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Canadian Private Market Recap: July 19

  • Posted By: Andrea Banerjee

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Last week the M&A market saw major activity with a 10-figure cash transaction as Stericycle bought Shred-It, the Oakville-based shredding and document destruction service, for $2.3 billion. The acquisition killed plans for Shred-It's IPO which was to be one of the biggest of the year. The company was a portfolio investment of PE firm Birch Hill Equity Partners since 2009. It proved to be a significant week for Birch Hill as another of its portfolio companies, Sleep Country Canada Holdings, completed its IPO raising gross proceeds over $300 million. Here are the major deals of the week:

Rogers To Sell The Shopping Channel
Stericycle Buys Shred-It International for US $2.3 Billion
ONCAP Acquires Canadian Hair Care Retailer Chatters
HICL Infrastructure Acquires RCMP Headquarters for $53 Million
Trinity Consultants Buys Minnow Environmental
Magna International Acquires Getrag Group of Companies for $2.5 Billion
Sleep Country Canada Raises $300 Million in IPO, Begins Trading on the TSX
CPPIB and Hermes Infrastructure Acquire One Third of Associated British Ports
TD Bank Facilitates Debt Recapitalization and Financing of $23 Million for Atlas Paper
Clevest Solutions Secures Growth Financing from Accel-KKR, Vancity

M&A

Rogers To Sell The Shopping Channel

Rogers Communications has announced that The Shopping Channel is up for sale.  Interest is mounting from foreign buyers for the TV asset, which is speculated to potentially sell for over $300 million. The Shopping Channel is a Canadian cable television channel and a division of Rogers Media headquartered in Mississauga, Ontario. It showcases products that viewers can purchase via the telephone or internet. After beginning the process about six weeks ago, Rogers has received its first round of bids. In addition to private equity firms, Liberty Interactive, HSN and EVINE Live are all said to be potential interested parties.

Stericycle Buys Shred-It International for US $2.3 Billion

Waste disposal company Stericycle Inc has announced that it will buy Shred-It International for US $2.3 billion in cash. The deal is expected to add 10 percent to cash earnings per share by 2016. Shred-It is a Canadian provider of secure information destruction services to 400, 000 customer locations in 15 countries. It is based in Oakville, Ontario. Shred-It’s management team will join Stericycle upon the close of the acquisition at the end of the year. Strategic benefits of the acquisition include improved EBITDA and EPS growth, with the combined company expected to generate in excess of $1 blilion in EBITDA in 2016. Dave Samuel, Chairman of Shred-it said, “The acquisition by Stericycle will allow continued innovation and expanded service offerings to a broader range of customers across the globe.”

ONCAP Acquires Canadian Hair Care Retailer Chatters

ONCAP has completed the acquisition of Chatters Canada, a retailer of professional hair care products. The financial details of the transaction were not disclosed. Chatters is headquartered in Red Deer, Alberta, and operates 101 hair salons across eight Canadian provinces. It offers both products (in the form of hair tools, skin and beauty products and accessories) and services such as men’s and women’s haircuts, colouring, styling and aesthetics.

HICL Infrastructure Acquires RCMP Headquarters for $53 Million

Infrastructure investment firm HICL has announced that it will purchase a 99.9 percent interest in the Royal Canadian Mounted Police E Division headquarters project for $53 million. The property is being sold from the InfraRed Infrastructure Fund III and as such the Board is seeking approval of Shareholders for the acquisition as a matter of good corporate governance. The purchase will be HICL’s third investment in Canada and will be funded by its revolving debt facility. HICL chairman Graham Picken said "This acquisition fits within the company's investment strategy and helps diversify the current portfolio further by geography.”

Trinity Consultants Buys Minnow Environmental

Trinity Consultants Inc, a portfolio company of U.S. private equity firm Gryphon Investors, has acquired Minnow Environmental Inc, a specialty consulting firm focused on aquatic ecology. The total value of the transaction was not disclosed. Minnow Environmental was founded in 2000 and has its headquarters in Georgetown, ON and Victoria BC. Its clients include major Canadian industrial companies primarily in mining.

