The company plans to use proceeds
from the IPO primarily to support
commercial activities and new product
development. It had 63 sales
representatives at December 31.DEERFIELD SPAC IN IPO HEADLIGHTSDFP HEALTHCARE ACQUISITIONS, the latest
30!#ûOUTûOFûTHEû$EERlELDû-ANAGEMENTû
STABLE ûPUBLICLYûlLEDûONû&RIDAY û&EBRUARYû
21 for a US$200m IPO.
Deutsche Bank, Jefferies and UBS are joint
bookrunners on a deal that could
conceivably debut in early March.
$EERlELD ûTHEûLIFEûSCIENCES
FOCUSEDû
sponsor of the SPAC, has plans to buy
US$50m of shares in the offering,
lightening the load for the remaining
US$150m targeted.
DFP is the successor to the (very
similarly named) DFB Healthcare, which
raised US$250m from its IPO in February
2018 and completed a US$1bn merger
with AdaptHealth in November. The new
vehicle comes with virtually the same
management team, including Richard
Barasch, Steven Hochberg and
Christopher Wolfe as executive
chairman, CEO and CFO, respectively.
AdaptHealth, a medical equipment
maker focused on sleep therapies, has
been a happy experience for investors, as
the stock is now trading at US$16.37 or
well above the US$10.00 IPO price/cash
redemption value of the SPAC.
DFP is more aggressively structured.
-OSTûSIGNIlCANTLY ûTHEûVEHICLEûISû
offering up just one-quarter of warrant
versus the one-third warrant structure
employed by DFB.
Only three SPACs have gone public
with a one-quarter warrant structure,
including the recent US$1bn deal by the
Michael Klein-backed Churchill Capital
III, according to SPACInsider.
DFP is also structured with a larger
working capital drawdown.
Whereas DFB was able to take out a
total US$250,000 annually of proceeds
held in trust over its 24-month
investment horizon, DFP has upped the
working capital draw to up to
US$500,000 annually over the same 24-
month investment horizon.
Lower warrant gearing and larger
working capital drawdowns highlight
the trend towards more aggressive,
management-friendly structures.
Lower gearing, in particular, makes it
easier to close an acquisition, though this
requires a long-only fundamental
investor support as opposed to the
technical investors that often make up a
big proportion of SPAC IPO demand.$&0 ûCONSISTENTûWITHûTHEû$EERlELDû
pedigree, is planning to make an
acquisition in the healthcare space,
either on a standalone basis or via an
hAFlLIATEDûJOINTûACQUISITIONvûWITHûAû
$EERlELDûFUNDBRAZIL
BRAZILIAN REAL ESTATE IPOS QUEUE
UPBrazil is witnessing a mini-boom in IPO
lLINGSûFROMûREALûESTATEûCOMPANIESûASûTHEû
local ECM pipeline continues to expand,
though the global stock market
correction has put near-term launch
plans in considerable doubt.
On February 21, CURY CONSTRUTORA E
INCORPORADORAûlLEDûWITHûTHEû"RAZILIANû
corporate regulator for an upcoming
Brazilian Stock Exchange IPO, adding to
AûRUSHûOFûREALûESTATEûlRMSûLOOKINGûTOû
raise money in local equity capital
markets.
Founded in 2007, Cury was formed
from a joint venture with Cyrela, also a
selling shareholder in the planned
offering. The primary proceeds of the
IPO, meanwhile, will be used mainly to
buy land.
Cury describes itself as a low and
middle-income developer focused on Sao
Paulo and Rio de Janeiro, the largest real
estate markets in the country.
4HEûCOMPANYûREPORTEDûAûûPROlTûOFû
R$204m (US$45.3m) on net revenues of
R$1bn, the latter up 10.8%.
BTG Pactual, Itau BBA, Bank of America
and Caixa are slated to the lead the
)0/ ûONEûOFûATûLEASTûlVEûREALûESTATE
RELATEDûCOMPANIESûTHATûHAVEûlLEDûTOû
go public.
Mitre Realty’s Bovespa IPO earlier this
MONTHûMARKEDûTHEûlRSTûFROMûTHEûSECTORû
in a decade.
Recent interest rate cuts have helped
support the sector’s rebound.
Other real estate companies that have
lLEDûRECENTLYûINCLUDEû#ANOPUS û
Pacaembu and One Innovation.
Also joining the broader IPO queue in
recent weeks is waste management and
recovery services provider Ambipar,
which generated R$484.4m of revenue
last year. Bradesco BBI, Bank of America and
BTG Pactual will lead the offering.
Ambipar was founded in 1995 by
Tercio Borlenghi Jr, the company’s
current president and controlling
shareholder.
In 2008 the company expanded from
waste management to emergency
response services.STRUCTURED EQUITY
UNITED STATES
EXACT SCIENCES FLOODS CB MARKET YET
AGAINEXACT SCIENCES, a darling of the CB market,
made the somewhat predictable move of
returning overnight on Monday with a new
US$1bn eight-year convertible bond to
replenish cash holdings.
The new CB is already the medical
diagnostic company’s third, and largest deal
in the past 20 months, leaving it with
US$2.16bn of convertible debt that matures
between 2025 and 2028.
Sole bookrunner Bank of America managed
to increase the size of the new deal from
US$850m to US$1bn placed at a 0.375%
coupon and 27.5% conversion premium,
after being marketed overnight at those
lXED
PRICEûTERMS
BofA was sole bookrunner on the two
prior CBs and defended the mandate this
time around by agreeing to backstop the
deal. The upsize and par-pricing ensured
this was a lucrative trade.
The challenge, of course, is that the new
deal had to be cheap to the existing bonds
without eroding value of the overall CB
COMPLEX ûANûEXERCISEûMADEûMOREûDIFlCULTûBYû
overnight marketing and broader market
volatility.
The underlying plunged 9.4% to US$86.54
post-pricing on Tuesday, no doubt aided by
the broader market sell-off.
Exact’s new 0.375% paper due 2028 traded
at 99.25-99.75 against that same reference.
In addition to the new 0.375% CB, Exact
has a US$747.5m principal 0.375% CB that
comes due in 2027 and another
US$415.1m principal of a 1% CB that
matures in 2025.
The 2027 bonds, which are eligible to
convert at prices above US$111.66, fell about
eight points to 106, and its 1% notes
(convertible at US$74.43) fell six points to
150.
“It’s a very tight and incremental type of
proposal,” said one convert trader away
from the deal. “Typically, you are able to
force incremental cheapness on investors to
get them to take an allocation on a new deal.
In a normal market, investors that wanted
to hedge would be more patient. But not in
this market.”
After November’s US$2.5bn cash-and-
stock purchase of Genomic Health, Exact
ended the year with just US$323.7m of cash,
MAKINGûAûNEWûlNANCINGûSOMEWHATû
inevitable.82 International Financing Review February 29 202010 IFR Equities and SE 2322 p 73 - 86 .indd 82 28 / 02 / 2020 19 : 13 : 57