The IPOX® Update 3/15/24

Reddit Targets Over 20% Revenue Growth in 2024, Eyeing IPO Success

Reddit, the popular U.S. social media platform, is aiming for an impressive 20% revenue growth in 2024 as it gears up for its highly anticipated IPO. The company's revenue reached $804 million in 2023, marking a 20.5% increase from the previous year. With its sights set on break-even adjusted Ebitda in 2024, Reddit is poised to make a strong debut on the public markets. The IPO, led by major banks, is expected to raise up to $748 million, with shares priced between $31-$34. Reddit's recent profitability in Q4 last year and diversified income sources, including licensing data agreements expected to contribute at least $66.4 million in 2024 revenue, have bolstered investor confidence. The company is set to list on the NYSE under the symbol RDDT on March 21. (Source)

Saudi's PIF Plans More Bond Sales, IPOs to Fund Economic Transformation

Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), is ramping up its bond sales and IPO plans to finance the country's ambitious economic transformation under Vision 2030. Despite the PIF's cash reserves dropping to $15 billion, the lowest since 2020, the fund remains committed to diversifying the Saudi economy. Valued at $940 billion, the PIF is exploring dollar borrowing to avoid draining local liquidity and plans regular bond issuances to establish yield curves for its portfolio companies. Additionally, the fund is preparing equity offerings for several portfolio firms, including those in the telecommunications, mining, and stock exchange sectors. The increased IPO activity in the region has also boosted the performance of the IPOX® MENA Index (Ticker IPEV), which has gained to a new all-time high, reflecting the high IPO enthusiasm in the Middle East. (Source)

CVC Capital Partners Plans May IPO, After Delays Due to Geopolitical Tensions

Luxembourg-based private equity firm CVC Capital Partners, with €118 billion ($127.2 billion) in assets under management, is planning to move forward with its IPO on the Amsterdam's Euronext Exchange in May. The listing, which was previously postponed twice due to geopolitical tensions, including Russia's invasion of Ukraine and conflicts in the Middle East, is set to proceed despite challenging market conditions. CVC's successful fundraising, including raising €26 billion ($28 billion) for its ninth Europe/Americas private equity fund in July, has demonstrated the firm's resilience amidst a broader industry slowdown. As one of Europe's largest private equity players, CVC's decision to move ahead with its IPO is a positive signal for the market and highlights the company's confidence in its growth prospects. (Source)

União Química, Brazil's Largest Pharma Industrial Park Owner, Plans IPO and Middle East Plant

União Química, Brazil's largest pharmaceutical industrial park owner, is planning an IPO on the B3 stock exchange to finance its M&A activities. The company, which reported net sales of R$3.96 billion ($763.8 million) in 2023, is also in talks with a UAE fund to establish a pharmaceutical plant in the Middle East, with the partner set to fund 90% of the project. União Química has been focusing on expanding its international presence, having registered 237 products abroad, including both human and veterinary medicines. The company has also been actively pursuing acquisitions, such as the purchase of Bayer's factory and brands in São Paulo, to enhance its Latin American presence. Despite a 13.9% drop in net income in 2023, União Química reported a 5.5% increase in net sales and a 9.8% rise in gross profit. The company plans to invest R$200 million ($38.6 million) to expand its Minas Gerais industrial complex by 2024. (Source)

Vista Equity Partners Plans US IPO for Software Provider Solera, Potentially by End of 2024

U.S. private equity firm Vista Equity Partners is planning a US IPO for its portfolio company Solera, a software provider specializing in the automotive and insurance industries. The IPO, which could take place by the end of 2024, comes after a previous attempt to go public through a SPAC deal in 2021 was unsuccessful. Solera, which Vista acquired for $6.5 billion in 2016, operates in over 100 countries and offers software solutions for fleet management, collision claims, vehicle registration, and repairs. The company also provides auto finance services, facilitating loans for car purchases in the US. While IPO details, such as fundraising goals and valuation, are not yet finalized, the move signals a potential recovery in the slow IPO market. The planned listing follows other notable upcoming public listings, such as Reddit and Rubrik. (Source)

China to Tighten Listing Requirements to Boost $9.2 Trillion Stock Market Confidence

