Slow and steady, third quarter IPO market still far ahead of last year: PwC survey

TORONTO (October 2, 2017) — The recovery in the Canadian market for initial public offerings slowed slightly in the third quarter but the momentum from a strong start should carry the market to a respectable level of deals and new equity through the end of the year.

That’s one of the trends identified by the third quarter PwC survey of the Canadian IPO market, released here today.

Eight new issues on Canadian exchanges and one IPO by a Canadian firm on a U.S. exchange generated $433 million in new equity during the quarter. The total dwarfed the single new issue of $690,000 logged in the third quarter of 2016, the PwC survey revealed.

Pharmaceutical companies claimed the spotlight in the third quarter with the $300 million issue on the TSX from Jamieson Wellness Inc. and Clementia Pharmaceuticals Inc.’s $120 million flotation on NASDAQ accounting for the majority of proceeds in the quarter. The Jamieson issue was the only IPO on the TSX during the quarter.

Four issues on the CSE and three on the TSX Venture exchange made up the balance of activity in the third quarter.

For the first nine months of 2017, $3.3 billion has been raised from 24 new issues on all Canadian exchanges compared to less that $2 million in the same period of 2016 when there were no issues on the TSX.

A slower third quarter is in keeping with the recent history of the IPO market, according to Dean Braunsteiner, national IPO leader at PwC in Canada. But the pipeline of new issues destined for the market suggests the lull won’t last long.

“The emergence of the pharma sector in the third quarter makes for some interesting analysis,” suggests Braunsteiner. “The vibrant hub of pharmaceutical companies in Quebec will be a topic of conversation with the success of Clementia in the U.S. And we know that regulatory issues have held back IPOs from companies in the medical marijuana field. When those issues are resolved, we expect to see activity there.”

A buoyant economy and steadily improving commodity prices also speak to the potential for a strong finish to the year, Braunsteiner says. “Optimism is always good for the IPO market,” he concludes.

PwC has conducted its survey of the IPO market in Canada for more than 15 years. The reports are issued on a quarterly basis to provide information to the corporate sector, investors, the media and others that will help them put the market into better perspective. For the purposes of the survey, investment vehicles such as structured products are not included in overall survey results because they do not represent new equity raised for operating companies. New issues from companies that are created from the reverse takeover of an existing public company are also not included in the survey.


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