acquisitions, either industry or
geographically.KEURIG DR PEPPER WIDENS FLOATA upsized $1.09bn block sell-down of shares
in KEURIG DR PEPPER mid-week proved a useful
way to slightly increase the soft drinks and
COFFEEûCOMPANYSûFREE
mOATûANDûBROADENûITSû
investor base at a time when consumer
staples stocks offer defensive appeal.
In a rare US$1bn-plus sole bookrunner
mandate, Morgan Stanley reoffered 40m
Keurig Dr Pepper shares at US$27.25, the
bottom of the US$27.25–$27.50 range and a
1.9% discount to last sale.
The deal, which priced overnight on
Wednesday, was upped from 37.5m shares
at launch.
Controlling shareholder Maple Holdings,
ANûAFlLIATEûOFû%UROPEANûCONSUMER
FOCUSEDû
INVESTMENTûlRMû*!" ûSOLDûMûSHARESûTOû
cut its stake to 64.6% from 67%, while snacks
maker Mondelez International sold 6.8m
shares to cut its stake to 13.1% from 14%.
JAB bought 7.4m shares in the offering or
about US$200m worth to tighten the supply
of stock.
Keurig shares fell 2.8% to US$27.00 in
Thursday’s aftermarket, though they still
managed to outperform the broader market
(the S&P 500 fell 3.4%).
Maple and JAB’s combined stake of 65.1%
is worth US$25bn at current prices, though
neither have indicated they plan to
materially reduce that holding over time.
The stake is a legacy of the JAB-led
acquisition by Keurig Green Mountain of Dr
Pepper Snapple in 2018, while Mondelez’s
holding dates back to its role as a co-investor
with JAB in Keuring Green Mountain.
In May last year, Keurig Dr Pepper
disclosed that Acorn, the parent company of
Maple, had sold 64m shares to increase the
COMPANYSûPUBLICûmOATûTOû ûCLOSEûTOûITSû
20% target. At that time, Acorn did not plan
to sell additional Keurig Dr Pepper shares
BEYONDûTHEûûmOATûTARGET
With the latest sale, Keurig Dr Pepper’s
mOATûEXPANDSûTOûABOUTû
Keurig Dr Pepper’s share price has done
little in the past year.
Acorn/Maple’s May 2019 sell-down
occurred at prices ranging from US$27.50 to
US$28.25 or above the reoffer price on
Wednesday night’s deal.
Capital Group, TIAA-CREF, Levin Easterly
Partners, Norges Bank and DE Shaw & Co
were among the buyers on that occasion.EVOQUA SELL-DOWN HITS SHARESSponsors behind EVOQUA WATER TECHNOLOGIES
TOOKûAûSTEEPûDISCOUNTûINûORDERûTOûOFmOADûAû
US$253.5m stake late on Thursday, drivingdown the water and waste-water treatment
provider’s share price in the process.
Evoqua shares fell 9.7% to US$20.34
during Thursday’s session while banks
marketed the secondary sale of 13m shares,
about 11% of the outstanding and 17 days’
trading. It was just the start of the pain.
Credit Suisse, RBC Capital Markets and JP
Morgan, with Citigroup, Goldman Sachs and
Baird coming on board late as additional
bookrunners, ultimately priced the offering
at US$19.50, a 13.5% all-in discount, after a
one-day roadshow.
The stock also struggled early in Friday’s
aftermarket, immediately dropping below
US$19 in what was shaping up as another
torrid session for stocks.
4HEûOFFERINGûINVOLVEDûPRIVATEûEQUITYûlRMû
AEA Investors selling 9m shares to cut its
stake to 22.3% from 30% previously, British
#OLUMBIAû)NVESTMENTû-ANAGEMENTûOFmOADû
2m shares to cut its stake to 5% from 6.7%,
and Banque Pictet sell 1.74m shares to cut its
stake to 4.3% from 5.8%.
There is a 60-day lock-up on further sales.
Though the offering proved poorly timed,
lead sponsor AEA Investors has held its
Evoqua investment since January 2014 and
Evoqua stock had been trading up solidly
from its late 2017 IPO price of US$18.00.
