Value Unleashed

Market Update

Twenty-eight Canadian M&A transactions closed this past week. The Canadian dollar appreciated by 0.93 cents, ending the week at 81 cents relative to the U.S. dollar. The TSX underperformed the S&P 500 by 0.5% in U.S. dollar terms. WTI Crude oil prices rose by 1.6%, ending the week at $61.41 per barrel.

According to The Lead Left, 2017 US syndicated loan volume hit a new high at $2.5 trillion, up 26% compared to 2016 results.

 

Valitas Insights: Private Equity Holding Period and Value Creation

Your typical source of finance literature would tell you that the standard holding period for a private equity investment is between three and five years. However, this theory has been contested lately, most notably by a PitchBook article positing that the 2017 year-to-date average holding period in the U.S. is 6.17 years[1].

In this week’s article, we aim to discuss whether prolonged holding periods have become the “new normal” and examine whether there has been a fundamental shift in the private equity landscape. We also interviewed Michael O’Neill, Director at Stone Arch Capital, who offered some of his insights from the perspective of an industry practitioner.

Click here to read our full article.

And on other topics…

• Divestopedia recently published this piece on maximizing shareholder value.
• Here are McKinsey’s top 10 leadership articles for 2017.

 

Canadian M&A Transactions [2]

Materials (Announced)

War Eagle Mining to Acquire Champagne Resources

War Eagle Mining Company Inc. (TSXV:WAR), a Canadian company that engages in the acquisition, exploration, and development of mineral resource properties in the Americas, has agreed to acquire Champagne Resources Limited, a Canadian company that engages in the exploration of mineral resource properties in northern Ontario. No transaction terms were released.

Makena Resources to Acquire Barker Cariboo Gold

Makena Resources Inc. (CNSX:MKNA), a Canadian company that engages in the acquisition, exploration, and evaluation of mineral properties, has agreed to acquire Barker Cariboo Gold Corp., a Canadian gold mining services company. Total transaction value is estimated to be $360 thousand.

Gulf International Minerals & Energy Group to Acquire Match Capital Resources

Gulf International Minerals & Energy Group Ltd., a Canadian operator of elder care facilities, has agreed to acquire Match Capital Resources Corporation, a Mourin Investments backed Canadian company that was previously engaged in the exploration and evaluation of mining properties. No transaction terms were released.

Materials (Closed)

Millar Western Forest Products has Acquired Spruceland Millworks

Millar Western Forest Products Ltd., a Canadian producer of softwood lumber and bleached chemi-thermo-mechanical pulp worldwide, has acquired Spruceland Millworks Inc., a Canadian manufacturer and distributor of spruce, pine, and fir wood products. No transaction terms were released.

Solmax International has Acquired GSE Holdings

Solmax International, Inc., a Fonds de solidarité FTQ backed Canadian manufacturer of polyethylene geomembranes, has acquired GSE Holdings Inc., a Littlejohn & Co. and Strategic Value Partners backed U.S.-based manufacturer of engineered geosynthetic lining products. No transaction terms were released.

Industrials (Announced)

VBG Properties to Acquire Baron Global Financial Canada

VBG Properties Limited, a British Virgin Islands-based company that leases real estate properties, has agreed to acquire Baron Global Financial Canada Ltd., a financial advisory services company. Total transaction value is estimated to be $6.09 million.

Platinum Equity to Acquire Husky IMS International

Platinum Equity, LLC, a U.S.-based private equity firm, has agreed to acquire Husky IMS International Ltd., a Berkshire Partners and OMERS Private Equity backed Canadian company that designs, manufactures, and distributes injection molding equipment to the plastics industry. Total transaction value is estimated to be $4.95 billion.

Fenplast to Acquire Les Boiseries Conrad Lajeunesse

Fenplast Inc., a Canadian manufacturer and supplier of doors and windows, has agreed to acquire Les Boiseries Conrad Lajeunesse Inc., a Canadian manufacturer of doors and windows. No transaction terms were released.

Industrials (Closed)

Vertex Resource Group has Acquired Sonic Oilfield Service

Vertex Resource Group Ltd. (TSXV:VTX), a Canadian provider of environmental and industrial services in North America, has acquired Sonic Oilfield Service Ltd., a Canadian material and fluid transportation services company. Total transaction value is estimated to be $4.5 million.

