Blog

Canadian Market Recap: Week Ended July 21st

  • Posted By: JT Paliwal, Anwar Khan, Chris Angelatos, Karen Fisman, Michael Mazza

  • |
  • Comments: 2

Market Update

Ninety-three Canadian M&A transactions closed this past week. Year to date, M&A closed deal count is 3.8% higher than the comparable period in 2016. The Canadian dollar appreciated by 0.77 cents, ending the week at 80 cents relative to the U.S. dollar. The TSX outperformed the S&P 500 by 0.5% in U.S. dollar terms. WTI Crude oil declined by 2.1%, ending the week at $45.77 per barrel.

The new issue environment for U.S. middle market loans became slightly less favourable. Average total leverage remained constant at 5.9x EBITDA compared to last week while yields rose by 2 bps to 6.34%, a level that is 45 bps lower than a year ago. According to The Lead Left, as average yields increased across the board in July, the gap between primary leveraged yields also widened. The average yield, assuming a three-year term to repayment, on first-lien institutional term loans reached nearly 4.0% for BB-rated issuers, in contrast to 5.79% for B-rated issuers.

Valitas Insights:  China, Canada, and Capital Controls…The Impact on Cross-Border M&A

Over the past couple of years, Chinese outbound M&A has reached record high levels, hitting a peak of US$227 billion in 2016, and more than doubling its 2015 level.  In November 2016, the Chinese State Council announced that new capital controls would be put in place, effective January 2017, to stem this outflow of currency.

Chinese investment in Canada differs from the global pattern.  Canadian deal activity peaked in 2012, with China taking first place in the rankings of inbound M&A, but dropped off in subsequent years as commodity prices fell.  In 2016, however, Chinese inbound M&A in Canada was back in the top three, ranking by value behind the U.S. and the U.K..

We were curious about whether the new Chinese capital controls were impacting deal activity in Canada, and were fortunate to speak with Chris Flood, counsel at Blakes, who has extensive experience advising Chinese corporate and financial investors on M&A transactions in Canada. 

To learn more, read our full article.

Canadian M&A Transactions[i]

Materials (Announced)

Georg Fischer Piping Systems to Acquire Urecon

Georg Fischer Piping Systems Ltd., a Swiss company that develops, manufactures, and markets a range of piping systems and components used to transport water, gases, and aggressive media worldwide, has agreed to acquire Urecon Ltd., a Desjardins Business Capital régional et coopératif backed Canadian company that manufactures and sells pre-insulated polyurethane foam pipe systems to customers in Latin America and the Caribbean. No transaction terms were released.

Materials (Closed)

Supremex has Acquired Stuart Packaging

Supremex Inc. (TSX:SXP), a Canadian manufacturer and seller of envelopes, packaging and specialty products in North America, has acquired Stuart Packaging Inc., a Canadian manufacturer of folding cartons. Total transaction value is estimated to be $19.6 million, reflecting a 1.09x revenue multiple.

Industrials (Announced)

Sunbelt Rentals to Acquire CRS Contractors Rental Supply

Sunbelt Rentals, Inc., a U.S.-based provider of equipment rental services, has agreed to acquire CRS Contractors Rental Supply, Inc., a Clairvest Group Inc. backed Canadian company that engages in the rental, sale, and service of equipment and supplies, primarily to building contractors and related trades. Total transaction value is estimated to be $295 million.

DAE Aviation Holdings to Acquire Vector Aerospace

DAE Aviation Holdings, Inc., a U.S.-based company that offers maintenance, repair, and overhaul (MRO) of engines for business and regional jets, has agreed to acquire Vector Aerospace Corporation, a Canadian company that provides aviation MRO services. No transaction terms were released.

Industrials (Closed)

WSP Global has Acquired Grupo POCH

WSP Global Inc. (TSX:WSP), a Canadian company that provides management and consultancy services globally, has acquired Grupo POCH, a Chile-based company that provides engineering and environmental consulting services. No transaction terms were released.

International Road Dynamics has Acquired Icoms Detections

International Road Dynamics Inc., a Canadian company that provides highway traffic management technologies worldwide, has acquired Icoms Detections S.A., a Belgium-based company that designs, manufactures, and sells microwave detectors and equipment for vehicle counting, classification, and speed measurement. Total transaction value is estimated to be $1.4 million, reflecting a 0.63x revenue multiple.

dormakaba Holding AG has Acquired Skyfold

dormakaba Holding AG (SWX:DOKA), a Switzerland-based company that engages in the security and access solutions markets, has acquired Skyfold Inc., a Canadian company that manufactures automated vertical folding wall systems. Total transaction value is estimated to be $109 million, reflecting an 8.5x EBITDA multiple.