Minnow founder and Principal Cynthia Russel said “We are very excited about becoming part of the Trinity group of companies and see this merger as an excellent fit given our similar client-centric culture focused on quality, service and technical excellence.”

Trinity’s Director of Corporate Development John Drennan commented on the transaction, “[O]ur acquisition strategy is focused on integrating with companies that are best in breed in their EHS service area. Minnow has a stellar reputation in Canada, providing highly technical scientific services to the mining industry. We look forward to helping Minnow grow, leveraging its strong brand and excellent technical team.”

Magna International Acquires Getrag Group of Companies for $2.5 Billion

Canadian automotive supplier Magna International Inc (TSX: MG) (NYSE: MGA) has acquired Getrag Group of Companies, the largest independent producer of vehicle transmissions in the world. Magna International is headquartered in Aurora, Ontario and manufactures auto parts that are sold to brands including General Motors, Ford and Chrysler. Getrag is a German manufacturer of passenger car transmission products serving European, Asian and North American automotive markets. It has 24 locations globally. The acquisition, which is projected to profit Magna by 2017, is expected to close by the end of the year. “We want to be global, we want to be a leader in technology, we want to be a leader in competitiveness and that was one of the driving factors behind doing this acquisition,” said Don Walker, Magna CEO.


Financing

Sleep Country Canada Raises $300 Million in IPO, Begins Trading on the TSX

Sleep Country Canada Holdings (TSX: ZZZ) has completed its initial public offering of common shares at a price of $17.00 per share. The company issued 17, 650, 000 shares for total gross proceeds of $300 050 000. The shares will trade on the Toronto Stock Exchange under the ticker symbol ZZZ. Sleep Country is a Toronto-based specialty mattress retailer with over 200 stores and 16 distribution centres across Canada. The underwriters of the deal were granted an over-allotment option to purchase up to an additional 2, 647, 500 shares of the company, to be exercised for a period of 30 days from the closing date.

CPPIB and Hermes Infrastructure Acquire One Third of Associated British Ports

The Canada Pension Plan Investment Board and Hermes Infrastructure have completed a joint acquisition of a 33.33 percent stake in Associated British Ports (ABP). ABP is the leading port operator in the United Kingdom, operating 21 ports and managing approximately a quarter of the UK’s total sea-borne trade. The purchase from GS Infrastructure Partners and Infracapital was estimated to value about $2.9 billion. All closing conditions of the transaction have been met.

TD Bank Facilitates Debt Recapitalization and Financing of $23 Million for Atlas Paper 

TD Bank’s Asset Based lending Group has provided $23 million in financing to Atlas Paper Holdings Inc. TD’s credit facility has also helped finance the debt recapitalization of the company. Atlas Paper is headquartered in Miami, Florida, and is a portfolio investment of PE firm Peak Rock Capital. The company is a leading manufacturer of tissue products made of both virgin and recycled fiber, and produces bath tissue, facial tissue, towels and dispenser napkins to a mix of customers. “We are pleased to have partnered with TD Bank to facilitate the growth of Atlas through this debt recapitalization,” said Rob Pistilli, Principal at Peak Rock Capital. “TD Bank was great to work with, and we are excited to have their support and expertise as we continue to grow the Atlas Paper business.”

Clevest Solutions Secures Growth Financing from Accel-KKR, Vancity

Clevest Solutions Inc has obtained growth equity financing in the form of an undisclosed investment led by Accel-KKR,  U.S. technology PE firm. Vancouver City Savings Credit Union, a previous investor in the company, also participated. Clevest Solutions is a software provider with 150 customers worldwide. Its platform focuses on mobile workforce automation and grid operations. The company is headquartered in Richmond, British Columbia. “Securing equity funding from Accel-KKR, a leading Silicon Valley based private equity firm, is strong affirmation of the growth prospects and market leadership for Clevest,” said Thomas Ligocki, President and CEO, Clevest. “The combined backing from these partners will allow us to continue to invest in innovation as well as successfully grow and expand our markets.”

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