- Open RAN specialist postpones IPO plan
- Change of heart comes only weeks after filing of papers with SEC
- ‘Market volatility’ cited
- But Intel and NVIDIA take stakes in private placements
Only weeks after filing papers with the Securities and Exchange Commission (SEC) for an initial public offering (IPO) of its stock on the Nasdaq Global Market, Mavenir has changed its mind and put its plan to raise money from a stock exchange listing on hold, citing “market volatility.”
Mavenir, one of the leading independent vendors in the super-hot Open RAN market and a cloud native cheerleader, initially announced its IPO intentions, and filed its papers with the SEC, on 6 October. Those documents revealed the company had generated revenues of $234.9 million in the six months to the end of July (the first half of its current fiscal year), up by 17% compared with the same period a year earlier. It also generated operating profit of $17.3 million during that period, compared with a loss a year earlier. (See Mavenir files for an IPO.)
That initial filing, however, did not include any details about how much stock would be issued and how much the company aimed to raise form the IPO.
Then on 21 October, Mavenir filed updated documents showing it intended to issue 13.636 million Class A shares priced at $20-$24 each, plus offer a further 2.045 million shares in an over-allotment, taking the total potential shares to be sold to 15.681 million. If all those shares were to be sold at the top-of-the-range price of $24, Mavenir would raise $376.4 million (before costs) and attain a valuation of around $1.8 billion.
That filing also showed that Intel had purchased equity from Mavenir’s owner, Siris Capital, worth $25 million, which would be converted into Class A shares at the same time as the IPO.
Then on 26 October, a further update was issued, showing that Mavenir had cut the number of shares to be issued to 12.5 million plus 1.875 million in over-allotment, cutting the total number of shares that might be issued to 14.375 million and the total monies raised at the top range price of $24 per share to $345 million.
That filing showed that NVIDIA, an ever-greater chip rival to Intel, had also purchased $25 million of equity from Siris Capital that could be converted into Class A stock after an IPO.
It’s worth noting, though, that Siris Capital was never planning to cede control over the company: Even after any IPO it intended to hold all the Class B shares in the company, giving it almost 98% of the voting power and the ability to control all decisions about Mavenir’s future, including whether it should be acquired at a later stage, making Mavenir a “controlled company.”
Only days later, on October 28, the company announced it had decided to postpone its IPO process “amid market volatility,” and documents were filed with the SEC requesting a postponement and asking that fees paid in connection with the filings be “credited for future use.”
So where does this leave Mavenir? Markets are certainly volatile, and certainly unpredictable in the coming weeks as the US presidential election process plays out.
But the markets in which Mavenir plays – Open RAN, virtualized packet core, virtualized voice platform, messaging and IMS applications – are all growth sectors, with the company expecting the value of its addressable market to grow from $4 billion this year to $12 billion in 2024, and with its technology well regarded by many Tier 1 operators. (See Vodafone IDs Open RAN radio unit frontrunners.)
It seems like there should be an appetite for stock in a company with such prospects… let’s see what happens in the next few months.
- Ray Le Maistre, Editorial Director, TelecomTV
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