The IPOX® Update 1/29/24

Fortegra Group Announces IPO Launch

Insurance provider Fortegra Group, a subsidiary of Tiptree Inc., has officially announced its IPO. The offering includes 18 million shares, with an additional 2.7 million shares available to underwriters for a 30-day option. The price range for the IPO is set between $15.00 and $18.00 per share. The net proceeds from the IPO will be strategically utilized for growth initiatives, working capital, and general corporate purposes. Leading the IPO as joint lead bookrunning managers are Goldman Sachs & Co. LLC, J.P. Morgan, and Jefferies, with Barclays also participating as a joint bookrunning manager. The team of co-managers comprises JMP Securities, Keefe, Bruyette & Woods, Piper Sandler, Raymond James, Fifth Third Securities, and Independence Point Securities. (Source)

Reddit Eyes $5 Billion IPO Valuation

Online platform Reddit is considering an IPO with a valuation of at least $5 billion, based on investor feedback. This valuation range comes despite current private trades valuing Reddit between $4.5 billion and $4.8 billion. The listing may come as soon as March, although details and the valuation target are subject to change. This development follows Reddit's 2021 private funding round, which valued the company at $10 billion. The tech IPO market, having cooled recently, has seen companies like Instacart debuting at valuations lower than their private rounds. For instance, Instacart's IPO in September 2023 was valued at $9.9 billion, significantly lower than its peak $39 billion private valuation. Founded in 2005, Reddit has over 70 million daily active users and is known for its influence during the meme-stock era. (Source)

NYSE President Optimistic About 2024 IPO Landscape

NYSE President Lynn Martin has expressed optimism for the 2024 IPO market, despite ongoing market volatility. Martin emphasized that companies planning IPOs need to demonstrate clear profitability paths and the ability to thrive amidst uncertainty. Among the firms slated for upcoming IPOs is Amer Sports Inc. on Friday, known for manufacturing Wilson tennis rackets. While IPO activity has declined from its 2021 peak, there is growing optimism for an increase in stock sales this year. Nasdaq Inc. reportedly has over 80 companies lined up for IPOs, suggesting a potentially busier year ahead. The increased market volatility has raised concerns among founders regarding post-IPO share prices. Martin pointed out a recalibration in valuations since 2021, underscoring the U.S. markets' role as a crucial source of liquidity. (Source)

Holcim Plans IPO for North American Business

Holcim, a Swiss construction materials company, is preparing to list its North American business in New York. The division is valued at a minimum of 26 billion Swiss Francs ($30 billion), a significant portion of Holcim's current total market value of just over $42 billion. This decision has been positively received by investors, evidenced by a stock increase of more than 4%. CEO Jan Jenisch, transitioning to Chairman, will focus on the spin-off starting May 1. The North American business, which accounted for $11 billion in sales last year, represents a third of Holcim's total revenue. Holcim has set ambitious targets for this division, aiming for net revenue of over $20 billion and EBIT of more than $5 billion by 2030. The spin-off, subject to shareholder approval, is planned for the first quarter of 2025. The move is reminiscent of rival CRH's shift from London to New York, demonstrating the attractivity of American capital markets. (Source)

Japan Prepares for Tokyo Metro Public Listing

The government of Japan is gearing up for the public listing of Tokyo Metro, planned for post-summer. The Tokyo Metro, currently owned 53.4% by the central government and 46.6% by the Tokyo government, is set for sale with the proceeds aimed at funding the reconstruction from the 2011 Tohoku Earthquake. The timing of the sale is linked to the rising Tokyo stock market. The Tokyo government has allocated $24 million in its 2024 budget for the sale procedures. This strategic move aims to balance the needs for reconstruction funding with maintaining management influence. Tokyo Metro's financial recovery is evident, with a net profit of 24.2 billion yen in fiscal 2023. (Source)

Cerebras Systems Inc. Eyes 2024 IPO

Cerebras Systems Inc., a chipmaker, is considering IPO in 2024, targeting a valuation above $4 billion. Currently in early discussions with advisers for a listing in the second half of 2024, the company is also exploring private fundraising options before the IPO, potentially with a current commercial partner. While the decision is not yet final, the IPO reflects rising interest in semiconductor firms within the IPO market. Cerebras, known for constructing the AI supercomputer Condor Galaxy 1, which costs over $100 million, had raised $250 million in its 2021 series F round, led by Alpha Wave Ventures among others. (Source)

Zelis Weighs Sale or IPO, Valuation Over $15 Billion

Healthcare technology firm Zelis, backed by Bain Capital and Parthenon Capital, is contemplating a sale or an IPO with a potential valuation exceeding $15 billion. Currently in early-stage deliberations, there is no final decision yet on Zelis's future course. The options being considered include a sale, an IPO, or a private transaction to bring in new investors. Zelis, which emerged from a 2019 merger, specializes in technology that handles about $80 billion in provider payments annually. In parallel, Bain Capital is also exploring the sale of payroll software firm Zellis, valued at $2.5 billion. (Source)

Renault Cancels IPO Plans for Electric Vehicle Unit Ampere

Renault has abandoned its plans to list its electric vehicle business, Ampere, citing sluggish stock market conditions. The anticipated IPO, previously estimated to be worth up to 10 billion euros, was influenced by weakening EV demand in Europe and strong competition from Chinese rivals. The objective of the IPO was to separate Ampere from Renault's combustion engine business and to enhance its market visibility. Despite this setback, Renault confirms it has sufficient cash flow to fund Ampere's development, expecting to reach break-even by 2025. Renault's alliance partners Nissan and Mitsubishi had confirmed investment plans in Ampere. Additionally, Qualcomm's investment in Ampere was contingent on the IPO, which is now subject to renegotiation. (Source)