We are pleased to announce that STJ has advised CVC Capital Partners on the successful Initial Public Offering of ARTERIA Networks Corporation on the Tokyo Stock Exchange. ARTERIA is a leading Japanese pure-play B2B telecom/internet company that operates a nationwide optical fiber network and specialises in providing high-speed data transmission, data centre and cloud Wi-Fi services to enterprises as well as optical internet services to condominiums.
The IPO was completed in very challenging market conditions and utilised many of the innovative techniques introduced by STJ into the Japanese market including transparency in terms of investor feedback, pilot fishing, priority lists, incentive fees and others.
CVC sold 40% of the company (assuming full exercise of the overallotment option), raising JPY 25bn ($220m) and valuing the company at JPY 62.5bn ($550m) at the issue price. The domestic tranche and international tranches account for 50% each of the offering. Priced at JPY 1,250, against the price range of JPY 1,150-1,500, the IPO attracted strong interest from international institutional investors, especially long-only investors which account for the majority of the demand. Domestic retail investors also actively participated and the retail tranche was heavily oversubscribed. The company had a smooth debut on the Tokyo Stock Exchange with the share price closing 3% above the IPO price after the first 3 days’ trading.
The success of the ARTERIA IPO was achieved despite a very challenging global IPO market environment where volatility spiked, issuance volume fell c.20% yoy in Q4 2018, and against the $21.3bn Softbank IPO which competed for investor interest in the Japanese telecom sector and which was priced just one week after ARTERIA.
STJ advised the company and CVC throughout the entire IPO process for a period of over 2 years on all the key aspects of the offering including equity story preparation, selection and terms of engagement of all syndicate banks, management of a bespoke and extensive investor education programme (including PRS, pre-sounding and IPO marketing), structure of the offering, marketing materials preparation, valuation feedback analysis, price range setting, pricing tactics and allocations.
This is STJ’s 7th IPO in Japan since its inception. STJ has advised on the overwhelming majority of mid-sized IPOs in Japan on behalf of international Private Equity firms, including Bain, Carlyle and Permira.