Magnet Forensics hopes to raise $90M

Makers of digital investigation software

Cybersecurity software firm Magnet Forensics Inc. is seeking to raise $90 million by offering an initial public offering (IPO) on the Toronto Stock Exchange.

The Waterloo, Ont.-based company in its prospectus filed Thursday said it anticipates it will offer 5.6 million to 6.4 million shares at a price between $14 and $16 each. The shares will trade under the symbol MAGT.

Magnet Forensics said it will use the proceeds to increase its capitalization, financial flexibility and visibility in the marketplace.

The company, founded in 2010, develops digital investigation software that acquires, analyzes and shares evidence from computers, smartphones and internet-of-things (IoT) devices for forensic specialists.

It claims its software has been used by more than 4,000 law enforcement, government, military and corporate organizations in over 90 countries to support investigations into cybercrime, child exploitation, terrorism, fraud, human resource disputes and intellectual property theft.

CEO Adam Belsher, CTO Jad Saliba and board chair Jim Balsillie are the company's principal shareholders. The company reported US$11 million in net income and US$51 million in revenue last year, according to its filing, with both those figures growing steadily since 2018, The Logic reports.

BMO Nesbitt Burns and Canaccord Genuity are leading the transaction, while CIBC World Markets, National Bank Financial, RBC Dominion Securities and Scotia Capital are acting as underwriters.

Over the past year, the pandemic has forced millions of people to work from home, prompting many to use more connected devices and open themselves up for cyberattacks.

Data breaches exposed 36 billion records in the first half of 2020, according to a study by Risk Based Security Inc.

But even before the pandemic, Canadians lost more than $43 million in 2019 to cybercriminals, a figure that is expected to increase as more people use more online devices.

The global IoT market is predicted to reach US$520 billion next year, according to research firm Statista, and research from networking equipment maker Cisco Systems Inc. states there will be 27.1 billion networked devices in 2021.

The worldwide information security market is forecast to reach US$170.4 billion as early as 2022, according to researcher Gartner.

This is in large part due to companies and organizations expanding their defences against an ongoing spike in cyberattacks and threats such as computer viruses, data breaches and denial of service attacks.