Looking back at 2007

We have much to be proud of here at Wellington Financial, both professionally and personally. Our Fund II portfolio exceeded expectations, and Fund III has been advanced at a far faster rate than we had originally forecast. On the Fund II front, here are just some of the highlights:

– Air IQ (IQ:TSX) sold its vehicle finance division for $22 million in March.

– Critical Control Solutions (CCZ:TSXV) became extremely EBITDA-positive, shed a couple of money-losing divisions, paid down half of our loan out of free cash flow, and financed the rest of our 2004/05 vintage advances with a new operating line.

– Venture-backed Dreamcatcher was acquired by Austrian-listed JoWood Productions in January.

– EnGlobe (EG:TSX) intergrated its acquisition of Biogenie, producing $40 million of revenue in Q3 2007 and $5.4 million of EBITDA. Stock didn’t reflect any of the progress over the year, but the day will come – no doubt.

– Intrinsyc Software (ICS:TSX) signed half a dozen new deals for its Soleus platform, and raised another $20MM via an equity offering at $0.60 in May. The stock closed the year at $0.93, producing a nice gain for those that played on the deal.

– Venture-backed Longview Solutions was acquired by Exact Software for US$51.5 million in September.

– Nexient Learning (NXN:TSX) announced on November 14, 2007 that it had entered into an agreement for a recapitalization of the company. That transaction is pending.

– Tm Bioscience (TMC:TSX) was acqiured by Luminex (LMNX:NASDAQ) in March for stock.

– Top Aces was acquired by Discovery Air (DA.A:TSX) for approx. $70 million in cash/stock in August.

On the Fund III front, we closed 15 financings in 2007 – leading $90.1 million of announced deals, of which $77.5 were drawn against our own fund. According to public and industry sources, that makes us Canada’s most active independent sub/mezz/venture debt firm for Canadian borrowers. Plus more $ volume than any other independent, as well. And we had just one fulltime employee on this day in 2004.

As we only closed the fundraising for our $125 million Fund III in October 2006, this was a remarkable place for the team, and I’m really proud of what our folks accomplished. Only one Fund III firm was acquired during 2007 – the $122 million Suez SA deal for venture-backed Ventus Energy.

A heartfelt thank you to our families, team, clients, limited partners, industry confreres and referral sources. None of this would be possible without your support and hard work.

Let’s see what 2008 brings.

Happy New Year.

MRM
(disclosure – we owns warrants and/or shares in the above firms: CCZ, DA.A, EG, ICS, IQ, LMNZ and NXN)