in 2018 by John A. Thain and Philip A. Cooper, is an affiliate of this blank-check company’s sponsor. Mr. Thain was the last chairman and CEO of Merrill Lynch & Co. before orchestrating a sale to Bank of America at the height of the financial crisis. He is also a former CEO of the NYSE.

This is an IPO of 25 million units at $10 each to trade on the NYSE. (The size was trimmed recently from 30 million units.) Citigroup is the sole book-runner. (The column has been updated to correct the size of the Pine Island Acquisition IPO to 25 million units at $10 each, and not 15 million as reported in an earlier edition.)

Zanite Acquisition Corp. (ZNTEU proposed) is a blank-check company or a SPAC focused on acquiring and managing a business in the aviation, aerospace and defense, urban mobility and emerging technology industries. It will search for targets with an enterprise value ranging from $600 million to $1.5 billion. The SPAC is based in Cleveland, Ohio.

This is an IPO of 20 million units at $10 each to trade on the NASDAQ. BTIG is the sole book-runner.

Wednesday night pricing for Thursday trading:

L&F Acquisition Corp. (LNFA.U proposed) is a Chicago-based SPAC focused on acquiring companies in the governance, risk and compliance sectors, as well as in the legal technology and software sectors.

This is an IPO of 15 million units at $10 each to trade on the NYSE. (The size of this SPAC was trimmed to 15 million units, down from 20 million units initially, according to an SEC filing on Monday, Nov. 16.) Jefferies is the sole book-runner.

Olema Pharmaceuticals (OLMA proposed) is a clinical-stage biopharmaceutical company focused on developing next-generation therapies to treat women’s cancers. It lead product candidate, OP-1250, is a breast cancer drug. The company is based in San Francisco.

This is an IPO of 10 million shares at $16 to $18 each to trade on the NASDAQ. J.P. Morgan, Jefferies, Cowen and Canaccord Genuity are the joint book-runners.

NeoGames S.A. (NGMS proposed), incorporated in Luxembourg, provides technology services to state lotteries for offering lottery games on smartphones, personal computers and handheld devices.. The company’s principal executive offices are in Tel Aviv.

This is an IPO of 4.8 million shares at $14 to $16 each to trade on the NASDAQ. Stifel is the sole book-runner.

Yatsen Holding Limited (YSG proposed) says it is a leader in China’s online beauty  revolution. Founded in 2016,Yatsen has launched three fast-growing color cosmetics and skincare brands: Perfect Diary, Little Ondine and Abby’s Choice. The company is based in Guangzhou.

This is an IPO of 58.8 million American Depositary Shares (ADS) at $8.50 to $10.50 each to trade on the New York Stock Exchange. Goldman Sachs/ Morgan Stanley and CICC  are the joint book-runners.

Thursday night pricing for Friday trading:

Maravai LifeSciences Holdings, Inc. (MRVI proposed) owns companies that manufacture and supply nucleic acids, reagents and proteins used in drug and vaccine research and development. Maravai is based in San Diego, California.

This is an IPO of 50.0 million shares at $24 to $27 each to trade on the NASDAQ. If priced at the midpoint, this IPO would raise $1.275 billion. Morgan Stanley, Jefferies and Goldman Sachs are the joint book-runners.

Sotera Heatlh Co. (SHC proposed), based in Broadview Heights, Ohio, is a leading global provider of sterilization and lab testing services to the medical device and pharmaceutical industries. Its customers include more than 40 of the top 50 medical device companies and eight of the top 10 global pharmaceutical companies (based on revenue).

This is an IPO of 46.6 million shares at $20 to $23 each to trade on the NASDAQ. If priced at the midpoint, this IPO would raise about $1.002 billion. J.P.Morgan, Credit Suisse, Goldman Sachs, Jefferies, Barclays, Citigroup and RBC Capital Markets are the joint book-runners.

Telos Corp. (TLS proposed) , based in Ashburn, Virginia, provides software-security solutions to U.S. government agencies, including the CIA, the FBI, the Department of Defense, the Department of Homeland Security, and others. The company’s commercial customers include Amazon, Citigroup and Microsoft, the prospectus says.

This is an IPO of 12.4 million shares at $16 to $18 each to trade on the NASDAQ.. B. Riley Securities, BMO Capital Markets and Needham & Co. are the joint book-runners.

Thanksgiving Week

The IPO Thanksgiving table is bare so far. No deals are scheduled for pricing in the week of Nov. 23. That week will be cut short by the Thanksgiving holiday, which will fall on Nov. 26th this year. But the IPO Calendar for this week and next – i.e., Thanksgiving week – could expand quickly as more filings flow into the U.S. Securities and Exchange Commission. By Monday afternoon, this week’s IPO Calendar had grown to a total of 11 deals from a preliminary roster of six deals. Of those 11 deals, there were seven traditional IPOs, including one REIT, and four SPACs, with bankers expecting to raise an estimated total of $4.4 billion. The calendar’s trend could continue over at least the next day or two.

Stay tuned.

(Note: This column was updated Monday evening to include Airbnb’s public S-1 filing and Wall Street’s latest IPO pricing plans.)

(For more information about these companies, please check the IPO profiles on IPOScoop.com.)

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

Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com 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 IPOScoop.com. 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.