Real Matters (TSX: REAL): Billion Dollar TSX Tech IPO Begins Trading

Real Matters Inc. provides a digital network that matches lenders with the highest performing real estate appraisers at the local level

Financial Post | May 15, 2017: Markham, Ontario-based Real Matters Inc. (TSX: REAL) closed its initial public offering of $156.7 million Thursday, the largest technology IPO on the Toronto Stock Exchange in a decade, according to its chief executive.

Jason Smith said the Company was thinking about going public as early as the summer of 2016, but wanted to know it had a predictable business in the United States where it is a leading player in the network management services platform sector for the mortgage and insurance industries.

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“There is a lot of readiness that you need to do in terms of going public, in terms of hiring people,” said Smith, who feels as though his Company has been in quasi-public state for awhile because it had already raised $200-million from Canadian asset managers who had taken common shares in a private company.

That shareholder base forced certain limitations on Real Matters, which Smith believes left it ready for the public markets. “We looked like a public company yesterday because of our shareholder base but trapped in a private shell,” he said.

The TSX is a first step with a cross listing in the United States possible later. The size of the offering while large by Canadian standards might have gotten lost in the shuffle south of the border.

[Editor’s Note: Real Matters raised approximately C$156.7-million in the IPO from the sale of 12-million common shares at C$13.00 per share, giving the Company a valuation in excess of C$1 billion.​ Real Matters provides a digital network that matches lenders with the highest performing real estate appraisers at the local level. The Company primarily serves the residential mortgage industry in United States where it generates over 90% of its total revenue from fees earned on each transaction it processes. 

Today, Real Matters reported second-quarter consolidated revenues that increased 39% to $64.5 million, as a result of higher revenues from acquisition and organic growth. Adjusted EBITDA for the period, though, decreased to negative $1.8 million from positive $1.1 million in Q2 2016, principally as a result of higher transaction costs and operating expenses in the appraisal business and new public company costs. The Company, however, expects that the impact of these costs will be more than offset by increased transaction volumes in future periods.]


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