Haivision Systems Inc.(HAI) going Public, what to expect?
Can Haivision IPO make you a millionaire?
Another IPO, wow! but before buying few questions that comes to our mind?
As soon as we hear about an IPO listing, few things popup into our minds to know more about the organization, its revenue model, underwriters, targeted price, value of common shares offered and staggering amount of subset of questions relating to profits, customers…. Today we have picked up Haivision Systems Inc. and we will provide you with all the information.
First thing first
What is Haivision Systems Inc.
Founded in 2004, based in Montréal, Haivision falls under Technology industry and claims to be a “leading provider of infrastructure solutions for the video streaming market, servicing enterprises and governments globally.” They deliver live video streaming over internet with high quality and low latency to a growing list of customers like Microsoft, Citibank, and it even got selected as provider for U.S government in 2009. The list also includes, LinkedIn, Wells Fargo bank, PNC Bank, Daimler, SAP, Sony Pictures, etc.
Earnings History
Revenue as of July 31, 2020 is 60,988 (amount in thousands of CAD) up from 53,622 in last year. Profits also up by approximately 6000 (~46–40)(amount in thousands of CAD). Their expense has also gone up from last year. For detailed financials look at page 14 of the prospectus.
Other financial executive summary report
Underwriters
Now we know what Haivision does, we want to bring your attention towards financial information and who are underwriters. In the list of underwriters we have “Canaccord Genuity Corp. and Desjardins Securities Inc.(together, the “Joint Bookrunners”)”, along with “BMO Nesbitt Burns Inc., Scotia Capital Inc. and Beacon Securities Limited (together with the Joint Bookrunners, the “Underwriters”).” They all have good reputation in the market. But it does not comes cheap to underwrite an IPO. The underwriting cost is estimated to be $2 million, which will be paid from proceeds of this offering. They also get Over-allotment option, exercisable for a period of 30 days after closing date.
Risk factors what Haivision envisions
It is good to be vulnerable in the sense that one must know its risk factors and caution decision makers on buying or selling an IPO. This is exactly what Haivision has done in IPO prospectus.
Investors must read these risk factors available on Page 86 before making any decision, Haivision has in details covered these risk factors ranging from manufacturing risk, software defects to sales cycle, intellectual property licenses, supplier relationship.
Offerings
Haivision Systems Inc. is looking to offer “ 6,428,571 to 6,923,077 common shares (7,392,857 to 7,961,538 common shares if the Over-Allotment Option is exercised in full)” with a value of “$45,000,000 ($51,750,000 if the Over-Allotment Option is exercised in full).”
Bringing average price of the offering between $6.50 and $7.00 per common share.
Intended Use of Proceeds
After deducting Underwriters fees and charges, Haivision is looking to have proceedings of around $42.3 million.) About $28.0 million is intended towards selective acquisitions, $6.0 million of the net proceeds towards accelerating development of new products, and about $6.0 million to fund the expansion and increase the scope of sales, marketing and global support activities; and the balance for general working capital and other general corporate purposes.
“We will use the net proceeds, if any, from the issuance of common shares by us on exercise of the Over-Allotment Option for general working capital purposes.”
Lock Up Period
Targeted Closing date December 7, 2020
“Pursuant to the terms and conditions of their Lock-up Agreements, each of our executive officers will be released of the restrictions applicable to him under his Lock-up Agreement in respect of (i) one third of his Locked-up Securities as of 6 months after the Closing Date, (ii) an additional one 14 third of his Locked-up Securities as of 12 months after the Closing Date, and (iii) the remaining one third of his Locked-up Securities as of 18 months after the Closing Date.”
Registered plan eligibility
RRSPs, RRIFs, RESPs, TFSAs, and RDSPs.
Minimum Purchase Amount
Cost to become the shareholder is $5000 CAD.
Final Say
“Buy not on optimism, but on arithmetic.” — Benjamin Graham
If you are a Tech enthusiast and are on lookout for upcoming IPO’s to invest, Haivision Systems Inc. might be a good option to look out for. It has been around since early 2000’s and surviving through 2008 downturn, and now COVID-19 situation. But, we recommend you to do your own analysis before buying, and where to buy it from? we recommend, Questrade app, with personal experience on using this platform to buy and sell stocks, its great way to start.
