Clarus is now in its 13th year of operation having prospered through good markets and bad. As a testament to our durability we are presenting a new look that reflects our confidence in the future.
The market landscape has changed radically over the past couple of years with new pressures on the agency and investment banking businesses. While many of our competitors have disappeared, we have battled hard and kept our brand intact. Aggressive focus on our targeted coverage list and agility in our core businesses have served us well. Given the shrinkage in the number of investment banks there has never been a time when companies like ours are more needed by the small and mid-cap segment. Giant, multi-business providers of debt, equity, M&A and other “tied” services can easily lose track of small and mid-cap companies that require a committed voice to tell their story to institutional investors day in and day out. At the same time, investors require idea oriented research and dedicated coverage of new and emerging trends and companies. What makes us unique is that the small and mid-cap market is our core business. It is what we do best.
Clarus is dedicated to provide the best information possible on our covered companies in the most accessible form. You might notice the focus of our new logo is on the “U”. It is because we know that as long as we put you, our clients first, we will prosper.
Execution Remains Strong in Q2/17
During a quarter where agency trading just got more challenging, markets also saw several financings fail to fully sell. Fortunately, Clarus continued its successful capital raising activities including executing some sizable IPO’s. In total, we raised $503 million in eight transactions of which we were lead or co-lead in six. Noteworthy, four transactions were of $80 million or more. Three transactions raised $245 million of new equity in the cannabis industry taking our 2017 total to 8 transactions and $326 million of new equity. In the last year, Clarus has raised $501 million in the cannabis space. Three transactions in Q2/17 totaling $98 million were completed in mining, one $80 million transaction was done in the oil and gas space and one for $81 million was done in the Special Sits space.
Alio Gold Inc.
Park Lawn Corp.
Med Releaf (IPO)
Clarus is an idea shop. We don’t cover all sectors and we don’t cover all the names in a space. By being very select in a sector, we try to deliver the best ideas that generate the best absolute returns to investors. We have been helping our clients with ideas like these lately:
We got involved in the medical marijuana space early, some 2 ½ years ago, and have delivered extraordinary returns to investors by way of names like Aphria (APH), our first idea in the space in July 2014 had an equity value of $41 million (share price $0.78/sh) and is now $750 million (recent price $6.70/sh). We have been publicly involved with multiple cannabis related companies and have become a go-to player in the emergent space.
Our mining group has been outstanding at generating ideas like: Endeavour Mining, a deep value turnaround story, whose market cap when we initiated in February 2015 was $223 million ($5.40/sh) at writing was $2,374 million ($25.39/sh) ; Golden Predator (GPY), a new exploration play in Canada’s Yukon that is proving up a potentially major new play and Cardinal Resources (CDV-ASX) which is delineating the large Namdini play in Ghana.
In special situations we identified: CRH Medical, a gastrointestinal company in early 2015, trading at $3.62/sh ($250 million) it recently surpassed $11.00/sh (equity value $800 million); Polaris Infrastructure, a geothermal energy turnaround and growth story, in January 2016 traded at $8.05/sh ($125 million) and recently traded at $14.30/sh ($225 million) having traded as high as $18.80/sh.
Our focus on oil and gas explorers like Leucrotta Exploration whose recovery from $0.83/sh (EV $98 million) to a recent $2.40/sh ($354 million) or Yangarra Resources trading from $0.48/sh ($85 million) in January 2016 to a recent $2.64/sh ($276 million), have strongly outperformed the sector because they are not commodity price calls but fundamental reserve growth stories.
Markets Were Open in Q1 2017
As markets opened up in Q1 2017, Clarus nimbly participated with a very active calendar. We participated in 15 transactions raising a total of $273 million. The cannabis space remained active with four transactions, the mining exploration space heated up with five deals and the healthcare, technology and special sits area saw six transactions.