Three Utah IPOs in Eight Days: Instructure, Bridge Investment Group, and Sera Prognostics; Two Acquisitions; and More (Week-in-Review Highlights, July 16—23, 2021)
Sera, Bridge, and Instructure each go public, raising over $600 million combined; while two Utah firms get acquired; construction begins on a new hybrid college campus; and more.
NOTE: When you’ve got a holiday-shortened week like this one (Happy Pioneer Day Weekend, by the way), you never know for sure what the news cycle is gonna be like. But as it turns out, this was a pretty busy week, with three IPOs (Instructure on Thursday, Bridge Investment Group on Monday, and Sera Prognostics last Thursday — more on that in a bit), two acquisitions, and some other interesting stuff. And that doesn’t even take into account some pretty big recent news for me and Deseret Business Watch.
But for now, and without further ado, here’s everything you need to know about the Week-in-Review from the Business Community of Utah.
Instructure Goes Public. Again. Raises $250 Million.
Less than 16 months after it was acquired for $2 billion in cash, and “taken private” in the process by Thoma Bravo, Salt Lake City-based Instructure Holdings is a public company once again.
Through its Initial Public Offering yesterday, Instructure raised $250 million by selling 12.5 million shares of its common stock to the public at an offering price of $20/share. Modest info on the IPO can be found in Instructure’s news release.
The Instructure shares are listed on the New York Stock Exchange under the symbol INST, and the stock opened at $22.39 before closing at $20.98, a 4.9% uptick over the offering price.
As a provider of Education Technology software, Instructure’s Canvas and MasteryConnect applications are used by over 30 million users at over 6,000 educational institutions in over 90 countries around the world.
Post-IPO, Instructure is still 87% owned by Thoma Bravo, an investment company with over $57 billion of capital commitments. Naturally, this means it can do pretty much whatever it wants from a management/decision-making process for SLC-based Instructure.
Case in point, as noted on page 13 of the Instructure Prospectus, up to $43.8 million of the monies raised through the IPO will go directly to Thoma Bravo to pay off some of the over $131 million of Instructure debt it currently holds.
Presuming that the underwriters do proceed forward and sell the maximum 1.875 million overallotment shares to the public, Instructure will have close to 140.4 million shares outstanding, which would give it a market capitalization of almost $2.95 billion.
Over 140 million shares outstanding and a market cap of nearly $2.9 billion
Based on my back of the napkin calculations (including the cash that went toward the debt reduction noted above), the IPO means that Thoma Bravo has seen roughly 30% Return On Investment (ROI) on paper in less than 16 months. {Not great returns, mind you, but not bad.}
Additionally, however, Thoma Bravo now has a ready path to liquidity through the public marketplace (should it choose to sell some of its Instructure stock), as well a more traditional sale of its Instructure holdings to another Private Equity Group or investor.
My guess, however, is that we’ll likely see Thoma Bravo maintain its holdings in Instructure for at least three to five years, as most PEGs tend to look for a 5—7-year holding period horizon.
In the meantime, being a publicly traded company also gives Instructure the opportunity to accelerate growth by raising more money (if need be) through future public offerings of its stock.
Regardless, Instructure may find such pathways unnecessary as it appears to be well-positioned in the professional, government, and corporate education/training markets for some time to come.
Anyway … an interesting week, and 16 months, for Instructure.
Utah’s Bridge Investment Group Goes Public, Raising $300 Million in the Process
On Monday, Sandy, Utah-based* Bridge Investment Group became a publicly listed company when it began trading shares on the New York Stock Exchange through an IPO under the stock symbol BRDG.
Through its Initial Public Offering, Bridge raised $300 million by selling 18.75 million shares of its common stock to the public at an offering price of $16/share. Modest details on the IPO can be found in Bridge’s news release.
As of market close yesterday, Bridge shares were priced at $15.90/share, down slightly from the initial offering price, giving the company a valuation of over $1.7 billion on nearly 110 million shares outstanding.
Formed in 2009, Bridge is an Integrated Real Estate Investment Manager, and according to its Prospectus, Bridge
“… manage(s) capital on behalf of more than a hundred global institutions and more than 6,500 individual investors across more than 25 investment vehicles.”
As shown in the table below, Bridge has $25.9 billion in Assets Under Management (AUM) from investments in ~48,800 Units, ~14.2 million square feet of office space, and ~1,750 loans.
