PwC: Canadian IPO Market Tops $4 Billion, but Recovery is Uneven

Oct 5, 2010 | Corporate Member News

With a quarter of the year still ahead, the value of initial public offerings in Canada in 2010 has crested above $4 billion, but the market has yet to show signs of a solid recovery, data from the PwC survey of IPO activity on Canadian exchanges has shown.

A total of 10 new issues on all Canadian exchanges in the third quarter of 2010 contributed $1.41 billion to a total value of  $4.3 billion raised so far this year, the PwC survey reported. In the same period of 2009, there were just five new issues on all Canadian exchanges for a total of $952 million. Activity for the full year 2009 was less than $2 billion.

New issues on the TSX dominated third quarter results this year, with three IPOs on the senior exchange accounting for $1.4 billion in new capital during the period. Two of those issues – MEG Energy Corp. at $700 million and SMART Technologies Inc. at $660 million – represented the majority of the new issuances.

“At the beginning of the year, we suggested the market could rebound to over $4 billion based on hopeful signs of renewed investor confidence. We have now exceeded that mark with three months to spare – which is great news – but the recovery has been clearly uneven,” explains Neil Manji, PwC national IPO services leader. “Looking at the deals so far this year, we achieved $4 billion through a handful of large issuances, whereas a prospering IPO market would feature a number of deals in the $200 million – $300 million range. IPOs of that size are still struggling to come to the market, as evidenced in planned IPOs that were cancelled. When we see more of those deals, it will be a clear indicator that medium-size companies can access the market again and investor confidence is back.” 

Manji points to a volatile July and a sleepy August as factors that may have held back the IPO market during the third quarter. Residual concerns about the state of the U.S. economy, its impact on Canada and potential volatility coming back to the market have also been considerations for issuers and investors.

“Many companies that are looking at an IPO as part of their growth strategy haven’t completely abandoned these plans,” he says, “they’ve had to postpone them.”

“In September, we started to see more mergers and acquisitions by large companies. This is a positive development that will give investors and issuers more confidence in the economy and should spark further IPO activity in the coming months.”

Seven new issues on the TSX Venture exchange generated just less than $15 million during the third quarter of 2010 vs two issues valued at $1.6 million during the same period of 2009, the survey showed. There were 25 issues on the Venture during the first three quarters of this year, an increase from eight IPOs registered on that exchange during the same period of 2009.

PwC has conducted its survey of the IPO market in Canada for more than 10 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 considered IPOs because they do not represent new equity raised for operating companies.

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About PwC

PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See for more information. In Canada, PricewaterhouseCoopers LLP ( and its related entities have more than 5,300 partners and staff in offices across the country.

“PwC” is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form the PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way.

For further information:

David Rowney, PwC, 416-365-8858, [email protected]

Susan MacDonald, MacDonald & Co., 613-966-4969, [email protected]

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