Investor relations software provider Q4 Inc. has postponed its planned $150-million initial public offering on the Toronto Stock Exchange.
The Toronto-based company, which filed in May to go public, is one of a slew of Canadian tech companies that had sought to tap public markets in the past year. Q4 had set a price range of between $10.50 and $13 a share earlier this month.
However, chief executive Darrell Heaps confirmed by e-mail that Q4′s planned debut on public markets is “paused.” He declined to provide additional information.
Two sources familiar with the company said Q4′s decision is not related to difficulties attracting investor interest or closing the offering on its desired terms. The Globe and Mail is not identifying the sources as they are not authorized to speak about the matter.
Several recent new issues have either been pulled or priced downward in recent months during one of the busiest periods for IPOs on Canada’s senior exchange in years. For example, on Friday, Burlington, Ont.-based clean-technology company Anaergia Inc. cut the share price and size of its offering to $14 a share and $175-million, respectively, from an initial range of between $17 and $20 and a planned $200-million raise.
Longueuil, Que.-based LED lighting systems maker LMPG Inc., a subsidiary of Power Corp. of Canada that was once a public company called Lumenpulse, earlier this month halted its plans to go public, citing “non-optimal” market conditions, saying it would revisit an IPO when conditions are less volatile.
Several Canadian IPOs struggled this year. MDA Ltd., Boat Rocker Media Inc. and ABC Technologies Holdings all had to cut their offering sizes and prices to complete their IPOs. Last month, Saskatoon’s Vendasta Technologies Inc. halted its offering on the TSX, instead raising $119.5-million in private financing.
Some Canadian companies that have gone public on the TSX since last fall have seen their shares fall well below the issue price, including Farmer’s Edge Inc., BBTV Holdings Inc. and MindBeacon Holdings Inc. Other stocks have fallen back to the range of their issue price after an initial burst, including telemedicine provider Dialogue Health Technologies Inc. and VerticalScope Holdings Inc.
At the same time, several new issues, such as Thinkific Labs Inc. and Softchoice Corp., have been well-received and are still trading above their issue prices.
Q4 designs software geared toward managing the investor relations needs of public companies. The technology facilitates webcasts and earnings calls for investors, and organizes financial statements on the investor relations section of company websites. It also provides data intelligence services to companies, analyzing capital flows and capturing information on activist shareholder activity.
Some of the biggest tech companies, such as Netflix Inc., Spotify Technology, Square Inc. and Shopify, use Q4′s technology. The company has about 2,400 corporate clients and touts itself as the “industry’s only comprehensive investor relations platform.”
Q4 software facilitates roughly half a million investors each quarter at virtual events, and about 12 million investors interact with its corporate customers each month through its network of investor websites. Q4 had $40.4-million in revenue in 2020, up 80.3 per cent from the previous year. The company lost $13-million last year, compared with a $11-million loss in 2019.
New York-based venture capital firm Ten Coves Capital is one of the biggest investors in Q4, with a 24.5-per-cent stake, while Mr. Heaps owns 4.9 per cent of the stocks, or 2.9 million shares.
Q4 had planned to sell between 11.54 million and 14.29 million shares in the offering, using the proceeds to repay an outstanding US$20.8-million credit facility and to pursue new acquisitions. Much of the company’s growth last year was driven by acquisitions.
The deal was led by underwriters CIBC World Markets Inc., National Bank Financial Inc. and Credit Suisse Securities (Canada) Inc.
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Sean Silcoff