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After the initial public offering of a digital publishing subsidiary of Torstar, the new owner of the Toronto Star has recovered his investment in the newspaper chain, and the company’s valuation is close to $400 million.
Investment company NordStar Capital acquired Torstar for $60 million last year, but in addition to the iconic newspaper named after the company, NordStar also acquired a large number of other unknown assets.
One of them is a digital publishing company called VerticalScope. VerticalScope was established in 1999 and operates more than 1,200 websites with a wide range of topics. The company maintains a digital community for all enthusiasts from cars and photography to parenting and outdoor activities such as archery, fishing and sailing. In the entire website chain, they interact with a total of 100 million users every month.
According to regulatory documents, the company’s revenue in the previous fiscal year exceeded $60 million.
Although the ownership structure of VerticalScope has changed many times during its more than 20 years of existence, it has been controlled by Torstar since 2015, when the newspaper chain paid $200 million to obtain majority control of the business. But VerticalScope completed its initial public offering on the Toronto Stock Exchange on Monday, selling nearly 6 million shares to the public at a price of $22 per share, raising $125 million.
“Completing this IPO is an exciting milestone for VerticalScope,” said Rob Laidlaw, the CEO who founded the company more than two decades ago. “With the funds raised, we have the ability to accelerate value-added acquisitions while continuing to invest in our software platform.
Despite the listing of VerticalScope, NordStar still holds nearly 40% of the company’s shares. According to the stock trading location, the shares are valued at approximately US$180 million, which is approximately US$22.33 per share close to noon on Monday.
This is enough to pay for more than three times NordStar’s investment in the parent company.
Julian Klymochko, CEO of Accelerate Financial Technologies Inc., an alternative ETF seller based in Calgary, said he was not surprised that Torstar’s new owner sold valuable assets. Before Torstar was acquired by NordStar, his company owned Torstar shares. The main reason for his ownership of shares was primarily because of the company’s assets outside of its core newspaper business.
In an interview with CBC News, he said: “Given the huge asset value, this is not surprising, it is very obvious now.”
Klymochko said that although there is no best offer, Torstar was the target of the bidding war that NordStar won last summer.
“They chose not to pursue higher bids,” he said. “The board sold the company at a price lower than the value of the assets, but even lower than the cash flow.”
He said NordStar “got a sweetheart deal.”
New Direction
Torstar’s new owners seem very happy to show off their new lover to the world-and squeeze a source of income from it.
In November, the company launched Parcel delivery service then Sold a digital marketing service to the grocery chain Loblaw Companies Ltd. The same month.
In January, Torstar partnered with retailer Golf Town, Buy SCREGolf brandAnd in March, it Purchased the copyright of Cineplex magazine, Movie viewers will flip through while waiting for the movie to start.
In the same month, Torstar made headlines for its most eye-opening plan to date: Proposal to open a casino.
Klymochko said that although VerticalScope is a good company, he has no plans to acquire the company because the company is listed because his company tends to focus on buying undervalued assets.
“Obviously Torstar is,” he said. “It’s more valuable, [so] As shareholders, we are very frustrated with this process. “
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