TORONTO, Jan. 25 /CNW/ - Valucap Investments Inc. (TSXV: "V") ("Valucap") has acquired an option to purchase NorthStar Bancorp Limited's
("NorthStar") 23% equity interest in Elliptic Technologies Inc.
("Elliptic") for $429,011, being NorthStar's cost of acquiring that
interest. NorthStar acquired its holdings in Elliptic on July 23, 2010
as part of its acquisition of the portfolio assets of Axis Investment
Funds Inc. NorthStar has determined that Elliptic does not fit into
its investment strategy, while Valucap has determined that Elliptic
would be a good fit, subject to financing.
Elliptic, a private company based in Ottawa, Ontario, is a provider of
embedded security solutions to information technology ("IT") hardware
and semi-conductor customers in the U.S., Canada, Europe and Asia. The
company has patents and patent applications relating to the company's
various products, which are designed for use with various devices, and
is providing its services and products to customers in conjunction with
leading industry players including ARM Holdings plc, MIPS Technologies,
Inc., RSA, a division of EMC Corporation, Impinj Inc., Xilinx, Inc. and
Faraday Technology Corporation, who supply complementary components.
"We believe that Elliptic fits into the Valucap strategy and provides
significant growth potential in the highly important IT security
market." said Jeffrey Watts, President and Chief Executive Officer of
The exercise of the option is subject to the approval of the TSX Venture
Exchange and receipt of sufficient funding. Valucap has commenced a
private placement of up to 50,000,000 units at $0.10 per unit (each
unit consisting of one common share and one warrant to purchase one
common share exercisable at a price of $0.16 for 18 months from its
date of issue) to finance the exercise of this option and additional
acquisitions in accordance with Valucap's investment strategy, the
retirement of Valucap's outstanding debts, and working capital.
Completion of the private placement is subject to TSX Venture Exchange
approval. Although the acquisition of the Elliptic interest will be a
"related party transaction" for Valucap, since NorthStar currently owns
more than 20% of the outstanding shares of Valucap, Valucap will be
exempt from the requirement to obtain a formal valuation of the
Elliptic interest and minority shareholder approval by virtue of
sections 5.5(a) and 5.7(a) of National Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, because neither the fair market value of the Ellptic interest nor the
fair market value of the consideration payable for it by Valucap exceed
25% of Valucap's current market capitalization. In connection with its
acquisition of its interest in Elliptic, NorthStar obtained a formal
valuation of the interest from Harris Brown & Partners Limited ("Harris
Brown") dated July 23, 2010. The method used by Harris Brown was to
derive valuation metrics from the recent sale of Elliptic's primary
competitor, and to apply the same to Elliptic's pre-tax operating
income to determine an overall enterprise value for Elliptic, from
which Harris Brown attributed a values to the interest being purchased,
discounted to reflect Axis Investment Fund Inc.'s overall minority
interest. Subject to the analysis and the assumptions set out in its
report, Harris Brown concluded that the fair market value of Axis
Investment Fund Inc.'s interest in Elliptic was between approximately
$300,000 and $430,000 as of March 31, 2010.
Valucap is an investment issuer and is interested in making investments
in emerging technologies and markets. Valucap intends to become a
leading small cap Canadian equity company that specializes in investing
in commercialized and undercapitalized companies that have high growth
potential. Specifically, Valucap seeks to generate above average
investment returns on its capital by providing "transaction driven"
growth capital to micro and small cap companies which operate within
preferred industry sector classifications. The common shares of
Valucap are currently listed on the TSX Venture Exchange.
This press release includes certain "Forward-Looking Statements." All
statements, other than statements of historical fact, included herein,
including without limitation, statements regarding future plans and
objectives of Valucap, are forward-looking statements that involve
various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Valucap Investments Inc.
For further information:
For additional information please contact Valucap Investments Inc.:
|Jeffrey S. Watts|
President and Chief Executive Officer
Tel: 1 (416) 364-2591