Torstar-owned tech company VerticalScope goes public at $22 a share

Torstar-owned tech company VerticalScope goes public at $22 a share
Technology company VerticalScope began trading publicly Tuesday morning on the Toronto Stock Exchange at $22 per share, valuing the stake owned by NordStar Capital, VerticalScope’s largest shareholder, at almost $173 million, as of market opening.

By 10:08 a.m., the share price hit $23.75, with a trading volume of more than 21 million. The share price climbed to about $24 just before 11 a.m.

By 11:30 a.m., the share price had dipped slightly to $22.80, with a trading volume higher than 41 million.

NordStar co-owner and Torstar chair Paul Rivett said NordStar has a roughly 40 per cent stake in VerticalScope as of the initial public offering. At market open, that stake was valued at almost three times the $60-million NordStar paid to acquire all of Torstar Corp. last year.

“I think there’s some headwinds in the markets today,” said Rivett, around an hour after the markets opened. “(The) market’s down but the stock’s still trading well out of the gate.”

The IPO was led by RBC Capital Markets, Canaccord Genuity and National Bank Financial, and included TD Securities, Desjardins Securities, Raymond James, Cormark Securities and HSBC Securities as underwriters.

The company announced it was increasing the size of the initial public offering Monday after a strong response, to 5,685,000 shares, increasing the initial proceeds of the IPO for VerticalScope, which is trading under the symbol FORA, to $125 million from $100 million.

The underwriters were granted an over-allotment option which, if exercised in full, will increase the gross proceeds of the IPO above $143 million.

The IPO is expected to close June 21, according to a press release published Monday.

VerticalScope was founded in 1999, and Torstar acquired a 56 per cent stake in the company in 2015. The online platform operates more than a thousand websites, including RedFlagDeals; its specialty is community websites and online forums. Its sites have more than 100 million active monthly users.

Rivett said NordStar decided to take VerticalScope public in order to provide capital for expansion opportunities, including acquisitions, which have bolstered the company in past years.
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