The Canadian initial public offering (IPO) market has been “slow and steady” with just over $1 billion of new equity raised in the first half 2018, according to a quarterly PwC Canada survey.
PwC Canada conducts its survey of the Canadian IPO market on a quarterly basis to help put the market into better perspective. The survey found that eleven new issues on all exchanges resulted in $956 million raised in the second quarter, including four issues on the TSX totalling $948 million representing the larger share of the proceeds.
The survey also found that the largest IPO of the quarter, worth $462 million, was the listing of Ceridian HCM Holdings Inc. on the New York Stock Exchange and the TSX. This took the half-year tally on all exchanges to 20 issues with a value of $1.1 billion for the period, compared to 16 issues generating $2.9 billion in the same period in 2017.
“It was a slow and steady quarter fairly typical of a traditional IPO market.”
“It was a slow and steady quarter fairly typical of a traditional IPO market,” said Dean Braunsteiner, PwC Canada’s national IPO leader. “Comparing it with last year is a little unfair given that the huge Kinder Morgan issue arrived in the same period of 2017.”
The PwC survey revealed that real estate, recreational cannabis, and gold miners were the most notable sectors issuing securities in the quarter. However, a general uncertainty in the Canadian IPO market makes it difficult to predict what the rest of the year will look like, according to Braunsteiner.
“From what’s in the pipeline, it looks like a very traditional Canadian IPO market, with good, mid-sized companies in the $75 million to $150 million range,” said Braunsteiner. “But many companies today are on a dual track: they start down the road toward IPO but keep the door open to a private purchase or funding option. With a great deal of uncertainty surrounding NAFTA and trade in general, they want the flexibility of another option.”
According to the survey, nine new issues on the Canadian Securities Exchange generated $10 million in funding in the first half of 2018, while the Venture has five new issues worth $4 million during the period.
In April, PwC and CB Insights’ latest MoneyTree report found that total venture capital funding to Canadian tech companies in Q1 2018 increased 52 percent, with $1.2 billion invested. The report revealed that Q1’s 105 deals represented a 30 percent quarterly increase in deal activity since Q4 2017.
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Disclosure: BetaKit is a media partner of PwC initiatives, including the MoneyTree report.
