The capital raising represents opportunity in current uncertain market conditions.
Herbert Smith Freehills (HSF) and Gilbert + Tobin (G+T) have advised on a successful $880m institutional placement.
HSF advised Cochlear Limited, which conducted the raising, while G+T counselled J.P. Morgan, which was the lead manager in the transaction.
The raising was part of Cochlear’s plan to stay capitalised in the face of present uncertainty and support the ASX-50 company’s future prospects as a leading provider of hearing implants worldwide, according to HSF. The firm said that the placement was only part of the “comprehensive” raising package it assisted Cochlear on, which also included a “credit-approved commitment for an additional $150m bank facility from an existing lender” and a non-underwritten $50m share purchase plan.
Meanwhile, G+T said that it worked on advising J.P. Morgan, which also served as the underwriter to the placement. The firm’s work on the deal included helping to facilitate an increase in the size of the placement from the initial expected value of $800m at its 25 March launch to $880m as a result of considerable demand from both domestic and international investors.
G+T said that Cochlear’s successful capital raising was a good sign that such transactions could be achieved, “albeit at deep discounts.” The firm also expects more companies to go down this path as the COVID-19 pandemic continues to impact the economy.
The HSF Australia team for equity capital markets was headed by partners Michael Ziegelaar and Andrew Rich, who were supported by senior associates Cecilia Mehl and Andrew Earle, as well as solicitors Jessica Voong and James Paolucci. They also collaborated with the firm’s US securities lawyers, including partner Siddhartha Sivaramakrishnan and senior associate Jin Kong.
Ziegelaar, who is also HSF’s co-head of Australian equity capital markets, considered the transaction to be a “landmark” capital raising given the uncertain market.
“[This is] a capital raising that will strongly capitalise Cochlear for the future. It shows that for the right business, the capital markets are still open,” he said.
The Cochlear deal was another achievement for HSF in the area of ASX secondary raisings; the firm had also advised on raisings for Orica, Carbon Revolution and EML Payments.
Meanwhile, G+T’s corporate advisory team was led by partners Peter Cook and Adam D’Andreti, with assistance from corporate advisory lawyers Michael Tong and Cassie Bell.
G+T said in its announcement that its corporate advisory team had also advised medical device manufacturing company Somnomed on a $15m capital raising, led by D’Andreti. The team advised TDM Growth Partners in that deal.
