One blockbuster issue before Canadian IPO market went into hibernation

Toronto - April 1, 2020 — A single blockbuster initial public offering of shares made it to Canadian investors before the market for new issues came to a standstill in the first quarter of 2020, the quarterly PwC Canada review of the IPO market has revealed.

The giant $1.4 billion GFL Environmental Inc. issue on the TSX accounted for virtually all of the first quarter activity as seven small issues totalling $9.8 million from the CSE brought the total for the quarter to eight issues on all exchanges — equal to the eight issues in 2019 but far above the $327 million raised in that prior period.

At least 11 new issues of all kinds were still in the pipeline when the first quarter of 2020 ended. The path to completion is an open question, says Geoff Leverton, PwC Canada national IPO leader.

“With businesses everywhere trying to manage the impact of COVID-19, nothing is going to happen in the short term,” Leverton notes. But it is possible for companies already committed to an IPO — and those considering one — to complete the preparation process up to the point of filing. “Then it’s a case of waiting for a market window to open,” he adds. “Companies with a longer runway — a year or more — can be ready when the time comes.”

“I expect the market for IPOs in Canada has gone into hibernation,” he says. “However, eventually hibernation ends.”

Leverton acknowledges that competing corporate priorities during a period of business disruption will make it hard for many potential issuers to focus on going public. “It will be interesting to see, if post COVID-19, there are new or previously under-appreciated companies that will shine. We are seeing a huge amount of disruption. What sort of changes will that drive? Just think of ‘work from home’ at scale, for example, and the technology that supports it. Does it change how we think about optimal use of commercial real estate, transportation or other industries?”

PwC has conducted its review 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 report, investment vehicles such as structured products are not included in overall 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 summary.

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