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Canadian Private Market Recap: Aug 2

  • Posted By: Andrea Banerjee

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Last week in M&A activity saw notable acquisitions in the Canadian mid-market, including GFL Environmental Inc.’s purchase of three Concord, Ontario-based businesses: Anpro Environmental Group Inc., Anpro Excavating & Grading Ltd. and Pro-Green Demolition Ltd. Toronto-based menswear retailer Grafton Fraser Inc will assume operations of all 35 Jones New York retail stores across Canada, and forged a long-term strategic partnership with Authentic Brands Group. In financing news, SaaS company Dealer-FX and digital media company VerticalScope have secured strategic growth investments.  Here are the major deals of the week:

Ireland’s One51 and Québec partners Close Their Acquisition of IPL
Precision Castparts to Acquire Noranco for $560 Million
CAE sells its mining division Datamine to Constellation Software
PE-backed GFL Environmental Buys Trio of Demolition Businesses
ABRY Partners Exits VerticalScope with $200 Million Investment from Torstar
Brazos Private Equity Will Sell Vision Source to Essilor International
Grafton Fraser Acquires Jones New York Stores in Canada
International Flavors & Fragrances Acquires Lucas Meyer Cosmetics for $392 Million
Investors in North American Palladium Approve Brookfield Recapitalization
HGGC to Make Strategic Growth Investment in Dealer-FX
 

M&A

Ireland’s One51 and Québec partners Close Their Acquisition of IPL

Dublin, Ireland- based plastics provider One51 plc has completed its control-stake acquisition of IPL Inc in partnership with the Caisse de depot et placement du Quebec and the Fonds de solidarite FTQ. At the time it was announced, the deal was valued at approximately $280 million. IPL Inc is an injection-molded plastics manufacturer based in Saint-Damien, Quebec.

Precision Castparts to Acquire Noranco for $560 Million

It was announced last week that U.S. PE firm MidOcean Partners will sell Noranco Inc to Precision Castparts (NYSE: PCP). Although the value of the transaction was not formally disclosed, Precision has stated it will pay $560 million for the acquisition. Noranco is a manufacturer and solutions provider to the international commercial and military aerospace sectors. It was jointly purchased by MidOcean Patners and pension fund manager PSP Investments in 2013. PSP has agreed to sell its stake in the company. “We are very pleased with this outcome,” commented Ted Virtue, MidOcean’s CEO, “which reflects the successful completion of MidOcean’s strategy to leverage our operating resources to drive growth and operating efficiency.”

CAE sells its mining division Datamine to Constellation Software

Constellation Software Inc (TSX: CSU) has acquired Datamine, the mining software business of training solutions provider CAE Inc (NYSE, TSX: CAE). Datamine will operate within Constellation Software’s Vela Software Division. The financial terms of the deal were not disclosed. Constellation Software is based in Toronto and acquires, manages and builds vertical market software businesses. It is a portfolio investment of OMERS Private Equity. CAE is a leader in training for the civil aviation, defence and security, and healthcare markets, with 160 sites and training locations in 35 countries. “As reported last year, we decided to sell our mining business in order to concentrate our capital investment and management resources on our three core markets: civil aviation, defence and security, and healthcare,” said Marc Parent, President and CEO of CAE. “We are pleased that Constellation Software, a leading Canadian company specializing in vertical-market software businesses, will be leading Datamine through the next phase of its development.”

PE-backed GFL Environmental Buys Trio of Demolition Businesses

GFL Environmental Inc. has announced that its wholly owned subsidiary, GFL Excavating Corp. has acquired 100% of the shares of three Concord, Ontario-based businesses: Anpro Environmental Group Inc., Anpro Excavating & Grading Ltd. and Pro-Green Demolition Ltd. The financial details of the transaction were not disclosed. GFL is based in Vaughan, Ontario and provides a variety of solid waste, soil remediation, and liquid waste services to approximately 23,400 commercial, industrial and institutional customers. The acquisition will give GFL access to new customers, cross-selling opportunities and new infrastructure projects. Patrick Dovigi, President and CEO of GFL said, “With this acquisition, GFL will be the largest soil remediation and demolition contractor in Ontario, placing GFL in an excellent position for the large volume of infrastructure projects that have been announced for Ontario over the next 3 to 5 years.”

