Pitch Book For IPO (Initial Public Offering) There are some files I have attached below please read through… You MUST follow the instruction and to to m

Pitch Book For IPO (Initial Public Offering) There are some files I have attached below please read through…

You MUST follow the instruction and to to make the powerpoint in correct form and meet requirement.

File IPO project – tell you general about the presentation, please focus one what it was written ( The powerpoint should focus mainly on slide #13 – #14 – #15 Bake – off section)

IPO Pitchbook – give you an outline to brainstorm

FILE JUNE, 3, 2019 – FOCUS THIS FILE, ALL THE REQUIREMENTS ARE IN IT. ALSO IT HAS INSTRUCTION AND INFORMATION NEED.

There is a photo with 5 different colors that we divide in our group to present. My color is Orange so please take a good care on that part – Thank you.

IMPORTANT – IMPORTANT

The COMPANY WE ARE WORKING ON TO DO THIS PRESENTATION IS

RATTLE MIDSTREAM PARTNERS

You can find more information as well as data about this company through some sources such as

S-1 – SEC.govhttps://www.sec.gov/Archives/edgar/data/1748773/…/d596284ds1.htmIPO Update: Rattler Midstream Readies $583 Million IPO – Rattler …https://seekingalpha.com/…/4263594-ipo-update-rattler-midstream-readies-583-millio…

RATTLER MIDSTREAM LP (RTLR) IPO – NASDAQ.comwww.nasdaq.com/markets/ipos/company/rattler-midstream-lp-1061137-87552

You can find your own sources too.

