54 LEXPERT MAGAZINE
|
JANUARY/FEBRUARY 2018
FEATURE
BECOMING A PUBLIC
company is not a big event in the life of a business;
it's a huge one. e transition from private to public can be out of this world
in terms of sheer complexity. But that didn't keep Canadian companies from
making the leap in 2017, a year in which the initial public offering (IPO) came
back to life. For all of 2017, 38 new issues raised $5.1 billion on all Canadian ex-
changes. And corporate finance lawyers suggest many more are in the pipeline
for the first half of 2018.
e uptick in new offerings can be attributed to a confluence of factors, start-
ing with pent-up inventory. Deal lawyers interviewed for this story agree that
2016 was a disaster on the IPO front, with just eight new offerings in total —
the least in 19 years. Many IPO candidates didn't like the valuations they were
getting and, with interest rates so low, decided to stay private longer. But with
oil prices finally stabilizing at around US$50 a barrel last year and with the pub-
lic looking for more investment diversity, IPOs have started to bubble up again.
Going public, however, is no small feat. Desmond Lee, Co-chair of the Cor-
porate Finance and Securities practice at Osler, Hoskin & Harcourt LLP, says
IPOs "remain a really intense experience compared with other types of financ-
ings. We tell issuers, 'Once you get through your IPO, you'll never have to go
through that kind of intense experience again.'"
Most business owners who've made that particular journey would probably
agree. Raman Grewal, partner in Stikeman Elliott LLP's Corporate Group,
AFTER YEARS IN THE DOLDRUMS,
IPOs LAST YEAR STAGED A COMEBACK.
BUT AS BUSINESS OWNERS START
TO WEIGH THEIR PROSPECTS, LEGAL
ADVISORS WARN THAT THE ORDEAL
OF A PUBLIC OFFERING IS NOT
FOR EVERYONE
BY SANDRA RUBIN
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PHOTO:
SHUTTERSTOCK
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