Investor relations software provider Q4 Inc. has set a price range between $10.50 and $13 per share for its planned $150 million initial public offering on the Toronto Stock Exchange.
The Toronto-based company, who filed for IPO last month, it is one of a number of Canadian technology companies that sought to exploit public markets during the pandemic. Despite the recent turmoil, several tech and nontech names have recently filed for IPO, including Softchoice Corp. – which debuted on May 27 – and LED lighting systems manufacturer LMPG Inc. Pet retailer Valu Holdings Ltd. and cleantech waste processor Anaergia Inc. presented preliminary prospects to regulators this week. VerticalScope digital media company, owned by Torstar Corp.., is also in the process of obtaining a public listing.
The fourth quarter designs software aimed at managing the investor relations needs of public companies. The technology facilitates webcasts and earnings calls for investors and organizes financial statements in the investor relations section of the company’s websites. It also provides data intelligence services to companies, analyzing capital flows and capturing information about the activity of activist shareholders.
Some of the biggest technology companies, such as Netflix Inc., Spotify Technology, Square Inc. and Shopify, use fourth-quarter technology. The company has approximately 2,400 corporate clients and calls itself the “only comprehensive investor relations platform in the industry.” The fourth quarter software facilitates about half a million investors each quarter on virtual events, and about 12 million investors interact with their corporate clients each month through its network of investor websites. The fourth quarter had revenue of $40.4 million in 2020, an increase of 80.3% over the prior year. The company lost $13 million last year, compared to an $11 million loss in 2019.
In a letter to investors included in the prospectus, CEO Darrell Heaps said 50 percent of S&P 500 companies and 63 percent of Dow Jones Industrial Average companies use fourth-quarter software for investor relations purposes. “If you’ve visited a public company’s investor relations website or joined a earnings call in recent years, you’ve probably used fourth-quarter software,” he wrote.
New York-based venture capital firm Ten Coves Capital is one of the biggest investors in the fourth quarter, with a 24.5% stake, while Mr. Heaps owns 4.9% of the shares, or 2. 9 million shares.
The company plans to sell between 11.54 million and 14.29 million shares in the offering. Subscribers are entitled to purchase additional shares in the amount of $22.5 million at the offering price after the closing of the deal; if underwriters exercise this right, Mr. Heaps may sell up to 14.1 percent of his interests as part of the subsequent transaction.
The fourth quarter plans to use proceeds from the IPO to pay off an outstanding $20.8 million line of credit and pursue new acquisitions. Much of the company’s growth over the past year was driven by acquisitions.
CIBC World Markets Inc., National Bank Financial Inc. and Credit Suisse Securities (Canada) Inc. are the leading brokers in the business, alongside Canaccord Genuity Corp., Raymond James Ltd., RBC Dominion Securities Inc., Stifel Nicolaus Canada Inc. ., TD Securities Inc. and INFOR Financial Inc. shares for the fourth quarter, once listed, will trade under the symbol QFOR.
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