Copperleaf Technologies Inc., a Vancouver-based maker of decision-analysis software, has set a price range of $11 to $13 per share for its impending initial public offering, the first new Canadian technology issue on the Toronto Stock Exchange during summer break. Post busy emerging area.
The company said in the securities filing that it planned to raise $125 million in the deal, which is co-led by underwriters Merrill Lynch, Bank of Montreal and William Blair & Co. Other investment banks participating in the offering include CIBC World Markets. RBC Dominion Securities, Canaccord Genuity and Cormark Securities. Copperleaf filed a preliminary statement with regulators earlier this month.
Based on information about outstanding shares as stated in the prospectus, the company is targeting a market capitalization of approximately $760 million to $875 million, depending on the current share price range and target size. Those numbers may change based on investor demand during the deal’s marketing period. As a group, the underwriters also have the option to buy up to 15 percent of the offer price at the issue price once the shares begin trading.
Copperleaf sells artificial intelligence-powered optimization software to large companies with extensive physical assets, such as energy and water utilities and transportation infrastructure giants. BC Hydro, Duke Energy Corp. and Enbridge Inc. Customers of the 350-person company use its products to analyze, plan and budget how to spend capital budgets over a multi-year period toward mitigating business risks. Copperleaf says its software manages decisions on $2.3 trillion of infrastructure in 24 countries.
While the company faces a fragmented market of competitors, it states in its prospectus that generally, “the current solution used by our prospects is an in-house Excel-based solution that is largely under the burden of decision-making.” cracks down, let alone attempt to align decisions from the whole business.”
Copperleaf claims it has never lost a customer, and those companies spend more with Copperleaf each year. According to its public filing, net revenue from existing customers grew 25 percent year-on-year in the 12 months ended June 30.
Copperleaf was profitable in 2018, but has since dipped into the red as it increased spending to fuel its growth and shifted its business model to selling its software by subscription. Copperleaf lost $3.4 million in the first six months of this year, compared to $8.4 million in the same period a year ago. Revenue in the first six months of 2021 was $30.7 million, up 78 percent from the first half of 2020. Revenue was $44.5 million for all previous years and $36.9 million in 2019. The company has 62 customers. 39 at the end of 2019.
In early July LifeSpeak Inc. The offering is the first Canadian technical IPO on TSX since it raised $125 million. That IPO deal ended a year-long period in which 14 tech companies went public on the TSX. In comparison, there were a total of 12 Tech IPOs in the 11 years ended December, 2020.
Investor reception to Copperleaf will be watched closely to assess continued interest in new Canadian tech stocks. It was reported last week that online education provider D2L Corp is set to follow Copperleaf, with plans to file a prospectus in early October for an IPO on the TSX.
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