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Canadian Market Recap: Week Ended July 7

  • Posted By: Karen Fisman, Christopher Abt, Anwar Khan, Miranda Li

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  • Comments: 2

Market Update

Sixty-three Canadian M&A transactions closed this past week. Year to date, M&A closed deal count is 4.7% higher than the comparable period in 2016. The Canadian dollar appreciated by 0.76 cents, ending the week at 78 cents relative to U.S. dollar. The TSX underperformed the S&P 500 by 0.1% in U.S. dollar terms. WTI Crude oil fell by 4.1%, ending the week at $44.39 per barrel.

The new issue environment for U.S. middle market loans became more favourable as average total leverage rose to 5.8x EBITDA from 5.7x last week while yields fell by 20 bps to 6.07%, a level that is 83 bps lower than a year ago. According to The Lead Left, U.S. total syndicated loan issuance hit a record high, reaching more than US$1.2 trillion in the first half of 2017. Lenders are shifting towards riskier assets, bringing investment-grade issuance as a percentage of the total syndicated loan issuance to its lowest level since 2013.

Valitas Insights: Pursuit of Cross-Border Deals in the Face of Geopolitical Uncertainty

In the recently released EY Global Capital Confidence Barometer, the following question is posed:

Can complex geopolitical uncertainty and a healthy, active M&A environment co-exist?

The simple answer is yes, based on survey results reflecting the expectations[i] of 2300 executives in 43 countries including Canada, which is where we will focus. While geopolitical uncertainty is regarded as a significant risk factor, there is an overriding focus on other drivers (including, paradoxically, an interest in cross-border transactions) that are likely to fuel M&A activity. 

Read our full article to learn more.

Canadian M&A Transactions[ii]

Energy (Closed)

Halliburton Company has Acquired Summit ESP

Halliburton Company (NYSE:HAL), a U.S.-based oil and gas producer, has acquired Summit ESP, LLC, a U.S.-based company, with operations in Canada, manufacturing pumps for the oil and gas industry. Summit ESP, LLC was a subsidiary of Argonaut Private Equity. No transaction terms were released.

Materials (Closed)

Declan Resources has Acquired 5498 Nunavut

Declan Resources Inc. (CNSX:LAN), a Canadian mineral explorer, has acquired 5498 Nunavut Inc., a gold exploration company. Total transaction value is estimated to be $25.0 thousand.

Industrials (Announced)

AECOM to Acquire Shimmick Construction Company

AECOM (NYSE:ACM), a U.S.-based infrastructure giant, has agreed to acquire Shimmick Construction Company, Inc., a U.S.-based provider of construction services, with operations in Canada. Total transaction value is estimated to be $175 million, implying a 0.58x revenue multiple.

AK Steel Holding to Acquire Precision Partners Holding Company

AK Steel Holding Corporation (NYSE:AKS), a worldwide steel producer, has agreed to acquire Precision Partners Holding Company, a Milestone Partners backed Canadian supplier of machine metal parts for equipment manufacturers. Total transaction value is estimated to be $468 million.

CEP Forensic to Acquire Sintra Engineering

CEP Forensic Inc., a Canadian provider of forensic engineering, sciences, and investigation services, has agreed to acquire Sintra Engineering Inc., a Canadian provider of forensic engineering services. No transaction terms were released.

Industrials (Closed)

Logistec has Acquired FER-PAL Construction

Logistec Corporation (TSX:LGT.B), a Canadian logistics provider, has acquired FER-PAL Construction Ltd., a Canadian company providing water main rehabilitation solutions across North America. Total transaction value is estimated to be $49.5 million, implying a 1.0x revenue multiple.

West Midlands Pension Fund; Workplace Safety & Insurance Board have Acquired Red Funnel Ferries

West Midlands Pension Fund, a U.K.-based firm and Workplace Safety & Insurance Board, a Canadian insurance provider, have acquired Red Funnel Ferries Limited, a U.K.-based company, with operations in Canada, offering marine transportation services. Red Funnel Ferries Limited was a subsidiary of Infracapital. No transaction terms were released.

Experior Financial Group has Acquired VFG Financial Group

Experior Financial Group Inc, a Canadian insurance brokerage, has acquired VFG Financial Group, a Canadian provider of financial planning services. No transaction terms were released.

