SolarWinds’ public comps Red Hat,
Atlassian and Splunk came under pressure
during the marketing of the IPO, their share
prices falling as much as 8%-11% in the
sessions after the deal was launched late on
October 5.
4HEûlNALûTERMSûVALUEDû3OLAR7INDSûATûAû
multiple of about 14 times 2019 forecast
Ebitda (based on the forecasts of
underwriting banks), nearly three turns
lower than its valuation under the original
terms.
Red Hat, by comparison, trades at 23
times on the same metric, according to
2ElNITIVûDATA
Goldman Sachs, JP Morgan, Morgan Stanley
and Credit Suisse LEDûANû
lRMûSYNDICATE
SolarWinds’ high leverage and mature
GROWTHûPROlLEûMARKEDûAûDEPARTUREûFROMû
2018’s parade of high-growth subscription-
based software IPOs.
Acquired by Silver Lake Partners and
Thoma Bravo for US$4.5bn in 2016,
SolarWinds emerges from the IPO with net
debt/Ebitda of about 4.9 times.
SolarWinds has mid-teens sales growth,
THOUGHûITûGENERATESûHIGHûFREEûCASHûmOWû
margins of more than 40%.
h4HISûISûPROBABLYûTHEûlRSTûBIGûSPONSOR
backed software company to return to the
public markets, so the story is different from
the traditional software IPO,” the banker said.
Another banker on the deal said
SolarWinds was “a good company in a tough
market”.
“We knew all along this was not your
typical hyper-growth software company,”
the second banker said.
Silver Lake and Thoma Bravo sold 2.5m
and 2m shares to cut their SolarWinds
stakes to 44.3% and 36.1%.CHILE
FALABELLA TAPS INVESTORS FOR
ONLINE EXPANSIONFALABELLA raised roughly US$550m on
Thursday in a capital raising that the
Chilean retailer will use to fund its
acquisition of online retailer Linio and other
growth initiatives.
The stock sale was touted as the largest-
ever equity raising by a Chilean retailer and
THEûBIGGESTûBYûANYûCOMPANYûINûlVEûYEARS
Falabella sold a total of 70.7m shares,
including 21m by existing shareholders, on
Thursday at Ps5,250, a 1.5% discount to the
last sale on the Chilean Stock Exchange.Falabella shares traded on Friday at
Ps5,340.
3IGNIlCANTûTOûTHEûSUCCESSFULûOUTCOME û
foreign investors took down nearly half the
deal split between long-only (41.1%) and
hedge funds (5.5%). Local pension funds,
insurance companies and Chilean retail
lLLEDûOUTûTHEûBOOK
Chilean companies historically have
turned to deep domestic pools of capital to
meet their funding needs, making foreign
sponsorship an important endorsement of
Falabella and its growth plans.
“It was good to see it price in [a less than
ideal] market window,” said one banker
involved in the underwriting, who put
OVERALLûDEMANDûATûlVEûTIMESûTHEûNUMBERûOFû
shares offered.
Global coordinators on the deal were JP
Morgan and Bank of America Merrill Lynch.
Falabella, which sold stock internationally
in 2016, trades at a lofty 20.8-times
CONSENSUSûEARNINGSûFORû ûAûSIGNIlCANTû
premium to the 15-times Mexican retailer
Liverpool fetches and eight-times of US
department store operator Macy’s.
A big reason is continued earnings
growth.
Not everyone is convinced. Analysts at
Credit Suisse raised their price target forEQUITIES AMERICASECM DEALS: WEEK ENDING 19/10/2018
Stock Country Date Amount Price Deal type Bookrunner(s)
Bank Fuer Tirol Und Vorarlberg Austria 15/10/18 €75m €24.25 Follow-on (primary) –
Coronado Global Resources Australia 19/10/18 A$1.16bn A$4.00 IPO (primary/secondary) Goldman Sachs, Bell Potter Securities,
Credit Suisse, UBS
Falabella Chile 18/10/18 Ps371.2bn Ps5,250 Follow-on (primary/secondary) JP Morgan, BAML
Niu Technologies China 18/10/18 US$63.0m US$9.00 IPO (primary) Credit Suisse, Citigroup
Qingdao Haier China 18/10/18 €278 €1 IPO (primary) Deutsche Bank, CICC, JP Morgan, UBS
Studio City China 17/10/18 US$359.4m US$12.50 IPO (primary) Credit Suisse, Morgan Stanley
Niu Techonologies China 18/10/18 US$63m US$9.00 IPO (primary) Citigroup, Credit Suisse
Pioneers Holding Egypt 15/10/18 E£1.1bn E£5 Rights issue –
GL Events France 15/10/18 €107m €17.80 Rights issue CM-CIC Market Solutions, Natixis
Neoen France 16/10/18 €628m €16.50 IPO (primary and secondary) JP Morgan, Natixis, Barclays, Societe Generale
Studio City International Hong Kong 18/10/18 US$359m US$12.50 IPO(secondary) Credit Suisse, Deutsche Bank, Morgan Stanley
Piovan Italy 17/10/18 €156m €8.30 IPO (secondary) Goldman Sachs, UniCredit. Lazard advising
Nedbank South Africa 17/10/18 R1.26bn R230 Accelerated bookbuild (secondary) BAML
Robotis South Korea 15/10/18 W23.8bn W14,000 IPO (primary) Mirae Asset Daewoo Securities
Lotte Tour Development South Korea 15/10/18 W215.8bn W11,600 Follow-on (primary/secondary) Mirae Asset Daewoo Securities
Arima Real Estate Spain 19/10/18 €100m €10 IPO (primary) Citigroup, JBCM, Mirabaud, Morgan Stanley
Smithson Investment Trust UK 16/10/18 £822.5m £10 IPO (primary) Investec
Triple Point Social Housing REIT UK 17/10/18 £108.15m 103p Follow-on (primary) Canaccord Genuity (Akur)
Elementis UK 18/10/18 £154.5m 152p Rights issue HSBC, UBS
John Laing Environmental Assets UK 18/10/18 £50m 102p Follow-on (primary) Winterflood
Foresight Solar Fund UK 18/10/18 £58m 107.5p Follow-on (primary) Stifel
Aclaris Therapeutics US 17/10/18 US$92.9m US$10.75 Accelerated bookbuild (primary) Leerink, Evercore
Krystal Biotech US 18/10/18 US$60.0m US$20.00 Follow-on (primary) Cowen Wm Blair, Cantor Fitzgerald, Chardan
LogicBio Therapeutics US 18/10/18 US$70.0m US$10.00 IPO (primary) Jefferies, Barclays, Wm Blair
Osmotica Pharmaceuticals US 17/10/18 US$46.0m US$7.00 IPO (primary) Jefferies, Barclays, RBC Capital Markets,
Wells Fargo
PhaseBio Pharmaceuticals US 17/10/18 US$46.0m US$5.00 IPO (primary) Citigroup, Cowen, Stifel
SI-Bone US 16/10/18 US$108.0m US$15.00 IPO (primary) Morgan Stanley, BAML
SolarWinds US 18/10/18 US$375.0m US$15.00 IPO (primary) Goldman Sachs, JP Morgan, Morgan Stanley,
Credit Suisse