Tag Archives: IPO

Environmental blank check company files for IPO

Peridot Acquisition Corp is the latest Houston blank check company to file for an Initial Public Offering (IPO). The company plans to raise $300 million. It has its head office in the River Oaks area.



The company is looking to buy a business that focuses on environmentally sound infrastructure, industrial applications and disruptive technologies that eliminate or mitigate greenhouse gas emissions. The target should have an enterprise value of between $800 million and $2 billion.

Examples given include:

  • Clean fuel transportation, electrification and energy efficiency.
  • Environmental infrastructure (e.g recycling).
  • Carbon capture, utilization and storage.
  • Renewables.

Carnelian, a PE firm based in Houston, is backing the company. It has $1.8 billion in cumulative equity commitments in traditional E&P companies.

Management team

Alan Levande is the CEO of the company.  Most recently, he was the co-CEO of Covey Park Energy, a natural gas company that was sold to Comstock Resources (owned by Jerry Jones of the Dallas Cowboys) for $2.2 billion in June 2019. Prior to that, Mr Levande was a Co-Founder and Senior Managing Director at Tenaska Capital Management LLC, a $4 billion private equity manager focused on investments in the power and energy sectors, from 2003 to 2012.

Markus Specks is the CFO. He was most recently a Managing Director with Värde Partners, a global alternative investment advisor managing approximately $14 billion in assets, where he was employed from July 2008 to June 2020.

UBS Investment Bank and Barclays are the joint bookrunners on the deal.

Houston-area blank check companies

The company joins a stampede of blank check companies that have gone or are planning to go public this year. In Houston;

SEC filing – S-1 Peridot

 

Houston Blank check company files for $150m IPO – but with a twist

Good Works Acquisition Corp has filed for a $150 million Initial Public Offering (IPO). It is a Special Purpose Acquisition Company (SPAC) or blank check company. It has its head office in the Galleria area.



The company doesn’t have any commercial operations. It is focused on finding a business that has experienced financial distress or has recently emerged from a financial restructuring. It is particularly interested in finding a business that has been hard hit by COVID-19 but has good prospects for a rebound. The company is looking for a business with an enterprise value of between $400 million and $600 million.

Management

Fred Zeidmann is the Chairman and CEO. He has served as Chairman of Gordian Group LLC, a U.S. investment bank specializing in board level advice in complex financial matters since December 2014.

Douglas Wurth is Co-Chairman and worked for JP Morgan for over 20 years. During his time there he served as the CEO of the Alternative Investments business and the CEO of the International Private Bank.

The third co-founder is Cary Grossman.  He co-founded Shoreline Capital Advisors, an investment banking firm focused on financial advisory services and middle market corporate finance transactions.

Donation to Non-Profits

Zeidman, Wurth and David Pauker, an non-exec director, have agreed to make available 750,000 founder shares (5% of the initial allotment) to be contributed to non-profit organizations, including those involved in the arts, human rights and the advancement of life sciences. These shares will be donated within six months of the IPO closing.

A spate of SPACs

Nationwide there have been a spate of blank check companies seeking to go public. According to the Wall Street Journal, so far, in 2020 there have been 75 new SPACs, raising $30 billion. This is more than double the amount raised in 2019.

In Houston

SEC filing – S-1 Good Works Acquisition

Industrial blank check company files for IPO

Industrial Tech Acquisitions has filed for a $60 million Initial Public Offering (IPO). The company is a SPAC (Special Purpose Acquisition Company), otherwise known as a blank check company. In other words, it doesn’t have any commercial operations.



The company has its head office in the Galleria area and its CEO is Scott Crist. He has founded, run and exited a number of businesses in the technology, telecommunications and industrial sectors.

Mr Crist is currently the CEO of Osprey, a company that provides remote surveillance and analysis to the energy sector. Rather unusually, in September 2019, he swapped CEO jobs with Mark Slaughter, the CEO of INET , a telecommunications and networking company. The companies were not affiliated with each other and didn’t have common investors. They did, however, share office space in Houston.

The CFO is Greg Smith. He was the founder, CEO and CFO of ERF Wireless. It is a company that provides high-speed broadband for mission-critical applications in energy, banking and hospitals. He also served as CFO for Industrial Networks, between 2017 and 2020, where he worked with Mr Crist

Not surprisingly, Industrial Tech Acquisitions is seeking to buy a technology business operating in the industrial or energy area. This includes software, mobile and IoT (Internet of Things) applications, cloud communications and ultra-high bandwidth services. Targets would have am enterprise value of between $250 million and $500 million.

The company has 21 months from the closing of the IPO to finalize an acquisition, though that could be extended by a maximum of 9 months, if they are close to a deal.

Maxim Group LLC is the sole bookrunner on the deal.

SEC Filing – S-1 Industrial Tech Acquisitions

 

Houston biotech start-up files for IPO

Kiromic Biopharma has filed for an Initial Public Offering (IPO). It plans to raise $20 million. The company is based in the Medical Center district. It was formed in 2006, though it had minimal operations until 2012.

