Tech firm VerticalScope began publicly trading Tuesday morning on the Toronto Stock Exchange at $ 22 a share, valuing the stake held by NordStar Capital, VerticalScope’s largest shareholder, at nearly $ 173 million, at the opening. of the market.
At 10:08 a.m., the stock price was $ 23.75, climbing to around $ 24 just before 11 a.m.
At market close it stood at $ 22.95, with a total trading volume of 1.34 million. The stock price hit a high of $ 25.95 during the day and fell to $ 22.50.
Co-owner of NordStar and President Torstar Paul Rivett said NordStar held an approximate 40% stake in VerticalScope at the time of the initial public offering. When the market opened, this stake was valued at nearly three times the $ 60 million NordStar paid to acquire all of Torstar Corp. Last year.
âI think there are headwinds in the markets today,â Rivett said, about an hour after the markets opened. “(The) market is down but the stock is still trading well outside the gate.”
Near the market close, Rivett still felt positive about the IPO: âI think he traded well which wasn’t a good day. (The S & P / TSX Composite Index was up less than 0.4% at market close.)
The IPO was led by RBC Capital Markets, Canaccord Genuity and National Bank Financial, and included TD Securities, Desjardins Securities, Raymond James, Cormark Securities and HSBC Securities as underwriters.
The company said it was increasing the size of the initial public offering on Monday after a strong response, to 5,685,000 shares, increasing the initial proceeds from the IPO of VerticalScope, which trades under the symbol FORA, from $ 100 million to $ 125 million.
The Underwriters have been granted an over-allotment option which, if exercised in full, will increase the gross proceeds of the IPO above $ 143 million.
The IPO is expected to close on June 21, according to a press release issued on Monday.
NordStar owns Torstar, which owns the Toronto Star as well as a number of other dailies. All Torstar employees, including reporters for the Toronto Star, will receive 46 VerticalScope shares, valued at approximately $ 1,000 at the opening price.
VerticalScope was founded in 1999 and Torstar acquired a 56% stake in the company in 2015. The online platform operates over a thousand websites, including RedFlagDeals; his specialty is community websites and online forums. Its sites have over 100 million monthly active users.
Rivett said NordStar decided to go public with VerticalScope in order to provide capital for expansion opportunities, including acquisitions, which have strengthened the company in recent years.
âThe acquisition is definitely part of the strategy,â he said.
NordStar doesn’t have to stay invested in VerticalScope for a while, but Rivett said they are there for the long term.
âWe’re going to hold it untilâ¦ we see the dream come true (of CEO and Founder Rob Laidlaw),â he said. “We really think there’s a long way to go and we think it’s at least a billion dollar business.”
David Wismer, global head of technology investment banking for BMO, said the past year has seen a market receptive to tech IPOs, noting the success of companies such as Magnet Forensics in IPOs of their companies. , as well as the large number of such IPOs in Canada.
The pandemic helped as more people were working from home and businesses rushed to boost their digital offerings.
In recent months, the tech IPO market has cooled a bit, he said, noting that some have had a âlukewarmâ first day in the markets, and some haven’t seen the sharp rise in stock prices they were hoping for.
But this is by no means a bad time for a tech IPO, Wismer said, adding that investors are probably a little tired of all the action and getting a little more perceptive.
âI think the outlook remains good,â Wismer said.
Correction – June 15, 2021: A previous version of this article reported incorrect transaction volumes. This article has been updated to reflect that the trading volume was 1.34 million at the end of the day.