Stingray Digital Raises C$140 Million in IPO

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Stingray Digital Group Inc., a provider of music through television and the Internet, raised C$140 million ($113 million) in its initial public offering.

Stingray and its two private equity investors sold 22.4 million subordinate voting shares for C$6.25 apiece in the IPO and secondary sale, the Montreal-based company said Tuesday in a statement. Proceeds from the sale, which gives the firm a market value of C$296 million, will be used to pay down debt.

Stingray joins Canadian restaurant operator Cara Operations Ltd. and Ottawa-based Shopify Inc. in tapping the public markets for the first time in the past two months. There’s more to come. Mogo Finance Technology Inc.. is seeking to raise C$50 million in an IPO, while Sleep Country Canada and Shred-It International Inc. are also mulling public sales, according to people familiar with the matters.

Stingray focuses on its pay TV channels and sales of curated play lists to commercial clients like retailer Reitmans Canada Ltd. The company estimates it reaches more than 110 million pay TV subscribers worldwide. On the Internet, Stingray competes with companies including Spotify Ltd, Slacker Inc. and Pandora Media Inc.

The company was co-founded in 2007 by Chief Executive Officer Eric Boyko with support from private-equity investors Telesystem Ltd. and Novacap when it started The Karaoke Channel.

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National Bank of Canada, GMP Capital Inc. and Bank of Montreal led the banks on the sale. The banks have the option to buy an additional 15 percent of the offering after the deal closes around June 3, to add proceeds of C$21 million.

Stingray Digital shareholders will also sell 2.94 million shares for C$6.25 each at the close through a private sale, for additional proceeds of C$18.35 million, the company said.

The shares will trade on the Toronto Stock Exchange under the symbols RAY/A and RAY/B.

Stingray initially aimed to sell 10.2 million to 13.2 million shares for C$5.50 to C$6.25 each, while Novacap and Telesystem aimed to sell 8.6 million to 9 million shares in a secondary sale at the same price, according to May 11 sale documents.

Stingray Digital spokesman Mathieu Peloquin declined to comment.

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