Wednesday, July 29, 2020

Pershing Square’s $4B deal is year’s largest IPO

By John Filar Atwood

Pershing Square Tontine Holdings dominated IPO headlines last week with its $4 billion offering. It was the largest IPO ever by a blank check company (SIC 6770), as well as the biggest new issue of 2020 to date. Of particular note was that the company’s units priced at $20, bucking the long tradition of blank check new issuers selling at $10 per unit. Pershing’s offering was one of five SIC 6770 IPOs in a week that also saw deals by Ascendant Digital Acquisition, East Resources Acquisition, Property Solutions Acquisition, and Greencity Acquisition. JPMorgan led offerings by biotech/pharma industry new issuers Annexon, Nurix Therapeutics, and iTeos Therapeutics. The industry has produced 36 percent of JPMorgan's completed lead manager assignments this year. Skillful Craftsman Education Technology became the third China-based educational services provider to go public in the U.S. this year. Minnesota-based software developer Jamf Holding also completed its offering, raising $468 million for its business supporting Apple products. The deal was the second in July by a company headquartered in Minnesota, which produced no new issuers in 2019. Bank of America led the week’s other two IPOs, which were completed by Montrose Environmental Group and Inozyme Pharma.

New registrants. The week’s activity included 11 new registrations, seven of which were filed by blank check companies. Moscow-based Kismet Acquisition One is hoping to raise $287.5 million in a U.S. offering. The BVI-incorporated company intends to target telecom infrastructure, Internet and technology, and consumer goods companies operating in Russia. Jefferies was selected as lead underwriter by ARYA Sciences Acquisition Corp. III and FS Development. ARYA, whose affiliate completed an IPO in June, will seek a North American or European target in the life sciences and medical technology sectors. FS Development will search for a merger partner in the biotech sector. California, home to FS Development, also is the headquarter location of new registrants Dragoneer Growth Opportunities and Gores Holdings V. Dragoneer’s focus will be software, Internet, media, consumer/retail, healthcare IT and financial services companies. Gores Holdings V is an affiliate of Gores Group, which has backed IPO companies in each of the past five years except for 2016. The week’s other SIC 6770 preliminary filers were Fortress Value Acquisition Corp. II and NavSight Holdings. NavSight will seek to acquire a company that provides expertise to the U.S. government in support of national security, intelligence and defense. CureVac, which is based in Germany and incorporated in the Netherlands, filed its IPO plans. The company uses messenger RNA to develop vaccines, cancer treatments, and protein therapies. New filers Duck Creek Technologies and KE Holdings chose Goldman Sachs to lead their IPOs. Duck Creek provides software services to the property and casualty insurance industry, while Beijing-based KE Holdings offers housing transactions services in China. The week’s other preliminary filer was Inhibikase Therapeutics, a developer of treatments for Parkinson's Disease. The company’s investors include Duke University and Emory University.

Withdrawals. Two companies withdrew their pending registration statements last week, including low-cost airline operator Frontier Group Holdings. The March 2017 public registrant last amended its filing in June 2017. Gene therapy treatment developer 4D Molecular Therapeutics also chose not to pursue an IPO at this time. The California company never amended its September 2019 initial public registration.

The information reported here is gathered using IPO Vital Signs, a Wolters Kluwer Regulatory U.S. database that includes all SEC registered IPOs, including REITs and those non-U.S. IPO filers seeking to list in the U.S. markets. IPO Vital Signs does not track closed-end funds, best efforts or non-underwritten deals, or IPO offerings for amounts less than $5 million.