We have a winner.
A panel of five judges; Tom Liston, Director of Research for Versant Partners, Barry Richards, Managing Director of Research for Paradigm Capital, Tom Astle, Managing Director, Research Technology for Byron Capital, Byron Berry, Equity Research Strategist Byron Capital, Ron Shuttleworth, Technology Analyst, M Partners and the readers of Cantech Letter have chosen Ottawa’s MOSAID (TSX:MSD) as Cantech Letter’s 2011 Canadian Tech Stock of the Year.
MOSAID WINS AWARD, EXITS STAGE LEFT
Thoughts on MOSAID and the acquisition of some of Canada’s most promising techs
By NICK WADDELL, FOUNDING EDITOR, CANTECH LETTER
For MOSAID (TSX:MSD) shareholders, 2010 must have seemed like the icing on the cake. The company slogged through the recession that took its stock to $7.45 on November 14, 2008 and came out the other end a winner. By the end of 2010 shares of MOSAID were $29.73.
But MOSAID was just getting started. In 2011, the world seemed to become hyper-aware of the potential value of patents. By mid-summer a consortium of companies including Apple, Microsoft, SONY, EMC and Ericsson paid $4.5 billion for the final pieces of Nortel’s patent portfolio.
The 2011 Cantech Letter Awards are brought to you by Serenic (TSXV:SER). Serenic’s market cap of $3.63 million (as of December 20th, 2011) was less than its cash position of $4.03 million (as of Q2, 2012). The company has no debt. Click here for more information.
MOSAID, which can date its history back to 1975, was once best known for its key circuit technology, an innovation used in the memory of most of the world’s computers. It wasn’t until 2007, however, that the Ottawa company went virtual and decided to get out of the memory test equipment manufacturing and semiconductor IP design and focus on defending a stable of patents that is especially strong in memory, such as DRAM and Flash, and has strength in Wi-Fi, Power over Ethernet, and microcomponents.
While MOSAID can celebrate this award, the feeling is bittersweet to many who follow the Canadian tech sector. Why? Well, we lost another one. The story of the year in Canadian tech, if there was one, was the takeouts of many interesting Canadian tech concerns, from Zarlink (TSX:ZL) to Bridgewater (TSX:BWC) to March Networks (TSX:MN). On December 19th, the board of MOSAID voted to accept $590-million buyout from Chicago-based private equity firm Sterling Partners.
Can the string be broken? Can Canadian investors ever begin to once again fully realize the value of our own creations? The answer may come in the IPO market, which is showing some signs of life.
In the latter half of this year Canadians were reintroduced to something they may have thought extinct; the technology IPO. Some of Canada’s fastest growing technology companies, such as Toronto’s NexJ Systems (TSX:NXJ), Burlington’s Ecosynthetix (TSX:ECO) and Vancouver’s Avigilon (TSX:AVO) collectively raised hundreds of millions of dollars in recent listings. Does this mean a more tempting environment for bustling private techs go public?
The Canadian tech scene will require an influx of new public companies simply to replace the ones we have lost. But there are signs of life in Waterloo, where there are now thousands of private tech companies, in Ottawa, which is experiencing a tech revival, and in BC where there are more than two-hundred companies whose sole focus is the research, development or deployment of clean-technological innovations. Two-thirds of these did not exist a decade ago.
Congratulations to MOSAID, and condolences to the Canadian tech scene for losing another great innovator.