Market Commentary- December 31, 2010
Thomas J. Hayes - President & CEO - GrowthWorks Atlantic Ltd.
The last half of 2010 has been a very active period for the investment team on a number of fronts.
In September, Virtual Expert Clinics (VEC) based in Fredericton was acquired by California based Trumpet Behavioral Health (Trumpet) in a transaction that sees the Atlantic Fund retain an ownership position in VEC which owns shares in Trumpet. VEC is now part of a much larger enterprise focussed on the autism space and we see better growth potential for the combined companies as a result.
We have spent considerable time working on our second investment in Newfoundland and Labrador and expect to add an exciting new company to our portfolio by the middle of January 2011. Stay tuned for more details.
Our New Brunswick office has also been very busy working on two new deals in that province and we hope to have something to announce by the end of February.
A number of our existing portfolio companies including STI, Azorus, Virtual Marine Technologies and Origin Biomed continue to grow revenues and we are looking for them to have even better years in 2011. Globally we see positive trends in M&A transactions and it is possible one or more of our portfolio companies could be acquired in 2011.
Deal flow continues to be good however we remain challenged by a lack of syndicate partners who are able to invest alongside the Atlantic Fund. A recent report prepared on behalf of the Nova Scotia government advocates the establishment of a new institutional venture capital fund for Atlantic Canada. We welcome and will support this initiative as there remains a critical lack of VC in the region.
The above contains “forward looking statements”, including statements based on management’s current beliefs and assumptions in respect of the plans and prospects of, and results achieved by, portfolio companies, timing of venture portfolio investments and exits and information that was obtained from third parties. Actual results may differ from those implied by such statements or information as a result of numerous known and unknown risks affecting the Fund and current and future portfolio companies, including risks inherent in emerging businesses with unproven products or limited sales, general market and economic conditions, including M&A market conditions, and other risks referenced in the Fund’s public disclosure record. Many of these risks are beyond the control of the Fund, its manager and the Fund’s portfolio companies. Neither the Fund nor the manager assumes any obligation to update such statements or confirm the accuracy of such information.
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