While some firms are delaying their IPO in the face of volatile and uncertain near-term stock markets the parade of new filings continues on. Each week or so we sift through the flour to find the sweet bits – the ones we plan on doing more work on and covering during and after the process.
Here are the highlights:
- Lending Club – Their much-anticipated IPO is getting closer with an exchange chosen (the NYSE) although terms are not yet set. The lead underwriters are Morgan Stanley, Goldman and Citi so investors can expect lots of coverage and fanfare. Lending Club is working to bridge the gap between borrowers and lenders by providing an online marketplace which provides better loan rates for borrowers and higher returns for lenders. In broad terms it might be to loans what AdWords is for advertising. Their revenues are closing in on $200M or so for 2014. After reporting a profit for 2013 the company has aggressively increase spending to grow faster and will report an overall loss of $30M or so for 2014.
- INC Research – This is a less volatile way to play the continued development of new drugs, especially those in early clinical trials. INC is a contract research organization that handles the entire process in exchange for service fees. The company will do over $1B in revenue this year with strong cash flow. They have debt and high interest expense which we suspect will be the targeted use of proceeds. Top-line growth is running at 25%. Banks are Goldman, Credit Suisse, Baird, Wells Fargo and Blair.
- Workiva – Offering cloud-based business reporting tools under the “Wdesk” name to streamline compliance, risk management and other reporting tasks. Company growth is 30% and should hit about $100M for 2014. Losing substantial amounts on high S&M and R&D spend – to the tune of $30M+ in losses this year. Workiva has what is probably a much “stickier” business than other business SaaS plays like HUBS. One to watch. Banks include Morgan Stanley, Credit Suisse, Baird, RayJay and Stifel.
- PolyPid – is being brought out by a shady banking team (Aegis doesn’t put most deals up for online review) but the company has an interesting drug delivery technology that helps to target, localize and dose therapies. It’s a pre-revenue biotechnology company which means it’s out of favor right now but when they finally come to market we’ll track them along with a host of other alternative drug delivery technologies. If Foamix (FOMX) is an example of how this name will do investors will need to be cautious and patient.
- Habit Burger – Another “fast casual” restaurant play which sounds a lot like a Johnny Rockets or Tasty Burger. Founded in 1969 and looks like they recently entered a higher growth phase by investing in more outlets. Should do about $150M in 2014 with solid operating profits. Looks positioned above typical fast-food joints like McDonald’s but below other casual dining options. It’s hard to see much real differentiation here considering the options mentioned plus places like Sonic. Piper, Baird, Wells Fargo, RayJay, Stephens and Stifel make up the banking team which has an understandably retail focus.
There are not too many deals on the active calendar now to get excited about although we are keeping an eye on Electronic Cigarettes (ECIG) and Boot Barn (BOOT) which could be interesting. A number of transcripts are forthcoming and will be emailed out and added to the transcript page as we get them processed.
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