Winners of the 2015 PCMA Private Capital Markets Deals of the Year Awards Announced
May 22, 2015
The Winners of the 2015 PCMA Private Capital Markets Deals of the Year Awards
were announced at the 2015 PCMA Private Capital Markets Annual Conference
May 22, 2015, TORONTO - the Private Capital Markets Association of Canada (PCMA)™ held its 4th Annual PCMA Private Capital Markets Conference and announced the winners of the 2015 PCMA Private Capital Markets Deals of the Year Awards on May 19th, 2015.
The conferences hosted a great line up of speakers including the Hon. Joe Oliver, Minister of Finance, who opened the conference with a keynote address on the private capital markets and its impact on the economy.
“It was a pleasure to speak at 4th Annual Private Capital Markets Conference organized by the Private Capital Markets Association of Canada. Our Government’s top priority is creating jobs, growth, and long-term prosperity. A vibrant, liquid and competitive capital market is central to achieving that goal - and private markets are an integral part. So we share the same goal as the PCMA: harnessing capital markets as the engine of Canadian prosperity,” remarked Hon. Joe Oliver, Minister of Finance
This year the conference focused on the following theme: “Capital Raising and Effective Regulation – Private Capital Markets and Canada’s Economic Development”.
The event culminated with the presentation of the 2015 PCMA Awards – Private Capital Markets Deals of the Year – the only national industry awards for the private capital deals across Canada. These industry awards recognize Issuers of private market securities and Exempt Market Dealers that encourage best practices, high standards of conduct and recognize private capital markets business leaders who are helping build a vibrant and successful private capital market in Canada. Barry Critchley from the Financial Post hosted the 4th annual PCMA Awards presentation.
Geoffrey Ritchie, Executive Director, PCMA remarked, “The 2015 PCMA Award nominees reflect the many high quality and dynamic private capital deals going on across this country. This year, the PCMA received nominations from every region of the country - in fact it was the strongest nomination year since the awards began in 2012 and a sign of the growing momentum behind these Private Capital Awards.”
The nominees were evaluated based on their leadership in the industry, the qualities of the deal, its impact on the business, our industry and the community. We looked for innovative deals, projects that reflect the variety and complexity of the private markets, and issuers and dealers that displayed best practices and created great opportunities for Canadian investors. The award selection committee was comprised of independent members of the PCMA’s national Board of Directors.
The PCMA is committed to raising up the success stories of the private markets and honouring the industry leaders behind these successes stories. The PCMA Awards are the first awards to recognize excellence in the private capital markets and the activity of PCMA members across Canada engaged every day in helping to:
1. finance entrepreneurs, innovators and start-up’s;
2. inject capital to transition businesses;
3. support and grow emerging businesses that are creating jobs in local communities; and
4. create successful private market investment opportunities for Canadians.
Winners of the 2015 PCMA Awards – Private Capital Markets Deals of the Year
Agricultural Equity Deal of the Year
Raintree Financial Solutions & AgCapita Farmland Fund
Farmland has long been held by institutions as an income and capital preservation tool within a portfolio. AgCapita was the first issuer to open up the farmland asset category to Canadian retail investors through their series of farmland funds beginning in 2008. Raintree Financial Solutions is the exempt market dealer that has worked closely with AgCapita to raise their first fund, which was ultimately capped at 19,500 acres. During the life of the partnership, AgCapita managed the properties, distributed cash flows to shareholders and ended up selling the entire portfolio in 2014 delivering a NET return of 12% to investors. Today, the asset category has drawn the attention of major financial market players, including the Canada Pension Plan, and Brookfield.
