Pricing of 240p each represented a 30.4%
discount to TERP of 371.2p as of July 2, the
day before the rights issue and acquisition
were announced.
Within hours of the result on Tuesday
buyers for the remaining 5.5m shares were
secured by the underwriters.
The rump shares were placed at 302.9p
EACH ûAûûDISCOUNTûTOû-ONDAYSûCLOSE
3HAREHOLDERû+UALAû,UMPURû+EPONGû
followed through on its commitment to
exercise its rights in full, and holds 19.9% of
Synthomer post-money.
Synthomer is buying Omnova at US$10.15
per share, which values the share capital at
US$473m (approximately £375m), with an
implied enterprise value of US$824m.
)TûWILLûlNANCEûTHEûACQUISITIONûWITHû
proceeds from the rights issue and bridge
facilities.
AMERICAS
UNITED STATES
AUGUST STARTS IN CHOPPY FASHIONUS IPO activity is petering out ahead of the
August lull, but bankers still expect to bring
a string of follow-ons over the next two
weeks before investors take a summer
break.
The past week saw three IPOs of note
price, led by the US$570m NYSE IPO of IT
monitoring software provider Dynatrace.
Canadian cannabis company SUNDIAL
GROWERS cratered on debut on Thursday,
DESPITEûMID
POINTûPRICINGûANDûANûUPSIZINGûTOû
its US$143m IPO. Offshore drilling rig
operator BORR DRILLING made a subdued debut
on Wednesday on the NYSE with a US$50m
offering that added to its Norwegian Stock
Exchange listing.
4HEûBIGGESTûOVERALLû%#-ûDEALûOFûTHEûWEEKû
was California utility EDISON INTERNATIONAL’s
53BNûFOLLOW
ONûTOûCOVERûITSûWILDlREû
fund contribution, a deal that traded
impressively in the aftermarket.
'ETTINGûMOREûATTENTIONûWASûHIGH
mYINGû
plant-based meat maker BEYOND MEAT’s
US$520m secondary offering on Wednesday,
just three months after it went public.
With the week ahead bringing only one
IPO, the Nasdaq listing of Israel’s INMODE,
attention in the IPO market is turning to the
September pipeline.
Bankers say issuers are likely to push hard
to price deals in September, conscious that
some investors will be wary of a repeat
performance after last year’s fourth-quarter
downturn in stock prices.
“The scarring left over from Q4 last year
is going to be front of mind for investors,”
ONEûSENIORû%#-ûBANKERûSAID
Bankers estimate that at the current
RUNûRATEûANDûADJUSTINGûFORûTHEûOUTSIZEDû
)0/ûOFû5BERûINû-AY ûANOTHERû53BN
$20bn could price by the end of
year, market conditions
notwithstanding.
WEWORK, said to be seeking US$3.5bn, is
the largest deal expected by year-end,
though SMILEDIRECTCLUB, Envista (the
Danaher dental arm) and PELOTON are otherHIGH
PROlLEûDEALSûTHATûAPPEARûLIKELYûTOû
launch as well in this period.
Smaller healthcare and tech deals are
also expected to feature heavily in this
WINDOW ûTHOUGHûTHEûlRSTûHEAVYûPRICINGû
week is unlikely to come until the week
beginning September 16.
On the follow-on front, bankers are
ANTICIPATINGûSOMEûDEALûmOWûTHROUGHûTHEû
next two weeks before the market shuts
down for summer, though dicier market
conditions this week could complicate
those plans.EQUITIES AMERICASBeyond Meat loses sizzle as
pre-IPO investors sell
US Fake meat maker prices secondary at 28% all-in discountBEYOND MEAT, the plant-based fake meat maker
whose May IPO ranks as this year’s hottest debut,
took some of the heat out of its lofty valuation
by bringing a US$520m secondary offering that
enabled early investors to take some profits.
After two days of marketing, active
bookrunners Goldman Sachs, JP Morgan and
Credit Suisse priced the sale of 3.25m shares or
5% of the company at US$160 each, a 28% all-in
discount and a far steeper concession than the
average follow-on.
The offering, comprising 3m shares from
pre-IPO holders and only 250,000 primary
shares issued by Beyond Meat, launched just
one session after the stock hit a record high of
US$239.71, 860% above its US$25 IPO price.
In Thursday’s aftermarket, the shares closed at
US$176.04, handing investors in the follow-on a
handy gain.
Bankers downplayed the significance of
the wide offering discount, noting that selling
shareholders were playing with “house money”
after the almost vertical ascent of the stock price
in recent months.
Beyond’s stellar performance prompted
underwriters to allow early release of lock-up
restrictions on their shares. Their remaining
holdings are still subject to the original IPO
lock-up that expires in late October.
The sellers in the offering included more than
50 entities and individuals that were pre-IPO
holders.
The biggest was major shareholder Kleiner
Perkins Caufield & Byers, which sold 622,401
shares in the base deal but will still own 7m or
around 11.6%.
Founder and CEO Ethan Brown sold 40,000 but
still owns 3.1m shares or 5%. Likewise, each of the
sellers sold only a small amount of their holdings.
By pricing a secondary now, Beyond shares
might trade in a more orderly fashion when thelock-up expires, though the company’s disparate
shareholder base may make it harder than usual
to predict the reaction.
As it stands, Beyond’s share register is light
on household-name, long-only institutional
investors. The steep price concession may have
enabled it to attract some of those investors
through this offering.BEATING EXPECTATIONS
The offering was timed alongside the release of
Beyond’s second-quarter earnings. Revenues
soared 287% to US$67.3m, ahead of Street
estimates of US$58m.
Beyond lifted its full-year revenue guidance to
more than US$240m from US$210m, implying
a top-line growth rate of more than 170% from
2018 levels.
The higher guidance includes, for the first
time, revenues from Beyond’s partnership with
fast-food chain Tim Hortons, which is selling a
plant-based breakfast sausage and burger.
Beyond’s new partnership with Dunkin’ Brands
is in test mode and not included in the forecast.
Beyond, whose products are now in 51
countries, also expects positive adjusted Ebitda
versus its previous forecast of break-even
adjusted Ebitda. Adjusted Ebitda was US$6.9m
or 10.2% of net revenues in the latest quarter.
The offering raised US$40m of primary capital
for Beyond that it plans to use to increase its
production, pay for marketing costs and for
working capital, though to date Beyond has been
remarkably light in its capital needs.
Post-offering, Beyond’s cash pile grows to
US$328.7m.
A lingering concern is competition, including
from privately owned Impossible Foods, which
through fast-food chain Burger King is looking to
sell its burgers nationally.
Anthony Hughes