ABRY Partners Exits VerticalScope with $200 Million Investment from Torstar

Torstar Corp (TSX: TS.B), the company that owns and operates The Toronto Star and other media outlets, has purchased a 56 percent share in VerticalScope Inc. VerticalScope is a Toronto-based digital media company that owns and operates over 600 consumer shopping portals and user forms offering advertisers access to large audiences in popular verticals such as automotive, outdoor, home, technology and health. “VerticalScope is a Canadian success story, with a proven track record of growth and profitability over the past five years and is well-positioned to build on that record,” said David Holland, President and Chief Executive Officer of Torstar Corporation. “We are enthusiastic about this investment, which achieves our objective of allocating capital to a high-growth business opportunity.”

Brazos Private Equity Will Sell Vision Source to Essilor International

Dallas-based PE firm Brazos Private Equity Partners has agreed to sell its portfolio company Vision Source, a Canadian eye care services business, to Essilor International SA for an undisclosed price. Essilor International is the leading manufacturer of optical lenses in the U.S. Vision Source provides a variety of products and services to independent optometrists. Jeff Fronterhouse, Co-Chief Executive Officer and Co-Founding Partner of Brazos, said, “We are very pleased with our successful investment in Vision Source. Under our ownership and in partnership with a very talented management team, the company has experienced strong performance and impressive growth.

Grafton Fraser Acquires Jones New York Stores in Canada

Grafton Fraser Inc has assumed operations of all 35 Jones New York retail stores across Canada. The employment of 400 staff will be sustained under the terms of the deal, and significant growth is planned for the near future. Grafton Fraser has also signed a long-term strategic partnership with Authentic Brands Group, a brand development and licensing company based out of New York. Grafton Fraser is a menswear retailer based in Toronto. Its President and CEO Dave McGregor said, “We are very excited to add Jones New York women’s clothing stores to our growing fashion retail portfolio. For more than two decades Jones New York has been a trusted fashion brand in Canada that women have looked to for its timeless elegance, great quality and style. We bring 100+ years of experience to Canadian fashion retail, and see Jones New York as a perfect fit for Grafton.”

International Flavors & Fragrances Acquires Lucas Meyer Cosmetics for $392 Million

International Flavors & Fragrances Inc. (NYSE:IFF) has completed the previously announced acquisition of Lucas Meyer Cosmetics. Lucas Meyer Cosmetics is headquartered in Quebec City, Canada, with operations in France and Australia, and manufactures ingredients for the cosmetics and personal care industry. The deal, which was previously announced to value $392 million, will strengthen and expand the IFF portfolio. Chairman and CEO Andreas Fibig said, “The company has a successful track record of delivering double-digit growth since 2011 in a very attractive industry. We believe they will be an excellent complement to our existing portfolio and will strengthen our ability to achieve our Vision 2020 goals of accelerated growth and increased differentiation.”

Financing

Investors in North American Palladium Approve Brookfield Recapitalization

Investors in Toronto-based mining company North American Palladium (TSX: PDL) have voted in favour of a previously announced recapitalization agreement with Brookfield Asset Management focused on reducing the Company’s debt and enhancing its liquidity. Under the terms of the recap deal, amounts owing to Brookfield will be converted into equity, giving the firm 92 percent of the company’s outstanding common shares. The board of directors will also be reconstituted to include Brookfield Managing Partners. “The sale process and Recapitalization plan represent the best alternatives available at this time to preserve substantial value in the assets and operations of the Company, and to pursue longer-term growth and expansion opportunities at LDI,” said Phil du Toit, President and CEO. “We believe decreasing the debt burden and strengthening the capital structure is essential for the Company’s future.”

HGGC to Make Strategic Growth Investment in Dealer-FX

U.S. private equity firm HGGC has agreed to make an undisclosed investment in Dealer-FX Group Inc. Dealer-FX has its headquarters in Las Vegas and Toronto, and is a leading provider of SaaS process automation software for auto dealership service departments across Canada and the U.S. The investment will help the company to continue to grow and expand its solutions. “We are very excited to be partnering with HGGC,” said Gary Kalk, Founder and CEO of Dealer-FX. “Their resources and expertise in building technology businesses will be incredibly valuable as we continue to expand and develop new solutions that inject needed transparency into the car servicing process while helping automotive service departments evolve to meet the changing expectations of tech-savvy customers.”

 

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