Due Date for this project is Friday by 6:30 pm on June 7, 2019 Outline of IPO Pitchbook from Corporate Finance Institute
What’s included in an investment banking pitch book?
Here is an example outline for an investment banking pitch book:
1. Title page – logos, date, and a title
2. Table of Contents – all sections in the pitch book
3. Executive Summary / Situation Overview – explain why you’re giving
the pitch and the call to action or recommendation in one page
4. Team & Bank Introduction – introduce the people at the meeting
(short biographies) and discuss the bank’s track record in the client’s
space
5. Market Overview – charts and graphs as well commentary describing
the current market environment and trends in the client’s sector
6. Valuation – valuation methods include: comparable company analysis,
precedent transactions and DCF analysis (if enough information has
been provided to perform one) all displayed in a football field graph
7. Transaction Strategy – details around the bank’s strategy for the
transaction they’re pitching the client to lead – whether an IPO,
acquisition, or sale of the business
8. Summary – recap why the team and the bank are best suited to lead
the transaction, how the market environment is relevant, the valuation
you think is achievable, and the band’s strategy if leading the
transaction
9. Appendix – may contain a wide range of information depending on the
pitch, but mostly backup information the bank feels there may be
questions on, but doesn’t belong in the main pitch book (like financial
modeling assumptions/details)
Investment Banking
Management 185
L. Jean Dunn, Jr.
June 3, 2019
IPO
•
•
•
•
•
•
•
•
•
•
Company preparation
What does Company want?
What do major shareholders want?
What does Board want?
Alternatives
Investment banking marketing
Bake-off
Process
Closing
After closing
Company Preparation
• Company needs to implement the policies,
procedures and systems to look like a public
company 12-18 months prior to making the
decision to go forward.
• Issues
a) Accounting
Systems – IT security
Policies and Procedures
Revenue recognition
Asset valuation impairment – A/R,
reserves
Company preparation
Insider transactions
Options and warrants
Policy and procedures manual
Budgeting and forecasting
Closing
b) Board membership
c) Board committees – Audit & compensation
d) Regular meetings
e) Management – Experienced CFO
f) Acquisitions (?)
Company preparation
g) Company take-over defenses
h) Position company versus its peers
Preparations necessary for IPO
Enhance value in a M&A scenario
What does Company Want?
• Grow the business
• Capital for expansion
• Stock a currency for M&A
• Liquidity for insiders/founders
• Prestige / Ego
What do major shareholders want?
• Liquidity
• The best possible valuation
• Minimize risk of execution
• Timing
What does the Board want?
• Compromise between liquidity and long-term
growth of business
• Minimize any potential liability
• Fiduciary responsibility to shareholders
Alternatives
• IPO
a) Capital for growth
b) Liquidity for shareholders
c) Ability to participate in future growth
d) Stock can be used as a currency
Versus
a) Expensive
b) Time consuming
c) Uncertainty with regards to final
valuation and execution
M&A
• Relatively quick
• Greater certainty of execution
• Liquidity
• Cheaper
Versus
• No participation in upside
• Loss of control
• Management
Private Placement
• Quicker execution
• Maintain control
• Continued interest in long-term growth
Versus
• Usually lower valuation
• Usually less money
• Liquidity
Investment Banking Marketing
• Managing Directors do the marketing
• VPs, Associates and Analysts do the work,
handle the transaction execution
•
•
•
•
•
Where and how do they find opportunities?
VCs and PE groups
Lawyers
Accounting firms
Industry events, conferences, etc.
Bake-off
• Pitch Book for IPO
a) Executive Summary
b) Current stock market
c) Current IPO market
d) Recent IPOs, similar industry, recent
performance of deals, valuation
e) Market forecast, IPO forecast
f) Who are the current investors and what
are they looking for?
g) How does this demand mesh with the
company?
Bake-off
h) IPO Valuation – Focus on comparable
companies and comparable pricing for other
IPOs
i) M&A market – Who are the buyers?
What are they looking for? What are they
paying?
j) M&A Valuation
k) Summary Pros and Cons and
recommendation
l) Info as to why your investment bank
Bake-off
m) List of deals, performance of deals,
trading capabilities, retail placement,
institutional placement, analyst, analyst
ranking on Institutional Investor, IPO
ranking in Institutional Investor or Wall
Street Journal
What is Board and Management Looking For?
•
•
•
•
•
Valuation
Level of certainty of execution
Industry knowledge
Pricing history and success of previous offerings
Personality and compatibility with CEO, Board
