Q4 to price $150M IPO at $10.5-13.0 per share for $712M valuation

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By CPE News

CPE News (6/10/2021) – Q4 Inc. has filed an amendment to its preliminary base PREP prospectus in connection with its proposed initial public offering (IPO) of its common shares and secondary offering if the over-allotment option is exercised.

Q4 anticipates to issue between 11,538,461 and 14,285,714 common shares to be priced between $10.50 and $13.00 for gross proceeds of $150 million.

Darrell Heaps, founder & CEO of Q4, is selling between 371,107 to 459,466 common shares for $4 million if $22.5 million over-allotment is exercised.

Upon completion of this offering, assuming an offering size of $150 million at an offering price of $11.75 (the midpoint of the estimated price range), Q4 will have 59,061,353 common shares issued and outstanding on a non-diluted basis (and 63,182,144 on a fully diluted basis) and if the over-allotment option is exercised in full, 60,565,659 common shares issued and outstanding on a non-diluted basis (64,686,450 on a fully diluted basis).

Q4 would be valued approximately $712 million on non-diluted basis assuming the over-allotment is exercised in full at an offering price of $11.75 per share.

Q4 is backed by Ten Coves Capital (formerly Park Financial Partners), First Ascent Ventures (formerly OpenText Enterprise Apps Fund (OTEAF)), Information Venture Partners, Plaza Ventures, Accomplice, CIC Capital Ventures (formerly Emerillon Capital), HarbourVest Partners, Kensington Capital Partners, and Espresso Capital.

Following the closing of the offering, Ten Coves Capital will remain as the principal shareholder.

Ten Coves and Heaps currently beneficially control 14,417,527 and 2,909,593 common shares respectively. Following the closing of the offering at $11.75 per share and assuming fully exercise of the over-allotment option, Ten Coves and Heaps would beneficially 14,481,356 (23.9%) and 2,499,006 shares (4.1%) respectively.

For the year ended December 31, 2020, Q4 reported $40.4 million in revenues, $21.7 million in gross profit and $13.1 million in net loss.

Toronto based Q4 is a leading capital markets communications platform for publicly traded companies, investors and investment banks. With offices in New York and London and Toronto, Q4 had 394 employees as of December 31, 2020.

Correction: Darrell Heaps is selling $4M shares as part of $22.5 million over-allotment option.

photo credit: Q4