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Softchoice Corp. had a soft trading debut on the Toronto Stock Exchange Thursday after pricing its initial public offering at $20 a share in a planned $350-million deal that will see most of the proceeds go to controlling shareholder Birch Hill Equity Partners.

The stock, trading under the ticker symbol SFTC, opened at 14 cents above the issue price and closed at $20.30, up 1.5 per cent. The company had established an $18- to $21-per-share range earlier this month before announcing the final price early Thursday before trading commenced.

Softchoice is a Toronto information technology services company that resells software made by giants such as Microsoft Corp., Google and Cisco Systems Inc. to corporate customers and manages it for its clients.

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According to Softchoice’s final prospectus, filed early Thursday with Canadian regulators, Birch Hill, which took the company private in 2013, is selling 13.1 million of its 50.1 million shares for net proceeds of $249.4-million after deal-related fees and costs. Softchoice intends to use its net proceeds from the IPO, about $77.8-million, to repay debt. It will have 58.85 million shares outstanding and a market capitalization of $1.18-billion at issue. The deal is expected to formally close June 1.

The offering was led by TD Securities and Goldman Sachs, with additional underwriting support from RBC Dominion Securities, National Bank Financial, CIBC World Markets, Scotia Capital, BMO Nesbitt Burns, Cormark Securities, Laurentian Bank Securities, ATB Capital Markets, Raymond James and INFOR Financial Group. The group will share $17.5-million in underwriting fees.

Softchoice has 1,850 employees in 26 markets in the United States and Canada, serving 8,700 customers. Its operating earnings improved to US$65-million last year from US$43-million in 2017, even though its net sales declined in that period to US$837-million from US$875-million and from US$954-million in 2019. Net sales in the quarter ended March 31 were up 7.5 per cent year over year, to US$233-million. The company earned a net profit of US$2.1-million last year and US$1.8-million in 2019.

Last year the company launched a business transformation plan that it expects will improve operating earnings by more than $25-million annually next year.

Softchoice is one of a slew of Canadian companies advancing toward potential IPOs, including Q4 Inc., which filed its preliminary prospectus this week. Technology names dominate the list, although others considering going public include retailer Neighbourly Pharmacy Inc. and dental clinic operator Dentalcorp Holdings Ltd.

Canadian technology IPOs have been launched since last summer at a pace unseen in more than 20 years. But they have faced mixed reactions from investors. While some, such as Nuvei Corp., Magnet Forensics Inc. and Thinkific Labs Inc. have performed well after their debuts, others have traded down, including BBTV Holdings Inc. and MindBeacon Holdings Inc. Several new issues struggled to get off the ground after the market began to wobble in late winter. Several, including MDA Ltd., Boat Rocker Media Inc. and ABC Technologies Holdings Inc., all had to cut their offering sizes and prices to complete their IPOs. On Thursday, Vendasta Technologies Inc. withdrew its proposed $100-million IPO and instead said it had raised $119.5-million from private investors.

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