TRENDLINES GROUP: Q&A post 1QFY17 results

Trendlines, which released its 1Q2017 results this morning, had 43 companies in its portfolio at the end of Q1 2017 (or 44 with the addition of Limaca in Q2 2017). The fair value of the portfolio was US$83.8 million as at 31 March 2017. Here are the questions and answers in a teleconference Trendlines management had with investors this morning: 

Q: How is Trendlines' strategy evolving?

NextInsight file photo C0-Chairman Todd Dollinger (photo): During our IPO in Nov 2015, we announced a plan to grow Trendlines, which included increasing the number of portfolio companies that we would open, increasing our support for those companies, and looking for opportunities for geographic expansion. We invest only in 2 areas --healthcare technologies and agricultural technologies. 

These strategies remain the same. We opened Trendlines Medical Singapore just a few months ago and we opened 10 new portfolio companies last year, a record number. We continue to believe investing in healthcare and agriculture technologies presents a very strong opportunity for Trendlines and our shareholders. So, expect us to do more of the same, and perhaps more intensely.

Q: How is the exit environment?

C0-Chairman Todd Dollinger: We don’t see a substantial change in the environment over the course of the last few years. This is something we are always sensitive to. Generally, when the economy is perceived to be bad, the major players who are most likely to acquire our companies -- they tend to slow down or withdraw from acquiring early stage companies. At this time, there is nothing like that occurring and the market remains strong.

If you look at the 2 companies that are the most acquisitive worldwide, Medtronic and Boston Scientific, I am pleased to say we have excellent relationships with those companies. We spend a considerable amount of time working with our multi-national partners around the world, so when we choose to put companies into the market for potential acquisition, we have those relationships in place, both directly and occasionally through investment bankers. 

Q: Are you still looking for a number of exits each year?

C0-Chairman Todd Dollinger: We look for a basket of exits which includes very modest exits, includes exits that are less modest and, occasionally, exits of substantial size. If you look back at the six exits we have announced to date, you will see that sort of balance -- one very large exit and a series of modest exits of different size. Look to us continuing that pattern in the years ahead. 


Trendlines photoQ: Do you have only one independent company doing the valuation of your portfolio companies? Is it an internationally-recognised audit firm?

CFO Gabi Heller (photo): We have two independent valuation companies. One is an international company and the other one is an Israel-based company which is very well-known Israeli company that does valuation for many Israeli companies traded on Nasdaq.