Of those 20m units, an anchor investor,
the vehicle’s sponsor, and the IPO
underwriters are purchasing a combined
2.5m “private units”.
These carry the same economic value and
are similarly structured to the “public units”
being sold to public investors.
GigCapital3 is the third SPAC headed by
TMT executive chairman Avi Katz, who
lRSTûUSEDûTHEû00%ûDESIGNATIONûONû
GigCapital2.
Like its predecessors, GigCapital3 will
focus its search on TMT with a focus on
companies embracing digital
transformation to speed their growth either
organically or through acquisitions.
Nomura and Oppenheimer are joint
bookrunners, replacing the earliersyndicates of Cowen and Chardan that led
the US$125m IPO of GigCapital and the
EarlyBirdCapital/Northland Capital Markets
syndicate on GigCapital2’s US$172.5m IPO
last June.
Nomura and Oppenheimer are
purchasing 100,000 of the private units
and an investment vehicle controlled by
Katz another 650,000 units. Cohen &
#OMPANY ûAûPUBLICLYûTRADEDûlXED
INCOMEû
manager with US$2.67bn under
management, has indicated for 1.74m
private units.
Notably, GigCapital2 has yet to announce
an acquisition, though GigCapital1
completed its US$187m purchase of Italian
mobile messaging specialist Kaleyra in
November.
This continues a trend of SPAC sponsors
seeking to undertake an IPO without having
closed an acquisition on the earlier vintage
SPAC, following IPOs earlier this year of
Churchill Capital III and Gores Holdings IV.
$OUBLING
UPûRAISESûAûCONmICTûISSUEûWHICHû
vehicle should the next acquisition go to)
but may be a sign that SPAC issuers are
recognising the need to raise capital before
the funding window closes.
GigCapital3 continues the trend of more
aggressive SPAC warrant/acquisition
horizon structures.
Its half-warrant structure and 24-month
investment horizon compares with the
more investor-friendly three-quarter
warrants and 15 months of GigCapital1 and
full warrant and 18 months for GigCapital2.INARI MEDICAL FILES FOR US$100m IPOMedical device maker INARI MEDICAL has
PUBLICLYûlLEDûFORûAû53Mû.ASDAQû)0/û
to support sales and marketing of its two
FDA-approved treatments for vascular
diseases.
Bank of America and Morgan Stanley are joint
bookrunners on the offering, which now
looks on track (notwithstanding market
conditions) for an early March launch after
CONlDENTIALLYûlLINGûINû$ECEMBER
Inari, like other recent medical device
IPOs, has been able to fund itself with
limited outside funding.
Ahead of its commercial launch in late
2018, the company last raised money
privately via a US$27m Series C round in
March 2018 that took the total outside
funding to just US$54m.
Inari has two approved products called
ClotTriever and FlowTriever that treat two
major types of blood clots.
Both products remove blood clots through
use of a catheter.
The treatments have been used to treat
more than 6,700 patients since they were
launched.
Inari posted a net loss last year of just
US$1.2m on revenue of US$51.1m, versus
the US$10.2m loss and US$6.7m of revenue
in 2018 when it had only a few months of
sales.
High-gross margins (88.4% last year)
SUGGESTû)NARIûCANûPROlTABLYûSCALEûITSû
business.International Financing Review February 29 2020 81EQUITIES AMERICASFreshpet raises US$231m for five-year vision
US Refrigerated pet-food maker hopes to reach US$1bn of sales by 2025FRESHPET took one day of marketing to
raise US$231m of equity to help bankroll its
aggressive five-year growth plans, but it picked
an unfortunate week to do so.
Billed by some analysts as one of the most
compelling stories in the consumer staples sector,
the refrigerated pet food maker took advantage of a
40% stock price surge since the start of December
to sell 3.5m primary shares at US$66.00.
However, the poor timing alongside a savage
market correction meant the company had
to accept a 10.8% file-to-offer discount after
marketing the deal during a rugged session for
stocks on Wednesday.
Bank of America was sole bookrunner on the
sale of nearly 10% of outstanding.
The offering, increased slightly from a fixed
size proceeds target of US$215m at launch, was
well-oversubscribed, bankers said, even though
its shares slumped 9.3% as the deal was pitched
to investors.Certain officers and directors agreed to buy
US$1m of shares in the offering.
Despite another horror session for stocks,
Freshpet closed at US$66.41 or slightly
above the offering price in Thursday’s
aftermarket.
Freshpet is disrupting the US$30bn North
American pet food market, playing directly into
investment themes such as the humanisation of
pets and health and wellness.CAPACITY
The offering proceeds are being used to help
fund extra manufacturing capacity as Freshpet
looks to lift sales to US$1bn in 2025 from
US$246m last year.
Freshpet, best known for the chillers it places
with retailers to showcase its products, plans to
build what it calls “Kitchen 3.0” at a 74-acre site
in Ennis, Texas, for a total cost of US$700m over
two phases.The site is four times the size of Freshpet’s
existing facility in Bethlehem, Pennsylvania.
The company’s “Kitchens 2.0” (in Hanover
Township, Pennsylvania) will start production in the
second half of this year, giving Freshpet the capacity
to satisfy fast-growing demand for its products.
The offering came with the tailwind of
Freshpet’s guidance for 26% top-line growth
and 65% adjusted Ebitda growth this year.
DA Davidson analyst Brian Holland, a bull on
the stock with a US$102.00 price target, said
there was “logic” in Freshpet raising equity now
to keep capacity a year ahead of demand and
preserve first-mover advantage before more
competition emerged.
“Given increased confidence Freshpet’s
revenue trajectory can sustain greater than 20%
growth, we believe the top-line will remain the
primary investment consideration (in valuing the
stock),” he wrote in a note to clients.
Anthony HughesUS EQUITIES
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Including all domestic and international deals and rights issues
Source: Refinitiv SDC code: C3r1 Goldman Sachs 24 3,709.60 16.1
2 Morgan Stanley 22 2,998.98 13.0
3 JP Morgan 25 2,554.62 11.1
4 BofA 21 2,365.72 10.3
5 Citigroup 15 1,536.65 6.7
6 Barclays 13 1,186.28 5.1
7 Jefferies 18 1,140.00 4.9
8 Cowen & Co 16 927.12 4.0
9 UBS 10 887.01 3.8
10 Wells Fargo 14 828.87 3.6
Total 122 23,071.3010 IFR Equities and SE 2322 p 73 - 86 .indd 81 28 / 02 / 2020 19 : 13 : 56