and to lesser extent CFO
• Board votes to go forward with IPO – Quiet
period for company begins
Process
• Letter of Intent – From bank to Company
a) Reimbursement of out-of-pocket
expenses if deal does not go through
b) Amount of the gross spread
c) Commitment that bank will enter into a
firm underwriting agreement with company
d) Company will agree to due diligence
e) Company will provide for an over
allotment of shares equal to an additional
15% of the shares to be issued
Nothing about pricing or # of shares to be sold
Process
• Federal Securities law basics
a) Shares have to be registered prior to
being sold to the public
b) Company must disclose the relevant
facts about its business in the prospectus
c) SEC must review and approve of the
disclosure
d) Prohibitions on misrepresentations &
fraud
e) Civil liability & SEC enforcement
Process
• Two relevant laws
a) Securities Act of 1933 “Securities Act”
b) Securities Exchange Act of 1934
“Exchange Act”
Process
• All Hands Meeting
a) Investment Bank – MD, VP, Associate
b) Underwriter’s counsel
c) Company – CEO, CFO
d) Company counsel
e) Accounting / Auditor
f) Schedule
• Outline of Process and Offering
• Selection of Financial printer
• Selection of stock exchange
• Selection of transfer agent
Process
•
•
•
•
Drafting of the Form S-1 begins
Company counsel does drafting
Company populates the data room
Investment bank begins due diligence
• Week 1-2 Draft sent to participants
• 1st drafting session – MD usually participates –
Focus is on the prospectus summary
Process
• Additional drafting sessions until S-1 is complete
• Questionnaires sent to directors, officers, 5%
shareholders and selling stockholders – Info
needed for S-1 and due diligence
• Directors, officers, and 5% shareholders who are
not selling in offering sign lock-up agreements
• Company works with bank and underwriter’s
counsel to complete due diligence
• Company & bank negotiate underwriting
agreement
• S-1 complete, board must approve filing
Process
• 1 to 2 months to draft and file S-1
• Company submits a listing application to stock
market
• 30 days until first comments
• Working group responds to SEC comments –
usually 3-5 cycles – can be more
• Finalize due diligence and underwriting
agreement
• Bank arranges co-leads with company
Process
• Bank arranges underwriters and selling group
• Bank prepares internal sales memorandum – 2
to 3 pages max
• Bank may start to prep sales force
• Bank works closely with Company to produce
roadshow presentation
a) 25 to 30 slides max – 30 minutes max
b) Usually given by CEO with financials by
CFO
This period is 1-3 months from filing Total time 2-5
months
Process
• Preliminary prospectus printed – Red Herring
• Roadshow begins – 2 weeks approximately
a) Over 100 presentations
b) 10-15 cities in US, Europe, Asia
c) Roadshow and all arrangements are
handled by the bank
• SEC comments are cleared – Effective date
Process
• What are investors looking for?
a) 60% of the decision is how the company
looks versus its peers – EPS growth, revenue
growth, market share, ROE, margins, EBITDA
growth
b) 40% of the decision is: perception of
management quality, company strategy and
execution, brand, corporate governance,
R&D and new products
Quality of road show is critical – only time to meet
mgt.
Logical growth story backed by track record
Process
• Other entities involved
a) FINRA – Financial Industry Regulatory
Authority – reviews offering and
underwriting compensation
b) Financial Printer – prints prospectus and
submits electronic filings to SEC
c) Transfer Agent – Records stock
ownership, transfers shares among holders,
cancels and issues stock certificates
d) Bank note company – prints certificates
Process
e) DTC Depository Trust Co. – Holds all
shares that are in street name, clearing
agency for trade settlement
f) CUSIP – A division of S&P – assigns a
unique number to stock that must be in
place prior to trading
g) Investor relations firm – PR firm focused
on telling the company’s story to investors
once the offering is completed.
Process
• During roadshow lead manager maintains book
of investor interest
a) Retail – commit early in the process –
purchase at market rate
b) Institutions – commit late in the processset specific number of shares and max price
they will pay
• After last presentation – usually in NY – bank
holds a pricing meeting with Company
• Bank tells Company how many shares they can
purchase and at what price
Process
• Bank and Company sign the underwriting
agreement
• Final prospectus is printed
• Stock begins trading next day
• Closing is 3 days after pricing
• Spread 20% to lead manager- 60% to other
managers and underwriters as selling
commission – Remaining 20% covers counsel,
roadshow and other expenses
Process
•
•
•
•
Total process is 4-6 months
Significant expense
