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Canadian Market Recap: Week Ended August 18th

  • Posted By: Chris Angelatos, Topher Abt, JT Paliwal, Karen Fisman, Paris Aden

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  • Comments: 1

Market Update

Thirty-six Canadian M&A transactions closed this past week. Year to date, M&A closed deal count is 2.7% higher than the comparable period in 2016. The Canadian dollar appreciated by 0.64 cents, ending the week at 79 cents relative to the U.S. dollar. The TSX outperformed the S&P 500 by 0.9% in U.S. dollar terms. WTI Crude oil fell by 0.3%, ending the week at $48.66 per barrel.

The new issue environment for U.S. middle market loans remained stable as both New Issue Clearing Yield and average total leverage remained unchanged from last week.

According to The Lead Left, BDC 2Q17 earnings are exhibiting extremely mixed results thus far, keeping the landscape relatively divided. After returning to book value in 2Q17, the average share price to net asset value per share for the public BDCs is, once again, in decline, falling to 0.93x in mid-August.

Valitas Insights:  What’s your Growth Profile?  The Dimensions of Organic Growth

We write regularly about growth through acquisition in our newsletter.  This week, however, we are shifting our focus to the importance of organic growth.  After all, as noted in the HBR article Creating an Organic Growth Machine, acquirers need to generate organic growth in the businesses they buy to make their acquisitions successful.  Cost synergies only go so far, generating cost savings that justify an acquisition premium in only 36% of transactions.

A recent McKinsey article examined the growth profiles of businesses that succeed at driving organic growth (“growers”).  Drawing on survey results of almost 600 executives in the EU and North America, the authors found that growth strategies and behavior fall into three broad profiles:

Read our full article to learn more.

And on other topics…

We’ve written about the increased level of cross-border M&A over the past couple of months. In this recent DealRoom article, Going Global: Considerations for Cross-Border Mergers, authored by Firmex, the focus is on due diligence.  Worth a read! 

 

Canadian M&A Transactions[i]

Energy (Announced)

Husky Energy to Acquire Calumet Superior

Husky Energy Inc. (TSX:HSE), a Canadian integrated energy company, has agreed to acquire Calumet Superior LLC, a U.S.-based refinery previously owned by Calumet Specialty Products Partners LP. Total transaction value is estimated to be $552 million.

Energy (Closed)

Omers Energy has Acquired Superman Resources

Omers Energy Inc., a Canadian oil and gas exploration company, has acquired Superman Resources Inc., a Canadian company oil and gas exploration and development company. No transaction terms were released.

Materials (Closed)

Bravura Ventures has Acquired 1033602 Canada

Bravura Ventures Corp. (CNSX:BVQ), a Canadian mineral exploration and development company, has acquired 1033602 Canada Inc., a Canadian company that owns the Rabbit Cobalt mineral property in Ontario. Total transaction value is estimated to be $2.5 million.

            HPX Colombia Ventures has Acquired Cordoba Minerals

            HPX Colombia Ventures Ltd has acquired Cordoba Minerals Corp.                   (TSXV:CDB), a Canadian mineral exploration company, in a reverse                 merger transaction. No transaction terms were released.

Industrials (Closed)

Global Knowledge Training has Acquired CTC TrainCanada

Global Knowledge Training LLC, a Rhone Capital backed U.S.-based provider of IT training and learning solutions, has acquired CTC TrainCanada Inc., a Canadian provider of training solutions for corporate and government organizations. No transaction terms were released.

TELUS International has Acquired Voxpro

TELUS International Inc., a Baring Private Equity Asia backed Canadian provider of contact center, customer care, and business process outsourcing (BPO) solutions, has acquired Voxpro, an Ireland-based provider of business process outsourcing (BPO) services. No transaction terms were released.

Consumer Discretionary (Closed)

Fastway Group has Acquired Impact Tools and Supplies

The Fastway Group Inc., a Mill Street & Co backed Canadian distributor of industrial building products, has acquired Impact Tools and Supplies, a Canadian provider of industrial power tool equipment. No transaction terms were released.

Healthcare (Announced)

Mondias Natural Products to Acquire Laboratoire Holizen

Mondias Natural Products Inc., a Canadian developer of oral and topical botanical drug agents for the management of medical healing needs, has agreed to acquire Laboratoire Holizen Inc., a Canadian supplier of homeopathic and natural products. No transaction terms were released.

Alchemist Mining to Acquire Better Cannabis Genetics

Alchemist Mining Inc. (CNSX:AMS), a Canadian mining exploration company, has agreed to acquire Better Cannabis Genetics Corporation, a Canadian company that focuses on the research and development of cannabis strains. No transaction terms were released.

Financials (Announced)

GreenBank Capital to Acquire Veterans Financial Group

GreenBank Capital Inc (OTCPK:GRNB.F), a Canadian investment company, has agreed to acquire Veterans Financial Group LLC, a U.S.-based provider of insurance brokerage services to veterans and related families and businesses. Total transaction value is estimated to be $72 thousand.

Financials (Closed)

Industrial Alliance Securities has Acquired HollisWealth

Industrial Alliance Securities Inc., a Canadian provider of brokerage services, has acquired HollisWealth Inc., a Canadian provider of investment management, securities brokerage, and financial advisory services. No transaction terms were released.

Information Technology (Announced)

AtmanCo to Acquire VuduMobile

AtmanCo Inc. (TSXV:ATW), a Canadian company that provides assessment and recruitment services for human resources management, has agreed to acquire VuduMobile Inc., a Canadian company that provides professional text messaging services through a web based text messaging application for enterprises. Total transaction value is estimated to be $600 thousand.

Information Technology (Closed)

Descartes Systems Group has Acquired MacroPoint

The Descartes Systems Group Inc (TSX:DSG), a Canadian provider of federated network and logistics technology solutions internationally, has acquired MacroPoint LLC, a U.S.-based developer of automated location tracking solutions. Total transaction value is estimated to be $136 million, reflecting an 8.56x revenue multiple.

Real Estate (Closed)

Cushman & Wakefield has Acquired 20 VIC Management

Cushman & Wakefield Ltd., a Canadian provider of real estate services internationally, has acquired 20 VIC Management Inc., a Canadian provider of commercial real estate management services. No transaction terms were released.

Other (Announced)

GreenSpace Brands to Acquire The Cold Press

GreenSpace Brands Inc. (TSXV:JTR), a Canadian supplier of premium convenience natural food products, has agreed to acquire The Cold Press Corp., a Canadian supplier of cold pressed and high pressure pasteurized (HPP) juice products. Total transaction value is estimated to be $6.3 million.

Fortify Resources to Acquire DV Infrastructure

Fortify Resources Inc. (CNSX:FTY), a Canadian mineral exploration and development company, has agreed to acquire DV Infrastructure Corp., a U.S.-based company that engages in the investment and construction of mega greenhouse projects for lease to licensed cannabis producers and processors. No transaction terms were released.

Other (Closed)

Branded Cities Network has Acquired Clear Channel Canada

Branded Cities Network LLC, a U.S.-based company that promotes brands through iconic outdoor digital sign displays, has acquired Clear Channel Canada, a provider of outdoor advertising and media services. No transaction terms were released.

 

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

 

 

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