By Ciara Linnane, MarketWatch
The U.S. initial-public-offering market is gearing up for its busiest week since May of 2019, when Uber Technologies Inc. went public, with 12 deals expected to raise $6.8 billion.
The list includes Snowflake, a cloud company that raised its proposed price range by a wide margin early Monday, to $100 to $110 from a prior $75 to $85. The company is planning to offer 28 million shares to raise up to $3.08 billion at a valuation of up to $30.5 billion. That would make it the biggest deal of the year.
“More impressive, it’s the largest software IPO of all time,” according to Bill Smith, chief executive and co-founder of Renaissance Capital, a provider of IPO exchange-traded funds and institutional research.
The deal is more than twice as large as the second biggest software IPO, that of VMware /zigman2/quotes/209864107/composite VMW +2.70% in 2007, said Smith. “As Zoom /zigman2/quotes/211319643/composite ZM +5.72% and [Amazon’s] AWS /zigman2/quotes/210331248/composite AMZN -2.12% have shown, this seismic shift in the tech sector comes down to market and margins,” Smith wrote in commentary.
San Mateo, Calif.–based Snowflake has applied to list on the New York Exchange under the ticker symbol “SNOW.” There are 23 banks underwriting the deal, led by Goldman Sachs and Morgan Stanley. Proceeds are to be used for general corporate purposes, including potential acquisitions.
“We believe in a data connected world where organizations have seamless access to explore, share, and unlock the value of data. To realize this vision, we are pioneering the Data Cloud, an ecosystem where Snowflake customers, partners, and data providers can break down data silos and derive value from rapidly growing data sets in secure, governed, and compliant ways,” the company says in its prospectus.
Snowflake booked a net loss of $171.3 million in the first six months of fiscal 2020 to July 31, after a loss of $177.2 million in the same period a year earlier. But revenue rose to $241.9 million from $104 million.
Snowflake is joined on the IPO calendar by Unity Software Inc., a maker of software for 3-D videogames, that is a direct rival of Epic Games, the creator of “Fortnite,” which is currently in a dispute with Apple Inc. /zigman2/quotes/202934861/composite AAPL -3.17% and Google parent Alphabet Inc. /zigman2/quotes/205453964/composite GOOG -2.67% /zigman2/quotes/202490156/composite GOOGL -2.69% .
Unity is planning to sell 25 million shares priced at $34 to $42 each, according to its filing with the Securities and Exchange Commission. If underwriters exercise the option for another 3.8 million shares to cover overallotments, Unity would raise up to $1.21 billion. There are 11 banks underwriting the deal, led by Goldman Sachs and Credit Suisse.
Unity will have up to 267.2 million shares outstanding after the offering, including the overallotments, potentially giving Unity a valuation of $11.06 billion at the high end of its pricing range, which would nearly double the company’s valuation from July 2019 of about $6 billion. The company will have a single class of common stock, but the board reserves the right to issue up to 100 million shares of stock to fight off a hostile takeover.
Unity has applied to list on the New York Stock Exchange, under the ticker symbol “U.” Unity brought in $541.8 million in revenue and a $163.2 million loss in 2019, compared with $380.8 million in revenue for a $131.6 million loss in 2018. Epic’s annual revenue in 2019 was estimated at $4.2 billion, according to Forrester.
Packaging company Pactiv Evergreen /zigman2/quotes/220991534/composite PTVE -2.79% is expected to be the week’s third biggest deal, with plans to offer 41.03 million shares priced at $18 to $21 each. The biggest maker of fresh food and beverage packaging is expected to raise $861 million at a valuation of about $3.4 billion.
The company has applied to list on Nasdaq under the symbol “PTVE.” There are 14 banks underwriting the deal, led by Credit Suisse and Citigroup. Proceeds are slated to be used to repay debt and for general corporate purposes.
Broadstone Net Lease, a Rochester, N.Y., single-tenant commercial net lease real-estate investment trust with 633 properties, is aiming to raise $636.5 million by selling 33.5 million shares priced at $17 to $19 each.
The company plans to list on the NYSE under the symbol “BNL.” There are 10 banks underwriting the deal, led by J.P. Morgan, Goldman Sachs, BMO Capital Markets and Morgan Stanley.