Value Unleashed

Market Update

Fifty-Four 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 depreciated by 0.29 cents, ending the week at 80 cents relative to the U.S. dollar. The TSX underperformed the S&P 500 by 0.9% in U.S. dollar terms. WTI Crude oil fell by 4.4%, ending the week at $49.65 per barrel.

According to The Lead Left, total leveraged loan volume was $1.75 trillion for the first nine months of the year; approximately 25% higher than the comparable period in 2016. Loan volumes reached this level despite the slower U.S. syndicated loan issuance in 3Q17 of less than $475 billion.

Valitas Insights: Blockchain and M&A

Five Potential Use-Cases for Blockchain Technology in M&A: Part 1 – Fortifying Trust

Over the past few months, “Bitcoin” has become a global buzzword, often associated with either incredible wealth creation, or scandal and dismissiveness. The concept of a decentralized currency is both a fascinating and polarizing subject. It has received public endorsements from the likes of Peter Thiel, Goldman Sachs, and even Paris Hilton and Floyd Mayweather. It has also received polarizing disapproval from Jamie Dimon, CEO of J.P. Morgan and Chinese government regulators. The concept of Bitcoin is such a profound and fascinating topic that the search term “Bitcoin” has surpassed the total “Justin Bieber” searches on Google since August 2017.

In this three-part series, we will stay away from ‘Bitcoin Mania’ and focus on the underlying technology behind Bitcoin: Blockchain. More specifically, we will outline five potential use-cases for blockchain technology in M&A, with an emphasis on how blockchain can improve rather than compete with the current infrastructure.

To find out more, read our full article.

And on other topics…

What tangible value does an M&A advisor add to the sale process? Read our recent Divestopedia article to find out.

And in case you missed it, Firmex recently interviewed Paris Aden on the importance of Sell-Side Due Diligence. Read the full interview here.

Canadian M&A Transactions [i]

Materials (Announced)

Cava Resources to Acquire Gold Rush

Cava Resources Inc. (TSXV: CVA), a Canadian company that explores, acquires, and develops mineral and oil and gas properties in Canada, has agreed to acquire Gold Rush Cariboo Inc., a Canadian company that evaluates and acquires gold ore properties in British Columbia. Total transaction value is estimated to be $389 million.

Industrials (Announced)

Thermon Group Holdings to Acquire CCI Thermal Technologies

Thermon Group Holdings, Inc. (NYSE:THR), a U.S. based company that provides highly engineered thermal solutions for process industries internationally, has agreed to acquire CCI Thermal Technologies Inc., a Canadian company that develops and manufactures heating and filtration solutions for industrial and hazardous area applications worldwide. Total transaction value is estimated to be $258 million, implying a 11.5x EBITDA multiple and a 2.72x revenue multiple.

Héroux-Devtek to Acquire Compañía Española de Sistemas Aeronáuticos

Héroux-Devtek Inc. (TSX:HRX), a Canadian company that designs, develops, manufactures, and repairs aerospace products globally, has agreed to acquire Compañía Española de Sistemas Aeronáuticos, S.A., a Spanish developer and manufacturer of hydraulic and electromechanical components for the aerospace industry. Compañia Española de Sistemas Aeronauticos, S.A, is a subsidiary of Airbus SE. Total transaction value is estimated to be $205 million.

Industrials (Closed)

Lawson Products has Acquired The Bolt Supply House

Lawson Products, Inc. (NASDAQ: LAWS), a U.S. based distributer of products and services to the North and Central American maintenance, repair, and overhaul (MRO) marketplace, has acquired The Bolt Supply House, Ltd., a Canadian distributer of fasteners, power tools, and industrial MRO related products across Alberta, Saskatchewan, and Manitoba. Total transaction value is estimated to be $40 million, implying a 0.93x revenue multiple.

Titanium Transportation Group has Acquired Xpress Group

Titanium Transportation Group Inc. (TSXV: TTR), a Canadian company that provides asset-based transportation and logistics services in North America, has acquired Xpress Group, a Canadian company that offers van and flatbed transportation services in Southern Ontario and the U.S. Midwest. Total transaction value is estimated to be $8.7 million.

Gates has Acquired Atlas Hydraulics

Gates Corporation, a U.S. based manufacturer of power transmission and fluid power solutions for the global market, has acquired Atlas Hydraulics, Inc., a Canadian company that designs, manufactures, and supplies hydraulic tube and hose assemblies for the North American original equipment manufacturing (OEM) market. No transaction terms were released.

Consumer Discretionary (Announced)

Am-Cam Électroménagers to Acquire Corbeil Electrique

Am-Cam Électroménagers Inc., a Canadian holding company, has agreed to acquire Corbeil Electrique Inc., a Canadian company that operates a network of specialized major appliance stores. Corbeil Electrique Inc. is a wholly owned subsidiary of Sears Canada Inc. No transaction terms were released.

Consumer Discretionary (Closed)

KV Private Equity has Acquired Off Grid Trailers

KV Private Equity, a Canadian private equity firm, has acquired Off Grid Trailers, a Canadian manufacturer of rugged off-road and teardrop trailers for customers in the U.S. and Canada. No transaction terms were released.

Consumer Staples (Closed)

Capol has Acquired Colarôme

Capol GmbH, a German developer and manufacturer of coating products and services for the global confectionery industry, has acquired Colarôme Inc., a Canadian company that develops, produces, and markets natural ingredients for food and nutraceutical sectors. No transaction terms were released.

Tricor Pacific Founder has Acquired Armand Agra

Tricor Pacific Founders, a Canadian private equity firm, has acquired Armand Agra, Inc., a U.S. based company that processes and distributes meat and meat products. No transaction terms were released.

