Canadian IPO market 'slow and steady,' reaches $1.1 billion in first half of 2018

25 July 2018 3 min. read
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A recent quarterly survey found that initial public offering market in Canada reached a value of $956 million in the second quarter and $1.1 billion in the first half of 2018. The performance is about two-thirds less than the amount raised in the first half of 2017, which was buoyed by the massive Kinder Morgan Canada IPO.

PwC Canada has been conducting its survey of the Canadian IPO market for more than 15 years. The reports are released quarterly, and give valuable info and perspective to the corporate sector, investors, and media. The firm recently issued its Canadian IPO survey for the second quarter.

PwC reports that the Canadian IPO market reached a value of $1.1 billion in the first half of 2018 – performance that the Big Four accounting and consulting firm characterized as ‘slow and steady.’ Eleven new IPOs in the second quarter raised $956 million – including four big deals on the TSX that raised $948 million.

The largest IPO of the second quarter was the $462 million dual listing of Ceridian HCM Holdings – an HR software and services firm – on the TSX and New York Stock Exchange.

Nine new issues on the Canadian Securities Exchange generated $10 million in 2018’s first half, while the Venture saw five issues worth $4 million in the first half. PwC relates that successful issues from junior miners appeared on the above exchanges, while gold miner Steppe Gold completed a $25 million IPO on the TSX in May.Canadian IPO market ‘slow and steady,’ reaches $1.1 billion in first half of 2018The total $1.1 billion raised in first half 2018 was about two-thirds less than the amount raised by IPOs in the first half of 2017 – which generated $2.9 billion. "Comparing it with last year is a little unfair given that the huge Kinder Morgan issue arrived in the same period of 2017,” commented Dean Braunsteiner , PwC Canada national IPO leader. Last year the Kinder Morgan Canada IPO raised a massive $1.75 billion at $17 dollars a share.

As such, this year’s numbers lack a huge outlier of an IPO, making the amount raised more modest and closer to ‘business-as-usual.’ "It was a slow and steady quarter fairly typical of a traditional IPO market," Braunsteiner added.

The PwC report says, however, that predicting the second half of 2019 will be challenging. “Many companies today are on a dual track: they start down the road toward IPO but keep the door open to a private purchase or funding option,” remarked Braunsteiner. “With a great deal of uncertainty surrounding NAFTA and trade in general, they want the flexibility of another option.”

This has been particularly apparent in the cannabis sector, as companies that appear headed for an IPO are snapped up by a competitor before reaching the stock exchange.

In another recent PwC insight report, the firm found that rebounding commodity prices have boosted Canadian mining firms’ exploration endeavours by 31%. Top firms grew their spending to $600 billion, while also focusing on other areas like digital transformation and safety.