A weekly look at some small-cap stocks making news - or about to.
Canada’s S&P/TSX Small Cap Index TXTW-I is up 20 per cent over the past 52 weeks, as of Thursday’s close. The index reached a record high of 918.79 on July 3. The Russell 2000 in the U.S. has increased 10 per cent over the past 52 weeks.
Small-cap spotlight
Theratechnologies Inc. (TH-T, THTX-Q) shares closed up 31.7 per cent on Thursday after it announced a friendly deal to be taken over by CB Biotechnology LLC, an affiliate of Future Pak LLC, a company that has made past bids for the Montreal-based specialty biopharmaceutical company.
Before markets opened on Thursday, Theratechnologies said the offer is for US$3.01 in cash, plus one contingent value right (CVR), for potential additional aggregate payments of up to US$1.19 per share. (A CVR gives shareholders the right to receive an additional payment if certain milestones are met). The total acquisition price, including CVRs, is US$4.20 per share. The company said the total transaction, assuming full payment of the CVRs, is US$254-million (US$182-million without CVRs).
Theratechnologies said the deal represents a 126-per-cent premium to its closing stock price on the Nasdaq before the announcement and a 216-per-cent increase from April 10 - the day before the announcement of Future Pak’s previous bids.
Theratechnologies said its board unanimously recommends that shareholders approve the transaction.
“This transaction is the result of a thorough and deliberate sale process aimed at maximizing value for our shareholders,” stated board chair Frank Holler in a release.
In April, Theratechnologies announced an “open and non-exclusive” sales process after receiving a proposal from Future Pak, a privately held contract manufacturer, packager and distributor of pharmaceutical and nutraceutical products.
Theratechnologies said the first unsolicited non-binding proposal from Future Pak came in August, 2024 for US$100-million - and was rejected. It said a second unsolicited offer came from Future Pak in January, 2025 – but that it couldn’t be considered because it was in exclusive talks with another potential buyer at the time.
In the July 2 release, the company said the transaction with Future Pak represents the “culmination of [the] sale process whereby Theratechnologies solicited interest from a number of potential counterparties.”
In a note, Research Capital analyst Andre Uddin wrote that the “lack of a higher bid by a white knight is likely an indication of the current state of the markets.”
Mr. Uddin also noted that, based on his research, specialty pharma companies have been acquired at a median trailing price-to-sales (P/S) multiple of 3.7 times over the past 20 years and 3.6 times over the past five years.
“In comparison, THTX is being acquired at a trailing 12-month P/S multiple of 2.9x, or 3.0x based on projected 2024 sales,” he wrote.
On a trailing EV/EBITDA basis, he said the median acquisition multiple for specialty pharma companies over the past five years is 15.7x and Theratechnologies is being acquired at a 2024 EV/EBITDA multiple of 16.8x, or 24.5x based on his firm’s 2025 estimate.
Mr. Uddin also noted that he had previously assigned a “buy” rating and a US$3.80 target price to the stock.
“Given that the total acquisition price (including CVRs) is US$4.20/share - we are recommending that shareholders tender their shares into the offer given that there are no other bids,” he wrote.
Leede Financial analyst Douglas Loe maintained his “speculative buy” rating, citing the “lingering valuation gap” between the bid value and his target price of US$5.34.
“Future Pak’s bid seems poised to be accepted, but we stand by our view that the bid value omits readily achievable supplemental value from non-Egrifta/Trogarzo operations,” he said in a note, citing two of the company’s medications used to treat HIV.
“The delta between bid value, assuming all contingent payments are indeed conferred to shareholders, is still 27 per cent, hence our decision at present to maintain our rating,” he wrote, but added that “the transaction does appear to be steaming ahead now that board approval has been granted and on a reality check, TH shares were unlikely to reach bid value in the next several trading sessions without the impetus of acquisition interest to drive share value up to bid value.”
In the past 52 weeks, the stock has traded between a high of $4.33 and a low of $1.59 on the TSX and between a high of US$3.20 and a low of US$1.22 on the Nasdaq.
Small-cap summary
Other small caps making news this week:
Trican Well Service Ltd. (TCW-T) shares closed up 14 per cent on Thursday after the company announced it’s buying private oilfield services provider Iron Horse Energy Services.
Under the deal, announced before markets opened on Thursday, Calgary-based Trican stated that it will pay $77.35-million in cash and 33.76 million Trican common shares, making the deal worth about $231-million based on Trican’s share price on Wednesday.
“The acquisition enhances Trican’s position as a leading energy services company, expanding its operational expertise in coiled tubing integrated fracturing in Alberta and Saskatchewan,” the company stated.
Trican also announced a 10-per-cent increase to its dividend pending the closing of the acquisition. The quarterly dividend is set to increase to 5.5 cents per share, up from 5 cents, on Sept. 30 for shareholders of record as of Sept. 12, the company stated.
National Bank Financial analyst Dan Payne maintained his “sector perform” (hold) rating and increased his target to $6.50 from $5.75 after the announcement.
In a note, Mr. Payne described it as a “solid and logical transaction,” stating that the company is acquiring “complementary and synergistic assets, which should hold potential upside and operating leverage to compound the long-term value equation.”
In the past 52 weeks, the stock has traded between a high of $5.45 and a low of $3.69 on the TSX.
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AGF Management Ltd. AGF-B-T announced on Thursday the sudden passing of its CEO, Kevin McCreadie, at age 64.
“The entire AGF team is devastated by the loss of Kevin, our colleague and leader,” Blake Goldring, AGF’s executive chairman, said in a release. “His impact on our organization – and the people within it – has been profound and will be lasting.”
