Investor relations software provider Q4 Inc. has set a price range of between $10.50 and $13 a share for its planned $150-million initial public offering on the Toronto Stock Exchange.
The Toronto-based company, which filed to go public last month, is one of a slew of Canadian tech companies that have sought to tap public markets during the pandemic. Despite recent turmoil, several tech and non-tech names have filed recently to go public, including previously public Softchoice Corp. – which made its debut on May 27 – and LED lighting systems maker LMPG Inc.
Retailer Pet Valu Holdings Ltd. and clean-technology waste processor Anaergia Inc. filed preliminary prospectuses with regulators this week. Digital media company VerticalScope, controlled by the owners of Torstar Corp., is also in the process of pursuing a public listing.
Q4 designs software geared toward managing the investor relations needs of public companies. The technology facilitates webcasts and earnings calls for investors, and organizes financial statements on the investor relations section of company websites. It also provides data intelligence services to companies, analyzing capital flows and capturing information on activist shareholder activity.
Some of the biggest tech companies, such as Netflix Inc., Spotify Technology, Square Inc. and Shopify, use Q4′s technology. The company has about 2,400 corporate clients and touts itself as the “industry’s only comprehensive investor relations platform.”
Q4 software facilitates roughly half a million investors each quarter at virtual events, and about 12 million investors interact with its corporate customers each month through its network of investor websites. Q4 had $40.4-million in revenue in 2020, up 80.3 per cent from the previous year. The company lost $13-million last year, compared to a $11-million loss in 2019.
In a letter to investors included in the prospectus, chief executive Darrell Heaps said 50 per cent of S&P 500 companies and 63 per cent of the Dow Jones Industrial Average companies use Q4 software for investor relations purposes. “If you have visited a public company’s investor relations website or joined an earnings call in recent years, you have likely used Q4′s software,” he wrote.
New York-based venture capital firm Ten Coves Capital is one the biggest investors in Q4, with a 24.5-per-cent stake, while Mr. Heaps owns 4.9 per cent of the stocks, or 2.9 million shares.
The company plans to sell between 11.54 million and 14.29 million shares in the offering. Underwriters have the right to buy another $22.5-million worth of stock at the offering price after the deal’s closing; if underwriters exercise that right, Mr. Heaps may sell up to 14.1 per cent of his holdings as part of the follow-on transaction.
Q4 intends to use the proceeds from the IPO to repay an outstanding US$20.8-million credit facility and to pursue new acquisitions. Much of the company’s growth last year was driven by acquisitions.
CIBC World Markets Inc., National Bank Financial Inc. and Credit Suisse Securities (Canada) Inc. are lead bookrunners on the deal, alongside Canaccord Genuity Corp., Raymond James Ltd., RBC Dominion Securities Inc., Stifel Nicolaus Canada Inc., TD Securities Inc. and INFOR Financial Inc. Q4 shares, once listed, will trade under the symbol QFOR.
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