Metatek founder and CEO Mark Davies worked with his team to adapt full tensor gravity gradiometry to an airborne environment in order to create detailed underground maps by flying overhead with Metatek’s customized planes, such as this one.Supplied
Canada is getting its first tech sector initial public offering in nearly five years.
Shares of British geophysical services company Metatek Group Ltd. are due to start trading on the Toronto Stock Exchange under the ticker “MTEK” next week. When they do, it will mark the first tech IPO on the TSX since the November, 2021, market debut of e-commerce software developer Coveo Solutions Inc.
Whether or not Metatek represents the first drop in a steady rain of tech IPOs after a years-long drought, however, remains to be seen.
Pricing details will be decided closer to the debut, but regulatory filings indicate Metatek plans to raise $50-million, giving the entire company a valuation range of $250-million to $300-million depending on the finalized terms. The filings said pricing is expected to be between $5.75 and $6.25 per share.
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Toronto-based independent investment bank Canaccord Genuity Corp. is the lead underwriter and sole bookrunner on the deal, the filings said.
Metatek uses a technology called full tensor gravity gradiometry, or FTG, that was originally developed by Lockheed Martin for submarine navigation in the 1970s. Mark Davies, the company’s founder and chief executive officer, worked with his team to adapt FTG to an airborne environment in order to create detailed underground maps simply by flying overhead with Metatek’s customized planes.
“We end up with lots of different datasets that gives you a Google Maps of the subsurface,” Mr. Davies, who has a doctorate in volcano geophysics, said in an interview. “We are evaluating every level of the subsurface.”
Their data is used to determine the locations of oil and gas reservoirs, metals and minerals, as well as hydrogen and sources of geothermal energy. The process, Mr. Davies said, is “an order of magnitude quicker” and also less expensive than comparable 3D seismic surveys.
The company does not have any operations in Canada, though its largest shareholder is Calgary-based private equity firm PillarFour Capital Partners Inc.
“Canada was always the obvious destination if we were going to go public,” PillarFour co-founder and managing partner Paul Colucci, who is also a member of Metatek’s board of directors, said in an interview. “We looked at the U.S. as an option around the technology theme, obviously if you’re a big tech company that is where you want to graduate to and maybe we ultimately will.”
“It is a technology name, but because of Canadian investors’ broad understanding of minerals, mining, and oil and gas, we just thought it was the natural home for us,” Mr. Colucci said.
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Metatek works with governments around the world, including Japan, Singapore, Nigeria, Egypt, Azerbaijan and Colombia, to help them understand the state of their natural resources, which Mr. Davies said can only be accomplished through systems like the one Metatek has.
“If you take Egypt, you cannot cover the entire country in wide line spacing 2D. It would take decades and cost billions,” he said. “You need a technology that can do it rapidly.”
While Metatek does not consider itself part of the defence industry, Mr. Colucci said the fact that investors are paying closer attention to anything even tangentially related to defence has helped make the environment more attractive for the company to do an IPO here.
“Right now, there is a major focus around natural resource security and national security and security of supply,” Mr. Colucci said. “That is basically what Metatek is all about.”
The company generated roughly US$23.5-million in revenue last year, nearly double the amount of money it made in 2024. Once the IPO is completed, PillarFour and Mr. Davies will remain Metatek’s two largest shareholders, with ownership stakes of approximately 25 per cent and 17 per cent, respectively.
Metatek’s arrival on Canadian public markets comes as the country’s long-stagnant IPO market is poised to enter a period of possibly revival. Barrick Mining Corp., for example, said in February that it would IPO its North American gold assets later this year.
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A successful market debut for a tech company, in particular, would help turn the page on a difficult chapter in Canadian tech IPO history. Of the nearly two dozen Canadian tech companies that launched IPOs on the TSX during the frenzy that took place between mid-2020 and late 2021, nearly half have since been taken private at a loss relative to their initial public market value.
Most of those that are still public trade below their IPO prices. Coveo stock has recently traded around $5 per share, or about one-third of its IPO price.
But Metatek has high hopes that it can buck the previous trend. Mr. Colucci said the hope is to at least double the size of the business over the next two to three years, and Mr. Davies is ultimately targeting a $1-billion valuation.
“The addressable market we are in is billions and billions of dollars, and we know where we can leverage that,” Mr. Davies said. “We feel we have the right technology and the right team in place, and with the right backing, we believe we are positioned for accelerated growth.”