By Pritam Biswas and Pragyan Kalita
Aug 19 (Reuters) – Lyntris’ shares fell 11.4% in the defense contractor’s New York debut on Wednesday, valuing the company at $1.78 billion and signaling investor caution toward new listings.
Shares of the Falls Church, Virginia-based company opened at $15.50, below the IPO price of $17.50. The offering was downsized to 17 million shares from 24 million and raised $297.5 million, after pricing below an initially marketed range of $19 to $22 apiece.
The company sold about 5.7 million shares in the IPO, more than its earlier proposal of about 4.9 million shares, while existing shareholders cut their offering by more than 7.8 million shares.
“The market is discounting that this is a capital structure, rather than a venture capital deal,” said Josef Schuster, chief executive of IPOX, a Chicago-based IPO index and research firm.
The U.S. IPO market has rebounded strongly in recent months, bringing startups across sectors to the public markets, but investors remain selective. That caution has forced several companies to trim their deal sizes.
The drop reflected investors moving away from riskier, less-seasoned companies such as recent IPOs amid higher U.S. bond yields, even as earnings remained strong, Schuster added.
Private equity firm Trive Capital combined portfolio companies Accelint and Vitesse to form Lyntris, creating a defense technology supplier that has since grown through acquisitions.
Lyntris, which makes battlefield sensors and software for the U.S. and allied militaries, is the latest in a wave of defense companies that have sought to list their shares in New York since April as executives look to seize the opportunity created by the conflict involving Iran.
Arxis, AEVEX, Applied Aerospace & Defense, Doncasters and HawkEye 360 have debuted in New York since April.
Evercore ISI, Citigroup and Guggenheim Securities were lead book-running managers.
(Reporting by Pritam Biswas in Bengaluru; Editing by Tasim Zahid)
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