Waterloo-headquartered Magnet Forensics is set to raise $74.4 million CAD in a bought deal secondary offering, selling 2.45 million subordinate voting shares priced at $30.30 each.
The agreement was made with a syndicate of underwriters led by Canaccord Genuity Corp. and BMO Capital Markets, in which they are entitled to an over-allotment option. If exercised in full, it would increase the offering’s gross proceeds to $85.6 million.
Toronto Stock Exchange (TSX)-listed and launched in 2010, Magnet offers a digital investigation software that acquires, analyzes, reports on, and manages evidence from digital sources, including computers, mobile phones, IoT devices, and cloud services. Magnet claims over 4,000 public and private sector customers in over 90 countries.
This capital raise follows Magnet’s filing of its short form base shelf prospectus in October, where it stated that the company is looking to raise $950 million CAD through offerings during the 25-month period that the prospectus is effective.
RELATED: Magnet Forensics files for $950 million CAD offering for “financing flexibility”
According to Magnet, it intends to use the funds generated for financing flexibility. The startup also noted in its prospectus that as part of its growth strategy, it plans to consider strategic acquisitions.
Magnet has acquired three companies in its history. Most recently, it bought United States-based video and multimedia evidence solution company DME Forensics in a deal worth $9 million, marking Magnet’s first acquisition since it went public.
To finance its plans for growth, Magnet also entered into an amended and restated credit agreement with the Royal Bank of Canada in October, establishing a $30.9 million CAD ($25 million USD) revolving committed credit facility. The company previously held a $5 million CAD demand credit with RBC.
In April, Magnet increased its initial public offering on the TSX raising its target by $10 million. Upon closure of the IPO, Magnet raised $115.1 million CAD which includes the over-allotment option exercised in full.
The most recent secondary offering is expected to close on December 14.
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