Q-News

May 2011

Private Equity - April 2011

Posted in Private Equity

There were nine financings reported this April; eight of companies disclosed the size of the transaction, adding up to $538.15 million in capital.  However, with subtracting the two oil and gas financings, the total amount of capital reported in the remaining six deals is only $41.15 million.  The number of deals and dollar value totals are lower than our adjusted total from March, which was 10 deals and $72 million, as well as our totals from January and February of this year.  This time last year we came across five transactions and $52.5 million in reported capital.  In total, there were four transactions reported in Alberta, including the two oil and gas deals, two in British Columbia, and one in each of Ontario, Quebec, and New Brunswick.  Five of the companies receiving capital were technology/web-based companies while six of the nine financings of Canadian companies involved participation by a US investor.  Meanwhile, Blackberry Partners Fund and MMV continued to invest in the United States, with two investments each.

Financings of Canadian Companies

Lymbix, a New Brunswick company that develops sentiment analytics software aimed at analyzing the tone of Outlook email and social media conversations, raised $1.35 million from GrowthWorks Atlantic Venture Fund.

Montreal’s Modasuite, an online retailer that offers men fitted and customized formal wear, raised an undisclosed amount of seed capital from three Quebec funds: Real Ventures, Anges Quebec, and Bolidea. Modasuite was founded in 2010

Redmoon Pet Food, an Alberta-based ecommerce company that offers custom-blended dog and cat food to pet owners, has raised $700,000 from AVAC, a government sponsored fund with a mandate to invest in Alberta companies.

US and International Activity in Canada

Bain Capital Ventures, Egan-Managed Capital, and JMI Equity participated in a $6.2 million raise by AppNeta.  AppNeta, which was founded in Vancouver but has since moved its headquarters to Massachusetts, provides cloud-based network performance management technology to IT administrators and IT service providers, allowing them to monitor data center, cloud, remote office and mobile environments.  This was the company’s fourth round of financing.  AppNeta raised $12 million in a third round financing back in February 2009, and $13.6 million in a second round financing in July 2007.

Ottawa’s BTI Systems, which provides high-bandwidth packet optical networking solutions to service providers and enterprise customers, raised $23 million in venture financing from Business Development Bank of Canada, Growthworks (BC), Vengrowth (ON), and one unidentified American Investor. The company, which is generating over $50 million in revenue, had earlier raised $11 million in late 2010.

NGEN Partners (CA), The Westly Group (CA), and SAM Private Equity (Switzerland) invested $8.5 million in Calgary’s Greengate Power Corporation, which is involved in the development of wind energy projects in Alberta. NGEN Partners and SAM Private Equity had already put $5.8 million into Greengate in December 2010 as part of the first tranche of the same financing round.

Warburg Pincus (NY) participated in a $350 million raise by Calgary’s Black Swan Energy.  The oil and gas exploration company will use the start-up capital to fund exploration for oil and gas resources in Western Canada. The Canadian investors involved in the deal were Canada Pension Plan Investment Board and Calgary’s Kern Partners.

Unnamed US-based private equity investors contributed to a $147 million initial raise by Calgary’s Tangle Creek Energy, an oil and gas exploration and production company.  The deal also involved Canadian institutional investors, whose names were also not disclosed.

Hong Kong’s Morningside Ventures (Hong Kong), and Quantum Pacific Capital were involved in a $1.4 million second round financing announced by Vancouver’s Indel Therapeutics, a biopharmaceutical company dedicated to developing new drugs to address antibiotic resistance.  Local BC investor MAD Ventures also participated in the deal.

Canadian Investments Abroad

Blackberry Partners Fund and Rogers Ventures participated in a $19 million raise for New York’s Payfone, whose application enables payments through mobile devices. Other players who participated in the raise were American Express (NY), Opus Capital (CA), Verizon Investments (NJ), and RRE Ventures (NY).

Blackberry Partners Fund also participated in an $8 million third round financing announced by Digby, a Texas-based provider of mobile commerce and mobile in-store customer engagement platforms.  The other investors involved were Battery Ventures (MA), S3 Ventures (TX), and Daylight Partners (TX).

Toronto-based MMV Financial participated in two venture debt deals this April. The first deal entailed MMV increasing its investment in Axeda, a Massachusetts-based company whose web-based platform allows third parties to build and deploy machine to machine applications.  

The second MMV Financial deal was its $2 million investment in Washington State’s UIEvolution which provides media companies, service providers, and manufacturers with custom mobile applications for mobile devices.

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