SEC Company Response from Avantor, Inc. (AVTR) (CIK 0001722482) (AVTR) — May 7, 2019
Avantor, Inc. (AVTR) (CIK 0001722482)
Date: May 7, 2019 · CIK: 0001722482 · Accession: 0001193125-19-139997
AI Filing Summary & Sentiment
Reasoning
Letter
Response Letter
SIMPSON THACHER & BARTLETT LLP
425 LEXINGTON AVENUE
NEW YORK, NY 10017-3954
(212) 455-2000
FACSIMILE (212) 455-2502
DIRECT DIAL NUMBER
(212) 455-2948
E-MAIL ADDRESS jkaufman@stblaw.com
May 7, 2019
VIA EDGAR TRANSMISSION
Re: Avantor, Inc.
Amendment Nos. 4, 5 and 6 to Registration Statement on Form S-1
Submitted on February 8, 2019
CIK No. 0001722482
Tim Buchmiller
Amanda Ravitz
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Ladies and Gentlemen:
On behalf of Avantor, Inc. (the “Company”), we are hereby responding to the letter, dated May 6, 2019 (the “Comment Letter”), from the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission (the “Commission”), regarding the Company’s Amendment Nos. 4, 5 and 6 to the above-referenced registration statement on Form S-1 (the “Registration Statement”). The Company respectfully advises the Staff that it intends to file a subsequent pre-effective amendment (the “Pre-Effective Amendment”) to the Registration Statement to revise the Registration Statement in order to (i) reflect the occurrence of the 5-for-1 stock split of the Company’s common stock contemplated in the Registration Statement and (ii) address the issues raised by the Staff in the Comment Letter, as more particularly set forth below.
To assist your review, we have retyped the text of the Staff’s comments in italics below. Page references in our responses correspond to the pages of Amendment No. 6 filed on May 3, 2019 (“Amendment No. 6”). The responses and information described below are based upon information provided to us by the Company. Unless otherwise defined below, terms defined in Amendment No. 6 and used below shall have the meanings given to them in Amendment No. 6.
Securities and Exchange Commission
May 7, 2019
Amendment No. 6 to Registration Statement on Form S-1 filed May 3, 2019
Fee Table, page i
1. We note your revisions in response to prior comment 1. Please revise footnote (4) to track the language of Securities Act Rule 416. Rule 416 covers only securities issuable pursuant to transactions like those specified in Rule 416, such as stock splits, stock dividends, or similar transactions, and would not, for example, cover stock issuable as a result of a market-based conversion formula. If you are required to issue more shares than the estimate due to the operation of the conversion ratio disclosed in the registration statement, you would have to file an additional registration statement or rely on an available exemption from registration. These additional shares would not be covered by Rule 416(a). For guidance, see Securities Act Rules Compliance and Disclosure Interpretation 213.01.
The Company respectfully advises the Staff that the certificate of designations governing the Series A Mandatory Convertible Preferred Stock provides for certain adjustments to the conversion rate to prevent dilution resulting from stock splits, stock dividends or similar transactions, which anti-dilution adjustments are described under “Description of Mandatory Convertible Preferred Stock—Anti-Dilution Adjustments” starting on page A-43. The Company further advises the Staff that the Company’s reference to Rule 416 in footnote (4) was intended to cover additional shares of common stock issuable from such anti-dilution adjustments to the extent permitted by Rule 416.
In response to the Staff’s comment, the Company will, in the Pre-Effective Amendment, split footnote (4) into two footnotes, with (A) a new footnote (4) addressing the Company’s reasonable good faith estimate of the maximum number of shares of common stock issuable as a result of a market-based conversion formula, for which no additional registration fee is required because no additional consideration will be received in connection with the exercise of the conversion privilege under Rule 457(i), and (B) a new footnote (5) addressing additional shares of common stock issuable as a result of anti-dilution adjustments to the conversion rate, as permitted by Rule 416(a). The text of the two footnotes is set forth below:
(4) This registration statement also registers an estimated 29,487,150 shares of our common stock that are issuable upon conversion of the Series A Mandatory Convertible Preferred Stock registered hereby at the initial maximum conversion rate of 2.5641 shares of common stock per share of Mandatory Convertible Preferred Stock, based on the assumed initial public offering price of $19.50 per share of common stock, which is the midpoint of the
Securities and Exchange Commission
May 7, 2019
estimated offering price range shown on the cover of the common stock prospectus which forms a part of this registration statement. Under Rule 457(i), there is no additional filing fee payable with respect to the shares of common stock issuable upon conversion of the Mandatory Convertible Preferred Stock because no additional consideration will be received in connection with the exercise of the conversion privilege. The number of shares of our common stock issuable upon such conversion will vary based on the public offering price of the common stock registered hereby.
