Tuesday, December 13, 2016

Yitzhak Rabin Center
8 Haim Levanon Street
Tel Aviv, Israel

We have been witnessing significant changes in the U.S. capital markets, bringing about new challenges for IPO candidates, as well as opportunities to access better, and deeper, private capital markets. Join us at the Rabin Center for a complimentary session that will include engaged discussions regarding:

  • The IPO market in the United States and the ReIPO™ for listed companies;
  • Club IPOs:  insider participation in IPOs;
  • The “better” reverse merger:  merging into already public operating companies with failed clinical programs;
  • Is the pre-IPO private the new IPO?  A look at private financing markets in the United States;
  • Block trades and bought deals;
  • Areas of SEC focus for reporting companies; and
  • Recent U.S. securities laws developments.

Speakers:

  • Anna Pinedo
    Partner, Morrison & Foerster LLP
  • James Tanenbaum
    Partner, Morrison & Foerster LLP
  • Leonard Rosen
    Chief Executive Officer, Barclays Israel

Additional speakers to be announced at a later date.

For more information, or to register, please click here.

On November 3, 2016, the Second Circuit upheld the district court’s ruling involving the Facebook IPO that underwriters of the IPO are not required to disgorge short-swing profits made with their sales and purchases of shares in connection with the offering. Section 16(b) of the Securities Exchange Act of 1934 provides for the recovery by the issuer, in an action brought by the issuer or by a security holder of the issuer, of profits gained by a statutory insider (an officer, director, or more than ten percent “beneficial owner”) from any purchase or sale, or any sale and purchase, of the equity securities of the issuer within a six month period. Section 16(b) is intended to prevent such insiders from profiting from “short-swing” variations in share price. Although the lead underwriters alone did not meet the ten percent threshold, “beneficial owner” under Section 13(d) of the Exchange Act can include a “group.” The appellant argued that the lead underwriters and certain pre-IPO shareholders together formed a “group” under Section 13(d) due to the lock-up agreements between them prohibiting the shareholders from selling their stock for a specified period of time except as permitted by the lead underwriters. The court solicited the opinion of the SEC, as amicus curiae, which stated that a typical IPO lock-up agreement between shareholders and underwriters, standing alone, is not sufficient to establish a “group” under Section 13(d). The court agreed, stating that standard IPO lock-up agreements do not form a “group” of shareholders with respect to application of “short-swing” profit rules. The Second Circuit’s holding provides protection for underwriters entering into standard form lock-up agreements, which are standard for typical IPOs.

Morrison & Foerster and Raymond James invite you to join us for a discussion on Financing Opportunities for Technology and Life Sciences-Based Companies in Munich and Berlin.

The U.S. capital markets remain an attractive source of capital for emerging companies in the technology and biotech sectors. Late stage (or mezzanine) private placements made principally to U.S. institutional investors have raised in excess of $44.9 billion for privately held companies in 2015. Although the U.S. IPO market has become more selective, there has been continued investor interest in offerings by non-U.S. domiciled issuers. In 2015, 27% of the IPO issuers on a U.S exchange were non-U.S. issuers.

A U.S. securities exchange listing provides a currency for issuers to use in connection with future acquisitions and stock-based compensation awards, and provides enhanced liquidity for existing holders. Finally, as a U.S.-listed issuer, a company will have many more financing choices available to it in the future.

We will discuss:

  • European view of the markets for High Tech companies;
  • U.S. markets for capital raising;
  • Current market conditions;
  • Financing alternatives for pre-IPO companies;
  • The late-stage (or “cross-over”) private placement market;
  • The ReIPO™ for companies listed on a European securities exchange that may not provide the desired liquidity;
  • American Depositary Receipts, or ADRs; and
  • Planning a U.S. IPO or a dual listing.

We look forward to an interesting event and inspiring discussions.

MUNICH SEMINAR:
Thursday, November 17, 2016
8:30 a.m. – 12:30 p.m.

Raymond James Corporate Finance GmbH
Theresienstrasse 1
80333 Munich
Germany

BERLIN SEMINAR:
Friday, November 18, 2016
8:30 a.m. – 12:30 p.m.

Morrison & Foerster LLP
Potsdamer Platz 1
13th Floor
10785 Berlin
Germany

Renaissance Capital has released its 3Q 2016 Quarterly Review of the US IPO Market. The review reports an improved third quarter with 33 deals completed, raising approximately $6.1 billion. Renaissance attributes the rise in IPOs to a market rally following Brexit and the resurfacing of tech IPOs. While this increase in the number of deals is a sign of the recovery of the IPO market, Renaissance points out that many Silicon Valley startups continue to choose to remain private, a trend that has gained popularity over the past few years.