Consumer Discretionary (Closed)

Cirque Du Soleil Canada has Acquired Blue Man Productions

Cirque Du Soleil Canada Inc., a Canadian entertainment company and the largest theatrical producer in the world, has acquired Blue Man Productions, LLC, a U.S.-based theatrical entertainment company. Blue Man Productions, LLC was a subsidiary of GF Capital Management & Advisors. No transaction terms were released.

Consumer Staples (Closed)

Frutarom Industries has Acquired Les Ingrédients Alimentaires BSA

Frutarom Industries Ltd. (TASE:FRUT), an Israeli food, personal care and cosmetics conglomerate, has acquired Les Ingrédients Alimentaires BSA Inc., a Canadian producer of food seasonings and ingredients. Total transaction value is estimated to be $2.8 million.

C.H. Guenther & Son has Acquired Les Plats du Chef

C.H. Guenther & Son, Inc., a U.S.-based producer of grain products, has acquired Les Plats du Chef Inc., a Canadian food producer. Les Plats du Chef was a subsidiary of Claridge. No transaction terms were released.

KIK Custom Products has Acquired Lavo

KIK Custom Products Inc., a Centerbridge Partners backed Canadian producer of consumer packaged goods, has acquired Lavo Inc., a Montréal-based producer of laundering and cleaning products. Lavo Inc. was a subsidiary of Swander Pace Capital. No transaction terms were released.

Healthcare (Announced)

New Look Vision Group to Acquire IRIS The Visual Group

New Look Vision Group Inc. (TSX:BCI), a Canadian provider of eye care products and services, has agreed to acquire IRIS The Visual Group Inc., a Canadian provider of eye care services. Total transaction value is estimated to be $120 million.

ImmunoPrecise Antibodies to Acquire U-Protein Express

ImmunoPrecise Antibodies Ltd. (TSXV:IPA), a provider of custom hybridoma development services in North America, has agreed to acquire U-Protein Express BV, a Dutch contract research organization producing pre-clinical recombinant proteins and antibodies. Total transaction value is estimated to be $10.6 million, implying a 4.3x revenue multiple.

Financials (Announced)

Flying Monkey Capital to Fabled Copper and Gold

Flying Monkey Capital Corp. (TSXV: FMK.P), a Canadian firm, has agreed to acquire Fabled Copper and Gold Corp., a Canadian mineral explorer. No transaction terms were released.

Canaccord Genuity Wealth Management to Acquire Hargreave Hale

Canaccord Genuity Wealth Management, a U.K.-based firm, has agreed to acquire Hargreave Hale Limited, a Investec Growth & Acquisition Finance backed U.K.-based company, with operations in Canada, offering security trading and brokerage services. Total transaction value is estimated to be $133 million.

Financials (Closed)

FTI Consulting has Acquired CDG Group

FTI Consulting, Inc. (NYSE:FCN), a worldwide provider of business advisory services, has acquired CDG Group, LLC, a U.S.-based investment banking advisory with operations in Canada. No transaction terms were released.

Information Technology (Announced)

Symantec to Acquire Fireglass

Symantec Corporation (NasdaqGS:SYMC), a worldwide provider of cybersecurity solutions, has agreed to acquire Fireglass, a Norwest Venture Partners, Lightspeed Venture Partners, Singtel Innov8 Holdings and Deutsche Telekom Capital Partners Management backed U.S.-based provider of cyber security solutions. FIreglass is a subsidiary of Norwest Venture Partners, Lightspeed Venture Partners and Singtel Innov8 Holdings. No transaction terms were released.

Mastech Digital to Acquire InfoTrellis

Mastech Digital, Inc. (AMEX:MHH), a U.S.-based provider of IT staffing and digital transformation services, has agreed to acquire InfoTrellis Inc., a Canadian provider of data management and consulting services. Total transaction value is estimated to be $70.8 million.

Circa Enterprises to Acquire Guardian Telecom

Circa Enterprises Inc. (TSXV:CTO), an equipment manufacturer for the telecom and electrical industries across North America, has agreed to acquire Guardian Telecom Inc., a Canadian manufacturer of telephone equipment. Total transaction value is estimated to be $4.5 million.

Big Wind Capital to Acquire Hill Top Security

Big Wind Capital Inc. (CNSX:BWC), a Canadian mineral explorer, has agreed to acquire Hill Top Security, Inc., a Mach37 backed U.S.-based provider of digital platforms for businesses. Total transaction value is estimated to be $207 thousand.