Tervita has Acquired Columbia Recycle

Tervita Corporation, a Goldman Sachs Merchant Banking Division, Vestar Capital PartnersWestern America Capital Group and O.S.S. Capital Management backed Canadian company that provides environmental solutions to natural resource and industrial customers across Canada and the United States, has acquired Columbia Recycle Ltd., a Canadian company that offers metal recycling services. No transaction terms were released.

Premier Tech has Acquired Brisanzia Technologies

Premier Tech Ltd., a Caisse de dépôt et placement du Québec and Fonds de solidarité FTQ backed Canadian company that manufactures horticulture and agriculture products, flexible packaging equipment, and water treatment systems, has acquired Brisanzia Technologies Pvt Ltd, a India-based company that provides waste water and solid waste treatment services. No transaction terms were released.

Apollo Tourism & Leisure has Acquired CanaDream

Apollo Tourism & Leisure Ltd. (ASX:ATL), a Australian tourism leisure company that manufactures, rents, sells, and distributes recreational vehicles (RVs) in Australia, New Zealand, and North America, has acquired CanaDream Corporation, a Canadian company that engages in the rental and sale of RVs. Total transaction value is estimated to be $27.7 million.

Consumer Discretionary (Announced)

Alimentation Couche-Tard to Acquire Holiday Stationstores

Alimentation Couche-Tard Inc. (TSX:ATD.B), a Canadian company that operates and licenses convenience stores, has agreed to acquire Holiday Stationstores, Inc., a  U.S.-based company that operates a chain of gasoline stations and convenience stores. No transaction terms were released.

Consumer Discretionary (Closed)

Iconix Brand Group has Acquired Iconix Canada

Iconix Brand Group, Inc. (NasdaqGS:ICON), a  U.S.-based brand management company that owns, licenses, and markets a portfolio of consumer brands internationally, has acquired Iconix Canada L.P., a company that owns licenses for apparel brands. Total transaction value is estimated to be $23.8 million.

Noralta Lodge has Acquired North Country Catering

Noralta Lodge Ltd, a Canadian company that provides premium lodging for workers in Western Canada’s energy sector, has acquired North Country Catering Ltd., a Canadian company that offers catering services. No transaction terms were released.

Malar Group of Companies has Acquired DECOSTA Global

Malar Group of Companies, a Canadian provider of full service structural steel, steel fabrication & steel machining solutions, has acquired DECOSTA Global, a Canadian communication agency. No transaction terms were released.

Freeman Decorating has Acquired B.a.A.M. Productions

Freeman Decorating Co., a U.S.-based brand experience company that helps clients to design, plan, and deliver various brand experiences for their audiences, has acquired B.a.A.M. Productions, a Canadian creative production company focusing on the sports, culture, and entertainment markets. No transaction terms were released.

Ontario Teachers' Pension Plan Board has Acquired Memora Servicios Funerarios S.L.U.

Ontario Teachers' Pension Plan Board, a Canadian privately-owned pension fund, has acquired Memora Servicios Funerarios S.L.U., a Spain-based company that provides funeral services for families in Spain and Portugal. Total transaction value is estimated to be $169 million.

Atis Group has Acquired Fenestration Pro-Tech

Atis Group Inc., a  Desjardins Business Capital régional et coopératif, Fondaction, Fonds de solidarité FTQ and Cornerstone Capital Partners backed Canadian company that develops, manufactures, distributes, and installs windows, doors, and products for residential and commercial construction and renovation markets in Canada, has acquired Fenestration Pro-Tech Inc., a Canadian company that sells windows and doors. No transaction terms were released.

Plan B Games has Acquired eggertspiele GmbH & Co.

Plan B Games Inc., a Canadian company that publishes board games, has acquired eggertspiele GmbH & Co. KG, a German company that publishes mobile games and board games. No transaction terms were released.

FoxMind Canada Enterprises has Acquired Funnybone Toys

FoxMind Canada Enterprises Ltd., a Canadian company that manufactures toys and games, has acquired Funnybone Toys LLC, a U.S.-based company that manufactures toys. No transaction terms were released.

Consumer Staples (Closed)

Citron Hygiene Canada has Acquired Chemsyn Chemical

Citron Hygiene Canada Limited, a company that provides washroom hygiene, pest control, chemical, and life safety services for commercial facilities in Canada, has acquired Chemsyn Chemical Corporation, a Canadian company that manufactures commercial ware wash, laundry, and housekeeping chemicals and solutions. No transaction terms were released.

