Home Private Equity US private equity calls for Xpansiv, IPO talks take back seat

US private equity calls for Xpansiv, IPO talks take back seat

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An IPO bid put together earlier this month could’ve seen the company raise the $590 million in targeted primary capital at about a $1.2 billion valuation which, while attracting some big names investors, was a far cry from the $2 billion carrot dangled only weeks ago.

Investor letter

Xpansiv CEO Joe Madden and his team are exploring all funding options.  Peter DaSilva

It is understood Xpansiv wrote to its existing investors, including fund managers that are set in its convertible notes, late last week, telling them that the IPO remained its preferred path, however acknowledged its board was considering alternative funding options given market conditions. That’s understood to include talks with its private equity suitor.

Interestingly, the letter said that under the mooted IPO, all existing investors would have their shares locked up until next February, to ease any incoming shareholders concerns’ about stock trading in the secondary market.

It’s a fascinating situation, particularly for a company with strong ESG tailwinds, growing like a weed and ripe for the times.

But it needs money in the near term. Xpansiv has a deal to buy registry infrastructure owner APX for $US300 million in cash. It has already paid first 20 per cent, and had planned to use IPO proceeds to pay for the rest.

Xpansiv also has convertible notes due to mature in July, although they’re said to be less pressing with an ability to roll them forward.

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