Ottawa's Shopify eyeing acquisitions following $500M share offering

Shopify
Shopify executives celebrate the company's IPO on the NYSE in 2015. File photo.

Shopify believes an additional share offering worth about $500 million will better position the firm for future acquisitions, the Ottawa-based e-commerce firm told OBJ on Friday.

Shopify plans to release 5.5 million shares from its treasury on May 24 for sale on the Toronto and New York stock exchanges. The underwriters, Morgan Stanley, Credit Suisse and CIBC, have the option of purchasing an additional 825,000 shares.

At that start of this week, Shopify had about 92 million shares in circulation. The new offering of Class-A subordinate voting shares represents an overall increase of roughly six per cent.

Katie Keita, head of investor relations, said in an email to OBJ that the offering will help strengthen Shopify’s balance sheet to position it for future acquisitions. Funds will also go towards sales and marketing as well as further development of its merchant solutions and network infrastructure.

The offering comes at a high-growth period for Shopify, with the firm continuing to surpass analysts’ estimates. Shopify’s first-quarter revenues were up 75 per cent year-over-year, leading the firm to raise its guidance for the remainder of fiscal 2017. The company’s shares hit a new all-time high earlier this week, reaching $130.85 on Tuesday.

Last August, Shopify raised $246 million by selling five million treasury shares – roughly half what it’s anticipating with a similar offering this month.

Shopify May16-17
NYSE:SHOP and TSX:SHOP stock prices for Shopify from May 2016 to 2017.