We started IPO Candy in 2009 after the financial crisis hit the “reset button” on the IPO market. Here we are again in the midst of another crisis. So far this one is only a shadow of what we went through in 2008/9 but it’s not over yet. Even in this volatility the IPO market is still functioning at some level with one or two deals getting done and new filings adding to the post-crisis backlog.
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Last Week:
GFL Environmental (GFL) - They got this deal done at a price - in this case below the $20-21 range at $19. It broke deal price right away and has now dropped to $16.30. Even though this is a garbage company roll-up it is a fairly defensive play with $2.5B in trailing revenues. With 14 banks set to roll out coverage at the end of the quiet period this one could be getting too cheap. Also lower interest rates help them given their high debt levels. I’m not saying rush in on this one but I am watching it.
This Week:
Imara (IMRA) - This is a biotech with a drug in Phase 2. They are targeting rare genetic diseases related to hemoglobin. Sickle cell disease being a prominent example. It’s a good banker lineup with Morgan Stanley, Citi and Leerink on the cover. The deal size is fairly small at $75M suggesting a $300M market value at the midpoint of the $16-18 range. This one is scheduled for tonight.
We also had another SPAC price: DFP Healthcare Acquisition (DFPH) at the customary $10/unit. It’s a larger deal focused on a growth space so we are adding it to our new SPAC coverage list.
New Filings:
Despite the dire market conditions we had seven new filings led by a $2B deal for Albertsons (ACI). This comes after Warren Buffett bought a $500M stake in Kroger (KR). Could it be something is getting better for grocers? KR stock hasn’t gone anywhere for the over 2 years. These are also defensive stocks so they may do better in this type of market. Lower interest rates also help these companies.
The rest of the filings were split evenly between biotech (3) and SPAC (3). Two of the SPAC deals (CC Neuberger Principal I and Fortress Value) will be worth a closer look and be added to our SPAC coverage list.
The Candyman
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