Look, no hands!
Mobileye Global overcame a brutal new issue market to deliver the only US IPO to price above the marketing range as well as the year’s best performing large offering.
The float of the developer of advanced driver-assistance systems marked a return to market after a five-year absence with little change in the equity story since its previous IPO in 2014.
Many of the same investors that backed Mobileye in 2014 came back to support its return to public markets, said David Ludwig, global head of ECM at Goldman Sachs (who worked on both IPOs).
“The story is very similar [to when it first went public]. They are a market leader in ADAS technology and they should have a relevant role in autonomous [vehicles],” Ludwig said.
The collapse in valuations for growth and technology companies in the months preceding Mobileye's October IPO meant little had changed upon its Nasdaq listing compared to when Intel bought it for US$15.3bn in 2017 and delisted it from NYSE.
Mobileye went public with a market cap of US$16.7bn, well south of ambitious earlier hopes for a circa-US$50bn valuation. As the IPO represented just 6% of the company, its parent would have been cheered to see the valuation reach more than US$28bn by the end of 2022 as the shares jumped to US$35.06, up 67% from the US$21 offering price.
Mobileye’s offering was aimed not so much at raising capital (though Intel collected the bulk of the proceeds) but at illuminating the value of a business that stands to benefit from the potential eventual adoption of autonomous vehicles.
In a year that brought only two US tech IPOs, a syndicate of 10 bookrunners led by Goldman Sachs and Morgan Stanley priced Mobileye's IPO at US$21, above the US$18–$20 range, raising US$990m.
"We already had credibility because the trajectory of our growth and profitability while an Intel subsidiary was consistent with our metrics and outlook at the time of the acquisition," said Dan Galves, Mobileye’s chief communications officer. "We were self-funding the whole time within Intel and we gained market share in [ADAS] during that time. Plus we used our time within Intel well to build a next-generation product portfolio that is already showing traction."
Ahead of October's IPO, analysts and investors had the chance to experience assisted and autonomous driving technology at events in Jerusalem and Detroit.
A whistlestop six-day roadshow included 26 one-on-one meetings, eight small group meetings and one large group webinar.
Baillie Gifford and Norges Bank Investment Management anchored the deal, buying nearly 40% of the base offering for US$330m. Private equity firm General Atlantic separately agreed to invest US$100m in a private placement topping up proceeds to US$1.09bn.
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