“This transaction will increase the share of private foreign venture capital in Québec and thus stimulate the high technology sector, which is vital to Québec’s growth. In this way, a new stakeholder of international calibre will establish itself in Québec and contribute to launching and growing early-stage companies in life sciences, information technologies and industrial technologies – a development that pleases me greatly,” Minister Audet added.
The purchaser, Coller Capital, which was founded in 1990, is an international specialist in the private equity secondary market. The firm manages some US$3.5 billion on behalf of major institutional investors worldwide. The acceptance of Coller Capital’s offer will make possible the input of $200 million in private capital in the Québec venture capital sector, a significant amount of new funding and a move that is entirely in keeping with the government’s policy directions in this respect.
“Investments in venture capital have increased considerably in Québec in 2004. For the first nine months of this year, such investments stood at $463 million, i.e. $50 million more than the same period in 2003. During these nine months this year, Québec firms obtained 48% of all venture capital investments in the country,” Minister Audet said.
Of the $200 million invested by Coller Capital, $80 million will be paid to acquire the Société Innovatech du Grand Montréal’s portfolio, which comprises over 120 investments in high-tech companies. The firm will also assume Innovatech’s contractual obligations to these firms, which total an additional $41 million. Moreover, Coller Capital will invest up to $79 million of additional money to ensure the optimum development of the firms in the portfolio and to fund new projects.
We are pleased to conclude this transaction in Québec, which is a winning solution for all parties. Québec's private equity secondaries market is becoming increasingly dynamic and we intend to play a leading role here, providing liquidity to Québec investors in private equity funds and private companies
Denise Martin, Chairman of the Board of Directors of the Société Innovatech du Grand Montréal, emphasized that “this marks a positive outcome to the privatization process, since the firms in the portfolio can rely on the added value of a partner of international calibre taking the reins at the Société Innovatech du Grand Montréal.”
Minister of Economic and Regional Development and Research Michel Audet announced on April 6, 2004 the privatization of the Société Innovatech du Grand Montréal. At that time, he outlined the Québec government’s major policy directions respecting economic and regional development and the measures advocated to support private investment.
In June, following a publicly advertised tender process, the government asked the financial services firm KPMG and law firm Desjardins Ducharme Stein Monast to privatize the Société Innovatech du Grand Montreal. KPMG approached nearly 60 potential investors the world over and received offers to buy that were rigorously analysed according to the criteria set by the government.
“Coller Capital’s offer was the best one from a financial and strategic standpoint for the development of venture capital in Québec,” Minister Audet concluded.