Associated Engineering Group has Acquired NOR-EX Ice Engineering

Associated Engineering Group Ltd., a Canadian engineering consultancy that provides services for water, transportation, infrastructure, and environmental projects internationally, has acquired NOR-EX Ice Engineering Inc., a Canadian company that offers ice engineering and construction, environmental program management, disaster recovery planning, and project management support services. No transaction terms were released.

FinishMaster Canada has Acquired Substantially All Assets of T-W Pike Sales

FinishMaster Canada, Inc., a retailer of automotive replacement parts, accessories, tools, paints, and related products, has acquired Substantially All Assets of T-W Pike Sales Ltd., a Canadian distributor of automotive and industrial paint. No transaction terms were released.

Accuworx has Acquired CTI Group

Accuworx Inc., a Canadian environmental services provider, has acquired CTI Group Inc, a U.S.-based waste management services company. No transaction terms were released.

Consumer Discretionary (Announced)

Westridge Resources to Acquire Harrys International Manufacturing

Westridge Resources Inc. (TSXV:WST.H), a Canadian company that engages in the acquisition, evaluation, and exploration of mineral resource properties, has agreed to acquire Harrys International Manufacturing Inc., a Canadian distributor of cigarettes internationally. Total transaction value is estimated to be $9.98 million.

Canada One Auto Group to Acquire Four Dealerships in Canada of AutoCanada

Canada One Auto Group Inc., a retailer of automobiles under the Chrysler, Subaru, and Hyundai brands, has agreed to acquire four dealerships from AutoCanada Inc., a company that represents the combined operations of Lakewood Chevrolet Ltd, Nicholson Chevrolet (1977) Ltd., Kelowna Chevrolet, and Sherwood Park Buick GMC. No transaction terms were released.

Consumer Discretionary (Closed)

ONCAP has Acquired Laces Group

ONCAP, a Canadian private equity firm, has acquired Laces Group Inc., a Canadian designer, manufacturer, and marketer of bath accessories and home fashion products. No transaction terms were released.

Skyline CM Portfolio has Acquired Marriott Dayton South/Mall Hotel

Skyline CM Portfolio LLC, a Canadian private equity firm, has acquired Marriott Dayton South/Mall Hotel, a U.S.-based hotel. Total transaction value is estimated to be $7.95 million.

Consumer Staples (Announced)

Marine Harvest to Acquire Northern Harvest Sea Farms

Marine Harvest ASA (OB:MHG), a Norwegian-based seafood company that produces and sells farmed salmon products worldwide, has agreed to acquire Northern Harvest Sea Farms Inc., a Canadian aquaculture company that produces farmed Atlantic salmon. Total transaction value is estimated to be $315 million.

DOJA Cannabis Company to Acquire TS BrandCo Holdings

DOJA Cannabis Company Limited (CNSX:DOJA), a Canadian cannabis producer and distributor, has agreed to acquire TS BrandCo Holdings Inc., a Globalive Capital and Green Acre Capital backed Canadian manufacturer and retailer of coffee, clothing, and cannabis. Total transaction value is estimated to be $80.6 million.

Consumer Staples (Closed)

Ontario Teachers' Pension Plan has Acquired Jasper Farms Orchards

Ontario Teachers' Pension Plan Board, has acquired Jasper Farms Orchards, an Australian company that harvests and owns avocados orchards. No transaction terms were released.

Healthcare (Announced)

Tetra Bio-Pharma to Acquire PhytoPain Pharma

Tetra Bio-Pharma Inc. (TSXV:TBP), a Canadian developer of biopharmaceuticals and natural health products containing cannabis and other medicinal plant based elements, has agreed to acquire PhytoPain Pharma Inc., a Canadian manufacturer of cannabinoid-based drugs. Total transaction value is estimated to be $13 million.

GrowPros MMP to be Acquired

GrowPros MMP Inc., a Canadian producer of medical marijuana, to be acquired. GrowPros MMP is a subsidiary of Tetra Bio-Pharma.  Total transaction value is estimated to be $350 thousand.

Creso Pharma to Acquire Kunna Canada

Creso Pharma Limited (ASX:CPH), an Australia-based company that develops and commercializes cannabis and hemp based nutraceutical products, has agreed to acquire Kunna Canada Ltd, a medical cannabis company. Total transaction value is estimated to be $8.09 million.