Mr. McCreadie was the first CEO of AGF to come from outside the Goldring family. He joined the Toronto-based asset manager 11 years ago from a U.S. bank.
Read the Globe’s full story here
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Cargojet Inc. (CJT-T) shares closed up 8.5 per cent on Thursday after the company stated that it had extended its contract with a Canadian division of Amazon.com.
After markets closed on Wednesday, Cargojet announced that its Air Transportation Services Agreement with Amazon Canada Fulfillment Services has been extended for four years, until March 31, 2029. It also said Amazon will have the option to renew the contract until March 31, 2031.
“We view the extension of the agreement with Amazon as positive. It shows the strength of the relationship with Amazon within Canada,” Acumen Capital analyst Nick Corcoran stated in a note. He has a “buy” rating and $175 target on the stock.
In the past 52 weeks, the stock has traded between a high of $144.97 and a low of $69.60.
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TerrAscend Corp. (TSND-T) announced plans to sell its Michigan operations and exit that market.
After markets closed on Monday, the Toronto-based cannabis company stated that the decision was made following a strategic review.
Its Michigan assets include four cultivation and processing facilities, 20 retail dispensaries and real estate. The company stated that the net proceeds from the divestitures will be used to pay down debt.
After it leaves the state, the company said it will operate 19 dispensaries and four cultivation and processing facilities across five states, including New Jersey, Maryland, Pennsylvania, Ohio and California, as well as in Toronto.
“The strategic move is expected to meaningfully enhance TerrAscend’s financial profile,” the company stated.
In the past 52 weeks, the stock has traded between a high of $2.39 and a low of 30 cents.
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Western Forest Products Inc. (WEF-T) announced this week that a sawmill at its Columbia Vista Division in Vancouver, Wash., was damaged by a fire, “rendering the mill inoperable.”
After the markets closed on Monday, the company stated that no employees or emergency personnel were injured in the fire.
The Columbia Vista Division produced approximately 53 million board feet of lumber in 2024, with a focus on Douglas-fir specialty products for the Japanese and U.S. markets, the company said.
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Dorel Industries Inc. (DII-B-T) shares surged by about 20 per cent this week after the Montreal-based company announced a “significant reduction” in its home operations and the elimination of its domestic manufacturing operations in Cornwall, Ont.
Before markets opened on Monday, Dorel stated that the “strategic shift” in its operations will help its home segment return to profitability in 2026.
“Dorel Home initiated a new round of restructuring in the second quarter founded upon the reduction of the size of the organization and its ability to merge the sales, marketing and product development organization into the successful Cosco division,” the company stated, adding that a limited number of high-performing Dorel Home import products will be transferred to the Cosco portfolio, “focused on categories and customers driving the highest contribution with the least added complexity.”
Dorel said its decision to stop all Dorel Home manufacturing operations in North America was made “after a further extensive review of ongoing operations,” supported by an external consulting firm.
The company stated that it will provide more details on the costs and savings from these changes when it reports its second-quarter earnings in August.
Dorel said it’s also working with capital market advisors to recapitalize its balance sheet.
“The changes being implemented at Dorel represent some of the most significant in our over 50-year history,” Dorel CEO Martin Schwartz stated in a release.
In the past 52 weeks, the stock has traded between a high of $7.10 and a low of $1.25. The stock is down about 60 per cent so far this year.
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Kneat.com Inc. (KSI-T) announced this week that its chief financial officer, Hugh Kavanagh, is retiring on Aug. 8 “to spend more time pursuing other interests.” The company said Dave O’Reilly, most recently CFO at Ekco, will join the company as CFO on July 7.
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MDA Space (MDA-T) announced this week a contract extension with Fisheries and Oceans Canada to provide “critical and continuous maritime satellite surveillance data and analytics services for dark vessel detection.”
In a release before markets opened on Monday, the company said the amended contract, which extends the original agreement announced in 2023, “aligns with commitments outlined in the recent G7 Foreign Ministers’ Declaration on Maritime Security and Prosperity, reinforcing Canada’s leadership in promoting safe, secure and sustainable maritime operations.”
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Upcoming small-cap earnings:
July 8: Firan Technology Group Corp. (FTG-T)
July 9: Theratechnologies Inc. (TH-T)
July 10: Richelieu Hardware Ltd.(RCH-T)
July 11: Velan Inc. (VLN-T), MTY Food Group Inc. (MTY-T)
July 24: Mullen Group Ltd. (MTL-T)
July 29: First National Financial Corp. FN-T, Morguard North American Residential REIT (MRG-UN-T), Trican Well Service Ltd. (TCW-T)
July 30: First Capital REIT (FCR-UN-T), Morguard REIT (MRT-UN-T)
July 31: Aecon Group Inc. (ARE-T), Real Matters Inc. (REAL-T)
Aug. 1: NFI Group Inc. (NFI-T), Canfor Corp. (CFP-T), Canfor Pulp Products Inc. (CFX-T)
Aug. 5: CT REIT (CRT-UN-T)
Aug 6: Killam Apartment REIT (KMP-UN-T), Cargojet Inc. (CJT-T), BSR REIT (HOM-U-T),
Aug. 7: Western Forest Products Inc. (WEF-T), Alaris Equity Partners Income Trust (AD-UN-T), Russel Metals Inc. (RUS-T), Artis REIT (AX-UN-T)
Aug. 11: K92 Mining Inc. (KNT-T)
Aug. 12: Westport Fuel Systems Inc. (WPRT-T), Sienna Senior Living Inc. (SIA-T)
Aug. 13: H&R REIT (HR-UN-T), Bird Construction Inc. (BDT-T)
Sept. 24: AGF Management Ltd. (AGF-B-T)