The IPOX® Update 10/31/23

Western Digital Splits Flash Memory and Hard Drive Operations

Data storage giant Western Digital, based in the U.S., has decided to separate its flash memory and hard drive businesses, essentially undoing its $19 billion acquisition of flash memory producer SanDisk in 2016. This move is primarily to "realize its full value" for the flash unit. The company expects the separation to conclude by the second half of 2024. Western Digital's CEO underscored the strategic importance of both the Hard Disk Drive (HDD) and Flash units. The decision came after the company's revenue dipped 26% YoY due to waning sales of both flash memory and disk drives. Moreover, a potential merger with Japanese flash memory company Kioxia was halted due to disagreements among investors. (Source)

Tory Burch Engages with Morgan Stanley to Explore Strategic Options

Prominent fashion brand Tory Burch, known for its refined style since its inception in 2004, has teamed up with investment bank Morgan Stanley to ponder over strategic avenues. This could potentially mean considering an Initial Public Offering (IPO), drawing in new investors, or even looking into a potential sale. It's noteworthy that in 2009, Tresalia had acquired a stake of 20-25% in Tory Burch, placing its valuation at $1 billion. This stake was later procured by General Atlantic and BDT Capital. Even though the brand was previously hesitant, an IPO is now on the table due to evolving investor dynamics. If they choose to go public, they may face rivalry for investor attention from other fashion brands such as Skims and Shein. As of now, Tory Burch remains private, emphasizing global expansion and innovation, without providing specific comments on their current strategies. (Source)

Norconsult Announces IPO Price Range

Pan-Nordic consulting heavyweight Norconsult, a frontrunner in the domains of engineering, architecture, and community planning in Norway, has announced its IPO price range of NOK19-23 ($1.71-$2.07) per share. This price bracket indicates a market cap ranging from $508.5M to $616.5M. Based on the proposed pricing, the offering could amass between $162.7M to $196.7M, taking into account 95.1M shares. The final IPO price will be determined after the bookbuilding process in association with joint global coordinators. The offering encompasses up to 95.1M existing shares and there's provision for an extra 15% over-allotment, equating to 14.3M shares. The bookbuilding process for institutional investors is set to commence on Oct. 31 and wind up on Nov. 8. In 2021, Norconsult registered revenues of $594M. (Source)

Mamaearth Secures $92M Ahead of $200M IPO

Indian skin and personal care brand Mamaearth has garnered $92 million in anchor funding, setting the stage for its $200 million IPO. This significant funding round witnessed participation from over 35 asset managers, including renowned entities like Norges, Abu Dhabi Investment Authority, and Goldman Sachs. The brand aims to amass a total of $204.3 million from its public market debut, with the recent anchor investments accounting for almost half of this sum. The IPO subscription for Mamaearth initiated today, pricing shares between $3.7 and $3.9. However, the subscription has had a slow start with just 11% of the issue booked on the first day. The retail segment saw a subscription of 27%, while the institutional portion was limited to 2%. Many brokerage firms have expressed reservations about the offering, mainly attributing their caution to the company's weak financials and its loss-making status. Mamaearth is a brand under the umbrella of its parent company, Honasa, which offers a plethora of brands and boasts a vast distribution network both online and in 113,000 FMCG retail outlets. With the recent developments, many Indian startups are closely observing market dynamics, deliberating the best timing for their IPOs. Market analysts are also predicting a surge in internet company IPOs in 2024, with major players like Reliance Retail and Flipkart being in the spotlight. (Source)

Expertise Contracting Co. Eyes IPO in Saudi Arabia for 2024

Expertise Contracting Co., a distinguished industrial services provider in Saudi Arabia, is strategizing for a local Initial Public Offering (IPO) next year. As part of its endeavors, the company has initiated consultations with advisers regarding the potential share sale. The much-anticipated IPO by Expertise could possibly generate funds exceeding $200 million. This move aligns with Saudi Arabia's initiative to motivate private and family-owned businesses to opt for public listings, thereby strengthening the nation's capital markets. However, the escalating Israel-Hamas conflict poses challenges, casting shadows over the stability of Gulf region IPOs. Following a Hamas attack on Israel on Oct. 7, there was a noticeable decline in Saudi Arabia's benchmark index. Founded in 1999, Expertise is a frontrunner in delivering heavy equipment services and has a significant presence in several nations, including Dubai, Indonesia, Vietnam, and Kuwait. (Source)

Asia Pacific IPOs Plummet to 2019 Levels in October

IPOs in the Asia Pacific region have seen a notable decline, with October proceeds plummeting to $3.89 billion, reminiscent of figures from 2019. A significant contributor to this downturn has been mainland China, where capital raising activities have considerably decelerated. Joint share sales in key cities such as Shenzhen, Shanghai, and Beijing witnessed a staggering 71% drop, amounting to just $1.1 billion year-on-year. This is reflective of Beijing's strategic focus on amplifying secondary market liquidity while concurrently curtailing new offerings. Consequently, the number of companies making their trading debut on mainland exchanges has been on the decline compared to 2022. Additionally, Hong Kong experienced a subdued October in terms of IPOs, raking in $778 million, marking an overall decline of 64% for the year 2023. Seoul Guarantee Insurance Co., an insurance company based in South Korea, retracted its South Korean listing plans, citing valuation disparities as the primary concern. (Source)

Swiss SPAC VT5 Announces Merger with R&S Group

Swiss Special Purpose Acquisition Company VT5 has unveiled its plans to merge with R&S Group, a provider of electrical infrastructure components with operations in Switzerland and international markets. Upon the successful completion of the acquisition, R&S Group is set to be listed on the Swiss Stock Exchange. As per the agreement, VT5 will acquire all the outstanding shares of R&S for a deal amounting to CHF 274 million (approximately $304.14 million USD). After an exhaustive evaluation of multiple potential acquisitions, the VT5-R&S combination emerged as the most compelling proposition for investors. R&S Group is increasingly being recognized for its growth trajectory, attributed to the soaring global demand for electrification coupled with decarbonization trends. VT5 shareholders are slated to approve this acquisition, which necessitates a capital increase, with the revised share price oscillating between CHF 10.00-10.50 ($11.10-$11.66 USD). The official prospectus pertaining to the acquisition will be released on November 8, with the entire transaction expected to culminate by mid-December. (Source)