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Happy New Year Everyone!
Welcome to your monthly recap of the Canadian microcap market. Let's review December to close out what has been a fantastic year!
The concept is simple for those who recently signed up for this newsletter. I feature the news that caught my attention during the previous month after skimming through all the press releases on the Canadian market. Every press release, every single day!
Let's now look at some of the main highlights from last month:
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The flurry of M&A is not over yet! Three more Canadian microcaps announced they would be acquired in December: Ackroo (TSX-V: AKR) for a 25% premium by a strategic, Banxa Holdings (TSX-V: BNXA) for a 33% premium by management, and Payfare (TSX: PAY) for a 90% premium by a strategic. In a rare turn of events, STEP Energy Services (TSX: STEP), which had announced its acquisition in November, terminated the deal when it became clear that minority shareholders would not approve the transaction. Enough with the lowball offers!
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In no particular order, a few companies published solid financial results during the month. Progressive Planet Solutions (TSX-V: PLAN) came out with a record quarterly net income following a significant improvement in gross margins. Microbix Biosystems (TSX: MBX) capped off a solid year with revenue growth of 54%, improved gross margins, and a return to steady profitability. Lastly, I was surprised by the turnaround at DAVIDsTEA (TSX-V: DTEA). Following a few years of revenue declines, the Montreal-based tea merchant came out with 16% revenue growth in Q3, alongside significantly improved gross margins and positive adjusted EBITDA. The stock price more than doubled in the days following those results.