ViXS is next in line for Tech IPO parade

I wouldn’t call it a downpour just yet, but the Canadian Technology IPO market might just be getting some traction. When I told you a few months ago that two Tech companies were “on the launch pad”, I had that right. What I had wrong was that the two companies were Halogen Software and Virgin Gaming (see prior post “Two Tech IPOs moving to the launch pad” Feb. 24-13). I got Halogen correct, which filed last week, but number two in the que will in fact be ViXS, a semi-conductor story based in the north end of Toronto. As early as next week, I’m told. And yes, I think you’re the first to hear this good news.

ViXS has been rumoured to be going out for awhile (see prior post “IPO market costing PMs money” June 3-10), and even may have filed something called a confidential offering document for a NASDAQ deal right before the global financial crisis. The 2009 market meltdown wiped away most small-mid cap offering prospects in that part of the world for 18 months at least. ViXS is wise to look at a Canadian listing, what with absence of Dalsa, MKS, Miranda, Q9…. The company is backed by VCs Celtic House (Toronto/Ottawa) and NEA, a technology titan in the California landscape.

As a fabless semiconductor company enabling advanced video processing technologies for Consumer Electronic and Personal Computer platforms, ViXS is known to have best in class intellectual property and engineers. The company has developed advanced video codecs with capabilities for processing, managing, protecting and distributing broadcast-quality video across multiple devices. But one of its true strengths comes in the form of its CEO, Sally Daub, who would have made an excellent member of the JTF2 if she’d decided to join the military rather than the tech world. If you don’t get the metaphor, trust me when I say that her energy, focus and intestinal fortitude cannot be underestimated.

ViXS clients include many of the world’s largest electronic device and hardware manufacturers, making things like Blu-Ray players, laptops and smart digital TVs.

It sounds as though this financing is being led by two independent investment banks: GMP and Stifel Nicolaus Canada. As with the Halogen IPO, Canadian banks weren’t chosen to drive the selling process here, either (Canaccord Genuity and Stifel are running that roadshow). Back in the mid-2000s, it was the bank-owned dealers that led the Canadian tech domestic IPO parade. Which either means something or it doesn’t. Two wins for the new tech team at Stifel, led by Marwan Kubursi, will feel pretty good.

It may well be that Bay Street’s Institutional Sales teams have been reading backwater blogs (see prior posts “Belair / Ericsson deal a wake-up call for every Institutional Sales Desk” Feb 22-12 and “$1.1B Q9 Networks deal another reminder that Canadian markets don’t get tech” June 4-12), but the recent market highs have been crucial to the timing of these two deals.

I think the real credit belongs to the Boards, Management and investors involved with Halogen and ViXS. Their confidence was essential. It is so easy to put these decisions off, and no one likes to “go first” when it comes to breaking the ice. Canada, however, is better for it.

Break a leg, Sally and team.

MRM