A new special purpose acquisition company (SPAC) has formed to try to take advantage of Canada’s stagnant public markets.
“Canada offers a compelling opportunity to deploy capital into a market that is outperforming globally.”
Toronto-based MAK Acquisition, led by former executives from legaltech company Dye & Durham, has filed a preliminary prospectus with Canadian regulators to perform a $100-million USD ($139.5-million CAD) initial public offering (IPO) on the Toronto Stock Exchange. Canaccord Genuity and CIBC Capital Markets are acting as lead underwriters for the IPO.
The SPAC hopes to acquire technology businesses that provide “critical solutions in niche markets,” such as tech-enabled services, space, and defence. It says it will prioritize opportunities with high revenue retention, low customer concentration, and low capital expenditure requirements.
The firm believes the lack of activity on the public markets in recent years provides a “unique opportunity” to acquire and scale technology companies that are looking for liquidity at a discount.
“With solid fundamentals, strong sector leadership, robust capital markets, a scarcity of new issuance, Canada offers a compelling opportunity to deploy capital into a market that is outperforming globally and primed for growth,” MAK said in a statement. The SPAC will look to either combine multiple companies or take a single large company public.
MAK is led by CEO Matt Proud and CFO Avjit Kamboj, who each held the same titles at Dye & Durham. The company’s board includes Art Mesher, who once helmed Descartes Systems Group.
Proud left Dye & Durham last November after becoming the target of a series of governance challenges from investors dissatisfied over the company’s leverage, pace of acquisitions, and board oversight, according to The Globe and Mail. The company fired Kamboj earlier this year after he reportedly didn’t get along with Proud’s replacement.
The legal software company has been making headlines since Proud and his younger brother Tyler, who built the publicly-traded company together, had a falling out that resulted in a prolonged behind-the-scenes battle, according to The Globe and Mail.
Feature image courtesy Arturo Castaneyra via Unsplash.