Everfront Ventures to Acquire Nexalogy

Everfront Ventures Corp. (TSXV:EVC), a Canadian firm, has agreed to acquire Nexalogy Inc., a Canadian developer of business intelligence and data analysis software. Total transaction value is estimated to be $6.0 million.

Information Technology (Closed)

Les Équipements Power Survey has Acquired Power Standards Lab

Les Équipements Power Survey ltée, an EnerTech Capital, Investissement Québec, Investment Arm and Fonds régionaux de solidarité FTQ Montréal backed Canadian manufacturer of customized power equipment for commercial and industrial energy users, has acquired Power Standards Lab Inc., a U.S.-based manufacturer of power monitoring systems. No transaction terms were released.

Semtech has Acquired AptoVision Technologies

Semtech Corporation (NasdaqGS:SMTC), a U.S.-based developer of analog and mixed-signal semiconductor products, has acquired AptoVision Technologies Inc., a Canadian provider of Video over IP solutions. Total transaction value is estimated to be $97.5 million.

Vanderlande Industries has Acquired Optosecurity

Vanderlande Industries B.V., a Mahogany Private Equity and NPM Capital backed Dutch designer of automated material handling systems, has acquired Optosecurity Inc., a Desjardins Business Capital régional et coopératif backed Canadian developer of checkpoint security software solutions. Optosecurity was a subsidiary of BDC Venture Capital and Fondaction. No transaction terms were released.

Environics Analytics Group has Acquired RSI Research Solutions

Environics Analytics Group Ltd., an Eventi Capital Partners backed Canadian provider of marketing and analytical services, has acquired RSI Research Solutions Inc., a Canadian provider of a map-based software tool for market and real estate analysts. No transaction terms were released.

Les Solutions Victrix has Acquired VisionTI

Les Solutions Victrix Inc., a Desjardins Business Capital regional et cooperative backed Canadian provider of IT consulting services, has acquired VisionTI, a Canadian provider of IT consulting services. No transaction terms were released.

Telecommunication Services (Closed)

United American Corp has Acquired TNW Networks

United American Corp, Inc. (OTCPK:UAMA), a U.S.-based provider of internet services, has acquired TNW Networks Corp., a Canadian provider of telecom and internet services. TNW Networks Corp. was a subsidiary of Investel Capital Corporation. Total transaction value is estimated to be $2.6 million.

Real Estate (Closed)

Oxford Properties Group; Norges Bank Real Estate Management have Acquired ICG 16th Street Associates

Oxford Properties Group, Inc., a Canadian real estate investment firm; Norges Bank Real Estate Management, a Norwegian real estate investment firm have acquired ICG 16th Street Associates, L.L.C., a U.S.-based real estate investment firm with operations in Canada. ICG 16th Street Associates, L.L.C. was a subsidiary of ICG Properties, L.L.C. and The JBG Companies. Total transaction value is estimated to be $196 million.

True North Commercial Real Estate Investment Trust has Acquired Altis at Sand Lake Orlando

True North Commercial Real Estate Investment Trust (TSX:TNT.UN), a Canadian firm, has acquired Altis at Sand Lake Orlando, LLC, a U.S.-based apartment complex owner and operator. Altis at Sand Lake Orlando, LLC was a subsidiary of The Altman Companies. Total transaction value is estimated to be $81.9 million.

Other (Announced)

Silver Lake; General Atlantic to Acquire A Place for Mom

Silver Lake, a U.S.-based private equity firm; General Atlantic, a U.S.-based growth equity firm, have agreed to acquire A Place for Mom, a U.S.-based provider of senior care referral services, with operations in Canada. A Place for Mom is a subsidiary of Warburg Pincus. No transaction terms were released.

Other (Closed)

Polycor has Acquired Granite Industries of Vermont

Polycor Inc., a TorQuest Partners and PNC Mezzanine Capital backed Canadian manufacturer of natural stones, has acquired Granite Industries of Vermont, a granite manufacturer. No transaction terms were released.

 

[i] Expectations have proven to be predictive of M&A activity, but the predictive power weakens over a relatively short period.  For example, see “Can Business Expectations predict Merger Activity?”

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

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