IPO Outlook: MGOL, SKWD

Before we get stuck into the week ahead’s hottest IPOs, it’s worth reflecting on how many businesses joined the public markets in 2022.

The State of IPOs

Newly released analysis from EY shows that the planet saw a 45% drop in IPOs in 2022. Following on from a record year, 2022 saw just 1,333 businesses go through the IPO process, with total IPO proceeds also declining by 61% to $175.9bn.

The Americas saw the greatest reduction in both listings and proceeds, with these falling by 76% and 95% respectively. The US remained the most active market in the region, accounting for 69% of IPOs in the Americas across 2022.

EY Global IPO Leader, Paul Go, commented:

“A record year for IPOs in 2021 gave way to increasing volatility from rising geopolitical tensions, inflation and aggressive interest rate hikes. Weakened stock markets, valuations and post-IPO performance have further deterred IPO investor sentiment.”

However, EY pointed to good news on the horizon. The accounting giant said there is a strong IPO pipeline but the atmosphere will likely “remain somber” until:

Improved stock market performance.
Lower inflation and ending of the interest rate hikes.
Calming of geopolitical tensions.
Diminished COVID-19 pandemic effects on the economy.

Here are two IPOs reportedly taking place across the week ahead:

MGO Global Inc

This business is offering 1.5 million shares of common stock through its IPO, with an assumed price of $5 per share.

It will join the NASDAQ index under the ticker symbol MGOL. The company’s IPO date is as yet unconfirmed, but some sources have given the company an expected listing date of Friday 6 January.

What Does MGO Global Inc Do?

In its own words, MGO is a lifestyle brand portfolio company focused on strategically leveraging the fame, celebrity power and global social media influence of world class athletes, entertainers and other cultural icons to create fresh, modern and compelling product and apparel brands.

While this sounds potentially wide-ranging, the company’s current operations primarily concern Lionel Messi. The superbly talented Argentine, who is heralded as one of the planet’s greatest footballers and has just won the FIFA World Cup as captain of his national team, boasts hundreds of millions of followers and is recognized by billions around the globe.

MGO signed a global licensing agreement with Messi in October 2018 to spearhead the creation of “The Messi Brand”, which it says is a premium line of functional and sporty casual wear, accessories and home décor inspired by the superstar’s persona and trend-setting fashion sense.

However, this license was later terminated and replaced by an agreement which the company describes as having “similar terms”. To this end, the business has a number of Messi-related brand collections catering for men, women and children.

The Florida-based company was founded in 2018 but has a remote workforce in New York, London and South America.

Who is Leading the MGOL IPO?

The listing is being headed by Boustead Securities and Sutter Securities.

Use of MGOL IPO Proceeds

The company says it expects to use the net proceeds of its IPO, which are estimated to stand at around $5.9m for two primary purposes. Around two thirds of the net proceeds, amounting to approximately $3.8m, for team expansion and marketing. The remaining 35%, or $2.1m, is slated for general and administrative corporate purposes, including working capital and capital expenditures.

Additionally, the company notes in its IPO prospectus that it intends to acquire other apparel businesses but has not identified or begun serious discussions with potential targets.

Skyward Specialty Insurance

This business is listing 8.5 million shares at an expected price of between $14 and $16 each.

The 8.5 million shares consist of 4.75 million shares of common stock offered by Skyward Specialty, 3.75 million shares of common stock to be sold by certain of the company’s existing stockholders and up to an additional 1.275 million shares to be sold by existing stockholders that the underwriters have the option to purchase.

The company will join the NASDAQ index under the ticker symbol SKWD.

What Does Skyward Specialty Insurance Do?

This business is a specialty insurance company delivering commercial property and casualty products and solutions on a non-admitted and admitted basis, predominantly in the United States.

The business says five key elements underpin its strategy:

Providing differentiated products, services and solutions that meet unique needs.
Attracting and retaining exceptional underwriting and claims talent.
Amplifying the expertise of its people with advanced technology and analytics.
Empowering its underwriting and claims teams with considerable authority to make decisions and apply their expertise.
Fostering a culture that promotes nimbleness and responsiveness to market opportunities and dislocation.

The company possesses eight underwriting divisions, with these being Accident & Health, Captives, Global Property, Industry Solutions, Professional Lines, Programs, Surety and Transactional E&S.

It also has a number of subsidiary insurance businesses, including Houston Specialty Insurance Company, Imperium Insurance Company, Great Midwest Insurance Company, and Oklahoma Specialty Insurance Company.

Who is Leading the SKWD IPO?

Barclays Capital and Keefe, Bruyette & Woods are acting as joint lead book-running managers for the proposed offering.

Us of SKWD IPO Proceeds

The company says the principal purpose of the offering are to increase capitalization and financial flexibility, as well as to create a public market for its common stock.

The business says it intends to use the net proceeds to make capital contributions of at least $45m to its insurance company subsidiaries to fuel growth, with the remainder earmarked for general corporate purposes.