Kingsoft Cloud, China-based enterprise software producer Kingsoft’s cloud services subsidiary, will raise as much as $450m in an initial public offering after setting its price range at $16 to $18 yesterday.
The company will issue 25 million American depositary shares, with each representing 15 ordinary shares, valuing the business at up to $3.6bn. It expects to price shares on Thursday before listing on the Nasdaq Global Select Market under the symbol KC on Friday.
Formed in 2012, Kingsoft Cloud operates a cloud infrastructure business that includes offerings such as enterprise cloud and artificial intelligence of things services. The company has been bolstered by an increased reliance on cloud computing during the lockdown, Reuters said.
Kingsoft and smartphone manufacturer Xiaomi have expressed an interest in buying $25m and $50m in the stock offering, respectively, while Carmignac Gestion is considering the purchase of $50m worth of shares.
Proceeds from the proposed offering will go towards upgrading and expanding Kingsoft Cloud’s infrastructure, technology and product development, international expansion efforts and building out its ecosystem as well as supplementing working capital.
Kingsoft Cloud has attracted approximately $700m in funding, beginning with $1.8m from Xiaomi in 2012. The corporate returned in 2015 for a $66.6m series B round also backed by Kingsoft and IDG Capital.
Kingsoft, IDG Capital and an affiliate of China Asset Management supplied $60m in series C funding in February 2016.
Brokerage firm China Merchants Securities then led a $50m series C-plus round in May 2016 before Kingsoft, Liyue Investment and China Minsheng injected $300m in a series D round the following year.
Kingsoft and FutureX Capital each provided a further $100m in funding for Kingsoft Cloud in 2018.
Kingsoft owns a 53.7% stake in its spinoff, which is set to be diluted to 46.8%. Xiaomi will see its shareholding reduced from 15.8% to 13.8%, while FutureX’s stake will drop from 5.7% to 5%.
JP Morgan Securities, UBS Securities, Credit Suisse Securities (USA) and China International Capital Corporation have been appointed underwriters for the offering. They have been given a 30-day option to purchase up to an additional 3.75 million American depositary shares.
