The U.S. initial-public-offerings market is gearing up for a busy fall, with at least six companies launching roadshows on Tuesday as traders returned to their desks following the Labor Day holiday weekend.
With the broader equity markets at record levels and a robust pipeline of private unicorns, or companies valued at more than $1 billion, “many long-awaited names will finally take the leap to public markets, supported by the busiest month of August for new filings in over a decade,” said Bill Smith, founder and chief executive of Renaissance Capital, a provider of institutional research and IPO exchange-traded funds.
“That said, fall IPO activity is unlikely to match the summer’s frantic pace,” Smith wrote in commentary. “August filings were down from prior months, and the year’s weak IPO aftermarket returns serve as a headwind, evidenced by several postponements at the end of July.”
Still, as of Sept. 1, there were 115 U.S. IPOs publicly on file, of which 81 have updated filings since June 1, suggesting they are actively working up deals. The list includes names like eyeglass maker Warby Parker /zigman2/quotes/229389137/composite WRBY -6.71% — planning a direct listing — and restaurant payment processor Toast /zigman2/quotes/229432452/composite TOST -3.69% , as well as Authentic Brands Inc. , parent of retailers Forever 21 and Nine West and owner of Sports Illustrated and the holder of the brand name and rights to such legendary stars as Marilyn Monroe and Elvis Presley, plus eco-friendly shoe maker Allbirds /zigman2/quotes/229904251/composite BIRD -2.66% .
Assuming the stock market holds up, Renaissance is expecting 90 to 110 U.S. IPOs by year-end, raising $30 billion. Adding to the long list, Renaissance has identified 28 candidates among private companies that have filed confidentially, chosen underwriters or otherwise made noises that a deal is pending.
“The pipeline contains an especially strong backlog of tech unicorns, consumer brands, and biotechs,” said Smith.
The biggest deal launch Tuesday based on terms set earlier in the session was that of Thoughtworks /zigman2/quotes/229331545/composite TWKS -6.89% , a Chicago-based technology consulting firm company that will go public at a valuation of up to $6.1 billion.
The company, which expects to change its name to Thoughtworks from Turing Holding Corp. with the IPO, said a total of 36.84 million shares will be offered in the IPO, split between the company and selling shareholders.
The deal is expected to price at between $18 and $20 a share. The stock is expected to list on the Nasdaq under the ticker symbol “TWKS.” Goldman Sachs and JPMorgan are the lead underwriters. The company recorded net income of $79.3 million on revenue of $803.4 million in 2020, after income of $28.4 million on revenue of $772.2 million in 2019.
The second biggest deal is expected to come from On Holding AG /zigman2/quotes/229331620/composite ONON -2.35% , a Swiss sneaker and sporting apparel maker with a line co-developed by tennis player Roger Federer. On has applied to list 31.1 million shares priced at $18 to $20 each on the New York Stock Exchange, under the ticker symbol “ONON.”
Goldman Sachs, Morgan Stanley and Morgan Stanley are lead underwriters in a syndicate of nine banks on the deal. Proceeds are to be used for general corporate purposes.
The company had net income of 3.8 million ($4.1 million) Swiss francs in the six months through June 30, after a loss of 33.1 million francs in the year-earlier period, according to its IPO documents. Sales came to 315.5 million francs, up from 170.9 million.