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Magnet Forensics Inc., a cybersecurity company based in Waterloo, Ont., and staffed with a slew of former BlackBerry Ltd. executives, has formally filed to go public in a $90-million offering that could be the first new issue from the tech-heavy region in 15 years.

The offering comes amid a period of volatility for the IPO market and will test the continued appetite among investors for new Canadian tech issues after several recent offerings had their size and share prices cut, including space company MDA. Another technology company, Vancouver online course platform provider Thinkific, filed to raise $160-million earlier this week.

Founded in 2009, Magnet sells software to law-enforcement agencies and companies that are at risk of cybercrime. Its software has also been used for investigations into human trafficking and child sexual exploitation. The company was founded by Jad Saliba, a former Waterloo police officer, and Adam Belsher, a former BlackBerry executive. Former BlackBerry co-CEO Jim Balsillie is chairman of Magnet.

According to a company prospectus, Magnet plans to sell the shares at between $14 and $16 apiece, which would value the company at upwards of $560-million. The company says it will use the capital to expand its customer base, develop more products, and to fund acquisitions.

The company is one of the few highly profitable technology companies to go public. Magnet earned US$11-million in net income last year, or 21 per cent of its US$51-million in revenue, compared with a US$1-million profit on revenues of US$39-million a year earlier. Its earnings before interest, taxes, depreciation and amortization (EBITDA) was US$15-million in 2020, compared with US$3-million in 2019. The company’s average recurring revenue per account has grown significantly, to US$9,400 per account in 2020 from US$5,100 in 2018 as it has expanded its offerings to the corporate world.

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“We at Magnet Forensics believe there are truths embedded in digital evidence that can contribute to the pursuit of justice,” Mr. Saliba wrote in a letter within the prospectus. “We are innovating to address this very challenge … our tools are increasingly being adopted to protect private companies and their assets.”

Mr. Saliba, Mr. Belsher and Mr. Balsillie will between them exercise more than 97 per cent voting control postoffering based on an assumed share price of $15 given their ownership of multiple voting shares, according to the prospectus. Mr. Balsillie declined to comment when contacted by The Globe and Mail.

Mr. Saliba, Magnet’s chief technology officer, is the only member of the C-suite that did not work at BlackBerry. Chief financial officer Angelo Loberto, chief revenue officer Craig McLennan, and chief strategy officer Scott Williams all worked at the smartphone maker. Only five of the company’s 16 executives do not have previous BlackBerry experience. Magnet had 270 employees at the end of 2020.

If Magnet completes its IPO, it will be the first Waterloo-based company to go public since telecommunications equipment supplier Sandvine Corp. in 2006.

BMO Nesbitt Burns Inc. and Canaccord Genuity Corp. are the lead underwriters on the IPO. CIBC World Markets Inc., National Bank Financial Inc., RBC Dominion Securities Inc. and Scotia Capital Inc. round out the underwriting syndicate.

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