Boat Rocker Media Inc. expects to debut on the Toronto Stock Exchange next week after reducing the share price for its initial public offering.
Boat Rocker has produced scripted television hits such as Orphan Black and Being Erica, and reality series such as Big Brother Canada and MasterChef Canada. Its shows have been distributed to entertainment giants such as Netflix Inc., Walt Disney Co. and ViacomCBS Inc.
The amended IPO will raise $170-million, down from the initially proposed $175-million and will debut at $9 per share, less than the $12-$14 range offered in the initial prospectus. The Globe and Mail previously reported that investor demand for the initial offering was tepid, according to investment bankers familiar with the transaction. The Globe is not naming the sources because they are not authorized to speak for the company.
Boat Rocker will sell more of the company than originally planned, and at a lower valuation. There will be approximately 32.6 million common shares outstanding in the amended IPO, compared with 26.7 million in the initial prospectus.
The company is majority owned by Fairfax Financial Holdings Ltd., an asset manager and insurer. The amended prospectus removes a secondary offering wherein Boat Rocker co-founders David Fortier and Ivan Schneeberg, and chief executive John Young sell their own shares in the company.
The company will use the IPO to repay more than $90-million in debt, fund new productions and acquire intellectual property to develop for the screen. The company forecasts $700-million in revenue in 2021.
In the nine months ended Sept. 30, 2020, Boat Rocker had a net loss of $43.8-million on $171.2-million in revenue. The company was also in breach of a covenant on its BMO credit facility because its earnings were below a target. The company received government assistance in 2020, accessing $13.9-million from the Canada Emergency Wage Subsidy.
In 2019, Boat Rocker generated revenue of $244-million and saw a net loss of $19.5-million.
RBC Dominion Securities Inc. and TD Securities Inc. are the lead underwriters on the IPO. Stikeman Elliott LLP is the legal adviser to Boat Rocker.
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