VerticalScope increases IPO to nearly $144 million following exercise of over-allotment

VerticalScope, which went public on the Toronto Stock Exchange (TSX) a few weeks ago, has boosted the total size of its initial public offering by nearly $18.8 million CAD, after the deal’s underwriters exercised their over-allotment option in full.

The IPO’s underwriters have purchased over 850,000 additional subordinate voting shares at the offering price of $22 per share. The exercise of this option, combined with VerticalScope’s initial $125 million IPO, brings the company’s aggregate gross proceeds to about $143.8 million CAD.

The exercise of this option brings VerticalScope’s aggregate gross proceeds to about $143.8 million CAD.

The fresh funding gives VerticalScope even more capital with which to pursue its M&A-focused growth strategy. The Toronto-based company currently trades on TSX under the symbol ‘FORA’

Founded in 1999, VerticalScope is an acquisition-focused software company that operates a platform for online enthusiast communities in high-consumer spending categories, such as automotive, powersports, outdoor, home, health, and technology.

Through a combination of organic growth and acquisitions of websites like Health Media Today, VarageSale, and most recently, Paddling.com, VerticalScope has assembled a portfolio of over 1,200 online communities and more than 100 million active monthly users.

VerticalScope’s IPO was made through a syndicate of underwriters led by RBC Dominion Securities, Canaccord Genuity Corp, and National Bank Financial as lead underwriters and joint bookrunners. The group also includes TD Securities, Raymond James Ltd, Desjardins Securities, Cormark Securities, and HSBC Securities.

RELATED: VerticalScope upsizes IPO to $125 million, begins trading on TSX

According to its prospectus, VerticalScope generated $68.3 million USD in revenue in 2018, followed by a two year-long dip to $58.5 million in 2019 and 2020. In an interview with BetaKit last month, Rob Laidlaw, VerticalScope’s founder and CEO, called this decline “intentional,” adding that it happened as VerticalScope began to move its sites over to its new Fora software platform in May 2019.

VerticalScope has executed over 200 acquisitions to date. The company said its current pipeline includes 20 more acquisition opportunities, which it plans to pursue over the next year.

Feature image from VerticalScope

Josh Scott

Josh Scott

Josh Scott is a BetaKit staff writer who loves to tell Canadian business and tech stories. His coverage is more complete than his moustache.