REFLECTIONS ON HALOGEN’S SUCCESSFUL IPO
It is an honour few can boast – pushing the button that starts the markets at the Toronto Stock Exchange. For the Halogen Software leaders who did just that on May 17, it marked the company’s first day of open trading on the TSX after completing its initial public offering.
The IPO was seen as wildly successful, breaking a long drought for the Canadian high-tech sector and raising $50 million for the company, which sells automated employee- evaluation software.
With the public offering completed, CEO Paul Loucks reflected on what it took to get the company to this stage, key actions along the way that helped make it a success, and what going public means for the company’s future.
LEARNING FROM INVESTORS:
“We did the road show, where you’re going out to meet institutional investors, in late April, early May. That was a 13- day road show. We did London for two days, we did Toronto for a day. We did Montreal, Boston, New York, Chicago, Salt Lake City, San Francisco, Vancouver, Winnipeg and then back to Toronto for a couple of days. We met a lot of very smart people through the process. They asked great questions.”
LEARNING THE COMPANY’S TRUE VALUE:
“This is really the first time you know what your shares are worth. I mean, as a privately held company, it’s not nearly as obvious. There isn’t a marker every day out there that tells you what the shares are worth. This was kind of, for the executive team, many of whom have been around for five, seven, or 10 years, they were finally able to say, ‘OK, I’ve put in all that hard work and I own these shares and this is now what it’s worth.’ ”
“From a pricing perspective we are very happy. We priced at $11.50, and it traded up somewhat. It didn’t trade up astronomically. I think that if you had to write a script, I think you would want our script. If the company doubles on opening day, I think the company didn’t price the shares at a level that made sure the company was getting great return for the issuance of the shares.”
THE ROLE OF LUCK:
“When you think about all those companies out there that are startups that are trying to get to be a successful company, and how few of them turn into a commercially viable company to start off with, to get to a level where you can do an IPO, I think it’s an incredible success. We’re grateful to be able to participate in that and very fortunate, and clearly you don’t get to do that without an amount of luck along the way.”
“It was an important time for us to recognize the accomplishment of our employee group towards helping us get to this, and making sure we were reaffirming to our customers our commitment to them.”
THE IPO’S PLACE IN THE COMPANY’S HISTORY:
“We really view it as a step along the way. So I mean it was a great capital raise for the company. We now have great balance sheet strength. We have the resources that we need in order to become incredibly successful. Our objective is to become that Canadian powerhouse. And you know, really, this is just another step along the way.”