There was little activity in terms of initial public offerings from companies outside the natural resources sector in 2008.

Of the 224 IPOs in Canada last year, 216 firms, or 96%, were either capital pooling companies, “shells” for raising money for natural resources development, or the energy and mining developers themselves, according to Investment Executive’s 2008 IPO research.

Of the eight non-resources-based companies that issued common shares last year, none have seen their shares exceed their prospectus prices on either the Toronto Stock Exchange or the TSX Venture Exchange. But this doesn’t mean all the deals — which raised between about $800,000 and $200 million — are flops. As investment guru Peter Lynch would say, it could be a client’s chance to buy into the next “big bagger” at a junk bin price.

Toronto-based Sprott Inc.’ s IPO in May was by far the richest deal. The firm raised $200 million by selling 20 million shares at $10 each on the TSX upon its listing. As of Feb. 25, the shares had fallen by 58% to $4.25 each.

Taking million-dollar risks is nothing new for Sprott, the $7-billion asset management company headed by CEO and portfolio manager Eric Sprott. Since opening its doors 27 years ago, the firm has built a reputation for taking bullish stances on commodities, even when market trends pointed the other way.

Sprott’s prospectus stated that a public listing would help the firm increase the awareness of its funds with the general public, as well as attract new investment talent. Also, having a listed security would result in better compensation incentives for its current staff, as well as make the firm more attractive to new recruits. But as for Sprott’s stock weathering the storm and surpassing its IPO price, that remains to be seen.

The next hot IPO in 2008 outside the natural resources space was Vancouver-based Seacliff Construction Corp. on April 24. The offering raised $100 million on the TSX. However, the price of 7.69 million shares plummeted by 47%, to $6.80 each as of Feb. 25, from their prospectus price of $13.

Despite its stock’s flop, the diversified construction company reported an increase in revenue to $365 million in the nine months ended Sept. 30 from $309 million in the same period a year earlier. Its net income also increased, to about $14 million from $11 million in the corresponding periods.

The bulk of Seacliff’s business is rooted in its general contracting services to institutional, commercial and industrial clients. These services involve pre-construction planning, project management, and electrical and data communications contracting.

“We see the stock price returning to the $7 range,” says Frederic Bastien, an analyst with Raymond James Ltd. in Vancouver. “A lot of construction work in the pipeline is for institutions, specifically for governments … putting Seacliff in a better position to weather the financial storm than other construction firms.”

Although 2008 seems as though it couldn’t have been a worse time for a company to go public, Seacliff was already halfway through the process when the market began to tilt. Additionally, it could not have waited any longer, says CEO Bill Crarer, because its two main subsidiaries “were already at the top of their game,” meaning Seacliff couldn’t put a tender on larger-scale projects without an influx of cash. “It hasn’t been all doom and gloom,” he adds, pointing out that since the IPO, the company has won five construction tenders worth $144 million.

“Going public has improved our balance sheet and enabled us to go after larger private-sector projects,” says Crarer, adding that it will also help the company make strategic acquisitions, such as a third business arm.

While Seacliff plugs along, the share price for Levis, Que.-based Davie Yards Inc., a ship-building firm, continues to drop. As of Feb. 25, its share price was 16¢, a far cry from the $1.35 at which it opened on the TSX in February 2008.

Having been in business since 1825, Davie Yards went public in a $41.5-million, 31-million share deal with the goal of increasing its construction, conversion and repairs of tankers, freighters, trawlers and ferries, naval ships and vessels for offshore oil drilling platforms.

Another firm that has seen its shares hard hit following its IPO is Culver City, Calif.-based Fluid Music Canada Inc. The firm, which raised $27 million after issuing 13.5 million common shares on the TSX at a price of $2 each in June, saw its share price drop by 78% to 44¢ each as of Feb. 25.

@page_break@Unlike conventional music distributors, Fluid Music operates a portfolio of music distribution businesses including Trusonic, a branded music provider for retailers, restaurants and other businesses, and Audio Lunchbox, an independent digital music store.

Within a month of going public, it issued a take-over bid for Toronto-based Somerset Entertainment Income Fund, a producer and distributor of specialty music. The company offered to buy out all of Somerset’s outstanding shares at about $4 each, a 34% premium above their July 14 closing price of $2.99. However, the deal fell by the wayside because of economic conditions.

The other non-resources companies to go public on Canadian exchanges were Clearwater, Fla.-based MedX Health Corp., a health phototherapy device manufacturer; Denver-based ID Watchdog, Inc., an identity-theft protection systems producer; and Hong Kong-based China Zirconium Ltd., a chemical manufacturer. IE