GrowthWorks to buy Mavrix

Mavrix Fund Management has announced the signing of a letter of intent to sell itself to a subsidiary of GrowthWorks, at a price of 25 cents per share. The price represents a 15% premium over recent closing values.

“We are looking forward to the prospect of joining forces with Mavrix to create a larger, stronger operation with over $1 billion in assets under management. Mal Spooner and his team at Mavrix would be a great addition to our group,” said David Levi, president and CEO of GrowthWorks.

GrowthWorks is still conducting due diligence on the transaction and retains the right to scupper the deal.

The transaction will require approval by two-thirds of the votes cast by shareholders. The deal has the approval of shareholders who represent 56.7% of the voting shares, which includes the officers and directors of the company.

The companies have signed support agreements, which provide that if the sale is not completed, the signing shareholders will tender to a takeover bid offer by the GrowthWorks subsidiary at a price of 20 cents or more.

According to Mavrix, GrowthWorks intends to retain all personnel in order to maintain smooth operations of the business.

GrowthWorks is one of Canada’s leading retail venture capital firms and has roughly $685 million in assets under management.

Mavrix is best known for its focus on resource investments, including flow-through shares, which are rolled over into mutual funds. The company has struggled to maintain its asset base despite soaring interest in the resource sector in recent years.

In its financial statement dated Dec. 31, 2008, the company reported that assets under management fell in the second quarter of 2008, declining by more than 15% to $539.1 million as at June 30, 2008.

GrowthWorks has proposed that the deal be completed on or about June 29, 2009.

(05/04/09)