Farmers Edge inc (TSX: FDGE) is the latest firm to complete an initial public offering, or IPO transaction. The company is set to begin trading today on the TSX following the closing of a $125.0 million IPO transaction.
Farmers Edge is focused on digital agriculture, whereby it provides farmers with what it refers to as “cutting-edge solutions powered by a unique combination of field-centric data, artificial intelligence, and complete integration.” The company currently has 40.7 million common shares outstanding, 21.0% of which are not held by major shareholders.
The financing saw a total of 7.4 million common shares of the issuer sold at a price of $17.00 per share. An over-allotment option has also been issued by the company, which is valid for a period of 30 days, that could see the financing expanded by up to $18.8 million if fully-exercised.
Proceeds from the initial public offering will see $80.0 million go towards strengthening the firms financial position, $14.5 million used to repay outstanding debt, and $20 million used for working capital.
Following the close of the transaction, Fairfax Financial Holdings remains the largest holder of the company, whom exercises control over 25,023,193 shares of the company, or approximately 61.5% of the outstanding shares of the issuer. The position was amassed following the conversion of certain outstanding debentures and warrants, as well as prior shares held before the firm went public.
Operationally, the company posted negative cash flow from operations of $74.9 million in 2019, as well as negative EBITDA of $74.2 million. Pro forma for 2020, the company has indicated that it will be posting negative EBITDA between $29 to $33 million, while pro forma negative cashflow for 2020 is between $37 to $41 million. As a result, net proceeds from the offering are currently expected to be used to fund future operations.
Information for this briefing was found via Farmers Edge and Sedar. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.