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Overview
The healthcare sector has experienced considerable disruption in recent years, from emerging telehealth innovations to new tools for treatment and diagnosis. Each new technology has the potential to change — or even save — countless lives. Yet distributing these technologies to the global market is often far easier said than done, thanks to regulatory challenges and a lack of investment capital.
Principal Technologies (TSXV:PTEC,FRA:J07) intends to tear those barriers down. Based in Vancouver, British Columbia, Principal Technologies focuses on investing in life-saving and life-improving healthcare technologies and innovations. Working through a wholly owned European subsidiary, the company intends to invest in private healthcare technology companies in Europe, and expose them to the North American marketplace where they can benefit from the region’s higher valuation of med-tech companies.
Principal increases shareholder value by steadily growing the company’s financial performance, and paying off debt with improved cash flows and new equity when capital markets are advantageous.
This process is repeated as new acquisition targets come into play.
Principal’s risk management strategy revolves around its acquisition targets. It exclusively pursues companies with a proven competitive advantage; stable cash flow; disruptive technology portfolio with IP capable of significantly improving patient outcomes or quality of life; significant growth potential; and a qualified management team with a strong vested interest in success.
The company leverages exclusive access to key opinion leaders and medical advisory boards and has a highly experienced leadership team.
Notable individuals in its management roster include Jerry Trent, a highly accomplished international investment banker and portfolio manager; Prince Alfred of Liechtenstein, a senior member of the Liechtenstein family; Dr. Gerald Rainer, former CEO of Switzerland’s largest and most prestigious asset management company; and Dr. Ivo Ivanovski, former European IT Minister and currently CEO of Telekom Austria Group’s Tower Co.
Principal’s directors, advisors and major shareholders all maintain significant connections throughout Europe’s healthcare technology space, ensuring ongoing introductions to potential investments. The company also owns a clinical research organization which maintains a database of emerging technologies, allowing it to assess prospective acquisitions on an ongoing basis.
Company Highlights
Principal Technologies invests in leading and proven European healthcare technologies.Principal drives value in its investments by purchasing them at a discount in the EU and exposing them to the North American market, which offers significantly higher valuations for healthcare technology companies.The company is managed, directed and advised by a group of incredibly experienced entrepreneurs and investors, all of whom maintain close industry connections in the EU.When acquiring a new target, Principal’s first step is to ensure an equity control position. It will typically finance the acquisition through a combination of debt and equity, accessing major EU funds when financing leveraged buyouts.Principal has implemented multiple checks, balances and strategies to reduce and manage risk, including:Maintaining profit-oriented compensation plans to incentivize performance.Maintaining strict capital allocation at the corporate level.Ensuring a margin of safety compared to intrinsic value in negotiating its acquisition prices.Principal exclusively seeks managers and advisors who will allow it to broaden its competitive advantage, expand its operations and support international expansion.
Key Investments
Principal Technologies’ previous acquisitions demonstrate a successful track record of increasing shareholder value and providing growth capital, marketing expertise and access to an international network to expand its acquisitions’ global operations and revenue.
Vivostat
Vivostat is Principal Technologies’ most recent acquisition and the result of an extensive due diligence process and evaluation of numerous European healthcare technology companies. Vivostat’s technology is a unique and best-in-class system worldwide for on-site preparation and application of autologous (i.e. based on the patient’s own blood) concentrated fibrin and platelet enriched fibrin sealants for post-surgical use.
The technology has been used in more than 200,000 post-surgical procedures, with peer-reviewed evidence of zero rejection and infection rates, which is unparalleled.
Vivostat has been profitable for the last three years with a seven-figure net profit while serving less than 5 percent of its potential market.
Principal will roll out this best-in-class technology on a global scale.
E&E CRO
An 80-percent-owned clinical research organization, E&E facilitates the international distribution permits process for healthcare technology companies. This strategic investment will allow Principal Technologies to build a unique database which it will leverage to improve patient outcomes, serve the industry (hospitals, insurers and other stakeholders seeking medical information), as well as find new acquisition targets for its international rollout process. Based in the European Union, E&E is a cash-flow-positive company with stable revenue and a highly experienced in-house technical due diligence team.
