Montfort Capital Corp. has announced a significant transaction involving the sale of its TIMIA Group to Round13 Capital for a total value of $6.5 million. The agreement highlights Montfort's strategic evolution as it shifts focus to other lending units. The sale includes an all-cash purchase price of $4.5 million along with the prepayment of $2 million in principal indebtedness to Pivot Financial, a Montfort affiliate.

Details of the Transaction

Under the terms of the securities purchase agreement, Montfort will divest all rights and interests in the entities that comprise the TIMIA Capital business unit. This business unit offers a technology-based lending platform designed to provide debt capital to B2B recurring revenue technology businesses across North America. In addition to the technology platform, the deal encompasses Montfort's equity interests in the TIMIA Group investment funds.

Ken Thomson, CEO of Montfort Capital, expressed optimism about the transaction, emphasizing its strategic importance. He stated, "We are very pleased to announce this transaction, which represents an evolution of our strategy. After successfully growing the business to its present size, TIMIA will now benefit from becoming part of Round13's portfolio, which focuses on technology investments within North America." Thomson also noted that Montfort intends to concentrate on its other lending units that deliver scalable and focused private credit opportunities.

Round13 Capital's Perspective

Brahm Klar, Managing Partner of Round13 Capital, echoed the excitement surrounding the acquisition. He remarked, "As a leading venture debt platform supporting a long-underserved segment of the Canadian private credit market, TIMIA is an exceptional complement to our core equity funds." Klar indicated that this acquisition would enhance Round13's ability to provide Canadian entrepreneurs with a broader range of financing options, aligning with their vision of fostering long-term partnerships with investors and portfolio companies.

Transaction Logistics

The transaction is subject to customary closing conditions but is not contingent on financing. It is expected to close by the end of October 2024. The sale marks a notable shift for Montfort Capital as it reallocates resources and attention to other lending avenues within its portfolio.

About Montfort Capital

Montfort Capital is a trusted provider of focused private credit strategies for institutional investors, family wealth offices, and wealth managers. The company operates several business lines, including Brightpath Capital, which is known for alternative residential mortgages; Langhaus Financial, which offers insurance policy-backed lending solutions; Nuvo Financial, focused on net asset value loans; and Pivot Financial, specializing in asset-backed private credit aimed at mid-market borrowers in Canada.

About Round13 Capital

Round13 Capital is a leading venture and growth equity investment platform established in 2013, based in Toronto. The firm targets high-potential companies across various sectors, emphasizing the support of growth and long-term development. With a team of experienced investors and operators, Round13 aims to create enduring value for both investors and the companies in its portfolio.

Forward-Looking Statements

This announcement includes forward-looking statements, which are subject to risks and uncertainties. Such statements include expectations regarding the completion of the transaction and its benefits to Montfort Capital. The company cautions that actual results may differ significantly due to various factors, including market conditions and the ability of each party to fulfill its obligations under the agreement. Readers are encouraged not to place undue reliance on these forward-looking statements.

The sale of the TIMIA Group to Round13 Capital marks a pivotal moment for Montfort Capital as it seeks to refine its focus on other lending units. The transaction is expected to provide both parties with strategic advantages, enabling Montfort to concentrate on its core business while offering Round13 the opportunity to enhance its investment portfolio with a technology-driven lending platform. With the deal set to close by the end of October, stakeholders are keenly observing the developments surrounding this significant transition in the Canadian private credit landscape.