Q-News

February 2011

Private Equity - February 2011

Posted in Private Equity

During the month of February we identified ten reported transactions; this deal flow was very similar to the totals we observed over the three prior months as well as last February when we reported nine transactions.  Of the ten announcements last month, only seven divulged the amount of capital raised, which added up to $70.1 million in new money.  All of the deals were done in either Ontario or Quebec, which reported six and four transactions, respectively.  Seven of the transactions involved technology companies while the remaining three took place in the cleantech, industrial, and biotech sectors.  Of the three investments that Canadian funds made south of the border, two involved technology companies while the third went to a company that caters to the financial services sector.


Financings of Canadian Companies

MMV Financial made a $3 million venture loan to Montreal-based Beyond the Rack, a members-only shopping club that provides its members with discounts on clothing items by buying items in bulk that appeal to its membership base.  This was one of four investments reported by MMV during February.

Smart Energy Instruments (formerly ANI Technologies) raised $850,000 from private investors.  The company is developing power monitoring devices for the smart grid and has received assistance from the MaRS Discovery District. 

Utilicase, a 17 year-old Quebec-based company that provides services and software to electric utilities companies, raised $10 million in VC funding from the Cycle Capital Fund.

Biopharmacopae Design International, a Quebec-based developer of nutraceutical and cosmeceutical products, raised $2 million from Avrio Ventures. 

Capital régional et coopératif Desjardins invested $30 million in A. & D. Prevost in order to ensure that the company keeps its operations in Quebec.  The company manufactures and installs treated aluminum windows, doors, and other architectural frames.  

Ottawa’s Embotics, a company that provides virtualization and private cloud management software to enterprises and large non-profit organizations, announced the completion of a multi-million dollar round of financing involving Tera Capital, Covington Capital, and another unnamed institutional investor. Terms of the transaction were not disclosed.  The company’s most recent capital injection, prior to this one, was a $4 million second round financing with Covington Capital that was announced in December 2008.

 

US and International Activity in Canada

Syncapse, the Toronto-based company behind the SocialTALK platform, a social media management tool designed for brand marketers and agencies, raised $25 million from ABS Capital, a late stage VC investor with offices in Massachusetts, Maryland, and California.

New York’s Metamorphic Ventures and the Canadian office of New York-based Rho Capital participated in a $4.25 million second round financing for Chango, a Toronto-based technology-driven service company whose ad platform allows online advertisers to target internet users based on their search history. Participating Canadian investors were Inovia Capital, and Extreme Venture Partners.

Ottawa-based Jigsee raised its first round of financing from the Indian Angel Network, a national angel group in India.  Jigsee is developing technology that facilitates the streaming of video across wireless devices in developing countries where bandwidth is limited.

JMI Capital, which has offices in Maryland and California, provided a small growth equity investment to Mississauga-based PointClickCare.  The company has developed a SaaS-based platform for long term care facilities to manage electronic health records. 

 

Canadian Investments Abroad

Three of last month’s investments made by MMV Financial involved US companies.  The first transaction involved $3 million in debt financing to Nistica, a New Jersey-based firm that supplies optical networking system manufacturers with modules that help their systems rationalize the delivery of high bandwidth applications.  The debt financing coincided with a $5.5 million fourth round equity financing involving Novitas Capital (PA), Fujikura Limited (Japan) and NTT Electronics (Japan).  The second company that MMV Financial invested in was California-based NileGuide, which operates a website providing tourists with information on various travel destinations by employing locals that inhabit those locations. Terms of the second transaction were not disclosed.  The third US transaction for MMV was a $3.5 million investment in Massachusetts-based Sermo, an online community for physicians that makes money by selling the information generated by the community’s members.  Sermo had previously raised equity financing from Longworth Venture Partners, SoftBank Capital, and Legg Mason capital Management. 

Healthcare of Ontario Pension Plan financed the majority of a $75 million financing announced by KGS-Alpha Capital Markets, a NY-based broker-dealer that provides services to institutional investors. 

 

Fund News

Toronto’s Birch Hill Equity Partners announced the close of its fourth fund with $1.04 billion in commitments from international and Canadian investors.  The fund is set to spread that capital across 12 to 14 mid-sized Canadian companies in various sectors.

The Quebec government announced that it has set up a new life sciences fund.  The $49.5 million fund is called AmorChem.  $41.25 million of the fund’s capital is coming from Investissement Québec, FIER Partners, and the FTQ with the remaining $8.25 million coming from the private sector.  The main private sector participant is Merck Canada, which is investing $6.8 million.  


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