Canadian maritime tracking venture exactEarth has filed a preliminary prospectus for a proposed initial public offering on the Toronto Stock Exchange.
The company plans to undertake a treasury offering of common shares, though the number of shares and…
Canadian maritime tracking venture exactEarth has filed a preliminary prospectus for a proposed initial public offering on the Toronto Stock Exchange.
The company plans to undertake a treasury offering of common shares, though the number of shares and pricing range has yet to be determined. The offering is being made through a syndicate of underwriters led by Canaccord Genuity.
There is also an over-allotment option for a secondary offering of common shares held by exactEarth’s owners Com Dev and Hisdesat. The prospectus does not state how much of their share in the company they would sell if the secondary offering takes place.
ExactEarth stated that proceeds from the treasury offering will be used to repay the C$44m (US$35.5m) of debt owed to Com Dev and Hisdesat, and to help it fund its expansion plans, including new product development and improvements in infrastructure.
The announcement comes four months after exactEarth hired Canaccord Genuity to advise it on public and private funding options as well as potential merger and acquisition opportunities.
Indeed, within the IPO prospectus, exactEarth highlights that post-listing it plans to pursue a disciplined acquisition strategy targeting either complementary maritime information products or those within an international presence that can provide additional channels to markets that exactEarth currently underserves.
The firm added: “Although we have no agreement or commitment with respect to any acquisition at this time, we have identified a number of opportunities that may be actionable in the short- to medium-term.”
ExactEarth was spun out of Canadian space hardware manufacturer Com Dev in mid-2009 and uses a constellation of microsatellites in low Earth orbit for maritime tracking using the Satellite Automatic Identification System (S-AIS).
In 2010, Hisdesat, the government and military focussed Spanish satellite operator, acquired a 27% stake in exactEarth for C$15m (US$12m) in cash. Com Dev retains the remainder.
The company has seen revenues continually rise since its inception but is still operating at a slight loss. Revenues grew from C$9.6m (US7.7m) in the fiscal year ending 31 October 2012 to C$15.8m (US$12.7m) in FY2014, while losses fell from C$5.8m (US$4.7m) to C$3m (US$2.4m).
ExactEarth believes that, by expanding its addressable market beyond the core maritime market and into the Internet of Things, it can tap a much larger potential market.
To aid that plan, exactEarth recently announced a strategic partnership with Harris to develop and operate 58 hosted payloads on Iridium’s forthcoming NEXT constellation. The payloads will broadcast in the maritime VHF frequency band and provide real-time monitoring. exactEarth management said it intends to leverage this capability to further grow the market for S-AIS data services.
Stikeman Elliott has provided legal advice to exactEarth for the IPO, while Gardiner Roberts is representing Com Dev and Borden Ladner Gervais the underwriters.
