BBTV prices shares at $16 each for $172m IPO

BBTV CEO Shahrzad Rafati | Submitted

What happened: BBTV reveals share price for upcoming initial public offer

Why it matters: The IPO is aimed at giving the company greater control of Vancouver’s BroadbandTV

BBTV Holdings Inc. — the part-owner of one of Vancouver’s largest media companies — will issue 10.7 million shares priced at $16 each as part of an initial public offering aimed at raising more than $172 million.

In a final prospectus released Friday (October 23), BBTV revealed the Toronto Stock Exchange has tentatively approved the October 28 listing of subordinate voting shares under the symbol “BBTV.”

More than 1 million separate subordinate voting shares are being optioned to the IPO’s syndicate of underwriters, led by Canaccord Genuity Corp. and Scotia Capital Inc.

Those shares are also priced at $16 each, which would net an additional $17 million for BBTV if the underwriters scoop up all the additional shares.

The holding company announced earlier this month it wished to go public and use the proceeds to buy out Vancouver-based BroadbandTV Corp., which is majority owned by Luxembourg’s RTL Group.

The European media company, a subsidiary of Germany’s Bertelsmann SE & Co. KGaA, delivered a $36 million investment to BBTV in 2013 in exchange for a 51% stake in BroadbandTV.

BBTV controls the remaining 49% of BroadbandTV, which is best known for developing a platform that helps create, distribute and monetize video content for online consumption.

It has just over 350 employees, with 266 in full-time roles.

Shahrzad Rafati, a former BIV Forty Under 40 winner, is CEO and a director of both BBTV and BroadbandTV.

If successful, the IPO and subsequent buy-out would deliver greater control of BroadbandTV to Rafati, who founded the company in 2005 and also sits on the board of directors of Vancouver-based Hootsuite Inc.

“That IPO is going incredibly well,” David Barr, president and CEO of PenderFund Capital Management Ltd., told BIV just ahead of the release of the final prospectus.

He said accelerated technology adoption amid the pandemic has made it one of the best times in 20 years to be a tech company looking to go public

The same week BBTV announced plans for an IPO, Vancouver-based East Side Games said it would enter into a $150-million reverse takeover deal with Leaf Mobile Inc. (TSXV:LEAF).

The reverse takeover would allow East Side Games to trade on the senior TSX without going through the traditional IPO path.

“Chances are you’ve seen content from BBTV this month without even knowing it, which is key to how we believe we can support content owners: by putting them and their success at the forefront,” Rafati said in the prospectus.

“We have amassed one of the largest and fastest growing content libraries in the industry. We also license over 400,000 new videos on average every month, across 10 languages and the 28 countries in which we have a local presence. Our content spans key verticals in the digital video space, including music, entertainment, gaming, kids and family and sports.”

The prospectus shows BBTV’s revenue has gone from $33 million annually in 2014 to $372 million as of 2019.

The company calculates annual revenue for 2020 is set at $388 million based on money coming in during the 12 months between the second quarter of 2019 and the second quarter of 2020.

BBTV recorded about 439 billion views over its platform between June 2019 and June 2020, and the company asserts it has the second-most unique monthly viewers of all digital platforms: 596 million vs. Google’s 1.118 billion.