Pricing was still well below the US$22.00
MARKûONûTHEûlRSTûSECONDARYûSELL
DOWNûAû
US$443m offering) in March 2018.
Alongside the offering, Evoqua noted in
an updated disclosure that the spreading
coronavirus had not had a material adverse
impact on its operations in China, though it
warned that it might have if the virus
continued to spread or there was prolonged
disruption.
Evoqua shares surged 16.9% on February 4
AFTERûTHEûCOMPANYSûlSCALûlRST
QUARTERû
NUMBERSûBEATûESTIMATESûANDûITûREAFlRMEDûITSû
2020 outlook.
However, the stock is now well down
from a high of US$25.20 struck as recently
as February 20.EHEALTH SOARS AFTER US$207m RAISEFast-growing private insurance platform
EHEALTH delivered big aftermarket gains in
the wake of a US$207m all-primary stock
sale.
Treacherous market conditions meant the
COMPANYûHADûTOûTAKEûAûWIDEûlLE
TO
OFFERû
discount on the one-day marketed sale of 7%
of outstanding, but that proved overly
generous in the following session.
Late on Tuesday, a syndicate led by RBC
Capital Markets, Credit Suisse and Deutsche Bank
priced the sale of 1.8m eHealth shares at
US$115, a 7.2% all-in discount. The deal was
upsized from 1.5m shares at launch late
Monday.The stock surged 21.9% to US$146.09 in
Wednesday’s aftermarket, a bounce traced
in part to broadening investor interest in the
Medicare Advantage market and the
tailwind to healthcare stocks from former
Vice-President Joe Biden’s Super Tuesday
success in the race for the Democratic
Presidential nomination.
The company is using the offering
proceeds to add to its working capital and
fund potential acquisitions, though it was
also taking advantage of goodwill from a
50% stock price surge so far in 2020, aided by
last month’s fourth quarter earnings beat.
The offering was three times covered with
demand from new and existing investors.
4HEûTOPûlVEûACCOUNTSûTOOKûûOFûTHEûDEAL û
LEAVINGûEXCESSûDEMANDûTOûmOWûINTOû
aftermarket trading.
In January last year, eHealth raised
US$116.4m from the sale of 2.4m shares at
just US$48.50 each.BIOTECHS TEST TOUGH EQUITY MARKETCancer drug developer KARYOPHARM
THERAPEUTICS raised US$150m from a one-day
marketed stock sale that capitalised on
positive Phase III trial results.
JP Morgan, Morgan Stanley and Jefferies
priced 6.25m shares at US$24.00 each on
Tuesday night.
Shares of Karyopharm soared 69.6% to
US$27.72 on Monday following the release
of those Phase III results.
The trial showed patients with multiple
myeloma (bone marrow cancer) lived longer
on its treatment than those patients that
received chemotherapy.
Karyopharm last raised capital in October
2018 through the sale of a US$150m CB that
matures in 2025 and is convertible at
US$15.85, so this security is now well in the
money.
The latest offering gives Karyopharm
north of US$400m in cash. It expects to
submit a new drug application for its
multiple myeloma drug in the second
quarter, setting the stage for a possible
commercial launch by the end of the year.
ZOGENIX landed US$200m from an upsized,
OVERNIGHTûEQUITYûRAISEûAFTERûCONlDENTIALLYû
MARKETINGûTHEûlNANCINGûTHROUGHOUTû
Tuesday’s session.
SVB Leerink and Stifel placed an upsized
OFFERINGûOFûMûSHARESûATûAûlXEDû53û
price, a 5.6% discount to Tueday’s US$24.92
last sale, after securing full coverage from a
wall-cross.
Zogenix has been working through a
prolonged approval process with the FDA
for its anti-seizure drug Fintepla. Zogenix
has been working on a rolling submission of
its new drug application for more than a
year.84 International Financing Review March 7 202010 IFR Equities and SE 2323 p 77 - 87 .indd 84 06 / 03 / 2020 19 : 36 : 30