The IPO of Darktrace, the security software company, is now fully covered by investors after it opted for a cautious float price far lower than earlier expectations, sources said.
Having at one stage been expected to price its IPO at £3.6 billion, today it opted for £1.6 billion to £1.9 billion, or 220p to 280p a share.
Tonight, sources said it was fully covered, meaning every share on offer had at least one application to buy it.
The company will be selling 51-65 million shares to raise $200 million, much of which it will invest in its Cambridge research and development operation, where mathematicians work on new AI technologies for companies.
The knockdown valuation comes as investment bankers and company founders have been chastened by the disastrous float flop of Deliveroo, whose shares were drastically overpriced at IPO and have collapsed around 40% since.
The shares of Darktrace are due to start trading on 5 May.
Bankers on the deal are Berenberg, Jefferies and KKR Capital Markets as global coordinators, with bookrunners Needham and Piper Sandler.
Bloomberg first reported the terms.
Management and staff are selling up to $45 million of their shares, with some holders of former convertible loan notes potentially selling a further $75 million.
Some analysts have said the earlier reported valuation would have to be reduced because of concerns about the fact that Dr Mike Lynch is a founder shareholder. He is currently fighting fraud claims in the US over the sale of his Autonomy business.
According to IPO registration documents, he remained on the company’s advisory council until March 2021.