The China Securities Regulatory Commission (CSRC) is set to introduce stricter listing requirements and financial scrutiny for unprofitable firms and specific sectors to boost investor confidence in the country's $9.2 trillion stock market. The enhancements aim to combat financial fraud and revive the declining CSI 300 index. Initiatives include increased IPO gatekeeping by investment banks, enhanced oversight of listed firms, and proposed extensions of IPO lock-up periods for companies experiencing post-listing earnings drops. The move comes as IPO activity in Mainland China has decreased, with a 61% drop in proceeds since January. Recent IPOs have also underperformed compared to the previous year, with an average initial rise of 34% in 2024. The tightened regulations are expected to improve the quality of listed companies and restore investor confidence in the Chinese stock market. (Source)

Tech Firm Ingram Micro, Backed by Platinum Equity, Aims for $8 Billion IPO Valuation

U.S. technology company Ingram Micro, backed by private equity firm Platinum Equity, is preparing for an IPO with a target valuation of $8 billion. The company, which provides technology, hardware, services, and the digital platform Ingram Micro Xvantage, has filed confidentially for a US IPO in 2022 and is working with Goldman Sachs and Morgan Stanley on the potential listing, which could take place as early as April. Ingram Micro was acquired from HNA Group by Platinum Equity in 2021 for $7.2 billion. Operating in 61 countries, the company reported $50.8 billion in net sales in 2022 and ships over 1.5 billion units yearly. The IPO is part of a tech company rebound in the IPO market, following Arm Holdings' successful $5.23 billion listing. (Source)

DreamSmart Group, Owner of Smartphone Maker Meizu, Planning IPO in Hong Kong

DreamSmart Group, the owner of Chinese smartphone maker Meizu, is planning an IPO in Hong Kong, targeting a valuation of over $2.1 billion. The Geely-backed firm is working with China International Capital Corp. and Huatai Securities for the potential share sale and may aim for a valuation of up to 20 billion yuan, depending on market conditions. Meizu, which is transitioning towards AI development for mobile devices, reflects the broader investor interest in AI stocks. The IPO plans come as tech and EV firms look to revive Hong Kong's IPO market after a slow start to the year. Meizu's shift towards AI development aligns with the global trend of integrating AI in consumer technology. Chinese smartphone stocks have been gaining attention and are considered an attractive investment opportunity following a recent selloff. (Source)

Healthcare Startup Tempus Hires Morgan Stanley for Upcoming IPO

U.S. healthcare startup Tempus, founded by Groupon co-founder Eric Lefkofsky, has hired Morgan Stanley for its upcoming IPO. The company, which offers lab tests and a data platform for healthcare decision-making, particularly in oncology, has raised over $1.3 billion in funding to date. Despite a recent valuation adjustment by some investors, resulting in a roughly 36% decrease from its 2022 valuation of $8 billion, Tempus is moving forward with its plans to go public. The potential IPO valuation is expected to be around $6 billion, reflecting a trend of companies going public at valuations lower than their last private funding rounds. Although Tempus is currently a loss-making entity with high operational costs, the IPO represents a significant step for the company, emphasizing its focus on growth and technological innovation in the diagnostics sector. (Source)

Biotech IPOs Perform Well in Periods of Cautious Optimism, Analysis Shows

An analysis by distinguished University of Florida Professor Jay Ritter reveals that biotech IPOs tend to perform well during periods of cautious optimism. The industry is seeing a rebound after a recent downturn, with the Federal Reserve's stance on interest rates boosting stocks. Biotech funding has increased, with $15.5 billion raised early this year, although IPO activity is still recovering. Historical data suggests that muted IPO demand often leads to better long-term returns, with first-day IPO performance serving as a predictor of long-term success. Recent biotech IPOs have shown moderate first-day returns, indicating potential for growth. The timing of biotech investments is crucial, and current market conditions appear favorable for returns. The analysis highlights the importance of a measured approach to biotech investing, focusing on long-term potential rather than short-term hype. (Source)

Galderma IPO Set at CHF 2.3 Billion with Strong Investor Demand

Swiss skincare company Galderma, backed by private equity firm EQT, is set to launch its IPO at CHF 2.3 billion ($2.6 billion), offering a mix of new and existing shares. The implied market capitalization ranges between CHF 11.8 billion and CHF 12.6 billion, with trading expected to begin on March 22. The offering, led by the company's flagship Cetaphil brand, aims to strengthen Galderma's balance sheet and was over-subscribed within an hour, showcasing strong investor demand. Galderma was acquired by an EQT-led consortium in 2019 for 10.2 billion francs. The IPO proceeds will be used for debt reduction and balance sheet enhancement. The listing is being hailed as a revitalization of the European IPO market, as it is set to be the largest since Porsche AG's IPO in 2022. (Source)