Lyntris Inc. saw its stock trade lower on its first day as a public company, with shares opening at $15.50 on the New York Stock Exchange - below the $17.50 IPO price - resulting in an approximately 11% decline from the offering level. The Falls Church, Virginia-based defense sensor-technology company and certain selling shareholders collectively raised $297.5 million through the downsized initial public offering.
The company set the IPO at 17 million shares, of which 5,714,286 were sold by Lyntris itself and 11,285,714 shares were sold by existing stockholders. Based on the outstanding share count reported in Lyntris' filings, the trading debut values the company at about $1.68 billion.
Lyntris (NYSE:LYNX) will not receive any proceeds from the sale of shares offered by the selling stockholders. The company said it plans to use net proceeds from the offering, together with its existing cash, cash equivalents and short-term investments, to repay roughly $60 million outstanding under a new revolving credit facility. Remaining funds are intended for general corporate purposes, including additional development work, working capital and operational expenses.
Certain selling stockholders granted the underwriters a 30-day option to buy up to an additional 2,550,000 shares to cover potential overallotments at the IPO price, less underwriting discounts and commissions. If the underwriters exercise that option, the sale of those shares by the selling stockholders would not provide proceeds to Lyntris.
The underwriting group for the offering was led by Evercore ISI, Citigroup and Guggenheim Securities as book-running managers. Bank of America Securities acted as a joint book-running manager, with Baird, Raymond James and William Blair serving as bookrunners.
Market context
The company's debut price, share allocation between new and selling holders, the use of proceeds to reduce outstanding credit facility balances and the presence of a standard overallotment option are the primary factors detailed in filings and the IPO announcement. The decline at the open reflects the gap between the IPO price and market reception at the start of public trading.