Mogo Finance Technology and Difference Capital Financial merger has sparked activity in the tech M&A space, which could eventually involve the Canadian tech stocks on our list
SmallCapPower | April 17, 2019: On April 15, 2019, Mogo Finance Technology Inc. (TSX:MOGO) announced that it plans to merge with Difference Capital Financial Inc. (TSX:DCF), and will operate under the name Mogo Inc. Each share of Mogo will be exchanged for one share of Difference Capital. The combined entity will continue to execute on Mogo’s vision of building the primary non-bank fintech platform in Canada, giving Mogo access to approximately $10M in cash. Net cash is calculated as a company’s total cash minus total liabilities and is also referred to as the amount of cash remaining after the completion of a transaction. Investors may utilize net cash to determine whether a company’s stock is undervalued, using it with other metrics to measure a company’s overall liquidity. Net cash as a percent of market cap signals to the marketplace that the company is an attractive takeover candidate. The Canadian tech stocks we’ve listed today are relatively undervalued compared to their large-cap peers and hold an average net cash position of 16%, making them potential takeover targets.
*Share prices as at close April 15, 2019, data obtained from S&P Capital IQ
VersaPay Corp. (TSXV:VPY) – $1.50
VersaPay provides cloud-based, invoice-to-cash solutions. The Company strives to provide superior customer service, quick payments, streamline financial operations, and reduce costs. VersaPay ARC is the new standard in collections management and accounts receivable to view invoices online, facilitate secure transactions, and more. It offers an AR solution that automates the majority of work involved in AR and collections. On March 12, the Company announced that it was named a leader in the IDC MarketScape, the IDC Marketscape: Wordwide SaaS and Cloud-Enabled Accounts Receivable 2019 Vendor Assessment.
- Market Cap: $65.0 Million
- 7-Day Total Return: +7.1%
- 30-Day Total Return: +6.4%
- Net Cash Position (As a % of Market Cap): 17%
Patriot One Technologies Inc (TSX:PAT) – $2.11
Aerospace & Defense, Technology
Patriot One Technologies aims to deliver innovative threat detection and counter-terrorism solutions to promote safer communities. Through its PATSCANTM Multi-Sensor Covert Threat Detection Platform, the Company is able to gather a network of advanced sensor technologies with AI/machine learning software, which can detect and report threats wherever required. On April 8, 2019, the Company received final approval to graduate to the Toronto Stock Exchange, from the TSX Venture Exchange, commencing April 9.
- Market Cap: $291.7 Million
- 7-Day Total Return: -12.1%
- 30-Day Total Return: -22.1%
- Net Cash Position (As a % of Market Cap): 24%
Well Health Technologies Corp (TSXV:WELL) – $0.61
WELL Health Technologies is a Canada-based healthcare facilities company. The Company operates six medical clinics offering primary healthcare services in BC. WELL aims to consolidate and modernize primary healthcare assets. The Company’s walk-in and family practice clinics involve over 357 health professionals, including approximately 180 practitioners, who serve more than 600,000 patient visits per year. On November 15, 2018, the Company announced an agreement to acquire NerdEMR, BC’s largest OSCAR electronic medical records service provider. NerdEMR provides OSCAR EMR services to approximately 220 clinics in British Columbia and will help catapult WELL into the National EMR marketplace. On February 25, the Company was ranked second in the Diversified Industries on the 2019 TSX Venture 50.
- Market Cap: $55.9 Million
- 7-Day Total Return: -4.7%
- 30-Day Total Return: +8.9%
- Net Cash Position (As a % of Market Cap): 12%
VitalHub Corp (TSXV:VHI) – $0.175
VitalHub offers a suite of mobile app software to medical professionals for clinical care, communications, and medical research. Its VitalHub Chart software acts as a ‘middleware,’ bridging various operating systems, medical databases, and applications to provide medical professionals with real-time aggregated patient information at any location, on any device, at any time. The VitalHub Engage aims to create a branded app for medical institutions and the VitalHub Research application offers continued research and education for medical professionals as well as their patients. On March 20, the Company announced it has closed the acquisition of assets of The Oak Group, Inc. for $1.6M.
- Market Cap: $27.3 Million
- 7-Day Total Return: -10.3%
- 30-Day Total Return: -7.9%
- Net Cash Position (As a % of Market Cap): 11%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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