The Fall season kicks off with 10 deals scheduled for this week. It’s a good lineup in terms of quality. Companies are definitely asking investors to pay up with valuations a little hard to justify in some cases. Here is our rundown of interest and we note a tiny one at the end that may provide a little comic relief.

I’ve been waiting for Sportradar Group (SRAD) to debut for a while and was disappointed that their prior SPAC deal didn’t work out. SportsTech is a top investment theme and we already own their direct competitor Genius Sports (GENI). They are raising $500M at an $8B market cap. The Swiss company provides software, data, and content to sports leagues, betting operators, and media companies. This is a huge battleground area as franchise owners have decided to drive deeper into adjacent markets to get “a bigger piece of the pie.” SRAD has been a leading position for a long time and have a strong culture built on ongoing working relationships with franchises and media companies. I expect the space to be large and growing fast enough for both of these companies to do very well over the next few years. The current range is $25-28.

Healthcare intelligence company Definitive Healthcare (DH) is raising $350M at a $3.3B market cap. This company provides a healthcare analytics platform to multiple segments of the market. The struggle to identify profitable opportunities in this complex space drives demand. The combination of proprietary data and strong analytics allows them to offer high ROI to almost any significant player in the healthcare industry. Investors will be eager to own this one. They have already raised their price range to $24-26.

Identity management software firm ForgeRock (FORG) plans to raise $250M million at a $2.1B market cap. The company provides identity and access management software, with a platform to provision, authenticate, and govern digital identities. Their service is comparable to Okta (OKTA) in terms of function but is targeted more towards large enterprises with legacy systems. Ping Identity (PING) is also a leader (according to Gartner) in this space. They have also invested in some more user-friendly interfaces that help eliminate traditional login methods. The current range is $21-24.

A personal product favorite – Swiss running shoe brand On Holding (ONON) plans to raise $600M at a $6B market cap. On is a global provider of premium athletic footwear, apparel, and accessories that are designed using sustainable materials and its proprietary technology. It’s a niche DTC brand with Roger Federer as an investor. Their shoes are great, growth is strong and they are profitable but the valuation is pretty crazy at 9x sales and 63x EBITDA. The current range is $18-20.

Thoughtworks (TWKS) is a software development company that plans to raise $700M at a $6.3B market value. They provide “agile” software development, end-to-end digital strategy, design, and engineering services to more than 300 business clients. The management team has remarkable longevity (~20 years) and an impressive team. With TTM revenues of $900M and slow growth, it’s a little hard to pay 7x sales and 35x EBITDA for this company. They do have strong margins and we’ve seen good performance from similar names like GridDynamics (GDYN) (SPACvest) and EPAM Systems (EPAM). This is a name people will want to own. The current range is $18-20.

PROCEPT BioRobotics is developing surgical robots for urologic surgery. We love robots so that’s all good. We’ll take a closer look. Generally, these kinds of deals have done very well. They plan to raise $125M at a $1.1B market cap. The current range is $22-24.

Some folks we know really like Dutch Bros (BROS) coffee. They are doing a $400M deal at a $3.3B market cap. They have close to 500 drive-thru coffee shops in the Western US. LTM revenues were $405M. It’s a well-run company generating consistent growth but hard to get excited about as a stock. Current range is $18-20.

DICE Therapeutics (DICE) is an interesting but very early-stage biotech company with a good partner in Sanofi. It’s a small deal with a $550M market cap so might trade well. Leerink is on the cover. The current range is $15-17.

Tyra Biosciences (TYRA) is a preclinical stage biotech aiming to develop a treatment for solid tumors in the bladder. Just too early and narrow to be interested. The current range is $14-16.

We just had “car wash as service” company Mister Car Wash (MCW) tap the IPO markets and get treated to premium valuation (11x sales). This week we have a much smaller “gas a service” name coming with EzFill (EZFL). Operating in south Florida this small company offers the ability to schedule fueling for your car or truck on-demand or per a schedule using their app. I guess it’s also an “Uber for gas” if you like that. It’s a tiny deal at $25M with a $104M market cap. On the surface there does seem to be a market for this service. Few enjoy putting gasoline in their car and it is a waste of time. It’s unclear just what the margins will be in this business at scale. This is a stock that could end up appealing to retail investors who have lately enjoyed moving some of these names through their collective efforts. ThinkEquity is the banker and plans to price at $4.

Leave a Reply