All Sectors use ATMs

ATMs are a capital management tool used extensively in the United States since the 1990s by listed companies to unlock capital, mitigate risk, pay down debt, fine tune the balance sheet and optimise their cost of capital. 

1,182 US companies utilised ATMs to raise $173 billion between 2008 and 2016 (with many more establishing an ATM without actually utilising it. E.g. in 2016 $30 billion was raised using ATMs, though over $100+ billion was available under ATM programs). 

ATMs are used across all sectors by companies of all sizes, from the largest industrials to the smallest of growth companies.  

city-408952_1920.jpg
 Bank of America Corp and Ford Motor Group are some of the largest companies to use an ATM

Bank of America Corp and Ford Motor Group are some of the largest companies to use an ATM

LARge CAPs use atms

Complement capital management strategies, including cash flow optimisation and to the strengthen the balance sheet. E.g. in conjunction with a DRP

 Health sciences, technology and exploration companies use ATMs to raise capital at attractive prices

Health sciences, technology and exploration companies use ATMs to raise capital at attractive prices

Mid & Small Caps use atms

Opportunistically raise capital around news or liquidity events when price and volume may be attractive. E.g. following positive assay results or drug trial results

Who uses ATMs?

In a word: Everybody.

Companies of all sizes in all sectors use ATMs to manage the balance sheet, keep debt at comfortable levels and raise equity capital opportunistically.

Below are some examples of how companies use ATMs. 

financials & reits

Some of the largest finance and energy companies as well as REITs use ATMs to raise capital. 

This may be to raise capital to supplement/ complement capital management strategies or for use as working capital. 

tech & biotech

Tech, media and health sciences companies often have periods of extremely high price and volume. 

ATMs are used to monetise these optimal periods of liquidity and raise capital at a better price than otherwise would be possible. 

exploration

Like tech and biotech, exploration companies may generate news that creates higher prices and liquidity. 

ATMs can be used to raise capital at these better prices than otherwise would be possible through a traditional raise. 

Due to the ongoing and constantly changing nature of Acuity's ATM and CPA transactions we do not list them all here. Instead, we provide some useful case studies from the United States for larger ATMs as well as some smaller CPA deals with ASX companies. Contact Acuity for a list of all ATM and CPA transactions announced by ASX companies. 

 

At the annual REIT convention with the CUBE CEO talking about how they are using the ATM program to manage capital. 

REIT case study: cubesmart (NYSE:CUBE)

CubeSmart (CUBE) is a NYSE listed property trust. In May 2014 it amended its ATM program to provide additional capital.

At the time of the announcement in October 2014 the market capitalisation of CUBE was $2.2 billion. As at July 2016 the CUBE market capitalisation is circa $5.1 billion. 

From January 2014 to October 2014, CUBE raised $273 million using its ATM program, this was in addition to approx $150m being raised by more traditional means (i.e. SEO/ private placement).

The CUBE VWAP prior to the ATM being utilised (i.e. "turned on") was approx. $15.92 and the VWAP across the ATM valuation period was $17.90. However by being able to control when the ATM was utilised as well as being able to set a minimum price, the ATM actually raised capital at a PREMIUM to the VWAP with an issue price of $18.22.

The ATM was used to help its asset investment program and manage its balance sheet and capital position.

CUBE continues to use its ATM program in conjunction with more traditional capital raising methods.