TORONTO - Corel Corp., one of Canada's best-known software companies and at one time a feisty challenger to Microsoft Corp., announced plans Tuesday to go public again.
The Ottawa-based company, which was taken private after being purchased in 2003 by a San Francisco-based investment firm, is planning an initial public offering of eight million shares that will be priced between $18 and $20 (U.S.) a share.
Corel said in regulatory documents filed in the United States that it plans to sell five million shares and Vector Capital Group, which bought the software maker in a deal valued at about $120 million (U.S.), planned to sell another three million.
Once the IPO is completed, Vector Capital's stake in the company will drop from 98 per cent to 66 per cent.
Corel expects to have just under 24.5 million issued and outstanding shares after the IPO, giving the company a total value of about $441 million to $490 million.
Corel said it has also applied for listings on the Nasdaq market under the symbol "CREL" and Toronto Stock Exchange under the symbol "CRE."
Morgan Stanley & Co. Inc. will act as lead book-running manager for the offering. JPMorgan, Deutsche Bank, Piper Jaffray, CIBC World Markets and Canaccord Adams will be co-managers.
According to financial statements included with the IPO filing, Corel had $164 million (U.S.) in revenue for the fiscal year ended Nov. 30, 2005, up 47.7 per cent from $111.7 million in fiscal 2004.
Corel also recorded a net loss of $8.75 million in fiscal 2005, or $2.40 per share. The loss was due primarily to a $3.9-million charge for debt retirement, $12.8 million in interest expense, $1.8 million for amortization of deferred financing fees and $1.2 million in other non-operating expenses.
At an operating level it was profitable, however. Income from operations was $16.8 million - double the $8.4 million US recorded in fiscal 2004 when Corel had net income of $1.2 million US or 8 cents a share.
Founded in Ottawa in 1985 by Michael Cowpland, Corel grew to be one of Canada's best-known companies due to its CorelDraw graphics and WordPerfect office software products for personal computers.
However, by the late 1990s Corel was struggling as Microsoft's Office suite of word processing, spreadsheet and other productivity software overpowered WordPerfect, which at one time was the dominant word-processing product.
At its peak, Corel had about 1,400 employees - mostly in Ottawa and Ireland- but that was down to about 900 in late 2000 after the company came close to insolvency after failing to merge with a cash-rich U.S. software company.
Mr. Cowpland's highly publicized efforts to champion the Linux open-source operating system as an alternative to Microsoft's main product, the Windows operating system, also failed to make money for the company.
Microsoft handed Corel a financial lifeline when it invested $135 million in the company in October 2000, a few months after Mr. Cowpland's departure.
For a brief time, under the leadership of Derek J. Burney, Corel returned to profitability but fell back into the red in a strategic move to invest heavily in new products to diversify Corel's product lineup and restore it to rapid revenue growth.
Vector became Corel's largest shareholder, although still holding a minority of the stock, when it bought most of Microsoft's stake in the company in March 2003.
Vector then bought out Corel's other shareholders in a management-supported takeover offer that was vehemently opposed by an outspoken group of dissident shareholders, who argued the company was worth more an Vector paid for it and capable of remaining an independent company.