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CaaS Monthly

ECM Commentary

June 2023

June picked up where May left off, with KVUE opening a trail for CAVA and others to come to market. $17.2bn of total issuance in June was in line with the normalized pre-pandemic average for the second month in a row, bringing 1H23 total volume to $73.8bn (+31.5% y/y). The VIX has fallen to its lowest level since Fall 2021 and the broader market is holding onto gains, opening an opportunity for companies to come to market as YTD IPO volume is more than double 1H22’s total.

 

CAVA Group’s 99% day-one gain is the top story in ECM this month. Pricing above the upward-revised range at $22/sh, the company raised approximately $365m in primary funding post-shoe to help fund its rapid store expansion across the US. Three more similar sized IPOs followed shortly after:

  • Savers Value Village (SVV): Price $18 (range $15-$17), $401m deal size.

  • Kodiak Gas Services (KGS): Price $16 (range $19-$22), $256m deal size.

  • Fidelis Insurance Holdings (FIHL): Price $14 (range $16-$19), $210m deal size.

 

Issuers continue to leverage market strength to sell shares via Follow-Ons, with $15.5bn in volume on 77 deals in June. Spreads on deals >$50m averaged a 5.9% discount with a 0.4% gain day-one. With lockups expiring, recent IPOs and spin-offs including NXT, MBLY, SKWD, CRBG, GEHC, and MSGE sold a total of $6bn in Follow On offerings with an average discount of 3.3% and day-one performance of +3.1%.

 

In private markets, reports suggest Arm may be in talks with strategic investors including Intel Corp to anchor its potential 2H23 IPO. SpaceX is reportedly planning a new round of employee share sales which may value the company at $150bn, up from a December valuation of $140bn. Authentic Brands Group raised $500m from General Atlantic at a valuation north of $20bn ($12.7bn valuation Dec ’21), positioning the brand management company for an IPO that reports suggest may come in the next 24 months.

ECM Offerings this Month

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Source: CaaS Capital Management, Bloomberg, Capital Markets Gateway, SEC.gov

ECM Deal Tracker

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Source: CaaS Capital Management, Bloomberg, Capital Markets Gateway, SEC.gov

Monthly ECM Issuance 

Source: CaaS Capital Management, Bloomberg, Capital Markets Gateway, SEC.gov

IPOs Priced this Month

Source: CaaS Capital Management, Bloomberg, Capital Markets Gateway, SEC.gov

Follow-Ons Priced this Month [1]

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Source: CaaS Capital Management, Bloomberg, Capital Markets Gateway, SEC.gov
[1] Unregistered blocks not displayed

Average Follow-On Discounts and Day-One Performance [2]

Source: CaaS Capital Management, Bloomberg, Capital Markets Gateway, SEC.gov
[2] Follow-Ons with deal size $50m or greater, calculated as simple average of pricing discount to last trade and simple average of performance to day-one close from deal price

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