Healthcare (Announced)

Siemens Diagnostics Holding II B.V. to Acquire Epocal

Siemens Diagnostics Holding II B.V., a Netherlands-based company that is a subsidiary of Siemens AG, has agreed to acquire Epocal Inc., a Canadian company that develops and provides point of care blood diagnostic systems for healthcare enterprises. No transaction terms were released.

Healthcare (Closed)

KDA Group has Acquired Biomed 2002

KDA Group Inc. (TSXV:KDA), a Canadian company that provides pharmacy personnel replacement and vocational training services to the health industry in the Province of Quebec, Canada, has acquired Biomed 2002 Inc., a Canadian company that distributes generic pharmaceutical products throughout Quebec. Total transaction value is estimated to be $58 thousand.

Financials (Announced)

EVI Global Group Developments to Acquire EVI Global Group

EVI Global Group Developments Corp. (CNSX:EVI), a Canadian company that engages in the acquisition, exploration, and development of mineral properties in Canada, has agreed to acquire EVI Global Group Limited, a Canadian company that operates an online platform for trading foreign currency exchange transactions. No transaction terms were released.

Financials (Closed)

FIRST Insurance Funding of Canada has Acquired Insurance Premium Finance

FIRST Insurance Funding of Canada Inc., a company that provides payment solutions for the insurance market in Canada, has acquired Insurance Premium Finance Corporation, a Canadian company that offers financing options to insurance brokers and clients. No transaction terms were released.

Information Technology (Closed)

Garmin has Acquired Alphamantis Technologies

Garmin Ltd. (NasdaqGS:GRMN), a Switzerland-based company that designs, manufactures, and distributes a range of navigation, communication, and information devices worldwide, has acquired Alphamantis Technologies Inc, a Canadian company that develops software for cyclists. No transaction terms were released.

Highline BETA has Acquired Female Funders

Highline BETA, a Canadian company that focuses on venture co-creation, has acquired Female Funders Inc., a Canadian company that develops and operates an angel investing portal for women. No transaction terms were released.

Hytera Project has Acquired Norsat International

Hytera Project Corp., a Chinese company that develops, manufactures and sells two-way radios and wireless trunking systems, has acquired Norsat International Inc., a Prismafin SA and Privet Fund Management  backed  Canadian company that provides communication solutions globally. Total transaction value is estimated to be $91.8 million, reflecting a 12.7x EBITDA multiple and a 1.47x revenue multiple.

PayPal Holdings has Acquired TIO Networks

PayPal Holdings, Inc. (NasdaqGS:PYPL), a  U.S.-based company that enables digital and mobile payments on behalf of consumers and merchants worldwide, has acquired TIO Networks Corp., a IA Capital Group and Venture Science backed Canadian company that engages in processing bill payment transactions. Total transaction value is estimated to be $319 million, reflecting a 24.8x EBITDA multiple.

Other (Announced)

CNRP Mining to Acquire X-SPRAYS

CNRP Mining Inc. (CNSX:CND), a Canadian company that engages in the acquisition, exploration, and evaluation of mineral resource properties in Canada, has agreed to acquire X-SPRAYS, a Canadian company that engages in the production of oral sprays to deliver medicines, nutrients and vitamins. The target was a wholly owned subsidiary of 1127466 B.C. Ltd. Total transaction value is estimated to be $13.8 million.

Greenbriar Capital to Acquire 2587344 Ontario

Greenbriar Capital Corp. (TSXV:GRB), a Canadian company that engages in the acquisition, development, management, and sale of various real estate properties and renewable energy projects primarily in North America, has agreed to acquire 2587344 Ontario Inc., a Canadian company that holds exclusive Canadian sales, distribution and marketing rights for smart glass energy products developed by Gauzy, a Israel-based technology company. Total transaction value is estimated to be $2.1 million.

Other (Closed)

Nelson Education has Acquired Westhall Apparel

Nelson Education Ltd., a Canadian educational publishing company, has acquired Westhall Apparel, a Canadian company that produces campus apparel for colleges and universities. No transaction terms were released.

Transport Guilbault has Acquired Idéal Logistics Solutions

Transport Guilbault Inc, a Canadian freight transportation company, has acquired Idéal Logistics Solutions, a Canadian logistics and transportation company. No transaction terms were released.

Lookout Emergency Aid Society has Acquired Mood Disorders Association of British Columbia

Lookout Emergency Aid Society, a Canadian company that provides shelters, transitional, supportive, and affordable housing for low income individuals, has acquired Mood Disorders Association of British Columbia, a non-profit organization that provides treatment, support, and education for people living with a mood disorder. No transaction terms were released.


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

Add A Comment

Confidentiality and Communications Protocols

Continue Reading

Sign Up to Receive Valitas Publications

Subscribe