Vancouver’s BBTV seeks to raise $172m through IPO

BroadbandTV and BBTV CEO Shahrzad Rafati | BIV files

What happened: Prospectus reveals Vancouver-based BBTV is seeking to raise $172m by going public

Why it matters: The IPO would allow BBTV to buy out BroadbandTV from controlling stakeholder

The part-owner of one of Vancouver’s largest media and tech companies is aiming to raise $172 million through an initial public offering (IPO), according to a prospectus released Thursday (October 8) by BBTV Holdings Inc.

The goal is ultimately for BBTV, a holding company, to 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.

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.

The IPO is being led by Canaccord Genuity Corp. and Scotia Capital Inc.

The prospectus reveals 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 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.

“Our business, like the advertising industry as a whole, has some seasonal fluctuations in accordance with increased ad spending around holiday seasons, and in particular, historically we have generated higher revenues in the fourth quarter in connection with the winter holidays,” the prospectus states.

While BBTV said the pandemic has shifted it to relying on a remote workforce with little impact on productivity, the company acknowledged its revenue per thousand views declined year-over-year “driven by the initial sharp decline in global advertising spend, including digital advertising, related to COVID-19.”