The company is developing immunotherapies for blood cancers and solid tumors. It will use artificial intelligence and its proprietary neural network platform to identify new surface tumor targets. These targets can then be used to create therapies such as antibody therapies, T cell therapies and vaccine therapies. The company has three early-stage product candidates.

The CEO is Maurizio Chiriva Internati. He has been in that role since February 2018, though he joined the company in 2012. He has been an Associate Professor at MD Andersen Cancer Center since August 2019.

Tony Tontat is the CFO and COO. He joined the company, initially as a consultant, in April 2018. He has helped raise funds for biotech public companies such as Sorrento Therapeutics and NantKwest.

The company plans to list on the NYSE American under the symbol ‘KRBP’. No pricing terms were disclosed.

SEC filing – Kiromic Biopharma S-1

 

 

Houston biotech company completes IPO

CNS Pharmaceuticals, a biotech company, has completed its initial public offering. It has its head office in the Galleria area. The company raised $9 million by selling 2.1 million shares at $4, at the low end of its range of $4-$5.

The company is listed on the Nasdaq with a ticker symbol ‘CNSP’ and has a market capitalization of $67 million.



CNS doesn’t have any revenues yet and is developing anticancer drugs for the treatment of brain tumors. Based on preclinical data and positive results of the Phase I clinical studies conducted at MD Anderson Cancer Center, the company believes its lead drug candidate, Berubicin, could significantly help in the treatment of glioblastoma, a type of brain cancer that is considered incurable.

Berubicin was discovered at MD Anderson by Dr Waldemar Priebe, the founder of the company. Dr Priebe initially licensed the drug to Reata Pharmaceuticals. However they allowed their investigative drug application with the US Food and Drug Administration (FDA) to lapse for strategic reasons.

The money, along with a $5.8 million grant given to a sub-licensee, partially owned by Dr Preibe, will be used to commence the Phase 2 trials of Berubicin.  However the company will need to raise a further $7 million to complete the trials.

CNS becomes the fifth Houston-area IPO this year, following Sunnova and Castle Biosciences in July, Landcadia Holdings II, and Soliton.

You can see the complete list of Houston-area public companies on my blog here.

https://www.prnewswire.com/news-releases/cns-pharmaceuticals-announces-pricing-of-initial-public-offering-300954480.html

 

 

 

Mineral and royalty interests company files for IPO

[Update 08-06-20 – Fortis has formally withdrawn their filing.]

Fortis Minerals LLC, based in downtown Houston, has filed for an Initial Public Offering (IPO). Although the filing with the SEC states the company plans to raise $100 million, that is likely a placeholder. Renaissance Capital estimates the company could raise $400 million.

Fortis plans to list on the NYSE under the symbol NRI.



The company owns oil and natural gas mineral and royalty interests in the Permian Basin and the Stack play located within the Anadarko Basin of Oklahoma. The company was formed in 2016 with the backing of PE firm, Encap Investments.

For the 12 months ending 30 June 2019, the company had revenues of $138 million and adjusted EBITDA of $113.8 million.

Acquisition Joint Venture

The company also has formed an acquisition Joint Venture with Encap that could cause some conflicts of interests. Encap will own 100% of the capital interests in the JV while Fortis will own a carried interest, entitling the company to a percentage of distributions by the JV.

The JV will only consider acquisition opportunities brought to it by the company. Fortis states that the JV will only buy properties that represent attractive long-term value  but which would not be expected to increase cash flows in the short term following acquisition. However, Fortis may acquire these properties at a later date.  Encap will control the board of the JV.

The company states that they and the JV may jointly pursue an acquisition where the company would predominantly acquire interests in properties expected to be developed in the short term and the JV would predominantly acquire interests in acreage anticipated to be developed on a longer time horizon.

Management team

The CEO of the company is Christopher Transier. He was formerly the CFO of Escondido Resources. The CFO is Brad Wright. He was previously the Managing Director – M&A and Strategic Planning at Plains All American Pipeline.  With the exception of Scott Dole, Chief Accounting Officer, who is 62 years old, the rest of the management team are 36 years old or younger.

Just because the company has filed its registration statement, there is no guarantee that it will complete its IPO. If it does, I will add it to the list of Houston-area public companies. You can find that list here.

SEC filing – Fortis S-1

Contrasting fortunes for two Houston IPO’s pricing this week

There were contrasting fortunes for the two Houston-based companies that were pricing their Initial Public Offerings this week.

Sunnova Energy International, a residential solar energy provider, priced its IPO at $12 per share.  That’s below the expected range of between $16 and $18 per share. However the company is selling the same number of shares (17.6 million). At that price, the company will raise $221 million and have a market value of $1.1 billion.  The shares will begin trading on the NYSE on July 25 under the symbol NOVA.



Castle Biosciences, based in Friendswood, priced its IPO at $16 per share. That’s at the top end of the expected range of $14 to $16 per share. Also the company also increased the number of shares on offer from 3.3 million to 4.0 million. The gross proceeds are expected to be $64 million. The shares will also begin trading on July 25, but on the Nasdaq under the symbol CSTL.

The company is a commercial-stage dermatological company that uses genomes to provide physicians and their patients with more accurate treatment decisions. The main product is a multi-gene expression profile test that predicts the risk of metastasis or recurrence for patients diagnosed with invasive cutaneous melanoma, a deadly skin cancer.