Investment Fund Deal of the Year
Portland Investment Counsel Inc. / Portland Private Income Fund
The Portland Private Income Fund commenced operations in January 2013 and it provides a medium for investors to gain yield from different cross sectors of the private capital markets. The Fund’s objective is capital preservation, with income and above average long-term returns with likely low correlation to the stock market. Portland’s hands-on operational experience, and use of institutional experts has made this product unique and successful. The Fund primarily invests into a portfolio of private debt securities across Canada, with the underlying assets being in private commercial mortgages and private commercial loans, in particular secured mortgages, loans and participating capital with covenants. The Fund’s success is also entering into strategic partnerships with institutional experts such as Marshall Zehr, and Crown Capital Partners Inc. The Fund’s return since inception to March 31, 2015 was approximately 9.4%.
Residential Real Estate Deal of the Year
TriView Capital Ltd. & Hopewell Mahogany Limited Partnership
Mahogany was the winner of Canada’s Community of the Year in 2013 and is situated in Southeast Calgary. Mahogany is a master planned community anticipated to accommodate 12,800 residences and house over 25,000 Calgarians when completed. TriView was engaged by Hopewell to find a partner to develop the remainder of the Mahogany community. The funding criteria included no funds from U.S. or Western Canadian investor and a tight time frame. TriView was able to bring together Tricon and Hopewell and a commitment of $60,000,000 to support Mahogany. TriView, as an EMD, was able to secure a large private debt transaction, which will foster the continued development of an award-winning master planned community in Calgary.
Condominium Development Deal of the Year
Cranson Capital Securities Inc. and PlazaCorp.
Cranson Capital raised $14.5 million for Plazacorp, a leading Canadian real estate developer, for a new Widmer condominium development located in the heart of Toronto’s vibrant Entertainment District. Operating since 1982, Plaza is one of Toronto’s most experienced residential condominium construction and development organizations with over 7,000 condominium suites either already completed or under construction, in neighbourhoods including Yorkville, King West, Liberty village, St. Lawrence Market, and Harbourfront. Cranson Capital acts as an independent advisor to handle business financing arrangements and advise on mergers, acquisitions and divestitures, with a particular focus on solutions for real estate developments, technology companies and high growth companies.
Investments of this type are typically reserved for large institutions. Cranson Capital Securities’ innovative structure enabled 100 accredited investors to participate with a leading developer in the equity risks and rewards of this development. Conservative project forecasts suggest a potential 120% profit to investors over an expected term of 5 years.
Commercial Real Estate Deal of the Year
Arlington Street Investments - Haiku Management GP
This urban Calgary small commercial project was fully refinanced in Q1 2015 by Haiku Management GP, 3 months ahead of its financing schedule. The real estate asset was originally purchased in 2009 and redeveloped & repositioned by the management team in what is today, an area with significant development potential. The Haiku project revitalised the commercial space it occupies, attracted new high profile tenants and the management team was able to increase net operating income by 30% over the previous term.
Investors have received 100% return of their original invested capital and the project has paid 7.5% annual distributions since 2010. The real estate asset has more than doubled in value and the projected return to investors over years 6 - 10 are expected to average 14% per year based on original capital investment. Investors also have the right of first refusal to participate in a proposed high-rise condominium project and roll over of their investment. Arlington Street ascribed to best business practices in their project that included quarterly reporting to investors, annual shareholders meetings, priority payments to investors and the firm taking a carried interest and participation only after the project meets its performance expectations. Haiku has demonstrated the value of redevelopment to the Calgary city scape and the benefit of a disciplined management team for investors in private capital ventures.
Biotechnology and Manufacturing Deal of the Year
PowerOne Capital Markets Limited & Bedrocan Cannabis Corp.
In 2013 PowerOne Capital Markets Limited, an EMD and diversified Merchant Bank, investigated the potential for Medicinal Cannabis with the changing Health Canada legislation for this sector. Through their due diligence process in this developing market with nearly 1000 entrants, PowerOne reviewed 50 companies in detail before making a determination that Bedrocan Cannabis Corp could be a market leader under Canada's Marijuana for Medical Purposes Regulations. Bedrocan and its Dutch partner & shareholder, Bedrocan BV are a leader in the world of medicinal cannabis research and product innovation - supplying pharmaceutical grade government regulated cannabis for the last 13 years. PowerOne was the exclusive lead on the first and second private placements that totalled over $15 million. Subsequently, Powerone advised on the Reverse Take Over using a CPC Vehicle and Bedrocan is now listed as TSX-V:BED. The company has approximately 88 million shares out (diluted) and announced that production commenced in March 2015 of genetic clones that its Dutch partner produces in the Netherlands. The company began importing live plants from Holland, shortly after receiving its production licence from Health Canada.