Alliance Growers to Acquire Biotech Canna

Alliance Growers Corp. (CNSX:ACG), a Canadian cannabis company, has agreed to acquire Biotech Canna, a Canadian producer of medical cannabis. Total transaction value is estimated to be $8.0 million.

Abattis Bioceuticals to Acquire Green Tree Therapeutics

Abattis Bioceuticals Corp. (CSE:ATT), a Canadian company that that aggregates, integrates, and invests in cannabis technologies and biotechnology services in Canada, has agreed to acquire Green Tree Therapeutics Corporation, a Canadian manufacturer of medical marijuana vaporizers. Total transaction value is estimated to be $2.6 million.

Healthcare (closed)

Liberty Biopharma has Acquired Cloud Medical Group

Liberty Biopharma Inc. (TSXV:LTY), a Canadian clinical stage biopharmaceutical company, has acquired Cloud Medical Group Inc., a Canadian healthcare company which engages in the delivery of cell therapy and e-healthcare solutions and deploying artificial intelligence-augmented applications. Total transaction value is estimated to be $10.5 million.

ALQ Gold has Acquired Salvation Botanicals

ALQ Gold Corp. (CSE:ALQ), a Canadian company that engages in the acquisition, exploration, and development of gold and other precious metals, has acquired Salvation Botanicals Ltd, a Canadian producer of standardized Cannabinoid products. Total transaction value is estimated to be $500 thousand.

Inspirata has Acquired Artificial Intelligence in Medicine

Inspirata, Inc., a U.S.-based cancer informatics and digital pathology workflow solution provider, has acquired Artificial Intelligence in Medicine, Inc., a Canadian company that develops tools that leverage Artificial Intelligence and Natural Language Processing to extract cancer related information and data from clinical documents. No transaction terms were released.

Sunshine Biopharma has Acquired Atlas Pharma

Sunshine Biopharma, Inc. (OTCPK:SBFM), a Canadian pharmaceutical company that focuses on researching, developing, and commercializing drugs for the treatment of various forms of cancer, has acquired Atlas Pharma Inc., a Canadian company that provides analytical analysis and laboratory services of pharmaceuticals, cosmetics, and natural products. Total transaction value is estimated to be $851 thousand, reflecting a 1.7x revenue multiple.

Premier Diversified has Acquired MyCare MedTech

Premier Diversified Holdings Inc. (CSE:PDH), a Canadian company that, through its subsidiaries, designs, finances, and operates medical diagnostic imaging centers internationally, has acquired MyCare MedTech Inc., a Canadian telemedicine company that provides virtual medical consultations with licensed healthcare providers. Total transaction value is estimated to be $130 thousand.

Financials (Announced)

Axis Auto Finance to Acquire Cars on Credit Financial

Axis Auto Finance Inc. (TSXV:AXIS), a Canadian company that provides non-standard auto financing solutions, has agreed to acquire Cars on Credit Financial Inc., a Canadian company that provides sub-prime automotive loans and leases. Total transaction value is estimated to be $10.9 million.

Mining Buster to Acquire 27 Red Capital

Mining Buster Inc., a Canadian company that offers crypto-currency mining services, has agreed to acquire 27 Red Capital Inc., a Canadian debt issuer. No transaction terms were released.

Qtrade Canada to Acquire Northwest & Ethical Investments

Qtrade Canada Inc., a company that offers online securities brokerage and wealth management services, has agreed to acquire Northwest & Ethical Investments L.P., a Canadian company that is a privately owned investment manager. No transaction terms were released.

Information Technology (Announced)

Tova Ventures II to Acquire Enthusiast Gaming

Tova Ventures II Inc. (TSXV:TOVA.P), a Canadian capital pool company, has agreed to acquire Enthusiast Gaming Inc., a Canadian company that connects gamers through online content and channels as well as offline live events. No transaction terms were released.

Universal mCloud to Acquire NGRAIN

Universal mCloud Corp. (TSXV:MCLD), a Canadian company that provides IoT connected asset care cloud solutions, has agreed to acquire NGRAIN (Canada) Corporation, a Hawthorn Equity Partners and Tandem backed company that designs and develops 3D and AI technology solutions that support industrial activities. Total transaction value is estimated to be $2.7 million, reflecting a 6.5x EBITDA multiple and a 1.8x revenue multiple.

