Q-News

July 2011

Private Equity - June 2011

Posted in Private Equity

Deal flow slowed down a little bit from the 22 transactions we came across in May but it was nonetheless a decent month on the financing front - there were 11 deals announced in June.  Nine of the deal reports included the amount of money that was raised through the deal, with these nine transactions bringing in a total of $116.6 million.  The numbers were a lot more encouraging than the four deals and $37.2 million reported this time last year.  Of the 11 companies raising capital this month, five operate in the ICT sector and three are manufacturers.  The remaining three businesses include a cleantech company, a newly formed player in the oil and gas sector, and a pharmaceutical developer.  The ICT companies raised a total of $27.2 million.  Most of the activity this June took place in Ontario, where we came across six of the transactions, while three of the deals involved Quebec companies and the last two reports came out of Nova Scotia and Alberta.


Financings of Canadian Companies

Nova Scotia’s Led Roadway Lighting, which manufactures lighting fixtures for public spaces using modern LED technologies, announced a raise of $4 million from Cycle Capital Management. This investment is part of a round totaling $8 million.  Nova Scotia Business Inc, the province’s business development agency, contributed the remainder of the capital.

Toronto’s Fresco Microchip, a producer of Analog and Digital Semiconductors for Consumer Devices, has raised $9 million in third round financing. The Ontario Ventures Capital Fund joined existing backers Celtic House Venture Partners and Ventures West in the investment.

Toronto’s Profound Medical, a medical device company developing an MRI-guided, trans-urethral procedure for the treatment of localized prostate cancer, has raised $9.4 million from the Health Technology Exchange, BDC, and Genesys Capital.

Warburg Pincus (NY), Trilantic Capital Partners (NY), and ZAM Ventures made a private equity in Velvet Energy, a newly formed Calgary-based oil and gas company.

US and International Activity in Canada

Wave Accounting, a Toronto-based company that offers a free, online accounting application designed specifically for small businesses with nine employees or less, has raised $1.5 million in seed funding from Inkef Capital (an international partnership of Canadian pension fund OMERS and Dutch pension fund ABP).

Toronto’s Fixmo, a provider of mobile software, has raised $6.5 million in Series B financing in conjunction with Rho Ventures Canada, Inovia Capital, and Extreme Venture Partners. California’s based Panorama Capital was also part of the investment syndicate.

Montreal’s Enerkem, a manufacturer, owner and operator of community-based advanced biorefineries, has raised $59 Million in a financing deal in which a number of investors participated. Valero Energy (TX), a new investor that chose to take part in this financing round, joins existing investors, Cycle Capital(QC), Waste Management(TX), Rho Ventures(NY), and  Braemar Energy Ventures(NY). Enerkem also obtained a US$80 million loan from the US Department of Agriculture at the beginning of the year.

Pappas Ventures (NC) participated in a $13 million raise by Quebec-based Milestone Pharmaceuticals.  The Canadian investors in the deal were BDC, GO Capital, Fonds de solidarité FTQ (FSTQ), Fonds Bio-Innovation, and iNovia Healthcare.  Milestone is working on the preclinical development of a drug (MSP-17) aimed at treating cardiovascular conditions.

A.T.L.A.S Aéronautique, located in Granby, Quebec, recently received $6 million in financing from Capital régional et coopératif Desjardins to pursue the integration of its supply chain in order to improve the production of aeronautical components. The company currently controls two subsidiaries that specialize in component manufacturing (“Air/Ground Equipment”) and providing customized solutions for its clients (“Aviation Lemex”).

Direct Media Technologies Inc, a Toronto-based company that provides domain ownership, monetization and sales services, raised US $4.2 million. The firm generates revenues through advertisements on its 80,000 internet domains.

Catterton Partners recently announced a capital investment in Cover FX, a Toronto-headquartered, dermatology-inspired cosmetics producer. Catterton Partners’ investment, the financial terms of which were not disclosed, is geared towards accelerating the company’s growth in domestic as well as international markets.

Canadian Investments Abroad

American Aerogel Corporation, a NewYork company whose thermal insulation technology is used to ship temperature-sensitive shipments, raised an undisclosed amount of capital from Cycle Capital Management, a Canadian venture capital fund focused on the Cleantech sector.

Kansas-based Hopkins Manufacturing, which was acquired earlier in the month by ONCAP Management Partners from Friend Skoler & Co, raised an undisclosed amount of funds from Penfund.  Hopkins manufactures aftermarket automotive products such as booster cables and towing accessories. 

GrowthWorks participated in a $30 million raise announced by Ambit Biosciences.   The other investors in the deal were Apposite Capital, Perseus-Soros Biopharmaceutical Fund, OrbiMed Advisors, Forward Ventures, Roche Venture Fund, MedImmune Ventures, GIMV, Genechem, Radius Ventures, NovaQuest and Horizon Technology Finance.  Ambit is a California-based biopharmaceutical company working on kinase inhibitors aimed at cancer and other medical conditions. 

Fund News

The province of New Brunswick committed $15 million to a fund that will invest in the Maritimes.  The fund was born earlier thanks to a $15 million commitment by the province of Nova Scotia.  The fund still does not have a name but it intends to raise another $20 million dollars by early 2012. 

Covington Capital Corporation signed definitive agreement to acquire the funds being managed by VenGrowth.  Of course, the deal still has to be approved by VenGrowth’s current shareholders.  If the deal goes through, the target close date is August 31, 2011. 

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