Finally an IPO with MCAP Corp seeking $250 million via regular voting common shares

It has taken almost six months, but the stage has been set for the year’s first initial public offering.

And the 2016 debut issue, set to be launched with a road show next week, will come from a company that provides services in an area of vital interest to all Canadians: home ownership.

The other piece of good news: MCAP Corp., which has been private for more than 20 years, and regards itself as the “second largest mortgage finance company in Canada based on both 2015 origination volumes and mortgages under administration,” is planning to offer common shares in its offering. It’s understood that MCAP, which has $55 billion of mortgages under administration, is seeking at least $250 million.

Unlike 2015, when a number of companies went public and offered subordinate voting shares, MCAP has decided to take on new owners as equals. Those new owners can also expect to receive a quarterly dividend, as it “is the intention of the board following closing to declare quarterly cash dividends.”

MCAP’s business model is to “originate and underwrite mortgages, fund them by selling them to Canadian banks, trust and loan companies, credit unions, life insurers and pension funds or a securitization vehicle, and then provide ongoing mortgage servicing back to that institutional investor or securitization vehicle.”

MCAP’s offering will feature both shares from treasury and shares from selling shareholders, one of which is, Otéra Capital CADCAP Inc., an indirect subsidiary of Quebec’s Caisse de dépôt et placement du Québec.

MCAN Mortgage Corp. is the other selling shareholder, though Otéra has a stake that’s about five times as large as that held by MCAN. The two selling shareholders own about 93 per cent of the issuer. Employee shareholders own the rest.

Equity raisings

Numbers published by FP Data Group show the amount of equity raised this year is below what was garnered in the comparable period of 2015.

So far, using announced deals as the yardstick, $26.251 billion of equity in the form of common, convertibles and trust units has been raised. That amount raised, which compares with $31.664 billion in the comparable period of 2015, is the second best first half in the 23 years that the Financial Post has been compiling statistics.

So far this year there have been seven deals of at least $1 billion with the $4.419 billion raised by TransCanada Corp. being the top of the pile. This week Suncor added that list with an offering of at least $2.5 billion.

Numbers also show Canadian companies issue far more equity, on a relative basis, than their counterparts south of the border. When preferred shares are added to the mix, Canadian companies have issued more than $31 billion of equity. That compares with the more than US$82 billion that has been raised by U.S. counterparts. Accordingly the 10 to 1 ratio between the sizes of the two economies is not at work.

A couple of factors explain the higher percentage of issuance by Canadians:

  • the bulk of equity deals done here are via a bought deal, an arrangement, where the underwriters buy a block of stock before filing a prospectus, and which allow all parties to act quickly. (Such arrangements aren’t the norm in the U.S.); and,
  • on a given Canadian deal, a higher percentage of the shares are sold to non-Canadian investors, compared to U.S. companies.

Financial Post

Montreal’s Circo de Bakuza kicks off 2016 Euro Cup soccer tournament after beating out 24 other firms to win contract

MONTREAL — The Circo de Bakuza event company has faced torrential rains and transit strikes in preparation for its biggest contract to date: organizing the 51 ceremonies for 2016 UEFA European Football Championship in France, including Friday’s opening ceremony in Paris. 

Still, its president and founder Vincent Drolet seems calm as he works on last-minute planning with the team based on the other side of the Atlantic. 

“I guess it’s the jet lag,” joked Drolet, back in the Montreal office last week. “You need to have cold blood to do this job because if I start going into all the problems that I’ve had even since this morning, for sure I wouldn’t survive.”

The production, branding and marketing firm has been preparing for the Euro Cup ceremonies for the last year and a half, after its winning pitch beat out 24 other global firms.

The company also has an office in Paris, though Drolet says most of the event planning happens in Montreal, while design and branding work happens in France.

Although the employees at the Montreal office spend most of their time working on computers, Circo de Bakuza’s work on the ground in France is very different — the company’s role there covers nearly every aspect of the ceremony from choreography to scenography, costume, video and set design. 

Drolet will be in Paris for Friday’s opening ceremonies, and then on site for the events in the south of France. He says the ceremony themes will be rooted in its host country’s traditions, including performances by cancan dancers and a rendition of the national anthem by the French Republican Guard. He says they have also made giant jerseys of each team to be brought out onto the field before the matches.

Circo de Bakuza will be working with Rome-based Filmmaster production company for the opening and closing ceremonies, and will feature France’s most famous DJ, David Guetta, who has composed the tournament’s official anthem. 

The 70-person team was already facing a complex task to manage, feed and transport about 3,000 volunteers in 10 different cities in France, Drolet says, but recent heavy rains have flooded parts of the country, meaning many of the rehearsals have been done at indoor tennis courts which aren’t the same dimensions as the soccer pitches.

On top of this, sometimes volunteers simply don’t show up, and a nation-wide transit strike is not helping the situation.

“My job is just to find the best solution and to find the best compromise because it’s always about making a decision with the information that you have and keep on going,” Drolet said. 

My job is just to find the best solution and to find the best compromise because it’s always about making a decision with the information that you have and keep on going.

Circo de Bakuza was launched in late 2009 by Drolet and partners Julie Brassard, Roshan Soomarchun and Nancy Saint Laurent, and is privately funded with the help of some angel investors.

The 39-year-old Drolet says he studied pure and applied science in college, though immediately after graduating he began working at a photo studio and has continued on an artistic path ever since, working for Cirque du Soleil on special events throughout the world before striking out on his own. 

Drolet says the company of 40 full-time employees projects revenues of between $10- and $12-million this year.

Circo de Bakuza first broke into Europe’s soccer world when it created the opening ceremony for the 2014 UEFA Champions League in Lisbon, viewed by roughly 165 million spectators from more than 200 countries.

After the Euro Cup, Drolet says Circo de Bakuza wants to turn its attention to the U.S., where it plans to open an office in Miami next year in order to tap the huge market in sports and entertainment events.

“The aesthetic we’ve developed in Europe is not the aesthetic that will be bought in the U.S., so it will be a big adaptation for us,” he said. 

The Middle East is also on the company’s radar, Drolet says, and he hopes to position Circo de Bakuza for the 2022 FIFA World Cup in Qatar.

Although Circo de Bakuza has about 60 contracts in the pipeline, including the 40th anniversary ceremony of the Montreal Olympics, Drolet is not shy about setting his sights very high for future contracts, including the 2024 Summer Olympics, which have still not been awarded to a city.

“We don’t want to be the best in Canada, we want to be one of the best in the world,” he said. 

The UEFA Euro 2016 runs from June 10 until July 10. 

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