With 13 scheduled deals, this week is set to be the IPO market’s most active in more than three years. They include six biotech firms, a defense contractor, and the world’s largest ride-hailing company whose market debut has long been anticipated by investors and the financial media alike.
That final company is Uber, which will become the largest U.S. offering since Alibaba Group Ltd. (BABA) in 2014 and the largest deal for a U.S.-based company since Facebook Inc.’s (FB) launch in 2012. All 13 IPOs are expected to raise a combined $10 billion.
Here’s a breakdown of each deal…
No. 5: Mayville Engineering (MEC)
Mayville is a Wisconsin-based company that manufactures vehicle and automobile components, including tools for prototyping, fabrication, assembly, and coating. The 100% employee-owned firm primarily specializes in producing metal car components and boasts 16 facilities across five U.S. states.
The company is expected to raise $125 million by selling 6.25 million shares between $19 and $21 apiece. With that, Mayville should reach a market cap of $394 million once shares start trading hands later this week. The IPO underwriters include Robert W. Baird & Co. and Citigroup Inc. (C). Shares will list on the New York Stock Exchange (NYSE) under the ticker “MEC.”
No. 4: HeadHunter Group (HHR)
HeadHunter is an online job recruitment platform serving Russia and its surrounding territories. Based in Moscow, the company dominates over 50% of the country’s job-recruitment market and reportedly grew roughly 28% in 2018. Sberbank – Russia’s largest financial services company and one of the largest banks in Eastern Europe – wholly owns HeadHunter’s Rabota job platform, acquiring the site for an undisclosed sum.
The HeadHunter IPO is looking to generate $200 million by offering 16.3 million shares at a price range of $11 to $13.50 each. That would give the firm a public valuation near $613 million, with Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) overseeing the deal. It will list on the Nasdaq exchange under the ticker “HHR.”
No. 3: Landcadia Holdings II (LCAHU)
Formed by restaurant giant Landry’s CEO Tilman Fertitta and Jefferies Financial Group Inc. (JEF) CEO Richard Handler, Landcadia is a company with the sole purpose of raising money to acquire and merge with an entertainment business. Landcadia is classified as a blank check company, ventures that are typically vehicles for generating funds that will then be used to make an acquisition. According to the terms of the deal, Fertitta will become the company’s sole shareholder.
Landcadia will raise $250 million and sell 25 million shares at exactly $10 apiece, with Jefferies acting as the sole bookrunner. Its forecasted market cap is $313 million and will trade under the ticker “LCAHU” on the Nasdaq.
No. 2: Parsons Corp. (PSN)
Parsons is a technology, engineering, and defense contractor based in Centreville, Virginia. With over 16,000 employees spanning 24 countries and four continents, it has been one of the United States’ largest private defense firms. Its largest Federal Solutions business provides tech and defense services to various federal agencies, making up a sizable portion of the firm’s more than $3.6 billion in annual revenue.
Goldman and Bank of America Merrill Lynch are underwriting the deal, which is expected to sell 18.52 million shares between $26 and $28 each for a total deal size of $500 million. At that size, the firm would command a market valuation of $2.61 billion. It will trade on the NYSE under the ticker “PSN.”
No. 1: Uber Technologies (UBER)
By far the most anticipated IPO of 2019, Uber is expected to shatter previous IPO records thanks to its longstanding reputation as a cab industry disruptor and enormous $72 billion private valuation.
While the firm has somewhat managed to move away from controversies that marred its early existence – including the ousting of abrasive founder and former CEO Travis Kalanick – investors are receiving it with heightened enthusiasm as it takes strides to diversify its business. Most of the public view Uber as a ride-hailing app, but it’s since expanded into several businesses, including food delivery, shipping, and even flying cars, all of which separate the firm from its largest competitor Lyft Inc. (LYFT) that hit the market in March.
But Uber’s massive valuation and ambitious business prospects should be taken with a grain of salt. If past tech IPOs are any indication, Uber’s massive valuation will likely decline, often dramatically, by the time the actual market debut rolls around. For example, Snap Inc. (SNAP) boasted a valuation as large as $40 billion five months before its March 2017 IPO. By the time the stock listed, the valuation was cut in half to about $20 billion.
This already appears to be the case, as Uber is expected to raise $8.46 billion by selling 180 million shares between $44 and $50 each. That would give it a market cap of $85.86 billion, far below the expected $120 billion market cap many expected earlier this year. Still, the Uber IPO will be the largest in more than five years and likely see a gigantic first-day pop as a result of unbridled investor hype.