E Automotive is expected to start trading on Wednesday after raising IPO price

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Online car sales company E Automotive Inc. is set to debut on the Toronto Stock Exchange on Wednesday after increasing the size of its initial public offering and valuing the deal at the top of its proposed lineup marketed to investors.

The company announced Tuesday night that it would sell 5.9 million common shares at a price of $ 23 a piece, generating gross proceeds of $ 135.7 million. The company last month announced plans to raise $ 125 million in shares, originally setting a price range of $ 19 to $ 23 per share. The placement is led by Canaccord Genuity, CIBC World Markets and National Bank Financial. Other underwriters include Scotia Capital, Eight Capital, ATB Capital Markets and Laurentian Bank Securities. The underwriters have the right to purchase an additional 885,000 shares at the offering price within 30 days of the formal closing of the transaction on November 10.

Wednesday will be a busy day for Canadian tech new issues, as shares of D2L Corp., which slashed the size and price of its offering last week, are also expected to start trading. With their two debuts, 19 unprecedented technology companies will have gone public on the Toronto Stock Exchange since July 2020, up from just 12 in the 11 years ended December 2019. While some of the 17 have soared in value, the overall performance has been uneven. Many newly listed Canadian tech companies are now trading well below their issue prices.

E Automotive Inc., a fast-growing Toronto-based digital auto auction platform for dealerships that operates as E Inc., is controlled by Toronto’s merchant bank Intercap Equity Inc. , which also brought in Docebo Inc. two years ago, Interecap. , who invested four years ago, owns 26.2 million shares, or roughly two-thirds of the company’s capital before the IPO, which gives it the right to appoint a majority of directors as long as his stake exceeds 50% of the capital (he can always appoint a fixed part of the board, based on a sliding scale, as his holdings decrease). Four of the eight directors of E Inc. are appointed by Intercap, including Jason Chapnik, CEO of the investment bank, who chairs E Inc.

E Inc. has exploded in size in part thanks to three acquisitions in the past year and a shift to e-commerce during the COVID-19 pandemic. Demand for used vehicles has been aided by government stimulus checks to individuals and a global chip shortage that has hampered the availability of new vehicles. E Inc. is making a big push to expand in the United States, in part through more acquisitions.

The losing company generated revenue of US $ 37.2 million in the first half of this year, more than triple the amount for the same period a year earlier. E Inc. generates $ 362 in fees per vehicle sold through its wholesale platform and has over 1,000 dealer customers who pay $ 609 per month to subscribe to additional features. The platform processed 115,000 transactions during the 12 months ended June 30. The total gross value of transactions on the platform in the first half of 2021 was US $ 949 million, almost four times more year over year.

One of the selling characteristics of the offering is the history of the team behind E Inc. Mr. Chapnik formerly chaired Dealer.com, which sold online tools for car dealerships. It was bought in 2014 by Dealertrack Technologies, listed on the Nasdaq, as part of a transaction valuing Dealer.com to $ 1.1 billion. He joined the board of directors of Dealertrack, a provider of web software for the automotive industry; Dealertrack was sold to Cox Automotive in 2016 for US $ 4.5 billion.

In its prospectus, E Inc. notes that three of its senior executives worked at Dealer.com and / or Dealertrack, while Dealer.com co-founders Michael Lane and Richard Gibbs are directors with M. Chapnik. They have “the connections and experience to ensure similar success to E Inc.,” the prospectus states.

E Inc. hits the market in a busy fall for Canadian tech IPOs on the Toronto Stock Exchange. Copperleaf Technologies Inc., a Vancouver-based decision analysis software maker, soared in its early days this month. Financial technology provider Propel Holdings Inc. and investor relations software provider Q4 Inc., both of Toronto, have gone public in recent weeks. Montreal-based online advertising exchange Sharethrough Inc. also filed for an IPO last month, and Vancouver-based social media management firm Hootsuite has tested the waters with investors in recent days for a potential bid of $ 200 million.

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