Assets Under Management (AUM)
Multifamily: ~24,300 units worth $5.5 billion
Workforce & Affordable Housing: ~12,500 units worth $2.2 billion
Senior’s Housing: ~11,600 units worth $4.5 billion
Office: ~14.2 million square feet worth $2.6 billion
Development: ~10,400 multifamily units & 1 million square feet of office space worth $2.1 billion
Debt Strategies: ~1,750 loans worth $7.6 billion
Agency MBS: $1.4 billion in annual fees
According to the Bridge Prospectus,
“From 2018 to 2020, our total revenues increased 78%, from $130 million to $232 million and our net income increased 89%, from $88 million to $166 million.”
In addition to its Sandy headquarters, Bridge has offices in
Atlanta, Georgia;
New York City;
Orlando, Florida; and
San Mateo, California.
Author’s Note
As I have gone through this now six-month journey since launching Deseret Business Watch in mid-January, I have settled into a fairly steady cadence of publishing a Week-in-Review edition at the end of the week, typically on Friday mornings.
Unfortunately, I simply miss something.
This was the case last week when Salt Lake City-based Sera Prognostics began trading its shares on the NASDAQ Stock Exchange … on Thursday no less. UGH!
So … with apologies … the story below reports on this IPO.
Sera Prognostics Raises $75 Million in an IPO
Women’s health diagnostic company, Sera Prognostics, sold ~4.7 million shares priced at $16/share in an IPO a week ago Thursday, raising $75 million in the process.
Sold through the NASDAQ Stock Market (NasdaqGS:SERA), the stock of the Salt Lake City-based company closed at $10.30/share, a drop of over 35% since shares began trading, but with the biggest drop on the opening day.
You may recall from the late April write-up on the company — Recursion IPO, Sera Raises $100MM, Wasatch Invests $100MM, and More (The Week-in-Review, April 24—30, 2021) —
“(Sera’s) PreTRM® Test allows physicians to identify which women are at risk for pre-term birth during the 19th and 20th weeks of a pregnancy.”
And back in April, Sera closed on a $100 million Series E round of funding.
Unfortunately, of the three Utah-based firms who IPOed in the past eight days, Sera seems to be the one struggling the most on Wall Street so far.
News Items of Note from This Week
What follows below are four additional Noteworthy News Items taken from the breaking news announcements that hit our radar recently from Utah’s business community this past week, news items we thought you might find worthwhile if not also intriguing.
Case in point —
Klymit Acquired by MacNeill Pride Group
This past week Kaysville, Utah-based Klymit announced it has been acquired by MacNeill Pride Group out of Brentwood, Tennessee. Terms of the acquisition were not disclosed.
Formed in 2007, Klymit is an innovative outdoor products brand that initially made its name with an amazing new type of sleeping pad for backpackers and campers.
SLC-based Braintrace Acquired by Great Britain Firm, Sophos
Oxford, England-based Sophos announced this week that it has acquired Salt Lake City-based Braintrace.
Sophos plans to integrate Braintrace’s Network Detection and Response technology into Sophos’ cybersecurity offerings that are currently used by millions of customers inside of over half-a-million organizations in more than 150 countries.
According to numerous sources, Braintrace had previously raised $10 in funding, the most recent being an $8.5 million Series A round of funding led by SLC-based EPIC Ventures.
Financial terms of the acquisition were not disclosed, however.
Works Begins on a $57 Million Campus in Herriman to be Shared by SLCC and the UofU
Salt Lake Community College and the University of Utah have broken ground on a new campus the two educational institutions will share in Herriman, Utah.
According to a news release published by SLCC, it’s expected that the first building on the 90-acre campus will open in 2023, with the entire campus available for up to 7,000 students by 2025.
Weave Adds Three C-Suite Execs
Last of all, Lehi, Utah-based Weave announced yesterday it has expanded its executive team by hiring three new senior executives:
Wendy Harper: Chief Legal Officer;
Matt Hyde: Chief Revenue Officer; and
Matt Hilary: Chief Information Security Officer.
Formed in 2011, Weave offers an “all-in-one customer communication and engagement platform for small business” and has raised a total of $168 million in funding.
* — I’m aware that Bridge Investment Group lists its headquarters in Salt Lake City. But anyone who lives along the Wasatch Front knows that the 84070 zip code is actually Sandy and not SLC. So please don’t get your nose bent out of shape because I report Sandy as the city for the Bridge HQ.
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About the Author
David Politis is a Marketing Mercenary, which is a fancy way of saying that organizations and individuals hire him to solve their marketing problems. To learn more, please feel free to visit David’s LinkedIn Profile or the website for his business: The David Politis Company. If you have a story idea for him (or would just like to connect), you can reach him at me@davidpolitis.com.
So great to read your updates, David. I had missed the news about Bridge. I know those guys pretty well from past business dealings, some going back almost 40 years. Still, I hadn't heard about the IPO until I read the news here! You're my source for Utah business news!!!!