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Eric Boyko, president and CEO of Stingray Digital Group, poses in their offices in Montreal, March 19, 2013.

The market debut of Montreal's Stingray Digital Group Inc. kept the recent streak of hot Canadian initial public offerings alive, surging in early trading Wednesday.

The media company's stock, which was priced at $6.25 a share on the Toronto Stock Exchange, quickly zipped up above $7 a share and closed at $7.48. Stingray, best known for its streaming music service, raised $140-million in the offering, but an over-allotment option and private placement could see the company raise $180-million in total.

In all, about 50 per cent of the company is being brought public. The company plans to use the proceeds to pay down debt.

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Like many recent IPOs in Canada, demand for the shares far outstripped supply. In an interview, Eric Boyko, chief executive and co-founder of Stingray, said the order book was $1.2-billion, which means it was oversubscribed more than eight times. Demand for non-resource offerings has been brisk this year, with Cara Operations Ltd. setting the tone in April in a public stock sale that was 20 times oversubscribed. It also comes less than two weeks after the highly successful Shopify Inc. debut.

The Stingray stock sale was led by National Bank Financial Inc., GMP Capital Inc. and BMO Nesbitt Burns Inc. The deal is being co-managed by CIBC World Markets Inc., TD Securities Inc. and RBC Dominion Securities Inc. Stingray paid out $8.4-million in fees to bankers at a 6-per-cent commission rate.

Stingray's main offerings are its streaming services and, according to the final prospectus, it has 110 million subscribers in 111 countries spread across platforms delivering music, karaoke, music videos and concerts via cable television feeds. The company pays royalties on its services, which it offsets largely by collecting subscription revenue from cable companies.

Unlike the Shopify IPO, which saw minimal selling from early shareholders, some of Stingray's early private equity backers are cashing out. Quebec financier François-Charles Sirois's Telesystem Ltd., which invested in the firm in the early days, is selling four million of its 14 million shares. Novacap Management Inc., which invested $10-million into the firm six months after Stingray was founded, is selling down most of its 29.5-per-cent stake. Pascal Tremblay, president of Novacap, said the firm – which is selling eight million of its 10 million shares – will see more than a seven-fold return on its initial $10-million investment.

The timing of Novacap's share sale coincides with the typical exit plan for a private equity firm, which usually gets out between years seven and 10. Mr. Tremblay said that last year when the company was reviewing its exit options, it explored the possibility of selling its stake privately, but ultimately settled upon the idea of going public.

"We thought we had a very sound and solid company and we knew it was appealing to public markets because we were international and we could grow it," Mr. Tremblay said.

The decision to go public, which was made about six months ago, was "not motivated by market conditions," he added. At the time, the company had little idea the Canadian IPO market was about to go from sleepy to sizzling.

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Mr. Boyko, a self-confessed extreme sports nut (he says he's climbed four out of the Seven Summits – the highest mountains on each of the seven continents) is content to let himself be subject to the whims of the public markets, because in one way, nothing changes – he still has a huge amount of control. Through his ownership of multiple voting shares, which give him 10 votes to every one vote that subordinate voting shareholders get, he will control 54 per cent of the firm.

"We were worried about the 10-1" multiple voting share structure, he said, but once investors embraced Cara Operations Ltd. and Shopify IPOs despite their own respective multiple voting share structures, "it opened the door for us."

For Mr. Boyko, the share structure was a "condition" that he needed to have in place. "It protects the company from a takeover offer and makes sure we can build this company and not be forced to sell it," he added.

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