XL TechGroup Media Analysis

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XL TechGroup Media Analysis

The articles and media mentions of XL TechGroup, or XL, that mention capital in and returns for investors are generally positive. While the company itself reported losses over the years that are covered in this research, the media coverage at the time emphasized the ingenuity of XL's management approach, disruptive characteristics of the companies' technologies, and major partnerships that the spin-off companies had entered.

IPO Announcement

The Secret to Reaching $400 M

  • In 2005, London-based financial news company CityWire analyzed XL TechGroup's approach to starting new businesses.
  • The method that the article describes includes maintaining at least 50% ownership of the new business using XL's funds and acquiring intellectual property from leaders in education and business.
  • CityWire was cautious in declaring XL TechGroup's approach a success, claiming it was too early to tell. It pointed to the success of AgCert, one of XL's companies, as a gauge for how profitable XL's approach was.

Importance of Tech Transfer for Green Projects

  • AUTM, a research non-profit, outlined TyraTech's path from inception to partnering with XL TechGroup.
  • The article argues that technology transfer played a major role in advancing TyraTech's mission of delivering green pesticides to the global market.
  • From the perspective of TyraTech's founder, Essam Enan, Ph. D., the experience was gratifying, as his innovation now could have real benefits to communities around the world.
  • In 2007, when TyraTech went public, it had a $219 million market capitalization on the first day, before they even sold their first product.

Handling of AgCert 'Blip' in Production

  • In October 2005, CityWire described XL TechGroup's handling of AgCert's production problems.
  • The company's shares at the time were valued at more than twice their value at IPO.
  • The article noted XL's unique approach to managing the businesses it creates: XL runs the companies for the first 18 months, adapting the strategy to the changing market conditions, and bringing their operational expertise to run their companies.
  • In comparison with XL's $400 million valuation goal, it only spent $35 million on AgCert at the time. Even while dealing with production problems, XL still had plenty of margins to exit.
  • CityWire concluded on a hopeful note, citing XL's track record and a high potential for its businesses.

Major Deals

  • In August 2006, Orlando Business Journal reported on the major deals signed by several of XL TechGroup's companies.
  • The article noted that XL reported $13 million in losses in 2005, which included the numbers from spin-off companies' performance. In light of these results, the key partnerships were crucial for XL goals.
  • AgCert entered a joint venture with AES Corp., which committed to investing $325 million over five years.
  • TyraTech signed three major deals with The Scotts Co, Syngenta Professional Products, and Arysta.
  • The article reported the partnership between XL TechGroup and Boston-based GEN3 Partners Inc., which would allow XL to implement its new business growth model at a faster rate. The new venture was funded equally by the two partners, with a total of $4 million scheduled for two years.

Research Strategy

We have analyzed the news and media sources that covered XL TechGroup's performance since its public offering. No coverage on return for investors was found, as the sources focused on capital in and market valuations. This could be explained by the fact that due to the high-risk nature of disruptive tech investment, the returns for investors could be delayed as the companies adjust to the unpredictability of markets for new, never-before-seen, technology.
Sources
Sources

Quotes
  • "We probably haven’t seen anything quite like this before in the UK, and therefore the market will continue to be wary. But for those that like high risk with potentially very high reward, this is certainly a company to take a closer look at. "
Quotes
  • "On a different front, Scott is seeing things improve at AgCert International Plc., the Ireland-based producer of greenhouse gas emission reduction credits that still is partially owned -- 24.7 percent -- by XL TechGroup."
  • "The biggest thing for AgCert was the recent announcement of a joint venture with Arlington, Va.-based AES Corp. (NYSE: AES). Called AES AgriVerde, the venture will deploy AgCert's technology in selected countries in Asia, Europe and North Africa."
  • "Perhaps just as intriguing for XL TechGroup is the recent signing of three major deals by another spinoff company, TyraTech LLC, a producer of all- natural pesticides."
  • "For XL TechGroup, which is also traded on the London Stock Exchange (AIM: XLT), the spate of deals couldn't come at a better time. Last year, according to its annual report, the company reported a loss of $13 million, which included some losses from its spinoff companies."
Quotes
  • "In exchange for an equity stake in the company for Vanderbilt, the technology was given to Tyratech, which would take responsibility for developing the technology into marketable products. Then the XL Techgroup, which founded TyraTech, began cultivating partnerships with large companies like Scotts Miracle-Gro, Kraft Foods, Syngenta, Arysta LifeScience and others to fund the development of the various essential oil products. "
  • "After three years of building partnerships and growing the technology from its initial platform, TyraTech went public in June 2007, on London’s AIM. The company had a first-day market capitalization of $219 million, before its products have even gone on sale. XL TechGroup expects this to increase significantly over the next several years."