MCAP’s IPO would’ve been the second to exceed $100 million in revenue this year had it pushed through
In a June 29 client note, MCAP Corp. surprised would-be investors with an announcement of the withdrawal of its planned initial public offering valued at $275 million.
“[The IPO] has been cancelled, withdrawn or deferred by the issuer. Therefore, all expressions of interest on this offering have been cancelled,” according to the note, as quoted by the Financial Post.
This marked a startling departure from the apparent confidence demonstrated by MCAP back in May, when the company filed the required paperwork—including a preliminary outline of its goal of listing its shares on the Toronto Stock Exchange—with Canadian regulatory bodies.
The same filings showed that MCAP has requested the Bank of Montreal and the Royal Bank of Canada to lead the sale.
MCAP’s initial plan was to go public via shares in the $18-$21 price bracket in a combined treasury and secondary offering. $100 million of the IPO would’ve been sourced from treasury, with the proceeds flowing to the company and the balance going to the seller shareholders.
MCAP currently has $55 billion of mortgages under administration. Had it pushed through, the IPO would’ve been the second to exceed $100 million in revenue this year, after Mainstreet Health Investments’ $124-million IPO earlier in 2016.
The post-Brexit market disturbances made the IPO impractical, however.
“That environment meant that a number of large institutional investors were in no mood to add a new name to their portfolio. Either they were too busy focusing on their existing portfolio or they weren’t prepared to pay the prices that they being demanded,” industry observer Barry Critchley wrote in his analysis.
Related Stories:
Canadian mortgage finance company to aim for $275M in IPO
MCAP’s Mortgage Servicing Centre earns prestigious CCEOC award
“[The IPO] has been cancelled, withdrawn or deferred by the issuer. Therefore, all expressions of interest on this offering have been cancelled,” according to the note, as quoted by the Financial Post.
This marked a startling departure from the apparent confidence demonstrated by MCAP back in May, when the company filed the required paperwork—including a preliminary outline of its goal of listing its shares on the Toronto Stock Exchange—with Canadian regulatory bodies.
The same filings showed that MCAP has requested the Bank of Montreal and the Royal Bank of Canada to lead the sale.
MCAP’s initial plan was to go public via shares in the $18-$21 price bracket in a combined treasury and secondary offering. $100 million of the IPO would’ve been sourced from treasury, with the proceeds flowing to the company and the balance going to the seller shareholders.
MCAP currently has $55 billion of mortgages under administration. Had it pushed through, the IPO would’ve been the second to exceed $100 million in revenue this year, after Mainstreet Health Investments’ $124-million IPO earlier in 2016.
The post-Brexit market disturbances made the IPO impractical, however.
“That environment meant that a number of large institutional investors were in no mood to add a new name to their portfolio. Either they were too busy focusing on their existing portfolio or they weren’t prepared to pay the prices that they being demanded,” industry observer Barry Critchley wrote in his analysis.
Related Stories:
Canadian mortgage finance company to aim for $275M in IPO
MCAP’s Mortgage Servicing Centre earns prestigious CCEOC award