Healthcare (Announced)

ANGLE to Acquire Axela

ANGLE plc, a U.K. based developer of medical diagnostics products, has agreed to acquire Axela Inc., a Canadian company that develops and delivers a portfolio of tools that provide enhanced analysis of proteins, DNA, and RNA. Total transaction value is estimated to be $6.1 million.

ImmunoPrecise Antibodies to Acquire QVQ

ImmunoPrecise Antibodies Ltd. (TSXV:IPA), a Canadian that provides custom antibody development, production services, and protein expression primarily in the United States and Canada, has agreed to acquire QVQ Holding B.V., a Netherlands based company that offers contract research for pharmaceutical, biotech, and diagnostic companies. Total transaction value is estimated to be $734 thousand, implying a 1.82x revenue multiple.

Healthcare (Closed)

Stallergenes Greer has Acquired Medic Savoure

Stallergenes Greer Plc (ENXTPA:STAGR), a U.K. based biopharmaceutical company specializing in respiratory allergy treatments, has acquired Medic Savoure Ltd., a Canadian company that manufactures allergy immunotherapy (AIT) products for the Canadian market. No transaction terms were released.

Financials (Announced)

Atoro Capital to Acquire Jeongsim Food

Atoro Capital Corp. (NEX:TTO), a Canadian capital pool company, has agreed to acquire Jeongsim Food Co. Ltd., a Korean company that manufactures and distributes dehydrated and semi-dehydrated fruits, vegetables, and nuts internationally. No transaction terms were released.

Financials (Closed)

            Novacap and Caisse de dépôt et placement du Québec has Acquired Pivotal Payments

A consortium of Canadian private equity firms including Novacap and Caisse de dépôt et placement du Québec has agreed to acquire Pivotal Payments Inc., a U.S. based company that provides merchant services and payment processing solutions to clients in various industries worldwide. Total transaction value is estimated to be $525 million.

Information Technology (Announced)

Transform-X to Acquire DragonWave

Transform-X, Inc., a U.S. based company possessing advanced waveform, software, and hardware technologies for RF communications, has agreed to acquire DragonWave Inc. (TSX:DRWI), a Canadian company that provides high-capacity packet microwave solutions that drive next-generation IP networks worldwide. No transaction terms were released.

AtmanCo to Acquire Appwapp

AtmanCo Inc. (TSXV:ATW), a Canadian company that provides assessment and recruitment services for professionals in Canada, has agreed to acquire Services Appwapp Inc., a Canadian company that offers web and mobile development services to corporate customers. Total transaction value is estimated to be $300 thousand.

Information Technology (Closed)

JONES Media has Acquired Verve.ai

JONES Media Inc., a Canadian digital advertising company, has acquired Verve.ai Corporation, a Canadian augmented intelligence data platform. Verve.ai Corporation was a subsidiary of realSociable. No transaction terms were released.

AVI-SPL has Acquired Sharp's Audio Visual

AVI-SPL, Inc., an H.I.G. Capital and Falcon Investment Advisors backed U.S. based company that designs, builds, integrates, and supports audio visual (AV) and video collaboration technology worldwide, has acquired Sharp's Audio Visual Ltd., a Canadian company that supplies and integrates a range of integrated audio visual solutions for organizations across Canada. No transaction terms were released.

KAR Auction Services has Acquired NthGen Software

KAR Auction Services, Inc. (NYSE:KAR), a U.S. based company that provides vehicle auction services internationally, has acquired NthGen Software Inc., a Canadian company that designed and developed a mobile and desktop automotive remarketing business tool. Total transaction value is estimated to be $156 million.

Hugging Face has Acquired Sam:)

Hugging Face, Inc., a Betaworks Studio and SV Angel backed U.S. based developer of a chatbot mobile application based on artificial intelligence, has acquired Sam:), a Canadian company that developed Chatty McChatface, an AI chatbot for use on mobile platforms. No transaction terms were released.

Other (Announced)

Aida Minerals Corp to Acquire Greenstream

Aida Minerals Corp (CSE:AMC), a Canadian mineral exploration company, has agreed to acquire 10375977 Canada Inc., a Canadian blockchain technology company doing business as “Greenstream.” Total transaction value is estimated to be $844 thousand.

R2G Global to Acquire WeeGro

R2G Global LLC, a U.S. based company that provides urban farmers with facilities, classes, support and technology to help eliminate common safety and health hazards, has agreed to acquire WeeGro, a Canadian company that provides self-contained, fully automated indoor grow boxes for medical cannabis. No transaction terms were released.

Esports Entertainment Group to Acquire Ardmore Investments SP. Z O.O.

Esports Entertainment Group, Inc. (OTCPK:GMBL), a Canadian online gambling company focusing on the eSports industry in Canada, has agreed to acquire Ardmore Investments SP. Z O.O., a Swiss developer of the Bet exchange Software utilized to create Esports wagering platform. Ardmore Investments SP. Z O.O is a subsidiary of Swiss Interactive. Total transaction value is estimated to be $5.6 million.

Tecvalco to Acquire Guest Controls

Tecvalco Ltd., a Canadian manufacturer and distributor of pipeline products to the gas utility, petroleum, and water industries in Canada, has agreed to acquire Guest Controls (2001) Ltd., a Canadian provider of electrical, instrumentation, and combustion solutions for the oil and gas industry in Western Canada. No transaction terms were released.

Other (Closed)

Arthur J. Gallagher & Co. has Acquired DiBrina Group

Arthur J. Gallagher & Co. (NYSE:AJG), a U.S. based provider of insurance and risk management services in the United States and internationally, has acquired DiBrina Group, a Canadian company that provides human resources, employee benefits, wealth management, and life insurance consulting services in Ontario. No transaction terms were released.