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Canadian M&A Market Recap: Week Ended May 5

  • Posted By: Karen Fisman, Christopher Abt, Anwar Khan, Miranda Li, Louis Goldberg

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  • Comments: 3

 

Market Update

Forty-Six Canadian M&A transactions closed this past week. Year to date, M&A closed deal count is 11.4% higher than the comparable period in 2016. The Canadian dollar depreciated by 0.15 cents, ending the week at 73 cents. The TSX was down 0.2% and underperformed the S&P 500 by 0.9% in U.S. dollar terms.

The new issue environment for U.S. middle market loans remained stable with average total leverage unchanged from last week at 5.0x EBITDA.  Yields rose slightly by 11 bps to 6.54%, a level that is 47 bps lower than a year ago. According to a poll conducted last week at Thompson Reuters LPC’s Middle Market Loans Conference, the largest threat to the middle market loan environment is a stark increase in competition, which could lead to both structural and yield deterioration.

 

Valitas Insights: The High-Flying U.S. Middle Market and its Impact on Canadian M&A 

South of the border, middle market sentiment is bullish.  Recently released Q1 2017 survey results reveal that U.S. middle market companies are outpacing their larger counterparts by a strong margin, with PE-owned companies leading the pack. And there is a notable level of optimism about the future. 

How will this U.S. economic confidence impact us here in Canada?  We consider the question in this week’s article.

 

Canadian M&A Transactions[i]

Energy (Announced)

            Manitok Energy to Acquire Craft Oil

Manitok Energy Inc. (TSXV:MEI), a Canadian oil and gas exploration and development company, has agreed to acquire Craft Oil Ltd., a Canadian oil and natural gas exploration company. Craft Oil is a subsidiary of Cardinal Energy (TSX:CJ). Total transaction value is estimated to be $6.6 million.

 

Materials (Announced)

Tasca Resources to Acquire Central America Mining

Tasca Resources Ltd. (TSXV:TAC), a Canadian mineral exploration company, has agreed to acquire Central America Mining S.A., a Nicaraguan gold and silver exploration company. Total transaction value is estimated to be $290 thousand.

 

Materials (Closed)

McEwen Mining Acquires Lexam VG Gold

McEwen Mining Inc. (NYSE:MUX), an international mineral exploration and development company, has acquired Lexam VG Gold Inc. (TSX:LEX), a Canadian gold exploration and development company. Total transaction value is estimated to be $70.3 million.

 

Industrials (Announced)

MGX Minerals to Acquire PurLucid Treatment Solution

MGX Minerals Inc. (CNSX: XMG), a mineral exploration and development company focused on British Columbia and Alberta, has agreed to acquire PurLucid Treatment Solution (Canada) Inc., a company that removes heavy metals and hydrocarbons from oil industry waste streams. Total transaction value is estimated to be $1.4 million.

 

Industrials (Closed)

Mosaic Capital Acquires Cedar Infrastructure Products

Mosaic Capital Corporation (TSXV:M), a Canadian private equity and venture capital firm, has acquired Cedar Infrastructure Products Inc., a Canadian importer and distributor of road, water, sewer and residential infrastructure. Total transaction value is estimated to be $18.3 million.

 

WSB Titan Acquires Dodds Lumber & Building Supplies

WSB Titan Inc., a TorQuest Partners backed Canadian distributor of building supplies, has acquired Dodds Lumber & Building Supplies Ltd., a Canadian distributor of building materials. No transaction terms were released.

 

Consumer Discretionary (Announced)

Human Holdings to Acquire JRCP Holdings

Human Holdings Co., Ltd. (JASDAQ:2415), a Japanese provider of human resource and employment services, has agreed to acquire JRCP Holdings, a Canadian company engaging in language education and English teacher training related business. No transaction terms were released.

 

Human Holdings to Acquire International House Career College

Human Holdings Co., Ltd. has also agreed to acquire International House Career College, a Canadian company providing training programs to students in various courses. No transaction terms were released.

 

Consumer Discretionary (Closed)

Park Lawn Acquires TCS Funeral Services

Park Lawn Corporation (TSX:PLC), a Canadian company providing goods and services associated with the memorialization of remains in North America, has acquired TCS Funeral Services Ltd., an international organization providing support services globally to funeral homes, nursing homes, and long-term care facilities. Total transaction value is estimated to be $3.6 million.

 

Sonar Entertainment Acquires Tricon Films and Television

Sonar Entertainment, Inc., a Kelso & Company and The Catalyst Capital Group backed, global producer of television series, miniseries, and movies, has acquired Tricon Films and Television, Inc., a Canadian producer and distributor of film and television programs. No transaction terms were released.

 

FMAV Acquires Ruoff & Company

FMAV, an Ironbridge Equity Partners backed Canadian company that provides audiovisual and event technology solutions, has acquired Ruoff & Company Inc., a Canadian company operating in the audiovisual and event production space. No transaction terms were released.

 

Warren Industries Acquires Vanhawks

Warren Industries Ltd., a Canadian automotive stamping company, has acquired Vanhawks Inc., a Canadian hardware and technology company that develops Vanhawks Valour, a connected commuter bicycle. No transaction terms were released.

 

Consumer Staples (Announced)

Easton Pharmaceuticals Acquires Herbs of Kedem

Easton Pharmaceuticals Inc. (OTCPK:EAPH), a Canadian pharmaceutical company that develops various drugs and therapeutic health care products, has agreed to acquire Herbs of Kedem, an Israeli manufacturer of herbal and organic cosmetic products. No transaction terms were released.

 

Consumer Staples (Closed)

Penney Group Acquires Ocean Choice International

Penney Group, Inc., a Canadian company engaging in the businesses of civil construction, automotive sales, real estate development, energy services, and marine transportation, has acquired Ocean Choice International Inc., a Canadian company that harvests and processes seafood. No transaction terms were released.