Lotus Bio-Technology Development to Acquire Coin Rig Solution

Lotus Bio-Technology Development Corp. (OTCPK:LBTD), a U.S.-based biotechnology development company, has agreed to acquire Coin Rig Solution, a Canadian company that operates as a cryptocurrency algorithm and encryption company. No transaction terms were released.

Information Technology (Closed)

ESC Corporate Services has Acquired AVS Systems

ESC Corporate Services Ltd., a Canadian company that provides online corporate public record due diligence and filing services for new business owners, has acquired AVS Systems Inc., a Canadian company that provides automation software technology services to serve lending, leasing, and credit issuing businesses and institutions in Canada. Total transaction value is estimated to be $45 million.

Stompy Bot has Acquired Token Play

Stompy Bot Corporation (CSE:BOT), a Canadian company that operates as an independent video game developer and digital media publisher, has acquired Token Play Inc., a Canadian designer and developer of blockchain based online video games. Total transaction value is estimated to be $11.1 million.

Martello Technologies has Acquired Elfiq

Martello Technologies, Inc., a Canadian provider of performance management solutions for real-time communications, has acquired Elfiq, Inc., a Canadian company that enhances network performance and business continuity through link balancing and bandwidth management technologies. No transaction terms were released.

Apple has Acquired Doe Pics Hit

Apple Inc. (NasdaqGS:AAPL), has acquired Doe Pics Hit Inc., a Canadian developer of a mobile iteration platform for iOS and Android applications. No transaction terms were released.

CNW Group has Acquired CEDROM-SNi

CNW Group Ltd., a Canadian provider of newswire and Webcast services, has acquired CEDROM-SNi Inc., a Canadian provider of online news information aggregation and distribution services for those who monitor, analyze, and measure information. CEDROM-SNi was a subsidiary of Transcontinental. No transaction terms were released.

Edlio has Acquired Scholantis Learning Software

Edlio, LLC, a  Bratenahl Capital Partners and L Squared Capital Partners backed U.S.-based company that develops and manages K12-school and district communication platforms, has acquired Scholantis Learning Software Inc., a Canadian developer of custom digital portals for schools. No transaction terms were released.

Utilities (Closed)

Capstone Infrastructure has Acquired Glen Dhu Wind Energy

Capstone Infrastructure Corporation, a Canadian owner, operator, and developer of thermal and renewable power generation facilities, has acquired Glen Dhu Wind Energy LP, a Canadian wind farm operator. No transaction terms were released.

Capstone Infrastructure has Acquired Fitzpatrick Mountain Wind Energy

Capstone Infrastructure Corporation, has acquired Fitzpatrick Mountain Wind Energy Inc., a Canadian wind farm operator, producing renewable electrical power. No transaction terms were released.

Other (Announced)

MYM Nutraceuticals to Acquire Budly Software

MYM Nutraceuticals Inc. (CSE:MYM), a Canadian company that focuses on acquiring Health Canada licenses to produce and sell organic medicinal cannabis supplements and topical products, has agreed to acquire Budly Software Inc., a Canadian operator of a mobile application that allows patients to order medical cannabis from their local dispensary. Total transaction value is estimated to be $2.9 million.

eBay has Acquired Terapeak

eBay Inc. (NASDAQ:EBAY), a U.S.-based operator of commerce platforms that connect various buyers and sellers worldwide, has agreed to acquire Terapeak (Canada) Inc., a developer of software for analyzing, understanding, and predicting consumer and product behavior in e-commerce markets. No transaction terms were released.

Other (Closed)

Totten Insurance Group has Acquired EasyInsure

Totten Insurance Group Inc., a Canadian company that provides insurance brokerage services, has acquired EasyInsure, a Canadian digital insurance brokerage. No transaction terms were released.

Kemin Industries has Acquired Agri-Marketing

Kemin Industries, Inc., a U.S.-based company that manufactures ingredients for animal health and human nutrition applications, has acquired Agri-Marketing Corp., a Canadian distributor and manufacturer of Kemin products. No transaction terms were released.

SOCOMORE has Acquired Sea to Sky Innovations

SOCOMORE S.A.S., a Groupe Siparex, Alliance Entreprendre SAS, ACE Management and CM-CIC Investissement backed France-based company that creates, manufactures, and commercializes chemical solutions for metallic and composite materials, has acquired Sea to Sky Innovations Ltd., a Canadian developer of water based paint strippers for aviation and infrastructure. No transaction terms were released.