Vision Surgery AI
A minor equity investment with the capacity for expanded ownership as operations increase, Vision Surgery AI uses advanced computer vision and artificial intelligence technology for real-time monitoring of surgical teams and operating room equipment.
Its technology detects and sends alerts about any anomaly or deviation from typical surgical procedures, significantly reducing complications and fatalities. Vision’s technology also leverages collected observations to build a database of medical information for machine learning purposes. Given that roughly 80 percent of surgical fatalities stem from human error, Vision Surgery has the potential to considerably improve surgical outcomes.
Management Team
Jerry Trent – President and Group CEO / Member, Board of Directors
Jerry Trent is the founder of Trent Investments, a multi-family direct investment agency for European ultra-high-net-worth individuals and asset management funds. In Europe, he served as the head of global markets and investment banking at SberBank, as well as the head of M&A and member of the Global Deals Origination Group at PricewaterhouseCoopers. His experience also includes being a highly successful Wall Street investor and portfolio manager.
Prince Alfred von Liechtenstein – Chairman, Board of Directors
His Serene Highness Prince Alfred von Liechtenstein has served on numerous boards and in several supervisory positions, including at LGT Group (largest family-owned asset management group globally). He holds a master’s degree in economics and informatics and has authored numerous books and articles on a wide range of topics. Prince Alfred von Liechtenstein is also the chairman of the advisory board of the International Peace Foundation – of which 19 advisors are Nobel Prize Laureates, including four in the medical field. His Serene Highness has also received multiple awards and prizes for his healthcare initiatives and humanitarian activity.
Dr. Leopold Specht – Member, Board of Directors
Dr. Leopold Specht is a veteran attorney with extensive investment experience. He is the owner of international corporate law firm Specht & Partner. In addition to serving on numerous boards, he is a member of the Economic Council at Harvard Institute for Global Law at Harvard Law School. Widely renowned for his expertise, Specht regularly serves as a guest lecturer at institutions such as Harvard University, Brown University, the University of Turin and the University of Sapienza Rome.
Peter McKeown – CFO
A seasoned finance and business professional, Peter McKeown has founded and served in executive positions at multiple successful listed companies. Armed with decades of experience, McKeown is a serial entrepreneur focused on the technology and resource sectors. He is also a chartered accountant with a Bachelor of Commerce in Accounting from Carleton University.
Dr. Gerald Rainer – Chairman, Board of Advisors
Dr. Gerald Rainer is the former CEO of Julius Baer, a US$400-billion asset management company in Switzerland. He has also served in multiple board and trustee positions at multi-billion dollar entities and trusts. His impressive business acumen and extensive international network have allowed him to also thrive as a serial entrepreneur.
Rick Geoffrion – Member, Board of Advisors
Rick Geoffrion has been president and CEO of multiple healthcare technology companies that have developed proprietary systems to significantly improve patient outcomes. Throughout his 35-year career, Geoffrion has also served in board positions at numerous healthcare technology companies. Currently, he is vice-chairman of the Mullings Group, a leading career development firm in the healthcare sector.
Dr. Ivo Ivanovski – Member, Board of Advisors
Dr. Ivo Ivanovski served as the IT Minister of the Republic of Macedonia from 2006 to 2015. He then entered the private sector as head of mergers and acquisitions, international affairs and regulations at A1 Telekom Austria Group, where he now serves as the CEO of the exchange-listed Tower Co. Ivanovski has received multiple awards in his career, including the International Telecommunication Union’s Distinguished Silver Star Award and an Honorary Doctorate for Technology Leadership.
Joe Mullings – Member, Board of Advisors
Joe Mullings is the chairman and CEO of The Mullings Group Companies, including TMG Search and Dragonfly. The search firm, with over three decades in the industry, is responsible for more than 8,000 successful searches in medtech/healthtech/life sciences with clients ranging from multi-billion-dollar companies to emerging high-tech organizations worldwide. TMG’s international presence and work with over 800 companies allow them to provide solutions to the clients they partner with across the globe. As the first search firm to integrate media and talent access, Dragonfly was launched as a media production company, complete with a state-of-the-art studio, for use by clients and partners for attention and awareness. Dragonfly is the media machine behind the eight-time award-winning video docuseries, ‘TrueFuture,’ hosted by Mullings.