The tech sector now makes up 30% of IPOs this quarter with 10 deals, raising upwards of $1.9 billion–a major increase compared to the previous quarter’s four tech IPOs and last year’s single tech IPO in 3Q.  Biotech IPOs keep the health care sector as the leading sector for IPOs, in terms of number of deals, with 11 deals, raising approximately $1.3 billion.

Private equity-backed IPOs account for 30% of this quarter’s deals with 10 IPOs, raising approximately $2.2 billion. Additionally, there were 13 venture capital-backed IPOs this quarter, raising $1.1 billion, surpassing the count of PE-backed IPOs for the 13th consecutive quarter. Seven of the 10 tech IPOs were VC-backed.

As the year comes to a close, we will continue to monitor IPO trends and news on this blog.

IPOs

Monday, September 12, 2016
3:00 p.m. – 7:00 p.m. EDT

Thomson Reuters Building
3 Times Square, 30th Floor
New York, NY 10036

On Monday, September 12, 2016, Partner Anna Pinedo will speak on a panel of senior ECM professionals at the 2016 IFR US ECM Roundtable. The Roundtable will focus on the challenges and opportunities facing the market and will provide an outlook for the year ahead and beyond.

Topics of discussion will include:

  • The overall state of the market;
  • Private equity;
  • Venture capital/Tech IPOs;
  • Energy;
  • Risk/block trades and accelerated book builds; and
  • The JOBS Act.

For more information, or to register, please click here.

“Direct-to-consumer” offerings enable companies to raise capital directly from their customers, with or without the use of underwriters or other financial intermediaries. Direct-to-consumer offerings have garnered attention recently given the ability to conduct offerings using a “crowdfunded” approach; however, companies have conducted direct-to-consumer offerings for years. With the amendments to Regulation A (commonly referred to as “Regulation A+”) and the adoption of Regulation Crowdfunding by the Securities and Exchange Commission (the “SEC”), companies have now become more acutely focused on broadening their investor base by soliciting interest in offerings of their securities from their customers. In this alert, we discuss the history of direct-to-consumer offerings, current approaches, the applicable SEC requirements, and considerations for companies undertaking such offerings.

Read our client alert.

As privately held companies choose to remain private longer and defer their initial public offerings (IPOs), these companies are increasingly reliant on raising capital in successive private placements. For companies in the life sciences sector, for instance, a late-stage private (or mezzanine) placement made to known and well-regarded life science investors may serve to validate the company’s technology. We have compiled data on late-stage private placements in the life sciences sector.

Read our Life Sciences Sector Survey of Late-Stage Private Placements for more information.

During the second quarter 2016, the IPO market improved with 34 IPOs raising approximately $5.5 billion, according to Renaissance Capital.  While activity in the quarter was significantly higher than the first quarter (there were only eight IPOs in Q1), overall IPO levels are down.  Healthcare continues to represent the most significant sector, accounting for 15 of the 34 IPOs during the quarter.  There were a few tech company IPOs, as well as two REITs, a untility, and four consumer IPOs.  Many of the quarter’s IPO issuers are venture-backed companies.  Private equity backed IPOs have not returned to typical levels.  The depressed levels are attributable to uncertainty regarding interest rates, disparities in valuations between the private and public markets, and Brexit concerns.

Renaissance graph

 

 

Renaissance chart

Congressman Himes (CT) and eight other members of Congress wrote to FINRA and to the Securities and Exchange Commission questioning the typical 7% gross spread in U.S. IPOs.  The letter appears to have been prompted by a somewhat dated journal article that discusses fees in European IPOs.  A link to the text of the letter is available here: https://himes.house.gov/press-release/himes-leads-letter-sec-finra-regarding-ipo-gross-spreads.

Thursday, July 12, 2016
11:00 a.m. – 12:30 p.m. EDT

Volatile capital markets and the rapidly changing financial landscape make it important for issuers to recognize changes quickly and adjust their financing strategies accordingly. For example, for an issuer that contemplated an IPO or is in the IPO queue, it is important to become familiar with other financing alternatives, such as venture debt or late-stage or mezzanine debt, as well as institutional equity private placements. Each of these markets is quite different. Familiarity with investor expectations and documentation requirements is essential in order to put your company in the best position to make crisp decisions. For issuers that already have their securities listed on a non-U.S. securities exchange, which may offer limited liquidity, it may be time to consider undertaking a U.S. IPO in order to establish a more liquid market for their securities.  Already public companies considering their next capital raise also must be nimble–a PIPE transaction may be an attractive (and available) financing alternative. During this session, the speakers will discuss:

  • Current market conditions;
  • Financing alternatives for pre-IPO companies;
  • The market for venture debt;
  • The late-stage (or “cross-over”) private placement market;
  • Options to consider on the way to an IPO;
  • The ReIPO™;
  • Financing alternatives for recently public companies; and
  • PIPE transactions and other financing alternatives.

CLE credit is pending for California and New York.

For more information, or to register, please click here.