MAK Acquisition closes $100-million (U.S.) IPO

Executive Summary

• MAK Acquisition Corp. has closed its initial public offering of 10 million Class A restricted voting units at $10.00 USD per unit, raising gross proceeds of $100 million USD.
• The offering was oversubscribed with strong institutional participation, validating the company's strategy to build a Canadian technology champion.
• The Class A units commenced trading on the Toronto Stock Exchange (TSX) under the symbol MAK.V, with proceeds held in escrow until the completion of a qualifying acquisition.

Key Details

• Offering Structure: 10 million Class A restricted voting units sold at $10.00 USD per unit.
• Gross Proceeds: $100 million USD (base); potential $110 million USD if the overallotment option is exercised in full.
• Unit Composition: Each Class A unit consists of one Class A restricted voting share and one-half of a warrant.
• Warrant Terms: Each whole warrant entitles the holder to purchase one Class A share at an exercise price of $11.50 USD. Warrants become exercisable 65 days after the completion of the qualifying acquisition and remain valid for 60 months.
• Trading Details: Units began trading on the TSX under symbol MAK.V. Shares and warrants are anticipated to trade separately 40 days post-closing under symbols MAK.U and MAK.WT.U.
• Overallotment Option: Underwriters have an option to purchase up to 1 million additional Class A units for 30 days from the closing date.
• Sponsor Holdings:
  • Sponsors (1011329901 Ontario Inc. and 1001361651 Ontario Inc.) hold 1,268,750 Class B shares each (approx. 9.8% of total issued/outstanding shares assuming no overallotment) and 94,500 Class B units each.
  • Class B shares were acquired for approx. $0.0089 USD per share; Class B units were acquired for $10.00 USD per unit.
  • If the overallotment is not exercised, sponsors will relinquish a maximum of 251,250 Class B shares.
• Use of Proceeds: Deposited into an escrow account; released only upon completion of a qualifying acquisition.
• Target Strategy: Focus on niche-market technology businesses with strong revenue retention, diversified customer bases, and potential for operational growth. Primary focus on Canadian and North American opportunities, targeting businesses with an estimated aggregate enterprise value of up to $1 billion USD.
• Management Team:
  • Matt Proud: Chairman and CEO; former CEO of Dye & Durham, completed over 70 M&A transactions.
  • Avjit Kamboj: Director and CFO; former CFO of Converge Technology Solution and Dye & Durham, successfully integrated over 50 acquisitions.
  • Board of Directors: Includes Ian Kidson (Director, Lakeshore Recycling Systems; former CFO of Docebo), Art Mesher (Former CEO/Chairman of The Descartes Systems Group), and Tyler Willox (Partner at Flowing River Capital).
• Underwriters: Canaccord Genuity Corp. (lead underwriter/sole bookrunner) and CIBC Capital Markets.
• Legal Advisers: Goodmans LLP (for MAK) and Bennett Jones LLP (for underwriters).

Notable Quotes

• "Oversubscribed offering and strong institutional participation validate MAK's strategy and vision to build the next great Canadian technology champion."
• "MAK expects to benefit from strong tailwinds driven by private-sector pursuit of growth and margin expansion, coupled with historic public-sector investment in defence and space."