I’ve added the two companies to the list of Houston-area public companies which you can see here. However I have deleted American Midstream from the list, whose deal to go private was completed yesterday.

Sunnova IPO pricing press release

Castle Biosciences IPO pricing press release

Houston solar energy company sets terms for IPO

Sunnova Energy International, a residential solar energy provider, has set terms for its Initial Public Offering (IPO). The company has its head office in the Greenway Plaza area of Houston.

The company filed confidentially for an IPO back in April. Its first public filing was on 27 June.



The company is offering 20% of its shares (17.6 million) with an expected price of between $16 and $18 per share. At the midpoint, that would raise $300 million, or $277 million after expenses.

$57 million of the proceeds will be used to repay convertible loan notes due March 2021 that have an interest rate of 9.5%. The rest of the money will be for general corporate purposes, primarily funding the growth of the company.

At $17 a share, the company would have a market capitalization of $1.5 billion. About a third of the 186 Houston-area public companies have a market cap higher than this. You can see the complete list on my website here.

The company is expected to price during the week of July 22, 2019

Sunnova S-1/A filing

 

Houston Biopharma company files for IPO


CNS Pharmaceuticals, a Houston-based biopharma company has filed for an Initial Public Offering (IPO).  The company has its head office in the Galleria area.

It is the second Houston-area biopharma company to file for an IPO recently. Castle Biosciences (which does have commercial revenues) filed for a $58 million IPO last week.



The company doesn’t have any revenues yet and is developing anticancer drugs for the treatment of brain tumors. Based on preclinical data and positive results of the Phase I clinical studies conducted at MD Anderson Cancer Center, the company believes its lead drug candidate, Berubicin, could significantly help in the treatment of glioblastoma, a type of brain cancer that is considered incurable.

Berubicin was discovered at MD Anderson by Dr Waldemar Priebe, the founder of the company. Dr Priebe initially licensed the drug to Reata Pharmaceuticals. They allowed their investigative drug application with the US Food and Drug Administration (FDA) to lapse for strategic reasons.

Dr Priebe engaged a couple of experts who were on the team at Reata. As a result of reviewing the data, the company intends to restart the application.

The company is seeking to raise about $8.5 million at a share price of between $4 and $5. The money will be used to start Phase 2 trials of Berubicin, expected to cost $7 million. Dr Priebe owns 67% of the company

The CEO, and only full-time employee, is John Climaco who joined the company in September 2017. He was previously the CEO of a biopharma startup. The CFO is Matthew Lourie, who is providing services on a part-time, consulting basis.

SEC filing

Houston solar company files for IPO

Sunnova Energy International, a residential solar energy provider, has filed for an Initial Public Offering (IPO). The company has its head office in the Greenway Plaza area of Houston.

The company leases rooftop solar energy systems to residential customers usually in the form of a 25-year lease. Customers get the benefit of cheaper electricity costs while the company retains ownership of the system, allowing it to claim federal tax credits.



$1 billion market cap?

Two weeks ago, Reuters reported that the company was planning an IPO that would value the company at $1 billion. In the current SEC filing there is no indication of the number or price of the shares being sold.

History

The company CEO is John Berger. He worked for Enron and founded residential solar energy company SunCap Financial in 2010. He sold that business to NRG Energy before starting Sunnova in 2012. The company is primarily backed by Energy Capital Partner, a PE firm that has raised over $13 billion in funds since 2006. They also led a consortium to take Calpine private in a $5.6 billion transaction in 2018.

For the 12 months ended 31 March 2019, the business had revenues of $111 million and adjusted EBITDA of $44.6 million. The company has 63,000 customers in 20+ states and territories. However, most of its revenue comes from customers in New Jersey (29%), California (26%) and Puerto Rico (14%).

Revenue grew by 35% in 2018 and the company expects the number of residential solar energy systems in the overall US market to increase from 2.2 million in 2018 to 5.4 million in 2024, a 16% compounded annual growth rate.

Problems in Puerto Rico

The business in Puerto Rico is causing some operational heartache. In September 2017, hurricanes Irma and Maria made landfall, resulting in;

  • damage to many of the company’s solar energy systems.
  • damage to Puerto Rico’s electrical grid. This meant that those solar energy systems that didn’t have a battery back up operated at a reduced capacity, even though the system itself was not damaged.
  • residents leaving the island, and suspending lease payments to the company.

In addition regulators in Puerto Rico have started administrative proceedings against the company after finding that it had enrolled 436 customers illegally by attaching signatures to contracts they hadn’t signed.  Sunnova disputes the findings but is unable to state what impact this might have on the business.

New CFO

The CFO of Sunnova is Rob Lane. He joined the company a month ago, from Spark Energy. The previous CFO, Jordan Kozar, left in November 2018.

The company plans to list on the NYSE under the symbol ‘NOVA’. BofA Merrill Lynch, J.P. Morgan, Goldman Sachs and Credit Suisse are the joint bookrunners on the deal.

The filing comes a day after another Houston company, Castle Biosciences, filed for an IPO.

SEC filing