The firm’s financials indicate a slight softening in revenue growth and increasing operating losses. The market opportunity for environmental services is large and expected to grow at a low-to-moderate rate of growth in the years ahead, although the aforementioned increasing focus on air quality as a result of the Covid19 pandemic may produce new market growth opportunities for nimble firms such as Montrose. The firm provides a range of environmental, Get the IPO Edge with unique research on next-generation high growth stocks. Shanghai, China-based Lufax was founded to create the ability for consumers in China to obtain loans and wealth management services via an online portal. IRVINE, CA (July 14, 2020) – Montrose Environmental Group, Inc. (the “Company” or “Montrose”) announced today that it has commenced an initial public offering of 10,000,000 shares of its common stock, all of which are being offered by the Company. BofA Securities is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 46.0% since their IPO. The firm provides enterprises and government entities with a variety of environmental services. New York, New York-based GBS was founded to develop a saliva glucose biosensor and more recently switched its efforts to repurposing its technology for a point of care diagnostic testing system for the Covid-19 virus. As to valuation, according to an NYU Stern School basket of publicly held Environmental & Waste firms, their average EV / Sales multiple in January 2020 was 3.08x. Montrose Environmental Group has gone public in an offering which went well with shares up 50% on their opening day despite a soft pricing process. This is a top-tier performance for all major underwriters during the period. Phoenix, Arizona-based Leslie's was founded in 1963 to create a network of retail locations providing pool and spa products and services in the U.S. Richardson, Texas-based Mavenir was founded to develop cloud-based software tools for tier 1 and other wireless service providers in global markets operating 2G - 5G networks. Montrose Environmental Group has filed to raise $160 million in an IPO of its common stock. Los Angeles, California-based MediaAlpha was founded to create an online programmatic ad purchasing and management system for insurance carriers to obtain prospective leads for new customers. 11 companies will see their 25-day underwriter research quiet periods end. Increasing gross profit, but variable gross margin, Growing operating losses and negative margin, Uneven cash flow from or use in operations. Montrose is seeking public market capital for its ongoing operations as well as to likely fund additional acquisitions, as the firm has been very acquisitive due to industry fragmentation. The company obtains customers through a direct sales force team and the firm has more than 4,500 clients producing revenue growth of an average of 17% per year since 2016, inclusive of its recent acquisition of consulting firm CTEH. The company does not necessarily look very compelling as a standalone business, as rapid dealmaking complicates financial statements. Montrose Environmental Group (MEG) intends to raise $160 million in an IPO of its common stock, according to an S-1/A registration statement. The SCOOP Rating does not reflect the opinions of anyone associated with The Selling, G&A efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of Selling, G&A spend, dropped to 0.5x in the most recent reporting period. (I have no position in any stocks mentioned as of the article date, no plans to initiate any positions within the next 48 hours, and no business relationship with any company whose stock is mentioned in this article. The IPO appears reasonably valued so is worth a closer look. Montrose is an environmental services provider offering measurement & analytical services as well as environmental resiliency & sustainability solutions To listen to an audio version of this report, click the Play button on the graphic below: Irvine, California-based Montrose was founded to provide environmental services through three business segments: Management is headed by president and Chief Executive Officer Mr. Vijay Manthripragada, who has been with the firm since September 2015 and was previously CEO of PetCareRx and prior to that was a Senior Vice President at Goldman Sachs. The 180-day shareholder sale lockup period will expire for one operating firm. According to a 2019 market research report by Environmental Business International, the global market for environmental services is estimated to have a value of $1.25 trillion. Management says its 'long-standing relationships with a number of Fortune 1000 companies and government entities, and many of its services were deemed 'essential' during the recent Covid19 shelter in place guidelines.Notably, the firm has acquired over 50 businesses in the last eight years, as management views the industry as still highly fragmented and it intends to continue 'selectively acquiring companies' in the industry. Given the reasonable IPO valuation, potential for continued growth through acquisition and new organic opportunities as well as resilience to viral pandemic conditions, my opinion on the IPO is a BUY at up to $16.00 per share. Today's IPO for Montrose Environmental Group (NYSE: MEG) opened for trading at $16.50 after pricing 10,000,000 shares of its common stock at … Oaktree-backed environmental services firm Montrose Environmental prices IPO at $15 low end 07/23/20 US IPO Week Ahead: A software provider and the largest SPAC ever … Montrose’s recent financial results can be summarized as follows: Below are relevant financial results derived from the firm’s registration statement: As of March 30, 2020, Montrose had $1.5 million in cash and $257.5 million in total liabilities. The firm's addressable market is believed to be approximately $395 billion and is expected to grow at a rate of 3.4% per year from 2018 to 2024. Information provided is for educational purposes only, may be in error, incomplete or out of date, and does not constitute financial, legal, or investment advice.). Montrose Environmental Group, which provides environmental assessment, management and remediation services, plans to raise up to $170 million in … The company is … Selling, G&A expenses have increased as a percentage of revenues; its Selling, G&A efficiency rate has dropped as revenues have increased. This article is exclusive for subscribers. MEG’s proposed EV / Revenue multiple of 2.55x indicates to me that the IPO appears reasonably valued, especially given the firm’s likely higher revenue growth rate of nearly 20%. I like the most recent deal which drives real profit potential, yet find the situation too uncertain to pull the trigger. Montrose Environmental Group (MEG-OLD) has filed to raise $160 million in an IPO of its common stock, according to an S-1/A registration statement. Management’s presentation of the company roadshow is available here. The firm provides enterprises and government entities with a variety of environmental services. After IPO, the firm’s enterprise value will approximate $622.9 million and its share float will be around 49%. Management says it will use the net proceeds from the IPO as follows: We intend to use $139.3 million of the net proceeds from this offering in connection with the redemption of all outstanding shares of our Series A-1 preferred stock and the remainder for general corporate purposes, including future investments in innovation and acquisitions in our highly fragmented industry. Montrose intends to raise $160 million in gross proceeds from an IPO of ten million shares of its common stock at a midpoint price of $16.00 per share. Watertown, Massachusetts-based SQZ was founded to develop its Cell Squeeze technology that squeezes cells 'through a microfluidic chip, temporarily opening the cell membrane and enabling biologic material of interest, or cargo, to diffuse into the cell.'. Expected IPO Pricing Date: To be announced. The SCOOP ratings should not be taken as investment advice. However, Montrose says it is engaging with over 70 clients on their Covid19 response activities, so it appears the firm has the potential for resiliency through the pandemic and even the potential for new business opportunities as a result of the pandemic as customers increase their focus on air quality. Jul 15, 2020 Montrose Environmental Group (MEG) intends to raise $160 million in an IPO of its common stock, according to an S-1/A registration statement.

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