Value Unleashed

Market Update

Forty-six Canadian M&A transactions closed this past week. Year to date, M&A closed deal count is 3.9% higher than the comparable period in 2016. The Canadian dollar appreciated by 1.27 cents, ending the week at 79 cents relative to U.S. dollar. The TSX outperformed the S&P 500 by 1.2% in U.S. dollar terms. WTI Crude oil rose by 5.3%, ending the week at $46.75 per barrel.

Total leverage for new issue U.S. middle market loans rose to 5.9x EBITDA from 5.8x last week, while yields fell by 3 bps to 6.04%, a level that is 75 bps lower than one year ago. According to The Lead Left, the record high activity in U.S. syndicated and leveraged loans, for the first half of 2017, largely involved refinancing or repricing transactions. Due to the lack of new credit opportunities, roughly 70% of all transaction activity involved recycled money. Loans related to M&A deals reached $196 billion, which is the lowest level in the last four years.  

Valitas Insights:  Canadian M&A – Our Q2/2017 Review

At Valitas, with our focus on Canadian mid-market M&A, it’s been a busy second quarter.  This week, we reviewed announced deal data sourced from Capital IQ to measure activity for the broader Canadian market.  We were also fortunate to speak with Jay Hoffman, Leader of Miller Thomson’s National Corporate and Mergers and Acquisitions Practice, about his perspective on mid-market M&A activity.

Read our full article here.

Canadian M&A Transactions[i]

Materials (Announced)

Compass Gold to Acquire Mali Gold Exploration

Compass Gold Corporation (TSXV:CVB.H), a Canadian gold explorer, has agreed to acquire Mali Gold Exploration Pty Ltd., an Australian operator of gold exploration properties. Total transaction value is estimated to be $780 thousand.

AbraPlata Resource to Acquire Minera Cerro Bayo

AbraPlata Resource Corp. (TSXV:ABRA), a Canadian mineral explorer operating in Argentina, has agreed to acquire Minera Cerro Bayo SA, an Argentinian provider of mineral exploration services. Total transaction value is estimated to be $4.52 million.

Giyani Metals to Acquire Menzi Battery Metals

Giyani Metals Corp. (OTCPK:CATP.F), a Canadian producer of raw materials for the battery industry, operating in sub-Saharan Africa, has agreed to acquire Menzi Battery Metals Pty Ltd., a South African holding company for various mining assets. Total transaction value is estimated to be $706 thousand.

Industrials (Announced)

Solar Alliance Energy to Acquire ARiES Solar

Solar Alliance Energy Inc. (TSXV:SAN), a global producer of rooftop solar systems, has agreed to acquire ARiES Solar LLC, a U.S.-based provider of installation services for the solar energy industry. ARiES Solar LLC is a subsidiary of Thompson Machinery Commerce Corporation. Total transaction value is estimated to be $1.29 million.

P Squared Renewables to Acquire Borealis GeoPower

P Squared Renewables Inc. (TSXV:PSQ.P), a Canadian renewable energy start-up, has agreed to acquire Borealis GeoPower Inc., a Canadian provider of consulting services for the development of geothermal energy projects. Total transaction value is estimated to be $2.31 million.

Industrials (Closed)

Jardine Transport has Acquired R.E.M Transport

Jardine Transport Ltd., a SeaFort Capital backed Canadian provider of trucking services across North America, has acquired R.E.M Transport Ltd., a Canadian provider of trucking services. No transaction terms were released.

Alpenglow Rail has Acquired Vidal Street Industrial Park

Alpenglow Rail LLC, a U.S.-based developer of short line rail businesses and related transportation assets across North America, has acquired Vidal Street Industrial Park Inc., a Canadian operator of short line rail cars. No transaction terms were released.

AGT Food and Ingredients has Acquired CanEst Transit

AGT Food and Ingredients Inc. (TSX:AGT), a worldwide food producer, has acquired CanEst Transit Inc., a Canadian provider of containerization services. No transaction terms were released.

Cooper Equipment Rentals has Acquired Alberta Lift and Equipment Rentals

Cooper Equipment Rentals Limited, a SeaFort Capital backed provider of construction and industrial equipment rental services in the Greater Toronto Area, has acquired Alberta Lift and Equipment Rentals Inc., a provider of equipment rental services. No transaction terms were released.

Executive Mat Service has Acquired Executive Mat Red Deer

Executive Mat Service Ltd., a Canadian provider of uniform rental and janitorial services, has acquired Executive Mat Red Deer, a provider of uniform rental and janitorial services in Alberta. No transaction terms were released.

Consumer Discretionary (Closed)

First Canadian Management has Acquired Charlottetown Inn & Conference Centre

First Canadian Management Corporation, an operator of hotels and senior care facilities, has acquired Charlottetown Inn & Conference Centre, a hotel located in Prince Edward Island. No transaction terms were released.