(5) The number of shares of our common stock issuable upon conversion of the Series A Mandatory Convertible Preferred Stock is subject to anti-dilution adjustments upon the occurrence of certain events described herein. Pursuant to Rule 416 under the Securities Act, the number of shares of our common stock to be registered includes an indeterminable number of shares of common stock that may become issuable upon conversion of the Series A Mandatory Convertible Preferred Stock as a result of such anti-dilution adjustments.
The Company supplementally confirms to the Staff that, to the extent the Company is required to issue more shares than the estimated maximum number in the new footnote (4) due to the operation of the conversion rate, other than due to anti-dilution adjustments to the conversion rate addressed by new footnote (5), the Company will be required to file an additional registration statement or rely on an available exemption from registration to cover those shares.
Item 16. Exhibits
Legality Opinion, page II-1
2. We note that the opinion assumes all necessary corporate actions, including board authorization and approval and filing of corporate documents. These appear to be inappropriate assumptions in that they assume that you have taken all corporate actions necessary to authorize the issuance of the securities being registered. Please file an opinion that does not contain such assumptions. For guidance, please refer to Part II.B.3.a of Staff Legal Bulletin No. 19.
In response to the Staff’s comment, the Company respectfully advises the Staff that the opinion will be revised in the Pre-Effective Amendment to remove the assumption that all corporate actions necessary to authorize the issuance of the securities being registered have been taken by deleting the following underlined language in opinion paragraph 1: “(a) When the Board of Directors of the
Securities and Exchange Commission
May 7, 2019
Company (the “Board”) has taken all necessary corporate action to authorize and approve the issuance of the Company Shares, (b) when the Amended Charter has been duly filed, (c) when the Certificate of Designations has been duly filed and (d) upon payment and delivery in accordance with the applicable definitive underwriting agreement approved by the Board, the Company Shares will be validly issued, fully paid and nonassessable”. The Company respectfully submits that, as revised, the opinion conforms to the requirements of Staff Legal Bulletin No. 19 and is consistent with legality opinions filed in connection with other recent initial public offering transactions.
* * * * * * * *
Please do not hesitate to call me at (212) 455-2948 with any questions or further comments regarding this filing or if you wish to discuss any of the above responses.
Very truly yours,
/s/ Joseph H. Kaufman
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Response Letter
SIMPSON THACHER & BARTLETT LLP
425 LEXINGTON AVENUE
NEW YORK, NY 10017-3954
(212) 455-2000
FACSIMILE (212) 455-2502
DIRECT DIAL NUMBER
(212) 455-2948
E-MAIL ADDRESS
jkaufman@stblaw.com
May 7, 2019
VIA EDGAR TRANSMISSION
Re:
Avantor, Inc.
Amendment Nos. 4, 5 and 6 to Registration Statement on Form S-1
Submitted on February 8, 2019
CIK No. 0001722482
Tim Buchmiller
Amanda Ravitz
Securities and Exchange Commission
Division of Corporation
Finance
100 F Street, N.E.
Washington, D.C. 20549
Ladies and Gentlemen:
On behalf of Avantor,
Inc. (the “Company”), we are hereby responding to the letter, dated May 6, 2019 (the “Comment Letter”), from the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission
(the “Commission”), regarding the Company’s Amendment Nos. 4, 5 and 6 to the above-referenced registration statement on Form S-1 (the “Registration Statement”). The Company
respectfully advises the Staff that it intends to file a subsequent pre-effective amendment (the “Pre-Effective Amendment”) to the Registration Statement to
revise the Registration Statement in order to (i) reflect the occurrence of the 5-for-1 stock split of the Company’s common stock contemplated in the
Registration Statement and (ii) address the issues raised by the Staff in the Comment Letter, as more particularly set forth below.
To assist your review, we have retyped the text of the Staff’s comments in italics below. Page references in our responses correspond to
the pages of Amendment No. 6 filed on May 3, 2019 (“Amendment No. 6”). The responses and information described below are based upon information provided to us by the Company. Unless otherwise defined below, terms defined in
Amendment No. 6 and used below shall have the meanings given to them in Amendment No. 6.
Securities and Exchange Commission
May 7, 2019
Amendment No. 6 to Registration Statement on Form
S-1 filed May 3, 2019
Fee Table, page i
1.
We note your revisions in response to prior comment 1. Please revise footnote (4) to track the language
of Securities Act Rule 416. Rule 416 covers only securities issuable pursuant to transactions like those specified in Rule 416, such as stock splits, stock dividends, or similar transactions, and would not, for example, cover stock issuable as a
result of a market-based conversion formula. If you are required to issue more shares than the estimate due to the operation of the conversion ratio disclosed in the registration statement, you would have to file an additional registration statement
or rely on an available exemption from registration. These additional shares would not be covered by Rule 416(a). For guidance, see Securities Act Rules Compliance and Disclosure Interpretation 213.01.