Major diversion of management
Subject to market conditions
After Pricing
• Bank stabilization – Only time when a bank can
legally manipulate the market for a security
• Price support can be done only at or below the
IPO price
• Bank has the option to draw down on Green
Shoe – 15% over allotment
• Company wants price to go up but not too
rapidly
After Pricing
• 25 days after pricing quiet period ends and
company can begin to speak with financial
press, investors, etc.
• Bank analyst then issues initial research report
• Bank continues to make a market in the stock
Carl Von Clausewitz
Carl Philipp Gottfried (or Gottlieb) von
Clausewitz[1] (/?kla?z?v?ts/; 1 June 1780 – 16
November 1831)[2] was a Prussian general and
military theorist who stressed the “moral”
(meaning, in modern terms, psychological) and
political aspects of war. His most notable work,
Vom Kriege (On War), was unfinished at his death.
Clausewitz was a realist in many different senses
and, while in some respects a romantic, also drew
heavily on the rationalist ideas of the European
Enlightenment
Simplify, Decide
• The talent of the strategist is to identify the
decisive point and to concentrate everything on
it, removing forces from secondary fronts and
ignoring lesser objectives.
Focus
• Once we have identified the decisive point it is
all about focus and determination. Concentrate
everything on it.
Effort
• Strong determination in carrying out a simple
idea is the surest route to success. Simplicity
empowers.
The IPO Process:
Perspectives from a CFO
and an Investment Banker
December 5, 2017
STRICTLY PRIVATE AND CONFIDENTIAL
Today’s Speakers
John Schmid has over 30 years of experience in financial and executive management in the biotech
industry and has raised over $900 million in private and public equity and debt financings
He is currently an independent Board Member and Audit Chair for Neos Therapeutics (Nasdaq: NEOS)
and AnaptysBio (Nasdaq: ANAB). Mr. Schmid also serves on the Boards of Forge Therapeutics, Patara
Pharma, and Speak, Inc.
Previously, he was the Chief Financial Officer of Auspex Pharmaceuticals which he joined in 2013 and
took public in early 2014 before it was sold to Teva in 2015 for $3.5 billion
Mr. John Schmid
Former CFO, Auspex Pharmaceuticals
Co-Founder, Trius Therapeutics
Prior to Auspex, Mr. Schmid co-founded Trius Therapeutics in 2004 where he served as CFO through its
IPO and until its sale to Cubist Pharmaceuticals in 2013 for over $700 million
Mr. Schmid received a BA in Economics from Wesleyan University and an MBA from the University of
San Diego
Nate is a Managing Director and Head of West Coast Healthcare at RBC Capital Markets with a focus on
Life Sciences. He joined RBC in May 2017 from Credit Suisse where he served in a similar capacity as
Head of West Coast Life Sciences
Nate began his career in investment banking in 2004 in the Healthcare Group at Credit Suisse. In 2006,
he joined Morgan Stanley’s West Coast Healthcare team in Menlo Park, CA and later rejoined Credit
Suisse in 2013. During this time, Nate has advised clients on transactions representing more than $40
billion of value, with a focus on financing (equity and debt) and strategic advisory assignments for
biotechnology and pharmaceutical companies worldwide
Nate Chang
RBC Capital Markets
Managing Director,
Head of West Coast Healthcare
Prior to business school, Nate worked in clinical research at Quintiles (now IQVIA), PPD and Gilead
Sciences. He spent the summer in Johnson and Johnson’s Business Development team in 2003
Nate received a BS in Molecular Biology and a BS in Bioengineering from the University of California,
San Diego (Warren College) and an MBA from the Tuck School of Business at Dartmouth College
2
RBC Capital Markets
What is an Initial Public Offering (IPO)?
? The first time that the stock of a private company is offered to the public on an exchange
? A company engages investment banks, referred to as “underwriters,” who can value the
company, price securities and ultimately distribute them
? Together with the underwriters, the Company must market the securities to potential
investors
? To get approval from the Securities and Exchange Commission (SEC) to move forward
with an IPO, a company must file an S-1 Registration, which includes a prospectus on the
company and other detailed disclosures
? Companies making an IPO need to comply with the registration requirements of the 1933
Act as well as the public reporting requirements of the 1934 Act
3
RBC Capital Markets
Why Go Public?
? Providing liquidity for a parent company or employees: Existing shareholders use an
IPO to monetize all or some of their equity stake. It is often difficult to translate the “paper”
value of the shareholders’ equity positions into cash without creating a market for trading
them through an IPO
