commitments. Its acquisition pipeline
includes targets in the bioenergy and
mEXIBLEûGENERATIONûSECTORSSEQUOIA RAISES £300m IN UPSIZED
PLACINGSEQUOIA ECONOMIC INFRASTRUCTURE INCOME FUND
has raised £300m in an upsized open offer,
placing and offer for subscription.
The fund had targeted £250m with strong
demand leading to the upsize and even
OUTSTRIPPINGûTHEûlNALûaMûRAISEDû
A total of 267.9m new shares were sold at
112p each, a 5.3% premium to the fund’s
unaudited NAV per ordinary share on
December 31, and a 1.7% discount to
Monday’s close of 114p.
Sequoia is planning to repay the balance
on its £280m revolving credit facility. The
excess proceeds will go towards the
company’s near-term pipeline of more than
£380m.
Books opened on February 10 for the
placing and offer for subscription, and the
following day for the open offer.
Jefferies was bookrunner on the ABB.
Sequoia raised fresh capital twice in 2019,
cashing in £138.75m in September and
£216m in June. Stifel ran both deals.NOTHING TO SEE AS INSPECS DEBUTSThere was little to look at on debut for UK
eyewear maker INSPECS, whose shares
opened up more than 1% but spent much of
THEûDAYûmATûTOûPRICING
Following its £94m London AIM IPO,
Inspecs shares opened on Thursday at
197.5p versus pricing at 195p for 48.2mSHARESûINûTHEûmOATû4HEûSHARESûQUICKLYû
shifted back to 195p, where they have spent
the rest of the day. In total, 403,052 shares
had changed hands, a tiny fraction of the
shares placed in the IPO.
There was no further movement on
Friday morning with no trades.
Inspecs raised £23.5m for its acquisition
strategy, with Harwood Capital and
Lombard Odier picking up £70.5m from a
SECONDARYûTRANCHEû4HEûFREE
mOATûISû
Peel Hunt was bookrunner.AMERICAS
UNITED STATES
US ECM IN WAIT-AND-SEE MODEThe rapid stockmarket correction spurred
by escalating fears of a coronavirus
pandemic is inevitably forcing ECM
syndicate desks to reassess their March
pipelines.
Coming just as the US IPO calendar was
poised to restock, major US stock indices
plunged into correction territory during the
week and spoiled the funding plans of a
string of issuers.
One IPO, from gene therapy developer
Passage Bio, still managed to price during
the week and did so in style with a large
upsize, highlighting the insulated status of
the biotech sector.
Only one company, Canadian waste
management company GFLEnvironmental, was brave enough to
launch its IPO into increasingly
treacherous market conditions.
'&,ûISûUNDERTAKINGûAûSHORTûlVE
DAYû
roadshow ahead of pricing on Tuesday,
bifurcating demand with a US$700m
concurrent mandatory convertible alongside
a US$1.5bn common stock offering. The
company is also pitching investors with
better metrics than its failed IPO attempt in
November.
Still, GFL’s four direct comps fell on
average about 6% during the week through
Thursday, dampening investors’ enthusiasm
to pay a price inside the US$20-$21 range.
Banks close to the deal expressed
CONlDENCEûLATEûINûTHEûWEEKûTHATûTHEûDEALû
would still go ahead, noting the offering was
already spoken for at launch.
Several other sponsor-backed IPOs were
set up to launch around this time, among
them decking company Azek, record label
Warner Music and shoe company Cole
Haan, but all are now in wait-and-see mode.
Fortive split-off Vontier and clinical-stage
blood disease specialist Imara are
theoretically ready to launch but few
bankers are likely to recommend moving
ahead while the VIX fear gauge is mired in
no-go territory (48 as of Friday morning or
185% above the prior week).REALTY INCOME JAMS RETAIL ON
US$696.2m RAISEREALTY INCOME got its money but left investors
holding the bag. Shares of the triple-net
lease realtor plunged on Thursday in the
backwash of a US$696.6m equity raise
overnight on Wednesday.International Financing Review February 29 2020 79EQUITIES AMERICASPassage Bio extends biotech IPO streak
US Gene therapy specialist prices twice-upsized IPOProving yet again that biotech ECM is a world
unto itself, PASSAGE BIO raised a better-than-
expected US$216m from its IPO after upsizing
the deal twice to 12m shares and pricing it at the
top end of the US$16–$18 range.
Despite the challenging market backdrop and
a late litigation threat over intellectual property,
the outcome was another impressive notch on
the belt of biotech ECM bankers, the double
upsize now well established as a sector trend.
JP Morgan, Goldman Sachs and Cowen hinted
at their confidence by increasing the offering size
from 7.4m shares to 10m shares ahead of the
market open on Thursday, a familiar progression
for biotech IPOs this year.
The final price was a little more conservative
than it otherwise might have been had Passagecome public a few weeks ago, but long forgotten
are the days when biotech IPOs were regularly
priced below range.
The IPO attributes Passage a starting market
cap of nearly US$820m assuming the shoe is
exercised. Passage opened Nasdaq trading on
Friday at US$22.27, a 23% opening gain.
Passage, a pre-clinical developer of
gene therapies for central nervous system
disorders, followed a typical sequencing
from late-stage crossover financing quickly
followed by an IPO.
In September, it raised US$110m from a
Series B round at US$14.50 per share. The IPO
valuation therefore represents 1.24 times the
private mark, again relatively tame by biotech
standards.Investors that participated in the crossover are
believed to be playing the IPO too.
Access Biotechnology, Ukrainian-born billionaire
Len Blavatnik’s investment vehicle, led the Series B
along with existing shareholders OrbiMed (a 19.6%
pre-IPO shareholder), Versant Ventures (14.8%)
and Frazier Healthcare Partners (6.5%).
Passage is planning to launch Phase I/II trials
on two gene therapy treatments later this year
and another trial for dementia in early 2021.
Biotech remains an ECM oasis. Passage joins
the 2020 biotech class of Revolution Medicines
(89.2% above offer), Beam Therapeutics
(34.9%), Arcutis Biotherapeutics (62.4%) and
Black Diamond Therapeutics (52.1%) that have
all delivered massive aftermarket gains.
Robert Sherwood10 IFR Equities and SE 2322 p 73 - 86 .indd 79 28 / 02 / 2020 19 : 13 : 56