2020 was a robust year for initial public offering (IPO) activity in Canada, with over 70 IPOs completed on Canadian stock exchanges and over CA$5.5 billion total gross proceeds raised. With traditional IPOs, reverse takeovers, Capital Pool Companies (CPCs) and a growing number of Special Purpose Acquisition Companies (SPACs), there are multiple options for companies to access the public capital markets today.

Here are five key reasons the market has been so active:

1. Valuation for promising go-public candidates has improved significantly with better multiples. Raising capital in public markets is becoming less expensive than in private markets.
2. Investors are looking for more liquidity with their portfolios.
3. Many active retail investors, who have been spending less during the COVID-19 pandemic, are having an increased appetite for investment opportunities.
4. Increasing popularity with online brokerage platforms has encouraged retail investors to look for the next accretive opportunity.
5. Historically, there have been clear windows to go public or raise money through the public markets. All things have pointed to the view that we are indeed in one of those pockets.

As we look to the year ahead, we expect that the volume and size of IPOs will continue to rise, with a renewed interest in the CPC program in light of recent policy improvements and more SPACs on the horizon. There will also be an increased interest from international companies to look at Canada as a viable alternative to the US as a go-public destination, considering recent US legislation to enforce certain auditing requirements on US-listed foreign companies. Finally, while mining issuers led all sectors in terms of the number of IPOs in Canada last year, we will likely see tech IPOs as the primary driver in 2021.

With this exciting year ahead in mind, Dentons’ Securities and Corporate Finance group is pleased to announce the launch of the Going Public in Canada Resource Centre, which aims to provide a one-stop shop for all things related to successfully entering the public markets, including complimentary resources such as:

• The going public in Canada brochure
• The in-depth guide to going public and listing in Canada
• Up-to-date going public related news, events and insight articles

Dentons’ Securities and Corporate Finance team has extensive knowledge of, and experience in, the Canadian capital markets. From our offices across the country, we regularly advise issuers, registrants, security holders and others on a broad range of Canadian securities law matters including, of course, the transaction types described in the guide.

As part of the launch, the team will also be hosting a series of fireside events over the coming weeks with various people who have experience in taking companies public. Stay tuned!

To check out the Dentons Going Public in Canada Resource Centre, click here.

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