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Canadian Market Recap: Week Ended October 13

  • Posted By: Karen Fisman, Matt Bogoroch, Ted Pispidikis, Andrew Schmidt, Miranda Li, JT Paliwal

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Market Update

Eighty-Three Canadian M&A transactions closed this past week. Year to date, M&A closed deal count is 2.1% higher than the comparable period in 2016. The Canadian dollar appreciated by 0.35 cents, ending the week at 80 cents relative to the U.S. dollar. The TSX outperformed the S&P 500 by 0.8% in U.S. dollar terms. WTI Crude oil rose by 4.2%, ending the week at $51.73 per barrel.

According to The Lead Left, a quarterly survey by Thomson Reuters revealed that 72% of buy and sell-side respondents believe that issuers continue to show stable performance alongside flat to very slow growth. Remaining respondents were evenly split, with half reporting that issuers are showing strong financial performance and growth has picked up while half stating that issuers are starting to show softness and tracking below plan.

 

Valitas Insights: Cross-border M&A: The Critical Role of Due Diligence

Dealmakers are reaching across borders, seemingly undaunted by political uncertainty. In Q2 2017, global cross-border deal value was up 49% over the previous year, accounting for 47% of total global value and 36% of volume.[1]  In Canada, cross-border transactions accounted for more than half of total activity by both value and volume[2].

As deal makers accelerate their cross-border activity, the due diligence process becomes more critical than ever in addressing risks inherent in those transactions. We spoke with Michael O’Neill, a Director at Stone Arch Capital, about his experience with U.S./Canadian cross-border deal making, and the unique concerns that need to be addressed during the due diligence process.

To learn more, read our full article.

And on other topics…

Firmex and Divestopedia have just released their 2017 Mid-Market M&A Advisory Fee Survey.  It’s a useful resource for business owners and M&A practitioners. 

 

 

Canadian M&A Transactions [[i]]

 Energy (Announced)

            Clearbeach Resources and Budd Energy to Acquire Liberty Oil & Gas

Clearbeach Resources Inc., a Canadian oil and gas exploration and production company, and Budd Energy Inc., a Canadian energy consulting services company, have agreed to acquire Liberty Oil & Gas Ltd., a Canadian company that engages in the exploration and drilling of petroleum substances. Liberty Oil & Gas is a subsidiary of Tribute Resources (TSX-V:TRB). Total transaction value is estimated to be $1.24 million.

            Bayfield Resources Acquired

An arm’s length purchaser has agreed to acquire Bayfield Resources Inc., a Canadian company that owns and operates petroleum and natural gas storage facilities. Bayfield Resources is a subsidiary of Tribute Resources (TSX-V:TRB). Total transaction value is estimated to be $800,000.

Materials (Announced)

            BC Partners, Ontario Teachers' Pension Plan, and Public Sector  Pension Investment Board to                  Acquire CeramTec

BC Partners, Ontario Teachers' Pension Plan Board, and Public Sector Pension Investment Board have agreed to acquire CeramTec GmbH, a Cinven Limited backed German-based company that supplies advanced ceramics, and engineers these materials for use in a wide area of global applications. No transaction terms were released.

            Falcon Gold to Acquire Esperanza Resources

Falcon Gold Corp. (TSXV:FG), a Canadian company that engages in the acquisition and exploration of mineral properties in North America, has agreed to acquire an 80% interest in Esperanza Resources S.A.’s mineral concessions located in the La Rioja and San Luis provinces of Argentina. Total transaction value is estimated to be $1.2 million.

Ceylon Graphite to Acquire JADS Enterprises

Ceylon Graphite Corp. (TSXV:CYL), a Canadian company that explores and develops graphite mines in Sri Lanka, has agreed to acquire JADS Enterprises (Private) Ltd., a Sri Lanka-based company that owns five graphite exploration grid units and an exploration license in the Malsiripura/Kurunegela region. No transaction terms were released.  

Industrials (Announced)

ENPAR Technologies to Acquire Pumptronics Incorporated

ENPAR Technologies Inc. (TSXV:ENP), a Canadian company that engages in development of environmental technologies, has agreed to acquire Pumptronics Incorporated, a Canadian company that manufactures integrated custom and automated pump stations. Total transaction value is estimated to be $3.0 million.

Industrials (Closed)

            City Wide Towing has Acquired Capital Towing

City Wide Towing & Recovery Service Ltd., a Signal Hill Equity Partners backed Canadian company that provides towing, transportation, and recovery services in Alberta, has acquired Capital Towing & Recovery Inc., a Canadian company that provides towing services in Edmonton and the surrounding area. No transaction terms were released.

Consumer Discretionary (Announced)

            Superior Plus to Acquire International Dioxcide

Superior Plus Corp. (TSX:SPB), a Canadian company that engages in the energy distribution and specialty chemicals businesses in Canada, the United States, and Chile, has agreed to acquire International Dioxcide Inc., a U.S.-based company that manufactures chlorine dioxide. International Dioxcide Inc. is a subsidiary of LANXESS. No transaction terms were released.

Kew Media Group to Acquire TCB Media Rights

Kew Media Group Inc. (TSX:KEW), a Canadian independent content production company, has agreed to acquire TCB Media Rights Ltd., a U.K.-based company that engages in distribution, marketing, and sale of Internet protocol (IP) and content rights. Total transaction value is estimated to be $17.0 million.

