Government shutdown, quarterly earnings slow US ECM
US IPO aspirants and their advisers continue to assess options amid a lingering government shutdown.
Now in its 10th day, the government shutdown has some companies pushing forward with legal manoeuvrings that require no regulatory oversight, others deferring launches because of inflexibility caused by the SEC closure, and a few publicly filing new deals in hopes of going public later this year.
Sponsor-backed washing machine maker Alliance Laundry and Phoenix Education Partners, a post-secondary education provider owned by Apollo Global, went public after gaining SEC effectiveness for their offerings prior to the government shutdown on October 1.
Pre-effectiveness provided Alliance and Phoenix with flexibility on both offering size and valuation, within a 20% safe harbour provision allowed on the active filing – Alliance modestly upsized its offering to facilitate additional selling by principal backer BDT Capital Partners.
MapLight Therapeutics, a Phase II biotech focused on Alzheimer’s and schizophrenia, opted to drop the so-called “delaying amendment” from its circa US$250m all-primary Nasdaq IPO, allowing it to go public in 20 days at fixed terms flagged in the new filing.
Crucially, the SEC Edgar electronic filing system is operational, so well-known seasoned issuers are still able to issue follow-on stock sales and companies that have already publicly filed to go public can utilise the delaying amendment option.
Navan, a venture capital-backed travel and expense management software provider, is considering moving forward with a circa US$900m Nasdaq IPO by dropping the delaying amendment, a banker involved in that process told IFR.
Like MapLight, Navan would be able to refile a registration statement with the more typical marketing range if the SEC reopens. (See Top News/US Equities for details on MapLight/Navan).
Evommune, a Phase II biotech, filed documents for a US$100m NYSE IPO, joining medical diagnostics maker BillionToOne as the only companies to have flipped public since the onset of the government shutdown.
SPACs AI Infrastructure Acquisition and Lake Superior Acquisition both priced their IPOs, raising US$120m and US$100m respectively, after gaining SEC pre-effectiveness ahead of the government shutdown.
Overall, 11 companies raised a combined US$5.3bn across US ECM, led by US$3.2bn from convertible bonds, excluding SPACs and only counting deals larger than US$50m.
The week ahead marks the onset of Q3 earnings reports, with blackouts expected to tamp down issuance. Citigroup, JP Morgan, Goldman Sachs and Wells Fargo are all due to report earnings on Tuesday, followed on Wednesday by Bank of America and Morgan Stanley, and Truist Financial on Friday.