Canadian M&A Market Recap: Week Ended Sept 16, 2016

  • Posted By: Louis Goldberg, Miranda Li, Michael Mazza and Paris Aden

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Capital Markets Update

U.S stocks fell amid a turbulent week across markets as investors are reassessing central-bank policies after the European Central Bank chose to forgo additional stimulus measures. According to a TransUnion study, 718,000 Canadians would be unable to have enough cash flow to cover their debt if a 25-basis point interest rate increase were to happen. Along this note, Canadian household debt has grown to 167.6% of disposable income, meaning household debt exceeds the country’s GDP.

Meanwhile, credit markets remain sluggish.

In addition to strong capital markets liquidity continuing to underpin future M&A activity, corporate cash balances for the equity index constituents as of the beginning of August were approximately $7.7 trillion, a slight increase from the $7.5 trillion one year earlier.

Valitas Insights: Global median PE fund return multiples by vintage

According to an article published by Pitchbook, Private Equity funds are observing deterioration in vintage return multiples. As is expected, newer fund vintages lower DPI multiples, while RVPI multiples have increased, as funds are beginning to mature. However, TVPI multiples have trailed off, implying funds are having difficulty achieving historical returns. Interestingly, 2009 vintages have returned 85% of capital to LPs only six years into the fund; these investments benefited from the robust exit market seen in the latter half of 2015. Fund return multiples growth is expected to decline once 2016 returns data is reported.

The graph below alludes to a broad theme seen in the Private Equity space, as committed capital and deal flow rise. Stronger competition for deals has depressed returns overall while funds are finding it more difficult to find quality deals. This trend puts an increased emphasis on proprietary deal flow, as more effort is needed to source and close quality deal opportunities.

Please click here if you would like to view the full report.

Weekly Canadian Private Market M&A Report

Announced Deals

Sunshine Oilsands to Acquire Nobao Renewable Energy

Sunshine Oilsands Limited, a Canadian company that evaluates and develops oil sands leases in the Athabasca oil sands region in Alberta, Canada, has agreed to acquire Nobao Renewable Energy Holdings Limited, a Tsing Capital and Tai Feng Investment backed Chinese company that develops, manufactures, and implements heat pumps and central air conditioning systems for commercial applications in China. No transaction terms were released.

TD Securities to Acquire Albert Fried & Company

TD Securities Incorporated, a Canadian company that provides capital market products and services to corporate, government, and institutional clients, has agreed to acquire Albert Fried & Company, LLC, a U.S. based financial services organization that provides execution and trading, trading technology, prime brokerage and clearing, and commission management services to select buy-side and sell-side clients in the United States and internationally. No transaction terms were released.

Vine Luxembourg to Acquire COMAX France

Vine Luxembourg SARL, a Luxembourg based company, has agreed to acquire COMAX France S.A.S., a French company that produces heat and electricity through cogeneration power plants. Transaction value is estimated to be $70 million.

Converde Energy to Acquire Hydration Company of PA

Converde Energy USA Incorporated, a development stage company that develops and applies renewable energy technologies to power systems, has agreed to acquire Hydration Company of PA, LLC, a U.S. company that provides water treatment, exploration, and augmentation services. No transaction terms were released.

Pan Global Resources to Acquire Minera Aguila

Pan Global Resources Incorporated (TSXV:PGZ), a Canadian company that engages in the exploration and development of mineral properties in Canada, has agreed to acquire Minera Aguila SL, a Spanish company that explores mining minerals. Transaction value is estimated to be $5 million.

Fairfax Financial Holdings and CI Investments to Acquire Golf Town Canada

Fairfax Financial Holdings Limited (TSX:FFH), which provides property and casualty insurance and reinsurance, and investment management services in North America and internationally, and CI Investments Incorporated, a privately owned investment manager, have agreed to acquire Golf Town Canada Incorporated, which retails golf equipment, apparel, and accessories in Canada. No transaction terms were released.

Patterson-UTI Energy to Acquire Warrior Manufacturing Services

Patterson-UTI Energy Incorporated (NasdaqGS:PTEN), a company that provides onshore contract drilling services to major and independent oil and natural gas operators in the United States and Canada, has agreed to acquire Warrior Manufacturing Services Limited, a Canadian oilfield services company that engages in the design, manufacture, and repair of oilfield equipment. No transaction terms were released.

MNP to Acquire A Hundred Answers

MNP LLP, a company that offers accounting and consulting services, has agreed to acquire A Hundred Answers Incorporated, a Canadian employee-based management consulting and systems integration firm. No transaction terms were released.

Namaste Technologies to Acquire URT1

Namaste Technologies Incorporated, a company that engages in the acquisition, exploration, and development of mineral resource properties in North America, has agreed to acquire URT1 Limited, a UK based company that engages in online retail of vaporizers, pipes, and other smoking accessories. No transaction terms were released.

