New issues from companies in the consumer and technology sectors helped provide a positive bounce to initial public offerings (IPO) in Canada in the second quarter (Q2) of 2015, ended June 30, according to PricewaterhouseCoopers LLP’s (PwC) quarterly report on the Canadian equity market.
More than $827 million in new equity was raised from eight issues across all Canadian stock exchanges, an increase from five new issues and $624 million raised in the first quarter of 2015. However, the most current figures are a significant decrease from the $2.1 billion raised from seven IPOs in Q2 2014.
Nevertheless, the range of sectors producing new issues in the first half of 2015 gives the market welcome stability, says Dean Braunsteiner, national IPO leader for PwC, in a statement.
Specifically, Braunsteiner points to companies such as Shopify Inc., which helps small and medium-sized businesses sell their products online, and Stingray Digital Group Inc., which uses multiple platforms to distribute music and videos, as new issues that received significant attention in Q2.
It’s worth mentioning that DAVIDsTEA Inc. and XBiotech Inc., Canadian companies that raised $97 million and $76 million, respectively, in IPOs in Q2 were not included in the PwC report as these companies were floated exclusively on the Nasdaq Stock Exchange in the U.S. The PwC study solely covers activity on Canadian markets.
The first half of 2015 in Canada was marked by new issues from the energy, financial, consumer products, pharmaceutical, mining, communications and technology sectors. Total proceeds for the first half of 2015 reached more than $1.4 billion from 13 new issues.
There were several developments in the first part of the year that are noteworthy, according to Braunsteiner. This includes the successful offering of special-purpose investment companies focused on startups as a significant addition to the financing options for new enterprises. The early signs of private equity firms bringing companies to the public equity markets is also a trend to watch, he says. And the IPO of technology companies that used to be bought by larger U.S. tech firms before they could go public may encourage more mid-stage firms in that sector to look at the IPO market.
PwC has conducted its quarterly survey of Canada’s IPO market for more than 10 years. For the purposes of the survey, investment vehicles such as structured products are not considered IPOs because they do not represent new equity raised for operating companies, according to PwC’s statement.