Mascon Communications has Acquired Raftview Communications

Mascon Communications Corp., a Canadian provider of cable and wireless communication services, has acquired Raftview Communications Ltd., a Canadian provider of cable television services. No transaction terms were released.

Consumer Staples (Announced)

Lantic to Acquire L.B. Maple Treat

Lantic Inc., a Canadian producer of sugar products, has agreed to acquire L.B. Maple Treat Corporation, a Champlain Financial Corporation backed Canadian producer of maple syrup. Total transaction value is estimated to be $160 million, implying a 1.0x revenue multiple.

Consumer Staples (Closed)

Bay State Milling Company has Acquired MGM Seed & Grain

Bay State Milling Company, a U.S.-based developer of grain-based ingredient solutions for various food producers, has acquired MGM Seed & Grain Ltd., a Canadian producer of gluten-free oat products. No transaction terms were released.

Healthcare (Closed)

Medicure has Acquired Apicore

Medicure Inc. (TSXV:MPH), a global developer of human therapeutics, has acquired Apicore, LLC, a Signet Healthcare Partners backed worldwide provider of process R&D and API manufacturing services for the pharmaceutical industry. Total transaction value is estimated to be $31.6 million.

Information Technology (Announced)

Cincinnati Bell to Acquire OnX Enterprise Solutions

Cincinnati Bell Inc. (NYSE:CBB), a provider of diversified telecommunications and technology services across the United States, has agreed to acquire OnX Enterprise Solutions Ltd., a Marlin Equity Partners backed global provider of technology services. Total transaction value is estimated to be $256 million, implying a 6.9x EBITDA multiple and a 0.32x revenue multiple.

Information Technology (Closed)

Resolver has Acquired Next Connexions

Resolver Inc., a Brookfield Asset Management and Klass Capital backed Canadian provider of governance, risk, and compliance (GRC) software solutions, has acquired Next Connexions, LLC, a U.S.-based provider of business continuity, disaster recovery and emergency notifications software. No transaction terms were released.

AudienceView Ticketing has Acquired TheaterMania

AudienceView Ticketing Corporation, a Rubicon Technology Partners and Five Corners Capital backed Canadian provider of e-commerce software solutions to the entertainment industry, has acquired TheaterMania, Inc., a U.S.-based website operator for the live theatre industry. TheaterMania was a subsidiary of ff Venture Capital. No transaction terms were released.

XPV Water Partners has Acquired Aquatic Informatics

XPV Water Partners, a Wheatsheaf Investments backed Canadian private equity firm, has acquired Aquatic Informatics Inc., a Canadian provider of software solutions for water data management and the environmental monitoring industries. Aquatic Informatics Inc. was a subsidiary of Renewal Partners and Renewal 2 Management Company. No transaction terms were released.

Spira Data has Acquired Zayfti

Spira Data Corp., a Canadian developer of operational software solutions for the oil and gas, construction, and energy industries, has acquired Zayfti, Inc., a Canadian developer of operational integrity software for the energy, mining, construction, and safety sectors. No transaction terms were released.

HyTrust has Acquired DataGravity

HyTrust, Inc., an Advance Venture Partners, Sway Ventures, Epic Ventures, Vanedge Capital and Trident Capital backed U.S.-based provider of workload security, has acquired DataGravity, Inc., a U.S.-based developer of a data management platform. DataGravity was a subsidiary of CRV, General Catalyst Partners, Andreessen Horowitz and Accel Partners. No transaction terms were released.

Real Estate (Closed)

Casalova has Acquired My Property Managers

Casalova, a Motive backed Canadian developer of a platform offering real estate property rental services, has acquired My Property Managers Inc., a Canadian owner of residential investment properties. No transaction terms were released.

Oxford Properties Group; Norges Bank Real Estate Management have Acquired 1101 New York Holdings

Oxford Properties Group, Inc., a Canadian real estate investment firm; Norges Bank Real Estate Management, a Norwegian real estate investment firm, have acquired 1101 New York Holdings LLC, a high-rise located in Washington, DC. 1101 New York Holdings LLC was a subsidiary of W.R. Berkley Corporation (NYSE:WRB) and Property Group Partners. Total transaction value is estimated to be $389 million.

Other (Closed)

Komutel has Acquired Centre De Telephone Mobile

Komutel Inc., a Canadian developer of enterprise communication software in the telecommunications space, has acquired Centre De Telephone Mobile Ltee, a Canadian provider of specialized telephone and radio communications equipment. No transaction terms were released.

Ivanhoé Cambridge has Acquired Evergreen Industrial Properties

Ivanhoé Cambridge, Inc., an Apollo Global Management, Montreal Police Pension Fund Association, Régime de Rentes du Mouvement Desjardins and National Bank of Canada, Investment Arm backed Canadian real estate investment firm, has acquired Evergreen Industrial Properties, LLC, a U.S.-based owner and operator of light industrial real estate properties. Evergreen Industrial Properties, LLC was a subsidiary of TPG Real Estate. No transaction terms were released.