A busy start to the year had Clarus lead or co-lead 3 transactions in January and co-manage another 2 raising a total of $303 million. (2/20/2018)
We recently initiated coverage of BeWhere Holdings (BEW $0.47). This young but experienced IoT telematics company is disrupting the market with its use of very low cost, next generation, low power cellular modem (LTE-M and NB-IOT) technology. We expect BeWhere to add several hundred thousand active subscribers over our forecast period. Buy with a Target Price of $1.00. (1/30/2018)
Greater Volatility but Investment Themes Resonate
Markets have taken a more volatile turn resulting in more cautious and less committed trading activity. Clarus has been able to remain active in important investment themes with some highly targeted financings in the cannabis, blockchain, technology, specialty healthcare segments. M&A has emerged in the Gold sector as larger players are driven to enhance productions levels, meanwhile Clarus has been busy at the other end of the spectrum as it helps fund exploration and mine restarts. Through May 2018, we have participated in $717 million of financings of which $295 million were as lead or co-lead. Reflecting the growing needs of our clients, we were also involved as strategic advisors or offering fairness opinions on $641 million of transactions.
Recently we initiated on People Corp, one of Canada’s largest players in employee group benefit consulting and third-party benefits administration (PEO $6.90, TP $8.50). Liberty Health Sciences is also new coverage for us. Focused on the Florida medical cannabis industry as an integrated player offering growing through dispensary services. LHS has a strong early mover position in this potentially huge market (LHS $0.87, TP $2.00).
Remaining At the Centre of Key New Industries
The evolving market focus on cannabis related companies translated into several lead, co-lead and manager roles including two lead roles for Aphria Inc. raising over $200 million supporting its aggressive growth plans and a co-lead role for MedReleaf in its $100 transaction to also support a build-out of capacity. We also helped Liberty Health Services with its roll-out of production and dispensary services in the Florida medical market. In all, we raised over $350 million in 5 transactions for cannabis related companies in Q4/17 and early 2018.
As a continuation of our special situation coverage focusing in the US healthcare industry, we completed an IPO for Akumin Inc., an outpatient imaging centre consolidation story that has considerable opportunities for growth. Also in the special sit area we led a transaction for QYOU Media, a company accessing massive international markets with its curating and packaging of web content and newly evolving e-sport content.
Blockchain related companies also developed a following and Clarus nimbly participated in the space with its involvement with LeoNovus, a cloud solutions provider using blockchain technology, as well as having supported the growth of Global Blockchain Technologies Corp.
Traditional sectoral coverage also played a role as Clarus led two, co-led one and co-managed one transaction in the gold sector including one for a West African gold developer, two for US focused companies and one for a Canadian focused company.
$ Millions Raised
Liberty Health Services
Akumin Inc. (non-raise IPO)
QYOU Media Inc.
Aurelius Minerals Inc.
Lucky Minerals Inc.
Pershing Gold Corp.
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.