Blog

Canadian Private Market Recap: June 19

  • Posted By: Ari Cuperfain

  • |
  • Comments: 0

Foreign private equity interest in the Canadian middle market continued to drive deal activity over the past week. U.S. private equity firm buyers accounted for three Canadian mid-market acquisitions. Additionally, both Shred-It and Sleep Country Canada, two portfolio companies owned by Birch Hill Equity Partners, are considering the launch of their respective IPOs. Here are the major deals of the week:

H.I.G. Capital Completes Acquisition of ATX Networks
TORC Ties Up Acquisition of Surge Energy Assets Valued at $430 Million
NovaCopper Completes Acquisition of Sunward Resources
The Grounds Guys Acquired by Dwyer Group
Tribute Pharmaceuticals Announces Acquisition of Medical Futures Inc.
OMERS Buys Stake in ERM for $1.7 Billion
Sleep Country Canada Seeks to Raise $250 Million in IPO
Shred-It Files Preliminary Documents for IPO

M&A
H.I.G. Capital Completes Acquisition of ATX Networks

U.S. private equity firm H.I.G. Capital completed its acquisition of ATX Networks Corp. last Tuesday. The financial terms of the transaction were not disclosed. ATX designs, manufactures and markets radio frequency processing equipment for use in cable television and private network applications. It is headquartered in Ajax, ON near Toronto, and it also has a manufacturing branch in Stuart, FL and a research division in Petach Tikva, Israel. H.I.G. is a global private equity firm that provides both debt and equity capital to small and medium-sized companies across a range of industries. Ken Wildgoose, ATX’s President and CEO, said, “We are excited about the future of the Company and feel our partnership with H.I.G. and their plans to invest in the business will allow us to attain our next level of growth.” ATX was acquired from private equity firm Pamlico Capital, also based in the U.S., which had invested in ATX back in 2010.

TORC Ties Up Acquisition of Surge Energy Assets Valued at $430 Million

TORC Oil & Gas Ltd. (TSX: TOG) completed its previously announced acquisition of light oil producing assets from Surge Energy Inc. (TSX: SGY). The transaction was valued at $430 million, paid in cash. Based in Calgary, AB, Surge focuses on the exploration, development, and production of oil and gas from properties in Western Canada. Likewise, TORC is based in Calgary, AB, and is a producer of intermediate light oil commodities in Western Canada. TORC investor CPPIB contributed $150 million in private funding to help finance the deal.

NovaCopper Completes Acquisition of Sunward Resources

NovaCopper Inc. (TSX, NYSE-MKT: NCQ) completed its previously announced acquisition of Sunward Resources Ltd. (TSX: SWD). The transaction was valued at $34 million, with Sunward shareholders receiving 0.3 common shares of NovaCopper for every share of Sunward held. Sunward is engaged in the acquisition, exploration, and development of mineral resource properties in Colombia, and is headquartered in Vancouver, BC. NovaCopper, also headquartered in Vancouver, explores and develops base minerals located in Alaska.

The Grounds Guys Acquired by Dwyer Group

Dwyer Group Inc. announced that it has acquired The Grounds Guys franchise. Financial terms for the deal were not disclosed. The Grounds Guys was started as a family business in 1987 as Sunshine Grounds Care. The company offers landscaping and lawn care services for residential and commercial clients, and it is headquartered in Mono, ON. Dwyer is a franchise holding company based in Waco, TX and currently manages 11 franchises. The Grounds Guys had partnered with Dwyer back in 2010 to expand their lawn care brand into the U.S. On the current acquisition, Dwyer CEO and President Mike Bidwell said, “Our expertise in franchise development and support across our service trades continue to blend perfectly with the landscape management skills that the van Stralen brothers [i.e. the original operating family] have established for The Grounds Guys. Now we look forward to taking this brand to the next level with continued growth and the new addition and support our Canadian locations.” Dwyer is backed by U.S. private equity firm The Riverside Company.

Tribute Pharmaceuticals Announces Acquisition of Medical Futures Inc.

Tribute Pharmaceuticals Inc. (TSX-V: TRX) announced that it has acquired Medical Futures Inc. (MFI) last Wednesday. The transaction was valued at $25.9 million. Both specialty pharmaceutical companies, Tribute is based in Milton, ON, and MFI is based in Richmond Hill, ON. Tribute will add 13 marketed and two pipeline products through the acquisition. This announcement comes shortly after the news about a Tribute-Pozen merger. Tribute President and CEO Rob Harris attributed the benefits of this strategic acquisition to a number of cost-saving and market extension synergies: "Based on 2014 actual results, the acquisition of the MFI business boosts our net revenues and gross margin by approximately 40% in Canada. The MFI business provides Tribute with further product diversification and considering the similarities of our respective corporate structures, significant cost savings will be recognized as well." MFI reported net sales of approximately $10 million for the last twelve months dating back from March 31, 2015.

OMERS Buys Stake in ERM for $1.7 Billion

Ontario Municipal Employees Retirement System (OMERS) private equity plans to buy a 55% stake in Environmental Resources Management (ERM) from Charterhouse Capital Partners. The transaction was valued at $1.7 billion for the majority stake. ERM is based in London, U.K. and offers consultancy services in environmental, health, safety, risk, and social consulting for both industrial and non-industrial clients. Charterhouse invested in ERM in 2011, and the company has experienced significant growth over the past four years. The Alberta Investment Management Corporation (AIMCo) will act as co-investor as part of the deal.

Financing
Sleep Country Canada Seeks to Raise $250 Million in IPO

Sleep Country Canada Holdings Inc. is looking to raise $250 million through its initial public offering, expected for later this year. Sleep Country Canada was previously a publicly traded entity on the TSX, but was taken private by Birch Hill Equity Partners and Westerkirk Capital in 2008. This would be the largest Canadian IPO in the last eight months. Sleep Country Canada is based in Toronto, ON, and is the largest distributor of mattresses in Canada.

Shred-It Files Preliminary Documents for IPO

Shred-it International has filed a preliminary prospectus for its initial public offering. Like Sleep Country Canada, Shred-It is a portfolio company of Birch Hill Equity Partners. Although not explicitly referenced, various sources indicate that the company may look to raise around $500 million. Shred-It is based in Oakville, ON and offers services in document destruction. Shred-It currently has over 400,000 recurring customers across 18 countries.

Never miss an update. Subscribe to our mailing list through our Subscription Page.

Add A Comment

Confidentiality and Communications Protocols

Continue Reading

Sign Up to Receive Valitas Publications

Subscribe