Value Unleashed

Last week’s activity in the Canadian private market included several mergers, acquisitions and financings – both domestic and international. Notably, two U.S. industry-specific consolidators have pursued acquisitions of multiple Canadian companies in a short period. In their statements, strategic acquirers noted that they are interested in businesses providing both synergies and cultural fit complementary to the acquiring company. Here are the major deals for the week.

M&A

Arthur J. Gallagher & Co. Announces Acquisition of Two Canadian Companies

This past week, Arthur J. Gallagher & Co. (NYSE: AJG) announced its separate acquisitions of Vital Benefits Inc. and McDowall Associates Human Resource Consultants Ltd. Financial terms for the transactions were not disclosed. Vital Benefits is a Canadian insurance company based in Calgary, AB that offers employee benefits products and consulting services to companies across Canada. "Vital Benefits is a great example of what we look for in a merger partner.  They have a sales and service culture that matches ours, and they are highly-regarded for their benefits expertise, and their ability to anticipate and provide benefit solutions for their clients' evolving business needs," said J. Patrick Gallagher, Jr., Chairman, President and CEO of Arthur J. Gallagher & Co.

McDowall Associates offers human resources consulting services and is headquartered in Toronto, ON. According to J. Patrick Gallagher Jr., "For more than 25 years, McDowall Associates has been extremely successful in designing and implementing key compensation and human resource strategies that have helped its clients motivate and retain quality employees and increase effectiveness and profitability."

Chorus Aviation Closes $80 Million Acquisition of Voyageur Airways

Chorus Aviation Inc. (TSX: CHR.B CHR.A) has closed its purchase of Voyageur Airways Ltd. for a transaction value of about $80 million. Voyageur, based in North Bay, ON, offers aviation services such as contract flight operations (both domestic and international) along with maintenance and engineering services. Chorus Aviation Inc. is a dividend-paying holding company headquartered in Halifax, NS with interests in Jazz Aviation Holdings Inc. and Chorus Aviation Holdings II Inc., among others. Chorus paid $47.0 million in cash and issued $8.0 million in Chorus Class B Voting Shares to Max Shapiro, sole owner of Voyageur. The remaining $25 million will be paid over three years in separate installments.

Grafoid Acquires MuAnalysis

Grafoid Inc. has acquired MuAnalysis Inc. for an undisclosed amount. Grafoid is a graphene research, development and investment company devoted to introducing economically scalable graphene applications for many materials and disciplines. MuAnalysis offers analytical services across a wide range of industries including electronics, photonics, life sciences, and manufacturing. Both companies are based in Ottawa, ON. According to Grafoid CEO and Founding Partner, Gary Economo, "MuAnalysis complements Grafoid's existing reach into the broad manufacturing sector with nanotechnology analytical services that support product innovation through to market success. The tremendous synergies and cross pollination between Grafoid and its group of companies provides for graphene application development at a significantly faster pace.” MuAnalysis is Grafoid’s third strategic acquisition in the past 12 months aimed at advancing their technology platform.

Sereca Consulting Acquired by Huron Capital’s JENSEN HUGHES

Canadian consulting service company Sereca Consulting Inc. was acquired by JENSEN HUGHES, Inc. The financial terms of the transaction were not disclosed. Both JENSEN HUGHES and Sereca offer consulting services in fire protection, among other similar civil engineering areas. This announcement comes several weeks after the acquisition of Toronto-based Randal Brown & Associates Engineering, Ltd. (RBA), which also offers consulting in engineering services. About the deal, JENSEN HUGHES President of North American Operations Dave Boswell said, “Both RBA and Sereca provide JENSEN HUGHES with a strong presence in the Canadian market, as well as staff with vast experience and widespread technical expertise.” JENSEN HUGHES is headquartered in Baltimore, MD.

Experchem to be Acquired by Eurofins

Eurofins Scientific (EUFI.PA) has announced its plans to acquire Experchem Laboratories, Inc. Based in Toronto, ON, Experchem provides regulatory affairs and quality assurance consulting services for pharmaceuticals, nutraceuticals, cosmetics, and medical devices. Eurofins is based in Luxembourg and is the world leader in food and biopharma product testing. According to Eurofins CEO Dr. Gilles Martin, "The acquisition of Experchem facilitates Eurofins' expansion into Canada, as well as reinforces our capabilities in key niche markets such as nutraceuticals testing, and our leadership in biopharmaceutical products quality control.” The deal is expected to close in 30 days.

Financing

Presteve Foods Secures Investment from New Private Equity Firm

In its debut investment, private equity firm Tricor Pacific Founders Capital Inc. has invested an undisclosed amount into Wheatly, ON-based Presteve Foods Ltd. Presteve is a leading, vertically integrated harvester, processor and distributor of freshwater fish and other seafood gathered from the Great Lakes. According to Tricor Pacific Founders Capital, “[their] strategy is to make control investments in food and other consumer packaged goods businesses, with EBITDA of $2 to $8 million, across the Mid-West and Western USA and Canada.”

Luna Gold Receives $30 Million in Funding from Australian Private Equity Firm

Luna Gold Corp. (TSX: LGC) announced that Australian mining private equity firm Pacific Road Capital has agreed to provide C$30 million in proceeds. The financing will be split between equity (C$10 million) and debt (C$20 million). Luna Gold is a gold exploration company headquartered in Vancouver, BC. Its principal project, the Aurizona gold mine, is located in Maranhão, Brazil.

GDI to raise $150 Million in Going Public Transaction with Medwell

In a going-public merger with Medwell Capital Corp. (TSX-V: MWC), GDI Integrated Facility Services Inc. is planning to raise roughly $150 million in aggregate gross proceeds. Based in Montreal, QC, GDI offers janitorial services including commercial cleaning services and other related mechanical and maintenance services. GDI has a strong client base in Canada and a growing cohort of clients in the United States. Medwell is a publicly listed investment and advisory firm based in Edmonton, AB. Both Medwell and GDI are portfolio companies of Birch Hill Equity Partners. Following the merger, the new public entity GDI will continue its janitorial operations, with Birch Hill staying on as a significant investor in the company.