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Feature Company: FAX Capital Corp. (TSX: FXC)

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FAX Capital is an investment holding company that listed on the Toronto Stock Exchange in November 2019.

Additional Information:

Company: FAX Capital Corp.
Website: http://www.FAXcapitalcorp.com
Stock Symbol: TSX: FXC
Date Published: Mar 16, 2020
Transcript: Available

Video Transcript:

I’m Fiona Forbes for Investmentpitch Media

Today’s feature company, FAX Capital Corp. is an investment holding company that listed on the Toronto Stock Exchange in November 2019.

The company raised gross proceeds of approximately $70 million from the sale of approximately 15.6 million units priced at $4.50 per unit, with each unit consisting of one share and one warrant with the warrant exercisable at $4.50 for 24 months.

An additional $120 million was raised from the sale of approximately 26.7 million shares sold to Fax Investments at $4.50 per share.

CIBC Capital Markets and National Bank Financial led the syndicate for the financing.

The shares are trading at $2.80, with the warrants trading at $0.11.

The company invests in equity, debt and/or hybrid securities of its portfolio companies.

The company initially intends to invest in a concentrated portfolio, targeting 10 to 15 high-quality businesses or businesses that have the potential to be high-quality businesses located primarily in Canada and, to a lesser extent, the United States across various industries, generally avoiding businesses with unproven and speculative business models.

The company intends to support the growth and development of its Portfolio Companies through active ownership, leveraging its industry experience, business contact network and financial strength.

The company anticipates that approximately 80% of its portfolio will be public companies with the balance invested in private companies.

Led by CEO Blair Driscoll, the company has an experienced executive team that provides an invaluable
perspective on how to build and scale organizations, having successfully built and sold a number of
businesses over the past 40 years.

The investment team is led by Marc Robinson, most recently an award-winning small cap portfolio manager at LDIC, and Nickolas Lim, who has extensive investment and M&A experience as the vice-president of permanent capital entities at Hamblin Watsa Investment Counsel and with Brookfield Asset Management.

The company operates with a permanent capital base, not subject to withdrawal or redemption, which is an essential component of wealth maximization, providing enhanced stability, particularly in downturns in the economy when capital is scarce, and reducing portfolio turnover.

The unaudited book value was approximately $4.30 at December 31st, 2019.

Since that time, the company has focused on high-quality, durable companies and has started to deploy capital into a number of public investments and has invested approximately 15% of its total cash resources, emphasizing that none of the company’s investments are in the energy or resource sectors.

Management is encouraged by the increasingly attractive opportunities this recent market sell-off has provided to accumulate shares of target companies at lower prices.

For more information, please visit the company’s website www.FAXcapitalcorp.com, contact Sophia Tang, Investor Relations, at 416-860-6108, or email IR@FAXcapitalcorp.com.

I’m Fiona Forbes for Investmentpitch Media