He bought the team. He bought the building. Now, can he bring home a Stanley Cup?
Few investors will be looking more anxiously to 2004 for proof of their deal-making acumen than Eugene Melnyk, the new owner of the Ottawa Senators.
The head of drug maker Biovail has already seen ticket sales grow and the value of the team climb, but the ultimate measure of his success, a Stanley Cup victory, is still to be determined.
Melnyk emerged as the only serious bidder after repeated efforts by Rod Bryden to put together a re-financing package for the team collapsed and the club filed for bankruptcy protection. Melnyk and his advisers steered the acquisition through the courts, picking up both the team and the Corel Centre for a reported US$130 million.
Investors in Ottawa's Tundra Semiconductor have already been rewarded for acquisitions made in 2003. The company's stock soared from the $7 range to more than $25 after the company purchased interconnect product lines from IBM for US$10 million and from Motorola for US$20 million.
The Motorola deal alone was expected to add up to $5 million a quarter to Tundra's revenues.
Disgruntled minority shareholders in Corel had a different story to tell. They fought a tenacious but ultimately futile effort to scuttle a takeover bid by Vector Capital of San Francisco. Corel founder Michael Cowpland dismissed the offer of $1.05 a share as inadequate, but with no "white knight" waiting in the wings, Vector emerged triumphant. The company pledged its commitment to Ottawa, but later cut jobs and installed its own man as CEO.
In the life sciences sector, World Heart strengthened its financial underpinnings with a re-financing scheme and a seven-for-one stock consolidation. The complex deal netted the maker of heart assist devices $35 million and followed a series of interim financings throughout the year.
Abbott Labs launched a friendly takeover for I-Stat, the New Jersey-based maker of blood analysis products with substantial operations in Kanata. Abbott was already I-Stat's largest shareholder. It will pay US$392 million for the shares it doesn't currently own.
Cash-strapped Adherex Technologies grabbed a lifeline with a $21-million dollar private placement late in 2003, enough to finance crucial clinical trials for its cancer-fighting products.
Two of Ottawa's independent Internet service providers were snapped up last year. Cybersurf Corp. of Calgary acquired Cyberus Online for $1.2 million; Ottawa Telecom expanded into the small business and residential market by purchasing Trytel Internet.
In the construction industry, privately-owned Westeinde Construction, a fixture among local contractors for 25 years, was acquired by Aecon Group of Toronto, Canada's largest publicly traded construction firm. Westeinde will operate as a stand-alone division of Aecon.
In other deals during the year:
-MDS Nordion sold its oncology software division for $35 million.
-California's Rainbow Technologies acquired Chrysalis-ITS for US$20 million in cash.
-EnLeague acquired Kildara Corp. of Almonte. Financial terms were not disclosed.
-local IT service firms Montera Corp. and ITSecure Networks merged.
- by Scott Evans
