Lone Wolf Trax now in good company

Hey there, time traveller!
This article was published 19/11/2014 (3997 days ago), so information in it may no longer be current.

The founders of Wolf Trax Inc. likely didn’t know it at the time, but the history of that Winnipeg company coincided nicely with global investor interest in plant science and agricultural technologies.

Wolf Trax benefited from the first wave of retail venture-capital investment in Canada and was part of the Ensis portfolio when that Winnipeg-based fund was sold to GrowthWorks.

As it sometimes happens in those sorts of deals, the new guys at GrowthWorks were not all that comfortable with agri-tech companies.

Kerry Green, one of the founding partners of Wolf Trax, said that forced him and his partner, Geoff Gyles, to find another investor that could both take out GrowthWorks and add some additional capital, because their plant micro-nutrition company was developing more products and was garnering sales around the world.

They found that partner in 2010 in Calgary-based Avrio Capital, an investment firm that focused on food and agriculture. (Avrio is also in an investor in Manitoba Harvest Hemp Foods & Oils.)

Wolf Trax won a Manning Innovation Award and continued to get market success with their niche products.

In the meantime, Green said, they got to another stage where they realized they needed another capital injection.

“We also realized that we were no longer prepared to continue to re-mortgage our homes to do it ourselves,” Green said.

They got together with investment bankers to solicit interest, and they decided on a number. If they found interest at that price, they would sell the company.

There was a lot of interest, and in March of this year, the company was sold for $95 million to Kansas City-based Compass Minerals, a leading producer of salt and specialty fertilizer.

Green spoke at the Agri Innovation Forum in Winnipeg on Wednesday.

His role in the conference — which brings together private equity, venture capital firms, corporate investors, commercialization professionals and entrepreneurs — was as the successful entrepreneur who grew his company to the point where it was sold for top dollar to a much large company.

But the point is, when Green and Gyles were starting to develop their dry-dispersible powder micro-nutrients, investing in ag-tech was just not that sexy.

There was a consensus among representatives of companies such as BASF and Syngenta, as well as investment firms from western Canadian and the Midwest U.S. present at the Winnipeg conference this week, that agri-tech is much more exciting now than it was 15 or 20 years ago when Wolf Trax was starting.

Sven Harmsen, investment manager with BASF Venture Capital America Inc. out of Cambridge, Mass., said, “Twenty years ago, there was just not that much agricultural-technology innovation. Now there is lots to look at.”

Green agrees with that assessment.

“Partly, it’s the (advancement) in technology, which allows us to understand more about how plants grow,” Green said.

But there is also a more fundamental commercial driver at play — higher commodity prices and increasing global food demand in the developing world means there is real money to be made in the sector.

“Prices have slipped a bit, but when there is money in that sector, people start looking for investment in agriculture,” Green said. “Suddenly it’s become sexy and (the investors) are saying they need some ag in their portfolio.”

Marc Elrick, the principal and founder of Calgary-based Critical Path Group, the organizer of the two-day annual conference, clearly hopes he’s got the timing right as well. This is the second year in a row the conference has been held in Winnipeg.

Considering the entrepreneurs presenting to the investors on hand come from as far away as Colorado, South Carolina, New York and Toronto, there is clearly some value for them to be here.

Elrick said, “The satisfaction for us is seeing companies secure funding even if it’s not entirely a result of presenting here. It’s tough to draw the line of correlation back to one presentation.”

Green remembers not so long ago giving a Wolf Trax presentation at a similar show in San Francisco and the anxiousness about hoping to be able to connect with potential investors.

Now he’s getting ready to move to the other side of the table and maybe invest in some new technologies himself.

martin.cash@freepress.mb.ca