October 19, 2021

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DNA Startup Oxford Nanopore Wins Oracle Backing for Upcoming IPO

(Bloomberg) —

DNA-sequencing company Oxford Nanopore Technologies Ltd., whose technology is used to identify variants of Covid-19, is looking to raise 300 million pounds ($415 million), with Oracle Corp. agreeing to be a cornerstone investor.

The offering will also include existing shares, the company said in a statement Thursday. The spinout from the University of Oxford supplies the U.K. with tests that use DNA and RNA sequencing to detect various strains of Covid. Its technology was also used during the Ebola and Zika outbreaks.

The company was worth about 2.5 billion pounds ($3.5 billion) during its last funding round in May, based on the valuation that shareholder IP Group Plc assigns to its 14.5% stake. Oxford Nanopore is opting for a listing on the standard segment of the LSE, meaning it will be ineligible for inclusion into major FTSE benchmarks.

Oracle has also agreed to subscribe for 150 million pounds of new shares. The U.K. company will move its genetic analysis applications to Oracle’s cloud-computing architecture as well, it said.

The decision by Oracle is a rare investment into the U.K. In 2015 Oracle bought cloud-based software provider Maxymiser

Oxford Nanopore shareholders in June approved a “limited anti-takeover” share structure, according to a registration document filed ahead of the listing. The special shares, which will be held by Chief Executive Officer Gordon Sanghera, will help block hostile takeovers, but won’t confer any other voting rights and will expire after three years.

Several big companies that have gone public in London over the past year — online retailer THG Plc, food-delivery startup Deliveroo Plc and fintech Wise Plc — have done something similar, giving founders a special class of shares with extra voting rights to block an unwanted takeover.

London has been working hard to lure more businesses to its stock exchange, and proposed changes to its listing rules would pave the way for companies with multi-class shares to qualify for a premium quotation, or the top-tier segment of the London Stock Exchange.

The reforms come as the U.K. attempts to bolster its financial position post-Brexit and keep fast-growing British companies, especially those operating in the tech and life-sciences sectors, from fleeing to the U.S. in search of more investors and richer valuations. U.S. gene-sequencing giant Illumina Inc. is valued at more than $70 billion.

Citigroup, JPMorgan Chase & Co, Barclays Bank Plc, Berenberg, Guggenheim Securities, Numis Securities Ltd and RBC are arranging the offering.

(Updated with information on Oracle in fourth paragraph.)

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