The IPO Buzz: Shimmick (SHIM) Prices Downsized IPO at $7.00 – $3.00 Below Low End

Shimmick Corp. (SHIM) priced its IPO at $7.00 – $3.00 below the low end of its range – and slashed the number of shares to 3.575 million – down from 4.55 million shares in the prospectus – to raise $25.03 million on Monday night (Nov. 13, 2023). The IPO raised half of the estimated proceeds of $50.05 million – an amount based on the terms in the prospectus – 4.55 million shares at $10.00 to $12.00. The IPO was a carry-over from last week. Shimmick’s stock opened flat at $7.00 at 11:45 a.m. EST today – Tuesday, Nov. 14, 2023 – on the NASDAQ on volume of slightly more than 183,000 shares, NASDAQ records showed. (Editor’s Note: This column, initially published Monday night, Nov. 13, 2023, was updated on Tuesday, Nov. 14, with news of Shimmick’s opening trade on the NASDAQ.) 

By 10:46 a.m. EST today, Shimmick’s stock slipped and broke issue price to trade at $6.86. By 11 a.m. EST, Shimmickd dropped to its session low of $6.60.

Roth Capital was the sole book-runner. Craig-Hallum Group was the co-manager.

Shimmick, a leading California public water works construction firm, plans to use the money to repay most of its outstanding $30.0 million revolving credit facility.

This was Shimmick’s second attempt to go public. The company had filed to go public in 2015 and abandoned that plan the following year.

Shimmick Corp.based in Irvine, California, is known for designing and building water treatment, water supply and other critical infrastructure projects. More than half of its 2022 revenue was generated in California, the largest construction market in the U.S., the prospectus says. Shimmick designs water supply, water treatment, water infrastructure (dams and reservoirs) and mass transit projects. Its clients include the Orange County Water District, the City and County of Los Angeles, the Port of Los Angeles and the City of San Francisco, as well as the U.S. Navy and the U.S. Army Corps of Engineers.

In addition to water and wastewater treatment projects, Shimmick designs and builds mass transit, bridges and military facilities. Shimmick is a contractor on the installation of the suicide prevention nets on the Golden Gate Bridge in San Francisco.

As of June 30, 2023, Shimmick had a backlog of about $1.28 billion in projects. Of that $1 billion-plus total backlog, work for state and local agencies accounted for $971 million, the prospectus says.

Private equity firm Oroco Capital bought Shimmick Construction in January 2021 for an undisclosed sum from AECOM Corp. (ACM)

Despite its $1 billion-plus backlog of projects, Shimmick was not profitable. The company had a net loss of $19.7 million on revenue of $689.9 million for the 12 months that ended June 30, 2023, according to financial statements in the prospectus.

Stay tuned.

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