MGX Minerals to Acquire PurLucid Treatment Solution

MGX Minerals Incorporated, an exploration stage company that acquires, explores for, and develops mineral resource properties in Canada, has agreed to acquire PurLucid Treatment Solution (Canada) Incorporated, which removes heavy metals and hydrocarbons from oil industry waste streams producing clean water as a final product. Transaction value is estimated to be $5 million.

Connection Services Group to Acquire Yuntone Capital

Connection Services Group, Incorporated, a major provider of end-to-end solutions for Internet delivered applications, has agreed to acquire Yuntone Capital Corporation, a Canadian capital pool company. No transaction terms were released.

Closed Deals

Norton Rose Fulbright Acquires Bull, Housser & Tupper

Norton Rose Fulbright US LLP, which provides corporations and financial institutions with a full business law service, has acquired Bull, Housser & Tupper LLP, a Canadian firm that provides legal services. No transaction terms were released.

Air Creebec Acquires Propair

Air Creebec incorporated, a Canadian company that provides air transportation services, has acquired Propair Incorporated, which specializes in air transport industry, serving the entire Québec territory as well as various remote and Nordic regions in Canada and some U.S. destinations. No transaction terms were released.

Maheu & Maheu Acquires Groupe Sirois Gestion Parasitaire

Maheu & Maheu Incorporated, a Canadian pest management company, has acquired Groupe Sirois Gestion Parasitaire Incorporated, which provides extermination and pest management services to residential and commercial sector. No transaction terms were released.

RPM International Acquires Specialty Polymer Coatings

RPM International Incorporated (NYSE:RPM), a company that manufactures, markets, and sells specialty chemical products for industrial, specialty, and consumer markets worldwide, has acquired Specialty Polymer Coatings, Incorporated, which operates as a formulator, manufacturer, and distributor of liquid epoxy and polyurethane coatings in North America and Internationally. No transaction terms were released.

CEN Biotech Acquires Tesla Digital

CEN Biotech, Incorporated (OTCPK:CENB.F), an early stage biopharmaceutical company that engages in the cultivation, processing, and distribution of medical marijuana, has acquired Tesla Digital, Incorporated, which manufactures lighting equipment. No transaction terms were released.

Annex Publishing & Printing Acquires Turf & Recreation Publishing

Annex Publishing & Printing, Incorporated, a company that publishes, prints, and distributes magazines in North America, has acquired Turf & Recreation Publishing Incorporated, which publishes Turf & Recreation, a publication serving the Canadian turf and grounds maintenance industry. No transaction terms were released.

Lazard Acquires Verus Partners & Co

Lazard Limited (NYSE:LAZ), which operates as a financial advisory and asset management firm worldwide, has acquired Verus Partners & Co. Incorporated, which provides investment banking advisory services in Canada. No transaction terms were released.

Eberspächer Gruppe GmbH & Co Acquires Vecture

Eberspächer Gruppe GmbH & Co. KG, a German company that develops, manufactures, and supplies exhaust technologies, pre-heaters, and add-heaters for passenger cars and commercial vehicle manufacturers, has acquired Vecture Incorporated, a Canadian original equipment manufacturing company that engages in the design and manufacture of battery management systems to a wide assortment of industries, internationally. No transaction terms were released.

ATX Networks Acquires Innotrans

ATX Networks Corporation, an H.I.G. Capital backed Canadian company that designs, manufactures, and markets a range of products to the cable television industry, and private video networks worldwide, has acquired Innotrans Communications, Incorporated, a U.S. based company that develops and manufactures innovative optical transport solutions for cable operators. No transaction terms were released.

SweetiQ Analytics Acquires Connectivity

SweetiQ Analytics Corporation, a Desjardins Business Capital régional et coopératif, Real Ventures, Plaza Ventures, Rothenberg Ventures and Otimo Retail Group backed Canadian company that provides local search marketing solutions for helping Fortune 500 brands convert online searches to in-store shoppers, has acquired Connectivity, Incorporated, a U.S. based company that provides online review and business listing management solutions to businesses. No transaction terms were released.

Pulsus Group Acquires Andrew John Publishing

Pulsus Group Incorporated, a Canadian medical peer-review publisher, has acquired Andrew John Publishing, Incorporated, a Canadian trade oriented publishing house, with a sharp focus on health sciences and specializing in association and society publishing. No transaction terms were released.

Polycor Acquires Swenson Granite Company

Polycor Incorporated, a TorQuest Partners and PNC Mezzanine Capital backed Canadian company that manufactures granite, marble, limestone, recycled glass, karmstone, and soapstone products, has acquired Swenson Granite Company, which engages in quarrying and cutting granite in New England. No transaction terms were released.

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