 

Ocean Choice International Acquires Landvis Canada

Ocean Choice International Inc. has completed a buyout of minority partner Landvis Canada Inc. No transaction terms were released.

 

Healthcare (Announced)

CGX Life Sciences to Acquire GreenMart of Nevada

CGX Life Sciences Inc., a Canadian company that sells supplements used to reduce blood sugar and support cognitive functions, has agreed to acquire GreenMart of Nevada LLC, a U.S.-based cannabis producer and wholesaler. Total transaction value is estimated to be $26 million.

 

Quest PharmaTech to Acquire Natural Rf Life Sciences

Quest PharmaTech Inc. (TSXV:QPT), a Canadian biotechnology company that develops oncology products in Asia, has agreed to acquire Natural Rf Life Sciences Inc., a Canadian producer of natural health products for seasonal allergies. Total transaction value is estimated to be $500 thousand.

 

Healthcare (Closed)

Invictus MD Strategies Acquires Acreage Pharms

Invictus MD Strategies Corp. (TSXV:IMH), a global manufacturer and distributor of lighting products for the hydroponic and indoor growing industries, has acquired Acreage Pharms Ltd., a Canadian producer of cannabis for medical purposes. Total transaction value is estimated to be $43.8 million.

 

Information Technology (Announced)

Wi-Lan to Acquire VIZIYA

Wi-Lan Inc. (TSX:WIN), a Canadian intellectual property licensing company, has agreed to acquire VIZIYA Corp., a Canadian developer of enterprise asset management (EAM) software solutions. Total transaction value is estimated to be $40.5 million, implying a 9.4x EBITDA multiple and a 2.44x revenue multiple.

 

FleetCor Technologies to Acquire Cambridge Global Payments

FleetCor Technologies, Inc. (NYSE:FLT), a global provider of fuel cards and workforce payment products to businesses, has agreed to acquire Cambridge Global Payments, a Canadian company that offers online payment solutions. Total transaction value is estimated to be $921 million.

 

Cisco Systems to Acquire Viptela

Cisco Systems, Inc. (NasdaqGS:CSCO), a global designer and manufacturer of Internet Protocol (IP) based networking and other products related to the communications and information technology industry, has agreed to acquire Viptela, Inc., a Sequoia Capital, Northgate Capital Group and Redline Capital backed U.S.-based provider of software-defined wide area network (SD-WAN) technology. Total transaction value is estimated to be $832 million.

 

Cisco Systems to Acquire Analytics Technology from Saggezza

Cisco Systems, Inc. has also agreed to acquire key talent and advanced analytics technology from U.S.-based financial data analytics company Saggezza, Inc. No transaction terms were released.

 

            Golden Gate Capital to Acquire 20-20 Technologies

Golden Gate Capital, a Monroe Capital backed, U.S.-based private equity and venture capital firm, has agreed to acquire 20-20 Technologies Inc., a Vector Capital backed Canadian company that develops, sells and licenses software solutions for the furniture and interior design industries. No transaction terms were released.

 

Information Technology (Closed)

Aon Acquires cut-e

Aon plc (NYSE:AON), a global provider of risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing services, has acquired cut-e GmbH, a German company that designs and implements online systems catering to employee recruiting and development. No transaction terms were released.

 

Volaris Group Acquires SYSTEMTECHNIK

Volaris Group Inc., the venture capital arm of Canadian company Constellation Software Inc., has acquired SYSTEMTECHNIK GmbH, a German company that develops fare management, entry control, and ticket validating systems and solutions. No transaction terms were released.

 

KPMG Acquires Tomont Solutions

KPMG LLP (Canada), an audit, tax and advisory firm, has acquired Tomont Solutions Inc., a Canadian company that provides consulting services in Oracle Enterprise Performance Management (EPM). No transaction terms were released.

 

Shopify Acquires UAB Oberlo

Shopify Inc. (NYSE:SHOP), a global company providing a cloud-based multi-channel commerce platform for small and medium-sized businesses, has acquired UAB Oberlo, a Lithuanian company that operates an online marketplace for entrepreneurs. Total transaction value is estimated to be $20.6 million.

 

Other (Announced)

Alternate Health to Acquire Neubauer Hyperbaric Neurological Center

Alternate Health Corp. (CNSX:AHG), a Canadian provider of cloud based software solutions in the health services industry, has agreed to acquire Neubauer Hyperbaric Neurological Center, an industry leader in neurological disorder research and treatment in the United States.

 

Other (Closed)

Stantec Acquires Inventrix Engineering

Stantec Inc. (TSX:STN), a global provider of professional consulting services in infrastructure, has acquired Inventrix Engineering, Inc., a U.S.-based mechanical engineering firm that specializes in smart, modern buildings. No transaction terms were released.

 

KV Private Equity Acquires Northern Lite Mfg

KV Private Equity Inc., a Canadian private equity firm, has acquired Northern Lite Mfg Ltd, a Canadian manufacturer of high end truck campers. No transaction terms were released.

 

SCM Insurance Services Acquires Nixon and Company

SCM Insurance Services Inc., a BMO Capital Partners and TorQuest Partners backed company that provides claims management, risk management, and related services in Canada, has acquired Nixon and Company Inc., a U.S.-based company providing service across all lines of claims management. No transaction terms were released.

 

HBNG Holborn Group Acquires The Country Club

HBNG Holborn Group, a leading provider of independent real estate investment and management expertise in Canada, has acquired The Country Club, a golf course located in Woodbridge, Ontario. No transaction terms were released.

 

 

[i] Includes all Canadian M&A transactions in which either the target or buyer is a private company.

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