The IPO Buzz: Money, Jobs, Scrubs & Drugs

Money, jobs, scrubs and drugs are the IPO buzzwords this week. Two payments companies – Flywire Corp. (FLYW) and Paymentus Holdings, Inc. (PAY) – priced their IPOs at the top of their respective price ranges on Tuesday night:  FLYW at $24, more shares (10.4 million priced vs. 8.7 million in the prospectus) and PAY at $21 on 10 million shares.  Both FLYW and PAY are set to start trading today.

“The payment space is hot right now,” a seasoned IPO trader said, adding that Paymentus reminded him of Bill.com (BILL).

ZipRecruiter (ZIP), an online job marketplace, is also expected to start trading today as a direct listing on the New York Stock Exchange.  ZIP is NOT an IPO.

Four healthcare IPOs are scheduled to round out the final week of May:   FIGS, Inc. (FIGS proposed), which sells its trendy scrubs D2C (direct to consumer); Day One Biopharmaceuticals, Inc. (DAWN proposed), a biotech developing a drug for pediatric cancer; Singular Genomics Systems, Inc. (OMIC  proposed), a life sciences technology company developing a new next-generation DNA sequencing platform, and Centessa Pharmaceuticals plc (CNTA proposed), a biotech holding company.

On Monday morning, the IPO Calendar doubled to six deals from three with the launch of Centessa, Day One Biopharmaceuticals and Singular Genomics. (The seventh deal this week is ZipRecruiter, the direct listing, which is NOT a traditional IPO.)

Valuation is the mantra now for IPO investors. They hope that bankers are getting the message: “Price it right.”

Looking back at last week, both Oatly Group AB (OTLY) and Procore Technologies (PCOR) did well. Shares of Oatly, the Swedish oatmilk brand backed by Oprah Winfrey, finished the week at $22.46, up 32.12 percent from their IPO price of $17.00. The stock of Procore Technologies, a construction management software company, ended the week at $88.62, up 32.27 percent from their IPO price of $67.00.

When Money Flies

Let’s take a look at the two payment-processing companies, whose IPOs were priced Tuesday night for debuts in Wednesday trading:

Flywire Corp. (FLYW) is a Bain Capital-backed global payments-processing company that processes cross-border payments for college tuition and healthcare payments, primarily hospital bills. The company, based in Boston, also serves the travel and B2B (business-to-business) sectors.

Note: Flywire upsized its IPO at pricing to 10.44 million shares – up from 8.7 million shares in the prospectus – and priced the deal at $24, the top of its $22-to-$24 range.

MarketWatch reported that Flywire was indicated to open at $30 – or about 25 percent above its IPO price.

Goldman Sachs, J.P. Morgan, Citigroup and BofA Securities were the joint book-runners.

Principal stockholders include entities affiliated with Bain Capital Ventures, which own a 19.4 percent pre-IPO stake. After the IPO, the Bain entities will have a 16.2 percent stake.

Note: Flywire had a net loss of $11.1 million on $131.8 million in revenue in 2020.

Paymentus Holdings, Inc. (PAY) is a cloud-based bill-payment technology company. Paymentus processes payments for utilities, financial services companies, insurance carriers, telecom and healthcare companies as well as for government agencies.  The company, based in Redmond, Washington, is backed by a KKR technology investment firm.

Note: Paymentus priced its IPO of only 10 million at $21 – the top of its $19-to-$21 range.

Goldman Sachs, J.P. Morgan, BofA Securities and Citigroup weree the joint book-runners.

Accel-KKR, also known as AKKR, owns a controlling stake in Paymentus, and this will continue after the IPO. AKKR has committed to buy $50 million worth of stock at the IPO price in a private placement scheduled to close immediately after the IPO

Note:  Paymentus earned net income of $13.7 million on revenue of $301.8 million in 2020.

On the Job Front

ZipRecruiter, Inc. (ZIP) is an online platform used by job seekers and employers. This is NOT an IPO.

ZipRecruiter expects its Class A common stock – 86.6 million shares – to start trading on Wednesday  via a direct listing on the New York Stock Exchange.

