Friday, October 20, 2006
Waterloo's Sandvine goes public on TSX
RON DERUYTERn RECORD STAFF
Sandvine Inc. is going public on the Toronto Stock Exchange with a $40-million share offering.
The Waterloo company, which went public on the Alternative Investment Market in London in March, plans to raise $15 million by issuing almost 7.9 million shares from its treasury, it said yesterday.
They will be priced at $1.90, it said in a news release.
Existing shareholders, including the company's founders, also are cashing in. They are doing a secondary offering of almost 13.2 million of their shares, boosting the size of the offering to $40 million.
Sandvine, a developer of software and hardware that helps providers of high-speed Internet service manage their networks, said it will use the proceeds to accelerate its growth and ramp up research and development.
It won't receive any of the proceeds of the sale of shares currently owned by existing shareholders.
Sandvine, which announced its intention to go public on the TSX last month, said the offering is expected to close next Thursday.
The shares have been conditionally approved for listing on the TSX under the symbol SVC, it said.
The underwriters, a group of investment banks led by Canaccord Capital and CIBC World Markets, have the option of buying up to an additional 15 per cent of the number of shares being offered, from existing shareholders, within 30 days of the closing of the offering, increasing the potential size of the offering to $46 million.
Company officials were not available for comment yesterday.
With the offering, Sandvine becomes the first high-tech firm headquartered in Waterloo Region to go public on the TSX in almost nine years.
The company, founded five years ago by former employees of PixStream Inc., created quite a buzz earlier this year when it became the first local firm to go public on the Alternative Investment Market. It sold 29.3 per cent of its outstanding shares, at 75 pence ($1.52), and raised $51.3 million.
The Alternative Investment Market, a junior exchange of the London Stock Exchange better known by its initials, AIM, has attracted a lot of Canadian startups that want to go public because they get higher valuations.
However, many of those firms also end up doing a public offering on a Canadian stock exchange.
The TSX listing will increase Sandvine's Canadian shareholder base.
It also will make its shares eligible investments for registered retirement savings plans and similar investment vehicles. The company is structured as a mutual fund corporation, but at the moment it doesn't qualify as an RRSP investment because AIM isn't deemed to be a prescribed stock exchange under the Income Tax Act.
The existing shareholders who are selling shares include chief executive officer Dave Caputo and fellow co-founders, Tom Donnelly, Brad Siim, Don Bowman and Marc Morin.
Sandvine, which employs about 150 people, mainly in its head office on Albert Street, hadn't made money yet as of its first publicly disclosed results. However, its losses have narrowed as its sales climbed.
The company, which reports results twice a year, lost $680,000 on sales of $14.3 million in the six months ended May 31. It lost $2 million on sales of $5.3 million in the same period a year earlier.
Its shares rose almost four per cent yesterday, closing at 93.5 pence ($1.99).