Could this rumoured ASX IPO become a billion-dollar takeover target?

There might be a second chance to invest in a similar company to the one set to depart the ASX on a $1 billion takeover.

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IPO written in circles with a man holding a smartphone and a laptop open.

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It was slim pickings for initial public offerings (IPOs) across the ASX and abroad last year. According to S&P Global, the number of IPOs shrank 16% compared to the previous year, cratering 40% from 2021 levels.

However, a few highly successful public market debuts in the United States in recent weeks might signal a renewed spark. Social networking company Reddit Inc (NYSE: RDDT) made a major splash last week, jumping 48% upon its listed launch. Similarly, Donald Trump's Truth Social rose after becoming a public entity.

At the same time, businesses are being taken over by the boatload.

Vessel demand could lure new ASX IPO

On Monday, a company named MMA Offshore Ltd (ASX: MRM) entered a binding scheme implementation deed with Cyan MMA Holdings (a subsidiary of Cyan Renewables).

The deal values the marine services provider at $1.03 billion.

MMA Offshore owns 20 vessels operating across six global locations. These gigantic, water-traversing platforms enable a range of offshore solutions, including servicing other vessels, subsea surveying, and specialist engineering.

For the 12 months ended 31 December 2023, MMA Offshore generated $352.6 million in revenue and $108.6 million in net profits after tax (NPAT).

Given the current industry dynamics, some are labelling the takeover as 'opportunistic'. For instance, Lewis Edgley, Pendal portfolio manager, has said there is a demand-supply imbalance in the offshore servicing sector.

Companies like MMA Offshore were already popular with oil and gas clients. However, the growth in renewables, such as offshore wind power, has given rise to another need for service vessels — maintaining the increasing pool of offshore renewable assets.

Edgley describes it as a growth phase for offshore vessel operators. For most, it's an unsuspected beneficiary of the renewable shift. However, the interest from private equity could ignite greater investor appetite for similar companies.

Rumours are surfacing about a possible ASX IPO by an MMA offshore look-a-like — Bhagwan Marine.

It is believed the 24-year-old vessel operator is getting a read on investor interest with a roadshow in February. According to The Australian, the 150-vessel-strong company is rumoured to seek a $100 million IPO before the end of this financial year.

IPOs on the horizon

The next expected IPO on the ASX is BlinkLab, a company using artificial intelligence (AI) to deliver early diagnosis of autism and ADHD in children.

Based on the ASX website, BlinkLab is slated to hit the public market on 4 April, a week from today.

The company's executive chair is Brian Leedman, the person behind the formerly listed ResApp Health.

Those participating in the IPO hope Leedman will have the same success with BlinkLab as with ResApp, which left the Aussie boards after being acquired by Pfizer for $179 million.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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