PowerOne clearly demonstrated the ability of an EMD to provide the early stage capital and financing expertise to support entrepreneurial business and create investor opportunity in the Canadian economy.
Private M&A Deal of the Year
Crosbie & Company Inc. & Blue Mountain Resorts Limited
Crosbie and Company Inc. is an EMD and specialty investment banking firm focusing on mid-sized companies. They advise on the sale of companies, raising capital, management buyouts and restructuring underperforming businesses. Blue Mountain Resort is Ontario's largest ski and mountain adventure resort that was originally founded by the Weider family, then as a partnership with Intrawest Resorts Holdings Inc.
Crosbie was retained by the Weider family to advise on the sale of their remaining 50% interest. Two significant challenges in maximizing value for the client were trailing results that did not reflect true earnings potential and existing shareholder agreements that effectively reduced the potential buyers to Intrawest. The business potential was addressed using a sophisticated normalization analysis, while the single buyer issue was overcome by effectively leveraging elements of the shareholders agreement. After extensive negotiations the family sold its interest at a valuation significantly higher than the initial offer. The transaction closed in September 2014 for $58 million with financing arranged through Bank of America Merrill Lynch.
The PCMA would like to thank the 2015 Conference Sponsors for their support of this important industry event: Walton International Group Inc., Western Investment Properties, Computershare, TMX Private Markets, Romspen Mortgage Investment Fund, Mandeville, MNP Corporate Finance, North Star Compliance and Regulatory Solutions, Introduction Capital, WeirFoulds LLP, Sloane Capital Corp., peHUB Canada, Investment Executive, and Women in Capital Markets.
The PCMA would also like to thank the PCMA Founding Sponsors that have played an important role in establishing and supporting our Association. The support of our Founding Sponsors has made a significant difference in the exempt market/private capital market industry from coast to coast: Walton International Group Inc., WeirFoulds LLP, MNP Corporate Finance, PowerOne Capital Markets Limited, IBK Capital Corp., Portland Investment Counsel, Cassels Brock & Blackwell LLP, Knightswood Financial Corp.
About the Private Capital Markets Association of Canada
Since 2002, the Private Capital Markets Association of Canada (formerly the Exempt Market Dealers Association of Canada™) has brought together exempt market dealers, exempt market product issuers, and professional advisers to the exempt market. The PCMA is the leading national industry voice for the private capital markets to securities regulators, government agencies and the capital markets. The PCMA provides valuable services and benefits to its members, including: regulatory and compliance resources, opportunities for professional development and industry education, exclusive insurance programs, and access to a network of private capital markets professionals from coast to coast. For more information visit www.pcmacanada.com and also review our industry magazine Private Capital Markets here: http://www.pcmacanada.com/?page=Magazine
About the PCMA Private Capital Markets Deal of the Year Awards
Private Capital Markets Deals of the Year – are the only national industry awards for private capital markets professionals, which recognize business leaders who help build a vibrant and successful private capital markets in Canada. Capital raised in the private capital/exempt market helps finance economic activity across Canada and is an important contributor to supporting entrepreneurial business, and creating wealth for Canadian investors. Nominees are evaluated based on their leadership in the industry, their contribution to the deal, innovative market, product or investment opportunities created, the benefits of the deal for the issuer and for investors, and the overall impact of the deal on the quality and integrity of the private capital markets. The award selection committee is comprised of independent members of the PCMA and its national Board of Directors. For more information please visit our website: www.pcmacanada.com.
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Communications Director, PCMA