? Access to the capital markets: Proceeds can be used to fund organic growth and
expansion or retire existing debt. Once public, a company has more financing alternatives
available, including bank debt, senior debt, hybrid/mezzanine capital or equity-linked
alternatives
? Establishing a currency for growth: Public companies have more funding alternatives
available to manage operations and growth. One example of this is that publicly traded
stock can relatively easily be used as a currency to fund acquisitions without using cash or
incurring additional debt. The acquiring company simply exchanges its shares for the
equity shares of the company being acquired
? Establishing a transparent value for the enterprise: Following a successful IPO, the
company’s board and management team will have a readily available measure with which
to determine the value of the company and compare its valuation with that of other
companies
? Branding/prestige: A public stock offering strengthens visibility and name recognition for
both current and new customers and stakeholders
4
RBC Capital Markets
Who are the Stakeholders Involved in the Process?
? Executives / Management
? Board of Directors
? Investors
? Legal Counsel
? Auditors
? Investor Relations
? Investment Bankers
? Underwriters’ Counsel
5
RBC Capital Markets
What is Involved and How Long Does the Process Take?
The IPO process typically takes 4 – 6 months
Starting approximately 6 months before listing
Preparation
? Issuer to engage investment bankers
and equity research across various
firms
? Select underwriters and counsel
? Hold organizational meeting
? Identify major objectives
? Set a timetable
? Determine corporate structure
? Perform due diligence
? Draft Registration Statement and
other
deal documents
? Hold Analyst Day
? Prepare listing application
? File initial filing confidentially with
SEC and await initial comments (~30
days later)
6
Structuring
? Respond to SEC
comments and file
amendments (1-2 weeks
each)
From ~1 month before listing
Launch /
Internal
Marketing
Roadshow
? File “Red” and launch
offering
? Roadshow meetings
over 8-9 days
? Research analyst
presentation to sales
? Investor dialogue
? Develop institutional and
? Management
retail “books” of demand
presentation to
? Convert investor interest
? Finalize underwriting
underwriters’ salesforces
into orders
agreement, legal opinions ? Sales make outbound
? Assess true demand
and comfort letter
calls to set up 1×1
picture and pricing
? Select co-managers
investor meetings
sensitivity
? Draft roadshow
presentation
? Determine valuation
range
? Publicly file amendment
and initiate 15-day waiting
period
? Underwriters build out
roadshow schedule
Listing and
Aftermarket
Pricing,
Trading and
Aftermarket
Support
? Determine offering price
? Determine appropriate
allocation mix
(institutional vs. retail)
and finalize institutional
allocations
? Stock opens for trading
? Stabilization agent
supports
stock in the aftermarket
? File final prospectus
with pricing details
? Close and fund
transaction (T+2)
? Exercise over-allotment
option
(if applicable)
RBC Capital Markets
Today’s Agenda
I. The IPO Process from the CFO’s Perspective
II. AnaptysBio: Path to Becoming a $2 Billion Biotechnology Company
7
RBC Capital Markets
The IPO Process from the
CFO’s Perspective
Section I
Auspex Pharmaceuticals – From IPO to Acquisition
($ in millions, except per share amounts)
Select Post-IPO News Events
1?
02/05/2014: Completed IPO raising $84mm in gross
proceeds
2?
06/02/2014: Announced data from an interim
analysis of its ARC-HD switch clinical study
demonstrating clinical activity of SD-809 in
Huntington’s disease (HD)
3?
07/11/2014: Completed a follow-on offering with net
proceeds of ~$64.9mm
4?
08/07/2014: Completed enrollment in its FIRST-HD
clinical trial and in October 2014 achieved target
enrollment in its ARC-HD switch clinical trial of SD809 for the treatment of people with HD
5?
10/01/2014: Announced the enrollment of the first
patient in its multi-center pivotal Phase 3 clinical trial
AIM-TD of SD-809 for the treatment of people with
tardive dyskinesia
6?
11/1/2014: Received FDA orphan drug designation to
SD-809
7?
12/06/2014: Announced topline efficacy and safety
results from Phase 3 trial of SD-809 for the treatment
of chorea associated with HD
8?
01/23/2015: Completed follow-on offering raising
~$190.5mm in net proceeds
9?
01/12/2015: Acquired Imphar, its development
partner for SD-1077 in Parkinson’s disease
$120
11
$100
10
$80
Share Price ($US)
12
$60
8
9
$40
5
2
$20
3
6
? 03/17/2015: Announced favorable topline safety
10
results from its thorough QT trial of SD-809 on
cardiac repolarization
7
4
1
$0
Feb-14
? 03/30/2015: Announced to be acquired by Teva
11
Pharmaceuticals for $3.2bn
12
? 05/05/2015: Teva completes acquis…
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