Argentina’s Despegar has drawn huge orders ahead of pricing an IPO, with ECM sources expecting the order books to be 10x oversubscribed.
Three ECM bankers said they expect the online travel company to price its equity offering towards the higher end of a suggested range. The deal was set to price later Tuesday.
The bookrunners set an initial range between $23 and $26 per share, giving Despegar a chance to raise more than $380m if the IPO prices at the top. The company is offering 12.8m shares, alongside a greenshoe option for 1.92m shares.
The offering includes 4.1m in existing shares, with the US travel company Expedia and two private equity firms – General Atlantic and Tiger Global Management – among the selling shareholders, the bankers said.
Investors are understood to have expressed heavy interest in Latin American tech stocks this year, according to one of the three sources. Fund managers looking for “pure play,” or dedicated, exposure to IT businesses in emerging markets have committed to Despegar’s IPO, he added.
The size of the order books on Tuesday led sources to say that commitments came from a diverse group of investors from the US and Latin America.
Despegar filed documents with the US SEC in August. The company hired Citi and Morgan Stanley to lead the offering, while Itau BBA and UBS were named comanagers. The boutique investment firms Keybanc Capital Markets and Cowen and Company were also named comanagers.
Conyers Dill & Pearman, Simpson Thacher, Tozzini Freire and Estudio Beccar Varela are the legal advisors for Despegar, while Gunderson Dettmer is advising the banks.
Founded in 1999, Despegar also operates the Brazilian online travel agency Decolar.com. Expedia held a 16.4% stake in Despegar before the IPO.