ûmOWûBACKûTOû%ARLY"IRD vûONEû30!#û
banker told IFR. “We have seen jump-ball
back-ends up to two-thirds. [EarlyBird] makes
it sound like Graf’s invented the wheel.”
The SPAC is headed by James Graf, the
former CFO and treasurer of Double Eagle
Acquisition through that vehicle’s acquisition
of the renamed WillScot last November.
WillScot, a builder of modular housing,
secured US$147.2m from a follow-on stock
offering in July to help fund an acquisition that
also built out its institutional shareholder base.
Graf has a similar industrial focus with an
intended target business size of “more than
US$1bn”.
Graf is typically structured, with each unit
sold comprising one common share and
one-half warrant exercisable per full
warrant at US$11.50. The vehicle will hold
100% of proceeds, including US$6.7m
invested by principal sponsor Graf
Acquisition, less underwriting fees, in trust,
pending an acquisition within 18 months.
Investors would get all their money back
if an acquisition does not materialise. Graf
Acquisition, and Jim Graf, stand to lose all of
their US$6.7m of “at risk” capital.
Graf closed its debut NYSE session on
4UESDAYûmATûATû53
TWIST BIOSCIENCE IPO HERALDS
BIOTECH’S INDUSTRIAL AGE
TWIST BIOSCIENCES ûAûPIONEERûINûTHEûlELDûOFû
synthetic DNA, has launched an IPO of up to
US$80m.
JP Morgan and Cowen are marketing 5m
shares at US$14-$16 each for pricing on
October 30. The offering is backed with
approximately US$30m of insider support.
Twist closed a US$292m crossover round
in July that was anchored by China’s Ever
Alpha Fund.
Ever Alpha invested US$70m for a 15%
stake in the company. Existing shareholders
Arch Venture Partners (15%), Illumina (7.7%),
Tao Capital (5.9%) and Fidelity Investors
(5.7%) also invested at the US$14.85
crossover price.
Twist has developed a synthetic DNA
platform that makes it possible for clients to
produce synthetic DNA-based products at an
industrial scale.
The company sells its products to more
THANûûCUSTOMERSûINûTHEûlELDSûOFû
healthcare, chemicals and crop production.
4WISTûmASHEDûITSûQUARTERLYûlNANCIALû
results for the period ending September 30.
The company expects just over US$8m of
revenue for the quarter and US$25m for the
trailing 12-months. The target valuation of
US$415m is 16 times trailing sales.ACLARIS FUNDS ACQUISITIONACLARIS THERAPEUTICS raised US$93m of
OVERNIGHTûEQUITYûlNANCINGûFORûAûPRODUCTûITû
bought from Allergan.
Leerink Partners and Evercore were covered
for a smaller US$75m target after
CONlDENTIALLYûMARKETINGûTOûEXISTINGû
shareholders earlier in the day.The banks priced an upsized offering of
8.6m shares at US$10.75, after marketing at
US$10.75-$11.75 off the US$12.17 closing
price.
Aclaris had announced on Monday night
it had acquired global rights to Allergan’s
product RHOFADE, a topical treatment for
rosacea.
Proceeds more than offset the US$65m
upfront payment to Allergan upon closing.
The acquisition is backed by bridge
lNANCINGûFROMû/XFORDû&INANCE ûAûSPECIALITYû
lender to life science companies. Aclaris
expects to close the acquisition in March
2019.
The company expects RHOFADE to
become accretive to Ebitda beginning in Q4
2019.
“Aclaris has a good sense of who the good
targets are,” a banker told IFR.
KRYSTAL BIOTECH raised US$60m of equity
lNANCINGûFORûITSûGENEûTHERAPYûFORûAûRAREûSKINû
disorder.
Cowen, William Blair and Cantor Fitzgerald
priced 3m shares at US$20 after marketing
for one day.
The company reported earlier in the week
that its drug achieved positive interim results
in a Phase I/II trial in patients with an
inherited skin disorder that causes blistering.SOLARWINDS IPO STRUGGLES IN
DIFFICULT MARKETThe return of IT management software
company SOLARWINDS to public markets
proved poorly timed, with challenging
market conditions forcing the company to
halve the size of its NYSE IPO to US$375m.
The poor performance of key comps
during the marketing period, and investor
pushback against the company’s leverage
and slow growth, hobbled what was billed
ASûTHEûlRSTûOFûAûSTRINGûOFûLARGEûSPONSOR
backed enterprise IT IPOs.
SolarWinds late on Thursday priced the
sale of 25m shares, including 5m from its
sponsors and management, at US$15 each,
the bottom of a US$15-$16 range earlier cut
from US$17-$19.
Not surprisingly, the stock traded in a
lethargic manner early on Friday.
SolarWinds opened at US$15.30 and traded
at US$14.70 at 12.30pm.
SolarWinds had cut the size of the deal
from 42m shares, including 25m from the
same insiders, and lowered the price range
on Thursday morning.
The downsizing of the deal meant the IPO
raised less than half the nearly US$800m
sum sought at the original terms.
The move was an attempt “to be prudent
and size the deal appropriately” in light of
market conditions, one banker close to the
deal said.SI-Bone connects with
investors on IPO
US Surgical implant maker touts new deviceIn a wobbly new-issue market, SI-BONE stood
out as the only IPO of the week that was both
upsized and priced at the top of the marketing
range.
Morgan Stanley and Bank of America
Merrill Lynch opted to accelerate pricing of
the spinal implant maker’s 7.2m-share offer
placed at US$15.00 apiece by one day, which
was telling in terms of the extent of investor
demand.
SI-Bone shares soared 33.7% on their NYSE
debut on Wednesday to US$20.06.
Overall investor demand was 10 times the
number of shares offered, allowing for an
upsizing from the 6m shares marketed and
pricing at the top of the US$13-$15 range
marketed. The top 10 institutions took down half
the deal.To accommodate that demand, existing
shareholders agreed to scale back their orders
from US$32m at launch to US$18m.
SI-Bone plans to use proceeds to expand
marketing of its next-generation, iFuse-3D spinal
implant devices. The device, which is manufactured
with 3D printers, treats patients with chronic back
pain caused by sacroiliac joint dysfunction.
In the first half of the year, SI-Bone generated
sales of US$26.4m, up 17% from the comparable
year-ago period.
At pricing, the IPO valued the company at
six times 2019 projected sales, a sharp discount
to other fast-growing medical device makers
such as Glaukos, Inspire Medical Systems and
Penumbra, which trade at nine, nine, and 15
times, respectively.
Robert Sherwood