Kitchener-Waterloo’s Magnet Forensics is now looking to raise just over $100 million CAD through its upcoming initial public offering (IPO) on the Toronto Stock Exchange (TSX), according to the company’s latest securities filings.
UPDATE (04/28/21): Magnet began trading on the TSX Wednesday morning, issuing nearly 5.9 million shares at an opening price of $22.50 per share, over $5 higher than its initial $17 target. The company said it expects its IPO to close on May 3.
The cybersecurity software startup filed its final prospectus earlier today. The new target represents a more than $10 million increase from the company’s initial goal of $90 million, as outlined by its preliminary prospectus, which it filed on April 15. A Magnet spokesperson declined a request for comment on the update, citing rules related to filing a prospectus.
The new target represents a more than $10 million increase from the company’s initial goal of $90 million.
Magnet Forensics, which develops digital investigation software for forensic professionals, intends to trade on the TSX under the symbol ‘MAGT.’ The company planned to sell between 5.6 million and 6.5 million subordinate voting shares priced between $14 and $16.
BMO Capital Markets and Canaccord Genuity Corp. are acting as lead underwriters and joint bookrunners for the IPO. The offering also includes an over-allotment option that allows the underwriters to purchase up tol 883,500 more shares at $17 per share, for additional gross proceeds of over $15 million CAD. This option can be exercised within 30 days of the IPO’s close.
Magnet Forensics intends to use the net proceeds from the offering to strengthen its financial position and pursue unspecified growth strategies. According to The Globe and Mail, the offering is set to become the first Waterloo-based IPO in 15 years.
Last year, the startup generated nearly $11 million USD in net income on over $51 million in revenue, according to Magnet’s final prospectus. This represented a significant increase compared to the nearly $1 million profit it earned based on almost $39 million in revenue during 2019.
Magnet Forensics is led by former Waterloo Region police officer Jad Saliba and ex-BlackBerry executive Adam Belsher. The company is backed by former BlackBerry co-CEO Jim Balsillie, who also serves as the company’s chairman. Together, the group is expected to control more than 97 percent of the company post-IPO.
According to LinkedIn, Magnet Forensics was founded by Saliba in 2009, while the company’s prospectus states it was founded in 2010.
The firm’s technology acquires, analyzes, and shares evidence from computers, smartphones, tablets and IoT-related devices. Magnet Forensics claims its software has been used by more than 4,000 law enforcement, government, military, and corporate organizations in over 92 countries.
According to Magnet Forensics, evidence recovered by its tools has been used to support investigations into cybercrimes, child exploitation, terrorism, human resource disputes, fraud, and intellectual property theft.
UPDATE (04/28/21): This article has been updated to note a response from a Magnet spokesperson and mention that Magnet began trading on the TSX on Wednesday.