Note: After the market’s close on Tuesday afternoon, the NYSE set a reference price of $18 for the ZIP direct listing. The reference price is not the same as the offering price, which will be determined this morning by the NYSE market makers and the ZIP team of financial advisers, working with the company’s management.

Goldman Sachs and J.P. Morgan led the team of financial advisers.

Note:  For 2020, ZipRecruiter earned net income of $86 million on revenue of $418.1 million.

ZipRecruiter pointed out in its prospectus that it faces “intense competition from many well-established online job sites such as CareerBuilder, Craigslist, Glassdoor, Indeed, LinkedIn and Monster.” ZipRecruiter is based in Santa Monica, California.

Trendy Scrubs & New Drugs

Wednesday night pricing for Thursday trading:

Day One Biopharmaceuticals (DAWN proposed) increased the size of its IPO early Wednesday morning to 10 million shares, up from 8.4 million shares, and kept the price range at $14 to $16 each.

J.P. Morgan, Cowen and Piper Sandler are the joint book-runners.

Day One Biopharmaceuticals, based in South San Francisco, is a clinical biopharma company whose lead product candidate is an oral treatment for the most common type of pediatric brain cancer.

FIGS, Inc.  (FIGS) was founded in 2013 by two women, Trina Spear and Heather Hasson, who believe that nurses, doctors and other healthcare professionals deserve scrubs that look good and feel good. The company sells fashionable and functional scrubs – made of a proprietary stretchy fabric that resists odors and wrinkles – with zippered pockets designed to hold jewelry, stethoscopes and other items. FIGS scrubs are sold D2C – direct to consumers – online and through a mobile app.

Spear and Hasson, the co-founders and co-CEOs of FIGS, say that their scrubs are the antidote to boxy, unsexy cotton scrubs in hospital green or blue. FIGS, designed for men and women, come in fashionable colors – think pop red, graphite or teal – with tops and pants with a lean cut in a variety of styles.  Some items are available in stretch fleece to ward off the Arctic chill of hospital air conditioning.

The FIGS deal consists of 22.5 million shares at $16 to $19 each to raise $393.8 million. Up to 1 percent of the stock will be sold to retail investors on the Robinhood platform – a first for an IPO – according to the prospectus. Robinhood Financial LLC is a member of the selling group for the FIGS deal.

Goldman Sachs, Morgan Stanley,  Barclays, Credit Suisse and BofA Securities are the joint book-runners.

Note:  In 2020, FIGS earned net income of $49.76 million on $263.11 million in revenue.

Singular Genomics Systems (OMIC proposed) is a life sciences technology company developing a next-generation DNA sequencing platform and solutions for use by researchers and clinicians. The goal is to enable a high-resolution view of DNA, RNA and proteins in individual cells, along with their spatial arrangement, the company says. The hope is “to open new frontiers in research and medicine,” according to the prospectus.

This is an IPO of 8.5 million shares at $20 to $22 each.

J.P. Morgan, Cowen and Piper Sandler are joint book-runners.

Singular Genomics Systems, based in La Jolla, California, is developing the G4 lab instrument and consumable kits that its expects to ship in the first half of 2022, the prospectus says.

Thursday night pricing for Friday trading:

Centessa Pharmaceuticals plc (CNTA proposed) is a biopharma holding company based in Cheshire in the U.K. The company was formed in October 2020 by Medicxi. On Jan. 29, 2021, Centessa acquired 11 biotech companies.

This is an IPO of 15 million shares at $18 to $20.

Morgan Stanley and Goldman Sachs are the joint book-runners.

First Week of June

Only one deal – dLocal (DLO proposed) – is on tap so far for the first week of June.  The U.S. stock market will be closed on Monday, May 31st, for the Memorial Day holiday. More deals are likely to land on next week’s IPO Calendar as the filings flow in through the SEC’s window.

Stay tuned.

(For more information, please see the IPO Calendar. You can click the hyperlinks on company names on the IPO Calendar and those links will take you to the IPO profiles on IPOScoop.com.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.