Kirk Falconer
Canadian retailer Hudson's Bay Co (TSX: HBC) has agreed to sell its Lord + Taylor department store operations to Le Tote Inc, a San Francisco-based fashion rental subscription service. HBC will receive about $100 million and a promissory note for $33.2 million. It will also secure a minority stake in Le Tote and two board seats. Le Tote will gain Lord + Taylor's brand and intellectual property, operation of 38 stores, as well as digital channels and inventory. HBC, which is currently reviewing a $1.74 billion take-private acquisition, said the agreement followed a review of strategic alternatives for Lord + Taylor. Le Tote is backed by Andreessen Horowitz, Azure Capital Partners, GV, Lerer Hippeau Ventures, Sway Ventures, Y Combinator and other investors.
Vancouver-based pharmaceutical company ESSA Pharma Inc (Nasdaq: EPIX; TSX-V: EPI) has closed a public offering and private placement, generating proceeds of about $48 million (US$36 million). The offering was led by Soleus Capital and included new investor RA Capital Management, a U.S. healthcare and life sciences investment firm. Existing backers of ESSA, including BVF Partners, Omega Funds and Eventide Funds, also participated. The company is also backed by Clarus Ventures, a U.S. life sciences venture capital firm acquired last year by Blackstone Group. Founded in 2009, ESSA is focused on developing therapies for treating castration-resistant prostate cancer. It will use the deal's proceeds for continued research and development.
Canadian long-term private equity firm Altas Partners has agreed to acquire DuBois Chemicals Inc, a Sharonville, Ohio-based provider of customized specialty chemical solutions. Terms weren't released for the deal, which is expected to close later this year. The seller is U.S. private equity firm Jordan Co, which bought DuBois in 2017 from Aurora Capital Partners. Established in 1920, DuBois serves more than 15,000 global customers, primarily in the mid-market manufacturing industry as well as the consumer car wash and fleet transportation markets. The company said the partnership with Altas will support its continued growth, organically and through selective acquisitions.
Marco Group International has acquired Bell & MacKenzie Co Ltd, a Hamilton, Ontario-based packager and distributor of abrasives and distributor of blast equipment and parts and accessories. No financial terms were disclosed. Founded in 1972 by Richard Bell and John MacKenzie, Bell & MacKenzie operates a conveyor and packaging operation and offers a broad array of products to several end markets. Marco, a Davenport, Iowa-based maker and distributor of surface preparation equipment, parts and supplies, said the deal supports its growth in Canada. U.S. private equity firm CapStreet Group completed a majority recapitalization of Marco in 2017.
Interface Fluidics, a Calgary-based oilfield laboratory services provider, has raised about $6 million (US$4.5 million) in a Series A financing. Equinor Technology Ventures, the venture capital arm of Norway's Equinor ASA, and U.S. accelerator Techstars led the round. Interface was founded in 2015 by CEO Stuart Kinnear, COO Tom De Haas and CTO David Stinton. It has developed a nanotechnology platform for optimizing oil production and visualizing fluid-fluid interactions through chemical testing at reservoir temperature and pressure. The company, a recent graduate of the first class of Techstars Energy Accelerator, said it will use the round's proceeds to expand capacity to meet market demand.
Canada’s venture capital (VC) market saw a record $1.28 billion invested in 143 financings in the second quarter of 2019, surpassing the prior record set in Q4 2018 , according to a report by the Canadian Venture Capital and Private Equity Association (CVCA). VC investment stood at a record $2.15 billion at the end of June, exceeding the previous high-water mark of $1.67 billion in the first half of 2018. Information and communication technology companies took 54 percent of VC invested in the first half, followed by life sciences companies, which captured 27 percent. Early-stage activity led late-stage activity in this period, accounting for 45 percent of the total invested.
Canada's private equity (PE) market saw $3 billion invested in 158 deals in the second quarter of 2019, up 54 percent from three months earlier but down 63 percent from Q2 2018, according to a report by the Canadian Venture Capital and Private Equity Association (CVCA). PE investment between January and June totalled $4.9 billion, the lowest amount invested in a first half since CVCA began collecting data (2013). The dollars went to 289 deals in this period, down from 324 deals in H1 2018. There was a record share of deals in the information and communications technology sector in Q2 2019 (20 percent). The industrial and manufacturing sector captured a comparable share (21 percent).
Mississauga, Ontario-based agricultural technology company Vive Crop Protection has secured $10 million in follow-on financing. The round was backed by new and existing investors, including Middleland Capital and the cleantech practice of the Business Development Bank of Canada (BDC). Founded in 2006 out of the University of Toronto, Vive develops new ways to use crop protection products using its Allosperse Delivery System, which improves the targeting and performance of pesticide ingredients. This creates farming efficiencies, as well as higher crop quality and yields. Led by CEO Darren Anderson, Vive will use the funds raised for commercialization of new products and continued field development.
TeraXion, a Québec City-based designer and maker of photonic components, has finalized a succession plan and restructured its share capital. The deal was backed by an undisclosed minority investment from the growth equity group of BDC Capital. BDC's Growth and Transition Capital division also partnered with CIBC to help the company with its bank refinancing. TeraXion said CEO Alain-Jacques Simard will assume the role of executive chairman, while CFO Richard Kirouac will retire but continue to hold a board seat. Simard and Kirouac are both co-founders. Ghislain Lafrance will be promoted to CEO. Established in 2000, TeraXion serves businesses in the light and heavy manufacturing, telecommunications, medical equipment, aerospace and defence industries.
PeerWell, a San Francisco-based health technology company, has secured US$6.5 million in a Series A financing. The round was led by OMERS Ventures, the venture capital arm of Canadian pension fund OMERS. It was joined by existing backer XSeed Capital and several individual investors. Founded in 2015, PeerWell provides a surgery optimization platform that helps patients with musculoskeletal conditions prepare for surgery and recover faster. In so doing, it contributes to lowering patient risk, controlling costs, and improving return-to-work times. Led by CEO Manish Shah, PeerWell will use the funds raised to accelerate the roll-out of its worker’s compensation solution.