Q-News

June 2010

Private Equity - June 2010

Posted in Private Equity

There were four private financings reported in June, bringing in $37.2 million in new capital. For the sake of comparison, in June 2009 we reported six deals and $7.9 million in new capital – the dollar figure that month was deceptively low due to the fact that two of the transactions reported did not give any details as to the amount of money actually raised. Looking at the last two years’ figures, it would be easy to say that June is merely a sluggish month in terms of financing. However, if we go back a little bit further - to June 2008 - we can see that there were 16 financings and $143.4 million in new capital reported that month. None of the financings reported this June involved an Ontario company while both Montreal and Vancouver reported two transactions each. The two Vancouver companies are both in the biotech space and accounted for $28.2 million of the $37.2 million in total funding – with a significant portion coming from foreign investors. For a second time in the last 12 months, there were more Canadian players investing in US-based companies than vice versa – we saw the same thing happen this past November. Four of the nine US investments made by Canadian parties were in technology companies while another two were in the biotech space.


Financings of Canadian Companies

Game On Audio (previously known as Point d’orgue), a Montreal-based company that provides audio tracks and voiceovers to gaming companies, raised $2 million. The investors participating in the raise were Business Development Bank of Canada, Investissement Québec, and the Regional Economic Intervention Fund. Part of the new capital will go toward opening a new studio in Los Angeles.

Montreal-based Abilis Solutions (formerly known as CMTek) raised $7 million from Société générale de financement du Québec. The company develops and integrates custom software for large clients, while also selling more standardized solutions, directly or through its subsidiaries, Info-Sys Solutions and MeditekOnline.


US and International Activity in Canada

Pfizer Venture Investments (NY), Johnson & Johnson Development Corporation (NJ), and Baker Brothers Investments (NY), participated in a $25 million B round financing announced by Aquinox Pharmaceuticals, a Vancouver-based biopharmaceutical firm. The Canadian players involved in the deal were Ventures West Capital and BC Advantage Funds.

UK-based Advent Venture Partners was part of a $3.2 million raise by Zymeworks, a Vancouver-based biotech firm that focuses on the development of antibody-based therapeutics. The other institutional investor in the deal was Montreal-based CTI Life Sciences Fund.


Canadian Investments Abroad

BlackBerry Partners Fund led a $9 million third-round financing by Transpera, a California company whose core technology is a platform aimed at monetizing video on mobile phones. The US investors in the deal were Flybridge Capital Partners, First Round Capital, Intel Capital, and Labrador Ventures. The company had previously raised $8.25 million as part of a second round financing in November 2008 and an undisclosed amount in July 2007.

MMV Financial participated in three US financings this month. It led a $4.5 million financing by LucidMedia, a $3 million raise by Smart Destinations, and provided $3 million to Unitrends. Lucid Media is a Virginia-based company with a technology platform that helps corporate clients, advertising agencies, ad networks, and publishers display online advertising. Smart Destinations is a Boston-based company that sells cheap access to tourist attractions across North America by bundling passes to multiple attractions for one fixed price. Unitrends is based in South Carolina and provides data recovery appliances to SMEs.

British Columbia Investment Management was one of the backers involved in a $100 million financing by International Meal Company Holdings, Brazil’s largest restaurant chain.

Montreal-based Versant Partners participated in a $28 million financing by Veracyte, a molecular diagnostics company based in San Francisco. The US investors involved in the second round raise were Domain Associates, Kleiner Perkins Caufield & Byers, and TPG Biotech.

Montreal-based Inovia Capital co-led a $5 million first round financing announced by Resonate Networks, a Virginia-based company that allows advertisers to target online audiences based on their attitudes through the use of a proprietary technology platform and process.

Monteris Medical raised $3.4 million to finance the sales of its first product, a brain surgery device. The company’s technology is based on research conducted at the University of Manitoba. Monteris continues to operate an office in Winnipeg but it moved its headquarters to Michigan as a result of a previous investment from the Southwest Michigan First Life Sciences Fund, a US-based fund that also participated in the most recent financing. The Canadian investors involved in this financing were Western Life Science Venture Fund, Business Development Bank of Canada, and Growthworks, all of whom are returning backers that became involved with the company when it was headquartered in Canada.

Knight's Bridge Capital Partners, a Toronto-based fund and subsidiary of Counsel Corporation (TSX: CXS), participated in a $250 million raise by Authentic Brands Group, a brand acquisition and licensing firm based in New York.


IPO News

Following months of rumors, SMART Technologies – a Calgary-based maker of interactive whiteboards and displays that enable people to collaborate in innovative ways – raised $660 million through an IPO and secondary offering in the US (NASDAQ) and in Canada (TSX). Over three quarters of the $660 million (USD) will go toward buying out the company’s private investors, who include Intel Corporation and Apax Partners. The company’s stock is trading under the symbol SMT.


Fund News

Vanedge Capital, a digital media venture capital fund based in Vancouver, recently secured $25 million from Quebec-based Teralys Capital Fund and an undisclosed amount from Vancouver-based Nicola Wealth Management. The two newly announced LPs, along with BC Renaissance Capital Fund and BDC Venture Capital, have allowed Vanedge to hit its target of $100 million for the initial close of its first fund.

Renewal2 Investment Fund, a Vancouver-based social venture fund, announced that it has raised a $35 million fund. The investors participating in the fund include several non-profit foundations based in Canada, the United States, and Europe.

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