The Company respectfully advises the Staff that the certificate of designations governing the Series A Mandatory Convertible Preferred Stock
provides for certain adjustments to the conversion rate to prevent dilution resulting from stock splits, stock dividends or similar transactions, which anti-dilution adjustments are described under “Description of Mandatory Convertible
Preferred Stock—Anti-Dilution Adjustments” starting on page A-43. The Company further advises the Staff that the Company’s reference to Rule 416 in footnote (4) was intended to cover
additional shares of common stock issuable from such anti-dilution adjustments to the extent permitted by Rule 416.
In response to the
Staff’s comment, the Company will, in the Pre-Effective Amendment, split footnote (4) into two footnotes, with (A) a new footnote (4) addressing the Company’s reasonable good faith
estimate of the maximum number of shares of common stock issuable as a result of a market-based conversion formula, for which no additional registration fee is required because no additional consideration will be received in connection with the
exercise of the conversion privilege under Rule 457(i), and (B) a new footnote (5) addressing additional shares of common stock issuable as a result of anti-dilution adjustments to the conversion rate, as permitted by Rule 416(a). The text
of the two footnotes is set forth below:
(4) This registration statement also registers an estimated 29,487,150 shares of our common
stock that are issuable upon conversion of the Series A Mandatory Convertible Preferred Stock registered hereby at the initial maximum conversion rate of 2.5641 shares of common stock per share of Mandatory Convertible Preferred Stock, based on the
assumed initial public offering price of $19.50 per share of common stock, which is the midpoint of the
2
Securities and Exchange Commission
May 7, 2019
estimated offering price range shown on the cover of the common stock prospectus which forms
a part of this registration statement. Under Rule 457(i), there is no additional filing fee payable with respect to the shares of common stock issuable upon conversion of the Mandatory Convertible Preferred Stock because no additional consideration
will be received in connection with the exercise of the conversion privilege. The number of shares of our common stock issuable upon such conversion will vary based on the public offering price of the common stock registered hereby.
(5) The number of shares of our common stock issuable upon conversion of the Series A Mandatory Convertible Preferred Stock is subject to
anti-dilution adjustments upon the occurrence of certain events described herein. Pursuant to Rule 416 under the Securities Act, the number of shares of our common stock to be registered includes an indeterminable number of shares of common stock
that may become issuable upon conversion of the Series A Mandatory Convertible Preferred Stock as a result of such anti-dilution adjustments.
The Company supplementally confirms to the Staff that, to the extent the Company is required to issue more shares than the estimated maximum
number in the new footnote (4) due to the operation of the conversion rate, other than due to anti-dilution adjustments to the conversion rate addressed by new footnote (5), the Company will be required to file an additional registration
statement or rely on an available exemption from registration to cover those shares.
Item 16. Exhibits
Legality Opinion, page II-1
2.
We note that the opinion assumes all necessary corporate actions, including board authorization and approval
and filing of corporate documents. These appear to be inappropriate assumptions in that they assume that you have taken all corporate actions necessary to authorize the issuance of the securities being registered. Please file an opinion that does
not contain such assumptions. For guidance, please refer to Part II.B.3.a of Staff Legal Bulletin No. 19.
In
response to the Staff’s comment, the Company respectfully advises the Staff that the opinion will be revised in the Pre-Effective Amendment to remove the assumption that all corporate actions necessary to
authorize the issuance of the securities being registered have been taken by deleting the following underlined language in opinion paragraph 1: “(a) When the Board of Directors of the
3
Securities and Exchange Commission
May 7, 2019
Company (the “Board”) has taken all necessary corporate action to authorize and
approve the issuance of the Company Shares, (b) when the Amended Charter has been duly filed, (c) when the Certificate of Designations has been duly filed and (d) upon payment and delivery in accordance
with the applicable definitive underwriting agreement approved by the Board, the Company Shares will be validly issued, fully paid and nonassessable”. The Company respectfully submits that, as revised, the opinion conforms to the requirements
of Staff Legal Bulletin No. 19 and is consistent with legality opinions filed in connection with other recent initial public offering transactions.
* * *
* * * * *
Please do not hesitate to call me at (212) 455-2948 with any questions or further comments regarding
this filing or if you wish to discuss any of the above responses.
Very truly yours,
/s/ Joseph H. Kaufman
Joseph H. Kaufman
cc:
Securities and Exchange Commission
Kristin Lochhead
Brian Cascio
Avantor, Inc.
Justin M. Miller
Simpson Thacher & Bartlett LLP
Ryan Bekkerus
Ropes & Gray LLP
Patrick O’Brien
John Sorkin
Rachel Phillips
4