Which of these three companies will win the 2012 Cantech Letter Award for TSXV Tech Stock of the Year? It’s that wonderful time of year here in Vancouver when children’s thoughts turn to rainball fights in the park. Perhaps they’ll build a rainman, or make a rainfort.
Must be time to start voting for the 2012 Cantech Letter Awards.
Well, at least the weather makes it easy to concentrate on work. And there’s a lot to be done. Over the next few days, we’ll be rolling out the nominees for our homegrown accolades. These awards, our third annual, will be different for a couple reasons.
First, we’re very grateful to have the event sponsored by the Toronto Stock Exchange and TSX Venture Exchange. Cantech Letter, the award winners, and many of the analysts who will vote on the awards will open the trading day on Friday, January 11, 2013, with an official Market Open Ceremony. We’d also like to thank sponsor Heenan Blaikie, who will be joining us for the presentation.
The second change this year is in the number of awards. For the first two years there were just two trophies, one for the Canadian Tech Stock of the Year and one for the Canadian Tech Stock Executive of the Year. This year we have added a separate category for TSX Venture Technology stocks. All companies listed on the TSXV Technology, Cleantech and Life Sciences Sectors are eligible for the awards.
We have polled our judges and arrived at the finalists for the 2012 Cantech Letter TSXV Tech Stock of the Year. These three companies, which we list in alphabetical order, have all had great years. Now, you get your chance to tell us which had the best 2012, in the poll below.
Amaya Gaming (TSXV:AYA)
Cantech Letter Awards judge, and soon to be Mackie Research Capital analyst Ralph Garcea, says Amaya Gaming’s aggressive expansion has established a diversified revenue stream from software licensing, finance leases and sales. What’s more, he says, Amaya is becoming a global player, with strength in North America, Europe and the Caribbean. Garcea believes that Amaya’s recent acquisitions will drive it to $57-million in EBITDA on revenue of $155-million by the end of 2013.
Amaya Gaming, which was founded in 2004 and IPO’d on the TSX Venture Exchange in July of 2010, has in the past designed electronic table games that allow players to remotely play majong, bingo or horse racing. But the company vaulted to public attention early in 2011 when it secured a license from the Betting Control and Licensing Board of Kenya to operate online gaming. Amaya diversified its reach last year when it acquired struggling Calgary-based Chartwell Technologies in July for just under $23 million, and followed that with the December pickup of Cryptologic, a company founded in 1995 by brothers Andrew and Mark Rivkin that became one of the world’s largest online gaming platform providers, but was also struggling. Earlier this year, Amaya paid €15m for the Ongame poker network, then made a bigger splash with the $177-million pickup of Cadillac Jack, which has machine placements in more than 200 venues in the United States and Mexico.
Lorex Technology (TSXV:LOX)
Just when you think there might be a lull, the M&A trend across Canada’s technology sector proves to be remarkably persistent. Late in October, Lorex Technology announced it had entered into a definitive agreement with FLIR Systems (NASDAQ:FLIR) to sell itself for $1.30 per share in cash. The acquisition valued Lorex at just over $35-million.
Founded in 1996, Lorex got its start manufacturing and selling a range of video surveillance products it manufactured in Asia and sold in North America. Recently, the company has expanded into sub-sectors of the surveillance market. Earlier in March, the company debuted Live View, which it calls a “next-generation baby monitoring system, and features high end LCD screens and high night vision clarity. Another product, Live Connect, lets users connect to their home security system using Skype.
Lorex seemed to be just hitting its stride; for the first nine months of fiscal 2012, its revenue grew by $14.6 million or 33% over the prior year to $58.7 million. The Company’s EBITDA grew by $2.7 million or 68% over the prior year to $6.6 million.
Shares of Sylogist took off midway through 2012 and haven’t looked back.
The Calgary-based company, which has grown through acquisition, reminds some of a junior version of Constellation Software. Sylogist provides intellectual property solutions to a wide range of public and private sector customers and along the way has become that rarest of birds; a TSXV technology stock that pays a dividend. CEO Jim Wilson says the company’s practice is to pay out, over the year, less than one-half of its expected annual operating cash flow. “Going forward,” he said in a press release last month that announced a dividend increase “…cash flow, excluding the impact of acquisitions, is anticipated to increase by at least 50% over the prior fiscal year”. With its stock more than doubling since June, those holding a ticket on Sylogist had their cake and got to eat it in 2012.