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Canadian Private Market Recap: Apr 15

  • Posted By: Ann Zhang, Paris Aden & Anan Sivapalu

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Market Updates

Last week, favourable labour market conditions lifted the North American equity markets despite continued uncertainty about OPEC, expected weakness in first quarter corporate earnings and the ongoing economic slowdown in Europe and Asia. In the currency markets, the Fed’s go-slow policy continues to strengthen the Canadian dollar.

North American M&A activity slowed down significantly from the levels seen a year ago as acquirers have become more cautious given historically high valuations and a general sense that the current economic expansion may be nearing its cyclical peak. This first quarter is usually the least active month for M&A activity, so month-over-month comparisons at this time of year are less meaningful.

 

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Change From

M&A Market Fundamentals

2/29/16

1/31/16

2/28/15

1/31/16

2/28/15

Number of Transactions

 

 

 

 

 

 

Canada

115

112

157

+2.7%

-26.8%

 

U.S.

1,385

1,454

1,785

-4.7%

-22.4%

 

Canada % of Total

7.7%

7.2%

8.1%

+0.5%

-0.4%

 

 

 

 

 

 

 

Dollar Volume (US$ in billions)

 

 

 

 

 

 

Canada

13,247

6,961

36,258

+90.3%

-63.5%

 

U.S.

438,596

407,510

332,013

+7.6%

+32.1%

 

Canada % of Total

2.9%

1.7%

9.8%

+1.3%

-6.9%

 

Valitas Insights: Who Are Your Potential Buyers?

An essential early step in planning any business ownership transition is understanding who your potential acquirers are. When developing a marketing campaign to sell a product or service, it is essential to know your audience. The same is true when it comes to preparing your business for a sale. In order to make your business attractive to an acquirer, it is important to understand how that acquirer sees value.

While each potential acquirer of your business is unique, they fall into two broad, but distinct categories: strategic and financial. Valitas has prepared a white paper that focuses on what makes each of these groups distinct. Click here to view.

Business Transitions Forum in Toronto on June 8: Maintaining Confidentiality During a Competitive Sale Process

The most successful transactions are those that bring the “outlier” to the surface, that one acquirer or investor who sees more value in a business than any of the others. It’s often difficult to identify the outlier, it is essential that multiple parties be contacted through a structured sale process to uncover outliers. To keep bidders honest, the competitive tension between bidders should be palpable.

How do you run a competitive sale process under the radar without information leaks to employees, customers or suppliers? How do you protect yourself against potential competitors using information gained through the due diligence process against you in the marketplace? What strategies come into play when speaking to different potential buyers concurrently and how can business owners manage the complexity of a confidential sale process? At what stage should personnel within and outside your organization be made aware of the bigger picture? What do you say (and do) if there is a leak? How should the announcement be made when the deal is finalized? What role can you expect your senior management, board, advisors and the rest of your employees to play?

Paris Aden is moderating a panel discussion at the Business Transitions Forum Program in Toronto on June 8th. The panelists include some of Canada’s leading M&A professionals:

Harry Blum, Managing Partner, Collins Barrow Toronto LLP

Curtis Cusinato, Partner, Stikeman Elliott LLP

Tim Morton, Managing Partner and Founder, Prompta Consulting Group

This panel will discuss the best practices and protocols that they use to maintain strict transaction confidentiality for their clients during the process. They will also discuss when and how the deal is best communicated to key stakeholders. We look forward to seeing you there.


 

As an event sponsor, Valitas invites you to take advantage of our 20% discount for Day 1, Day 2 or both days of the conference, using code BTFTSPOR1620. This early bird offer expires on May 6. Don’t hesitate to contact Paris Aden for more information.

Weekly Canadian Private Market M&A Report

Closed deals

KRG-backed Convergint acquires H&E Comfort Controls

Illinois based Convergint Technologies LLC, a portfolio company of U.S. private equity firm KRG Capital Partners, has acquired H&E Comfort Controls Ltd., a Windsor, Ont.-based provider of building automation and security solutions. No financial terms were released. Ken Lochiatto, President & CEO of Convergint Technologies, said the acquisition expands its presence in Canada and gives it more access to key vertical markets. Convergint received an investment from KRG in September 2012.

Boulder Energy closes going private deal with ARC Financial

Calgary-based junior oil and gas producer Boulder Energy Ltd. (TSX: BXO) has completed its going private transaction with Canadian energy private equity firm ARC Financial Corp. The previously announced deal, valued at about $268 million, including debt, was approved by Boulder Energy’s shareholders earlier this week.

PE-backed Blue Star buys Pointstreak Sports Technologies

Texas based software company Blue Star Sports has acquired Pointstreak Sports Technologies Inc., a Toronto-based sports technology solutions company, servicing customers in 23 countries. No financial terms were disclosed. Blue star is a provider of youth sports team and league management software. Rob Wechsler, Founder and CEO of Blue Star Sports, said the deal enhances the company’s suite of products and increases its global user base to 8 million. Blue Star this month received an investment from U.S. private equity firm Providence Equity Partners and Jerry Jones, the owner of the Dallas Cowboys. It said it is also backed by Bain Capital and other investors.

Ironbridge Equity Partners makes investment in Thermogenics

Toronto-based Ironbridge Equity Partners said it last month invested in Aurora, Ontario based Thermogenics Inc., a maker of coil-tube steam, hot-water boilers and related equipment used in industrial, commercial and institutional applications. No financial terms were released for the deal, which was done in partnership with the company’s existing owners and management. Bryan Heppell, President of Thermogenics, said the partnership with Ironbridge will enable him to scale and grow the business. Thermogenics is the eighth investment of Ironbridge Equity Partners II, which raised $154 million in 2014.

Ontario Teachers-backed Impark buys Republic Parking

Vancouver based Imperial Parking Corp. (Impark), a portfolio company of Ontario Teachers’ Pension Plan, has acquired Republic Parking System, a parking management company based in Chattanooga, Tennessee, as well as the affiliated Republic Parking Northwest, which is based in Seattle, Washington. No financial terms were released. Allan Copping, Impark’s Chief Executive Officer, said the acquisition significantly expands its footprint in the United States. The number of North American parking locations operated by the company now totals about 3,400. Impark was acquired by Ontario Teachers in 2011.

Shopify to acquire venture-backed messaging app Kit CRM

Ottawa based multi-channel commerce platform Shopify Inc. (NYSE: SHOP) (TSX: SH), which went public in May 2015, has agreed to acquire Kit CRM Inc., a San Francisco-based virtual marketing assistant that leverages messaging to help businesses market their online stores. No financial terms were disclosed. Craig Miller, Chief Marketing Officer at Shopify, said the acquisition will support its focus “on the growing trend towards conversational commerce.” Founded in 2013, Kit is currently venture-backed. Its investors include Technicolor Ventures and Visionnaire Ventures.

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