It was not the easiest of transactions but
the level of institutional participation did
“surprise to the upside”, in the words of
one banker involved in the transaction.
Having recently stabilised operations,
Capstead bumped its quarterly dividend in
1ûBYûFOURûCENTSûTOûûCENTS ûTHEûlRSTû
increase since late 2017. The mortgage
REIT is using proceeds to fund new
investments.
ALPHATEC FUNDS GROWTH PHASE WITH
EQUITY
Spinal implant maker ALPHATEC is poised to
invest in its business with US$50m raised
Tuesday from an overnight stock sale.
Piper Jaffray and Canaccord Genuity
conducted a targeted wall-cross before
launching overnight marketing after the
close Tuesday at a US$40m. They priced
10.9m shares at US$4.60 each, a 9.1%
DISCOUNTûTOûLASTûSALE ûTOûBUMPûTHEûSIZEûOFû
the deal to US$50m.
Alphatec closed Wednesday trading at
US$4.70.
Alphatec restructured its operations all
the way back in 2013.
In 2016, the company sold its
international operations for US$80m. A
year later, Alphatec recruited industry
VETERANû0ATRICKû-ILESûASûITSûNEWû#%/ûTOû
help it grow.
On the back of a strong second quarter,
Alphatec raised full year revenue guidance
for 2019 to US$104m-$109m.
Alphatec has already launched seven of
the 12 new products that were expected to
be introduced this year. It plans to launch
another eight to 10 new products next
year.
The company is using the money raised
from the offering for R&D and new
product launches.
NETFIN NETS US$220m ON SPAC IPONETFIN ACQUISITION landed US$220m on its
SPAC IPO.
The vehicle is structured at the most
investor-friendly ends of the SPAC
spectrum. In addition to an 18-month
INVESTMENTûHORIZON û.ETlNûUNITSûCOMPRISEû
one share and one warrant.
B Riley FBR, sole bookrunner, placed a
FULLYûSIZEDûMûUNITSûONû4UESDAYûATû
US$10.00 apiece.
.ETlNûCLOSEDûlRST
DAYûTRADINGûONû.ASDAQû
at US$10.06.
.ETlNûISûHEADEDûBYû2ICKû-AURER ûTHEû
YEAR
OLDûFOUNDERûOFûlNANCIALûSERVICES
FOCUSEDûPRIVATEûEQUITYûlRMû7ESMARû
0ARTNERS ûALSOûTHEûSPONSORûOFû.ETlNû4HEû
VEHICLEûWILLûFOCUSûONûTARGETSûINûlNANCIALû
SERVICESûANDûlNTECH
EXICURE GRABS EQUITY LIFELINECancer drug developer EXICURE has a new
lease on life after raising US$55m from a
stock sale overnight on Tuesday.
Exicure sold 27.5m shares, or 40% of the
company, at US$2 each as part of uplisting
TOûTHEû.ASDAQû#APITALû-ARKET
To satisfy listing requirements, it had to
sell the stock at no lower than US$2, a
condition made somewhat complicated by a
US$1.85 Tuesday close.
Exicure closed Wednesday’s session at
US$2.63, so it is solidly in compliance.
Guggenheim Securities, sole bookrunner,
CONlDENTIALLYûMARKETEDûTHEûlNANCINGûBEFOREû
going public with a US$45m target. The bank
WASûABLEûTOûINCREASEûTHEûOFFERINGûSIZEûTOû53MEQUITIES AMERICASDynatrace US$570m IPO
oversubscribed
US Software intelligence SaaS provider wows investorsDYNATRACE, an IT monitoring company backed
by Thoma Bravo, saw its shares soar as much as
65% on debut on Thursday as investors stormed
yet another subscription software IPO.
Dynatrace’s IPO printed as 35.6m shares at
US$16 apiece, above the US$13-$15 range that
was upped from US$11-$13 earlier in the week.
Dynatrace is using the bulk of the nearly
US$570m raised on the offering to repay debt.
On the NYSE debut, Dynatrace shares broke
for trading on Thursday at US$25.50, ticked a
high of US$26.37, and closed first-day trading at
US$23.85, 49% above offer.
Goldman Sachs, JP Morgan and Citigroup
acted as lead bookrunners on the IPO, while
Goldman also handled the stabilisation and
billing and delivery.
Dynatrace’s solid performance is nothing new
for investors in the software sector.
However, Dynatrace did especially well to
score a strong valuation given a hefty debt
load at five times net leverage. The company’s
slow top-line growth relative to other software
IPOs reflects a transition from a licence to a
subscription software model.
On the original terms, Dynatrace was
marketed at a discount to the 8.5-times EV-
to-forward sales multiple of IT services comp
New Relic. The final pricing terms valued it at a
premium to New Relic, and even more so once
the stock began trading.OVERSUBSCRIBED
The IPO was 25 times oversubscribed, leaving
excess demand to overflow into the aftermarket,
a banker close to the deal said.The final book of demand included 500
accounts. The top 10 were allocated 45% of the
shares and the top 25 66%, the banker said.
Also limiting allocations was the commitment
by San Francisco-based crossover investor
Dragoneer Investment ahead of the deal’s launch
to buy US$75m of shares in the offering.
Yet Dynatrace saw revenue grow at just
8% last year as it transitions customers to its
higher-growth cloud-based software intelligence
platform.
Dynatrace’s subscription revenues grew 36%
last year and are at a tipping point whereby
they will soon completely replace the fading
contribution of legacy licence revenue, which fell
59% last year.
The company boasts a 140% dollar-based net
expansion rate for the Dynatrace cloud platform.
To alleviate investor concerns about debt
leverage, management told investors that the
company plans to be debt-free before the bulk of
its debt matures in 2025.
The IPO was an especially strong outcome for
major shareholder and sponsor Thoma Bravo,
which only a year ago had toyed with selling the
business outright.
Thoma Bravo took control of Dynatrace as a
result of its US$2.4bn acquisition of Compuware
in 2014. Compuware bought Dynatrace for just
US$256m in 2011. Dynatrace now has a market
capitalisation of US$6.7bn.
Investors are likely to have to wait until after
Labor Day for the next hot software IPO, though
at this stage there are no companies of note yet
on file publicly.
Anthony HughesUS EQUITIES
BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Goldman Sachs 102 15,471.44 15.3
2 JP Morgan 111 11,712.41 11.6
3 Morgan Stanley 90 11,187.50 11.1
4 BAML 78 9,625.59 9.5
5 Citigroup 70 8,676.90 8.6
6 Barclays 53 6,670.72 6.6
7 Credit Suisse 54 4,576.50 4.5
8 Wells Fargo 44 4,341.68 4.3
9 RBC 35 4,060.55 4.0
10 Deutsche Bank 20 2,571.58 2.5
Total 426 100,927.99
Including all domestic and international deals and rights issues
Source: Refinitiv SDC code: C3r