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Copperleaf Technologies CEO Judi Hess, in Vancouver, on Oct. 25, 2019.

Rafal Gerszak/The Globe and Mail

Copperleaf Technologies Inc., a Vancouver-based maker of decision-analytics software, has set a price range of $11 to $13 a share for its impending initial public offering, the first new Canadian technology issue on the Toronto Stock Exchange following a summer break for the busy emerging sector.

The company said in a securities filing it planned to raise $125-million in the deal, which is being co-led by underwriters Merrill Lynch, Bank of Montreal and William Blair & Co. Other investment banks participating in the offering include CIBC World Markets, RBC Dominion Securities, Canaccord Genuity and Cormark Securities. Copperleaf filed a preliminary prospectus with regulators earlier this month.

Based on information about shares outstanding disclosed in the prospectus, the company is targeting a market capitalization ranging from about $760-million to $875-million at issue, based on the current share price range and target size. Those numbers could change depending on demand from investors during the deal’s marketing period. As a group, the underwriters also have the option to buy an equivalent of 15 per cent of the offering at the issue price after the shares start trading.

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Copperleaf sells artificial intelligence-powered optimization software to large companies with extensive physical assets, such as energy and water utilities and transportation infrastructure giants. The 350-person company’s clientele, including BC Hydro, Duke Energy Corp. and Enbridge Inc., use its products to analyze, plan and budget how to spend capital budgets over multiyear periods, with an eye toward minimizing business risks. Copperleaf says its software manages decisions on $2.3-trillion worth of infrastructure in 24 countries.

While the company faces a fragmented market of competitors, it says in its prospectus that typically, “the incumbent solution used by our prospects is a homegrown Excel-based solution that cracks under the burden of decision-making at scale, let alone attempting to align decisions from across the business.”

Copperleaf claims it has never lost a customer, and that those companies spend more with Copperleaf every year. Net revenue from existing customers increased by 25 per cent year-over-year in the 12 months ended June 30, according to its public filings.

Copperleaf was profitable in 2018 but has dipped into the red since then as it increased spending to fuel its growth and shift its business model to sell its software by subscription. Copperleaf lost $3.4-million in the first six months of this year, compared with a loss of $8.4-million in the same period a year earlier. Revenue in the first six months of 2021 was $30.7-million, up 78 per cent from the first half of 2020. Revenue for all of last year was $44.5-million, and $36.9-million in 2019. The company has 62 clients, up from 39 at the end of 2019.

The offering is the first Canadian tech IPO on the TSX since LifeSpeak Inc. raised $125-million in early July. That IPO deal capped off a torrid year-long stretch in which 14 tech companies went public on the TSX. By comparison, there were a total of 12 tech IPOs over the 11 years ended December, 2020.

Investor reception for Copperleaf will be closely watched to gauge continued interest in new Canadian tech stocks. The Globe and Mail reported last week that online education provider D2L Corp. is set to follow Copperleaf, with plans to file a prospectus in early October for an IPO on the TSX.

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