Healthcare (Closed)

            

            Cerebra Health has Acquired Younes Medical Technologies

Cerebra Health Inc., a Canadian company that develops technology for the assessment of sleep and sleep disorders, has acquired Younes Medical Technologies Ltd., a Canadian company that manufactures medical devices for the assessment of sleep and diagnosis of sleep disorders. No transaction terms were released.

            Right Health has Acquired Akira Medical

Right Health Inc., an iGan Partners and GreenSky Capital backed Canadian company that provides virtual and in-person health care services, has acquired Akira Medical Ltd., a Canadian company that develops a platform providing on-demand access to Canadian doctors by secure text and video. No transaction terms were released.

Financials (Closed)

            SS&C Technologies Holdings has Acquired CommonWealth Fund Services

SS&C Technologies Holdings, Inc. (NasdaqGS:SSNC), a U.S.-based company that provides software products and software-enabled services to financial service providers globally, has acquired CommonWealth Fund Services Ltd., a Canadian company that provides fund administration services to the hedge fund industry. CommonWealth Fund Services Ltd. was a subsidiary of Caledon Trust Company. No transaction terms were released.

Kingsway Financial Services has Acquired Professional Warranty Service

Kingsway Financial Services Inc. (TSX:KFS), a Canadian company that provides property and casualty insurance products in the U.S., has acquired Professional Warranty Service Corp., a U.S.-based company that provides new home warranty products and administration services to large-tier residential construction firms in the U.S.. Professional Warranty Service Corp. was a subsidiary of TA Associates Management. No transaction terms were released.

Information Technology (Closed)

            Calligo has Acquired 3 Peaks

Calligo Limited., an Investcorp Bank and Ti23 backed U.K.-based cloud service provider to the mid-tier enterprise segment, has acquired 3 Peaks Inc., a Canadian provider of cloud solutions including e-mail, website hosting, and infrastructure-as-a-service. No transaction terms were released.

Converge Technology Partners has Acquired Corus360

Converge Technology Partners Inc., a Canadian company building a national platform of regionally focused IT infrastructure firms across North America, has acquired Corus Group LLC, a U.S.-based company that, doing business as Corus360, operates as an information technology (IT) consulting and solutions company. No transaction terms were released.

Pelmorex Media has Acquired Addictive Mobility

Pelmorex Media Inc., a Canadian company that provides weather-related products, services and multimedia applications, has acquired Addictive Mobility Inc., a Canadian company that operates a mobile-first data management and media buying platform. No transaction terms were released.

            Solium Capital has Acquired Capshare

Solium Capital Inc. (TSX:SUM), a Canadian company that provides cloud-enabled services related to equity-based incentive plans, has acquired Capshare LLC, a U.S.-based company that provides an online software platform for managing, storing, and analyzing cap table information for private companies. No transaction terms were released.

Multi-Health Systems has Acquired Global Institute of Forensic Research

Multi-Health Systems Inc., a Canadian developer of scientific technology solutions for measuring and predicting human performance, has acquired Global Institute of Forensic Research, Inc., a U.S.-based risk-management and education software as a service company, focused on behavioral healthcare. No transaction terms were released.

Real Estate (Announced)

            Oxford Properties Group and Madison International Realty to Acquire Sochribel

Oxford Properties Group, Inc. and Madison International Realty, LLC, have agreed to acquire the Sony Center, an urban entertainment complex property in Berlin. The property was previously owned by Sochribel GmbH, a National Pension Service backed German-based company, and former subsidiary of Sony Corporation. Total transaction value is estimated to be $1.6 billion.

Other (Announced)

            MX Gold to Acquire Symple Internet Financial

MX Gold Corp. (TSXV:MXL), a Canadian junior mining company, has agreed to acquire Symple Internet Financial Ltd., a Canadian cryptocurrency/blockchain mining company. Total transaction value is estimated to be $893 thousand.

CGX Life Sciences to Acquire GreenMart

CGX Life Sciences Inc., a Canadian company that sells CinG-X supplements used to reduce blood sugar and support cognitive functions in the North America marketplace, has agreed to acquire GreenMart of Nevada NLV, LLC, a U.S.-based producer of cannabis and cannabis related products. Total transaction value is estimated to be $22.2 million.

Ackroo to Acquire KESM/LoyalMark

Ackroo Inc. (TSXV:AKR), a Canadian gift card, loyalty and rewards technology and services provider, has agreed to acquire KESM/LoyalMark, a Canadian company that provides gift card and loyalty processing solutions. KESM/LoyalMark is a subsidiary of M3 Rebel. No transaction terms were released.

MDRM Group to Acquire Marble Mining Company

MDRM Group (Canada) Ltd., a subsidiary of Modern Mobility Aids, Inc., has agreed to acquire Marble Mining Company Inc. No transaction terms were released.

Other (Closed)

            PUF Ventures has Acquired Natures Hemp

PUF Ventures Inc. (CNSX:PUF), a Canadian company looking to produce and supply medical marijuana in Canada, has acquired Natures Hemp Corp., a Canadian hemp-based foods and medicines developer. Total transaction value is estimated to be $600 thousand.

            365 Data Centers has Acquired Host.net

365 Operating Company LLC (365 Data Centers), a Lumerity Capital, Longboat Advisors, and Chirisa Investments backed U.S.-based company that provides co-location services for businesses, telecom, and cloud service providers, has acquired Broadband One LLC (Host.net), a Canadian data center services provider for Southeast Florida. Broadband One LLC was a subsidiary of Novacap. No transaction terms were released.

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

[1] According to the Baker McKenzie Cross-Border M&A Index

[2] Valitas Capital Q2 2017 Canadian M&A Review

 

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