May 19, 2017
The recent increase in IPOs has stirred plenty of discussion around whether the upward trend is likely to continue. Partner and co-head of the firm’s Capital Markets Practice Scott Cochlan provided his thoughts on this year’s early IPO uptick in an article on the subject for Listed magazine. The article points to a handful of recent IPOs, beginning with the Real Matters IPO, as potential harbingers of new public companies to come in 2017. Below is an excerpt of the article.
Below is an excerpt of the article.
These deals reinforce a trend that saw a handful of IPOs in the first quarter getting “2017 off to a better start,” than last year, says Scott Cochlan, co-head of the capital markets practice at Torys LLP. The highest profile of those were from Toronto-based clothing maker Canada Goose Holdings Inc. (TSX:GOOS) and health-food restaurant chain Freshii Inc. (TSX:FRII), which raised $391 million and $125 million respectively.
Cochlan, who is based in Torys’ Calgary office, notes that we’ve also seen three service-company IPOs announced of late. When Source Energy Services Ltd. (TSX:SHLE) raised $175 million in April it marked the first large IPO by a Canadian energy firm since 2014. Step Energy Services Ltd. (TSX:STEP)—like Source, a fracking services firm—joined it in May, with a $100-million raise. BOS Solutions Holdings Inc. filed its preliminary prospectus for an IPO but has yet to close. Tempering the excitement there, however, is that both the Source and Step IPOs had to be re-priced and raised less money than initially hoped, Cochlan says.
The question now is whether this early momentum will be maintained throughout the year. Since 2015, a number of other tech firms have been seen as IPOs-in-waiting, but at least two of those—PointClickCare Technologies Inc. and Vision Critical Communications Inc.—have done recent private financings instead. The firm that would make the biggest impact in this space, of course, is Hootsuite Media Inc. of Vancouver. Cochlan says he can’t speak to tech specifically, other than to note, “sentiment still seems to be optimistic” with “strong investor interest.”
The broad, multi-sector representation of firms in this year’s IPO crop bodes well for continued activity, too. Beyond that, when anticipating what might unfold for the duration of 2017, the usual caveats—the need for “continued growth from companies and positive market conditions to remain in place”—apply, says Cochlan.
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