U.S

U.S. IPO Week Ahead: Chinese EV’s Billion-Dollar Deal Closes Out Summer In A 2-IPO Week

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Two IPOs and two SPACs are scheduled to go public in the week ahead. Chinese EV maker Xpeng (XPEV) is leading summer’s last wave with a billion-dollar deal.

Xpeng plans to raise $1.0 billion at an $8.8 billion market cap. Xpeng targets the mid- to high-end segment in China’s passenger vehicle market and currently offers two electric vehicles, with a third model expected in 2021. The company is highly unprofitable (-6% LTM gross margin), and revenue was hit hard in the 1H20 as the coronavirus pandemic impacted sales.

Pain relief biotech PainReform (PRFX) plans to raise $23 million at an $82 million market cap. The company’s lead candidate is based on local anesthetic ropivacaine and provided substantial pain reduction in a small 15-patient Phase 2 trial. PainReform believes its post-IPO cash will last into 2021, though it will require significant additional funding to continue development.

Technology SPAC Burgundy Technology Acquisition (BTAQU) plans to raise $400 million. Led by the former CEO of HP and a former Chairman from Citi, the company plans to target businesses with enterprise values between $750 million and $2 billion.

Cannabis SPAC Petra Acquisition (PAICU) plans to raise $125 million. The company is led by technology veteran Andreas Typaldos and Sean Fitzpatrick, the founder and Managing Partner of Fidem Advisors.

U.S. IPO Calendar
Issuer
Business
Deal Size
Market Cap
Price Range
Shares Filed
Top
Bookrunners
Xpeng
Guangzhou, China
$1,020M
$8,779M
$11 – $13
85,000,000
Credit Suisse
JP Morgan
Manufactures smart electric SUVs and sedans in China.
Burgundy Technology Acq.
Grand Cayman, Cayman Islands
$400M
$510M
$10
40,000,000
Mizuho
Blank check company formed by the former CEO of HP and a former Citi executive targeting the tech industry.
PainReform
Herzliya, Israel
$23M
$82M
$8 – $10
2,550,000
Maxim
Joseph Gunnar
Phase 2 Israeli biotech developing therapies for post-operative pain relief.
Petra Acquisition
New York, NY
$125M
$156M
$10
12,500,000
LifeSci Capital
Ladenburg
Blank check company targeting a cannabis business.

Street research is expected for seven companies. On Monday, 8/24: Vertex (NASDAQ:VERX), AlloVir (NASDAQ:ALVR), and Li Auto (NASDAQ:LI). On Tuesday, 8/25: 1847 Goedeker (NYSEMKT:GOED), Fathom Holdings (NASDAQ:FTHM), Vasta Platform (NASDAQ:VSTA), and Vital Farms (NASDAQ:VITL).

Passage Bio’s (NASDAQ:PASG) lock-up period will be expiring on Wednesday, 8/26.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 8/20/20, the Renaissance IPO Index was up 48.4% year-to-date, while the S&P 500 was up 4.8%. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Zoom Video (NASDAQ:ZM) and Pinduoduo (NASDAQ:PDD). The Renaissance International IPO Index was up 31.6% year-to-date, while the ACWX was down 4.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Xiaomi and Meituan-Dianping.

Original Post

Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Credit: SeekingAlpha

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