Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Capstone Infrastructure Corp., the Toronto- based power and utility company, is working with bankers to explore a sale, people with knowledge of the matter said, Bloomberg News is reporting
The firm hired Toronto-Dominion Bank and the Royal Bank of Canada to advise on the process, said the people, who asked not to be identified because the matter is private.
Capstone oversees a portfolio of infrastructure businesses ranging from gas co-generation, wind, hydro, water and biomass power-generating facilities. It has operations across Canada and in the U.K. and Sweden. Potential suitors for Capstone include Brookfield Asset Management Inc. and some Canadian pension and infrastructure funds, said the people familiar with the matter.
Larger utilities that are involved in power generation as well as regulated utilities may also have some interest in the company, such as Algonquin Power & Utilities Corp., said Rupert Merer, a Toronto-based analyst with National Bank Financial.
"It is a bit of a diversified basket, which would tend to suggest that only the larger diversified utilities would acquire them," he said in a telephone interview.
The company's shares have fallen about 25 percent in the past 12 months, after it was handed an unfavorable rate decision for its Bristol Water business last December that affected its guidance for the year.
TransAlta Corp. (TA-T, TAC-N) says it's assessing its business and future strategy after the Alberta government unveiled its new climate change policy on Sunday, which includes an economy-wide carbon tax starting in 2017 and a phaseout of coal-fired power in the next 15 years.
"What's critically important is that the Premier has committed to an orderly transition that ensures system reliability and price stability for our customers, given that it is now certain that coal-fired generation will be phased out by 2030, and that the province's policies will not unnecessarily strand capital," TransAlta chief executive Dawn Farrell said in a statement on Sunday. "This is a positive, timely and important step forward."
Donald Tremblay chief financial officer of the Calgary-based power generation company, said the climate announcement is important for the company and its shareholders. "In the past six months we've seen a significant devaluation of our stock price due to the uncertainty of the future value of our coal assets in Alberta," Mr. Tremblay stated. The stock has dropped about 50 per cent in the past six months.
"The province's 15-year transition, and the commitment to appoint a negotiator, confirms that Alberta does not intend to strand capital."
TransAlta says it's analyzing a number of growth opportunities in renewables, including hydro, solar, wind and gas as part of a clean power strategy.
Madison Pacific Properties Inc. (MPC-T) reported net income of $30.7 million for the year ended Aug. 31, up from $16 million for the year-earlier period. The current year Included an after-tax net gain on fair value adjustment on investment properties of $21.8 million, compared to a similar gain of $7.4 million the year before.
The Vancouver-based real estate company, with properties in Western Canada and Ontario, reported cash flows from operating activities, before changes in non-cash operating balances, was $12 million for the year, up slightly from $11.5 million a year earlier. Income per share was 48 cents, versus 26 cents for the year ended Aug. 31, 2014.
Madison Pacific says it owns approximately $385 million in investment properties, which include 46 properties, with two million rentable square feet of industrial and commercial space. It says more than 99 per cent of the available space, not including properties under development, is currently leased.
Manitoba Telecom Services Inc. (MBT-T) says it has signed a deal to sell its Allstream business to Zayo Group Holdings Inc. for $465 million in cash.
Allstream provides Internet and other services to businesses and governments. U.S.-listed Zayo says it wants to add Allstream's assets to its own communications infrastructure business. After closing costs, MTS says it expects net proceeds of roughly $425 million.
The agreement to sell Allstream follows a failed deal to sell the business to Egyptian investment group Accelero Capital for $520 million. Ottawa blocked that agreement in 2013 due to national security concerns under the Investment Canada Act.
Under the deal, MTS has agreed to retain the pension obligations, and related pension plan assets related to retirees and other former employees under its defined benefit pension plans. All stream will retain the pension benefits related to current employees. MTS has also agreed to reimburse Allstream for certain solvency funding payments that it may have to pay.
Ivanhoe Mines Ltd. (IVN-T) says Zijin Mining Group Co., Ltd. has agreed to complete its investment in Ivanhoe's Kamoa Copper Project in the Democratic Republic of Congo (DRC) on or before Dec. 8, 2015.
Zijin agreed in May this year to acquire, through a subsidiary company, a 49.5-per-cent interest in Kamoa Holding Ltd for $412 million (U.S.). Kamoa Holding is an Ivanhoe Mines subsidiary that owns the company's interest in the Kamoa Project. Ivanhoe also has agreed to sell 1 per cent of its share interest in Kamoa Holding to Crystal River Global Ltd.
Ivanhoe Mines chief executive Robert Friesland said "constructive and cordial negotiations" between Ivanhoe Mines, Zijin and senior DRC government officials in recent weeks have led to agreed course of action to develop the Kamoa Project.
Sandvine (TSX:SVC) said it has received a software license expansion order for more than $4 million covering its deployments in the mobile properties of a major multi-national operator group in the Caribbean and Latin America region. It didn't name the company.
The Waterloo-based provider of broadband network solution said the order "reflects growth in the customers' deployments of Sandrine's Network Analytics, Traffic Management and Usage Management solutions."
It said the products will give the unnamed operator group insight into network traffic and the subscriber experience, to help it manage traffic to optimize network efficiency.
Pivot Technology Solutions, Inc. (PTG-V) said revenues rose 15.2 per cent in the third quarter to $414.5 million, compared to the same quarter last year, driven by strong product sales.
The San Diego-based company, which helps companies design, build and maintain computing and communication infrastructure, said product sales rose 16.9 per cent to $373 million in the quarter compared to a year earlier. Service revenues fell 1.7 per cent to $37.1 million year over year. Gross profit was up 1.3 per cent to $40.7 million, while gross profit margin of 9.8 per cent was down from 11.2 per cent a year earlier.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 25.6 per cent to $6.3 million, which it attributed to a " relatively large contribution to revenues from lower-margin product sales and a decrease in service revenues, which typically carry higher margins."
"While we experienced solid revenue growth from both major and non-major accounts, profitability suffered as a result of increased contribution from lower-margin product sales, lower service revenues, as well as competitive pressures in the storage segment compared to last year," stated Pivot chief executive Warren Barnes. "In general, we experienced relatively healthy levels of business activity, with the exception of storage offerings which continue to see competitive pressure and commoditization influence, while we continued to grow our customer base. In that respect, we benefited from the delivery of a sizeable data centre project for one of our new customers."
With files from The Canadian Press and Bloomberg News