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Canadian Private Market Recap: July 5

  • Posted By: Andrea Banerjee

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The Ontario Teachers’ Pension Plan made headlines last week with a $3.3  billion purchase of Cenovus Energy’s oil and gas royalty properties. The deal will assign about 4.8 million acres of mineral fee title lands to the Teachers’ Natural Resources Group. In other 10-figure deal activity, the federal government has approved  the sale of a majority stake in Montreal’s Cirque du Soleil to an investment group led by global investment firm TPG. Lastly, in IPO news, TMAC Resources filed a revised prospectus for the initial public offering of its common shares, and now plans to raise $135 million in gross proceeds. Here are the major deals of the week:

American Achievement Corporation Acquires Academic Regalia Manufacturer Gaspard
Ontario Teachers’ Pension Plan Will Acquire Cenovus Royalty Portfolio for $3.3 Billion
British PE Firm Hilco Capital Buys Canadian hat maker Tilley Endurables
StorageVault Canada to Purchase Storage for Your Life for $52.5 Million
Exchange Income Corporation Acquires Ben Machine Products for $46 Million
Federal Government Approves Sale of Cirque du Soleil to TPG Capital
PaperWorks Industries Closes Acquisition of CanAmPac
Quebec Investors Partner with One51 to Buy Majority Stake in IPL Inc
Brookfield Asset Management Offers $6.8 Billion Takeover Bid to Acquire Australian Asciano
TMAC Resources Increases Its Final IPO Prospectus to $135 Million
Orion Mine Finance to Invest $12.4 Million in Royal Nickel Corp

M&A

American Achievement Corporation Acquires Academic Regalia Manufacturer Gaspard

American Achievement Corporation, a manufacturer of commemorative recognition products backed by Fenway Partners, has agreed to the purchase of Gaspard LP. Gaspard is an international manufacturer of clergy vestments, legal attire and academic regalia. No financial details of the transaction were disclosed. Following the close of the sale, Gaspard will continue to be headquartered in Winnipeg and led by CEO David Blatt. American Achievement CEO Steven Parr said “Its offerings are a natural fit with the rest of the American Achievement portfolio – especially its academic regalia products, which will be an important new product for our customers and independent sales representatives to offer to students and parents.”

Ontario Teachers’ Pension Plan Will Acquire Cenovus Royalty Portfolio for $3.3 Billion

Cenovus Energy Inc has announced that it will sell its portfolio of oil and gas royalty properties to Ontario Teachers’ Pension Plan for roughly $3.3 billion. Cenovus Energy is an integrated oil company located in Calgary, Alberta, and is the second-largest independent oil producer in Canada. The purchase on behalf of Ontario Teachers’ Pension Plan aligns with the organization’s recent shift to more diversified holdings in the energy sector. Cenovus CEO Brian Ferguson said “We believe this agreement captures significant value for Cenovus shareholders from our royalty and fee lands business. This transaction will realize value that isn’t currently reflected in our share price.” The transaction is expected to close next month.

British PE Firm Hilco Capital Buys Canadian hat maker Tilley Endurables

British private equity firm Hilco Capital has purchased travel clothing manufacturer Tilley Endurables.  The Toronto-based enterprise was founded in 1980 and is renowned for the iconic cotton Tilley Hat, a popular piece of headgear for hikers, hunters and fishermen. Tilley hats are made by hand in Canada, but the company has wholesale operations in Canada, the USA and the UK.  Tilley Endurables products are sold in over 2,500 stores globally. The sale comes after an announcement by Alex Tilley earlier this year that he will be retiring. Paul McGowan, CEO of Hilco Capital said “We’re delighted to pick up the mantle and draw on Hilco Capital’s expertise and resources to grow the business further and take the Tilley Hat to new markets around the world.” Financial details of the sale were not disclosed.

StorageVault Canada to Purchase Storage for Your Life for $52.5 Million

Regina, Saskatchewan-based StorageVault Canada (TSX-V: SVI) has reached an asset purchase agreement with Storage For Your Life Solutions Inc and Carousel Ventures. StorageVault owns and operates storage facilities across Canada and will now acquire four self-storage properties from Storage For Your Life Solutions in the greater Vancouver area. The properties total around 300,000 square feet of rentable storage encompassing over 3,000 units. The deal is expected to close in September.

Exchange Income Corporation Acquires Ben Machine Products for $46 Million

Exchange Income Corporation (TSX: EIF), a Winnipeg-based aviation services and manufacturing company, has closed the acquisition of Ben Machine Products for $46 million. Ben Machine has headquarters in Vaughan, Ontario and is a precision-assembly manufacturer for the aerospace and defence industry. The company’s services, which include sheet metal fabrication, welding, casting and finishing, are compliant to many military, aerospace, nuclear and commercial standards. EIC’s purchase price of $46 million was paid through a combination of the issuance of 329 552 common shares of EIC (totaling $6.8 million) and a cash payment financed through EIC’s credit facility (comprising the remaining $39.2 million). Matteo Iacovelli, founder of Ben Machine said “Partnering with EIC will allow Ben Machine to continue to grow and expand into the future. We chose EIC because of their operating philosophy which, with their oversight and guidance, will allow Ben Machine to continue providing world class solutions to the aerospace and defence industry.”

Federal Government Approves Sale of Cirque du Soleil to TPG Capital

The previously announced sale of Cirque du Soleil to U.S. private equity firm TPG Capital has been approved. Cirque du Soleil is a Montreal-based Canadian entertainment company, and is the largest theatrical producer in the world. Founder Guy Laliberte agreed to sell control of the business in April for approximately $1.5 billion. The terms of the sale ensure that strategic decision making and artistic development will continue at the company’s Montreal headquarters, and that 70 percent of senior management personnel working in Canada will be Canadian. The Caisse de depot et placement du Quebec will assume a minority stake as part of the deal.

PaperWorks Industries Closes Acquisition of CanAmPac

PaperWorks Industries Inc, a Hamilton-based portfolio company of U.S. private equity firm Sun Capital Partners, has finalized its purchase of CanAmPac ULC. CanAmPac is a supplier of consumer packaging, printing and paper products located in Napanee, Ontario. It operates three divisions: Boehmer Box, LYFT Visual and Strathcona Paper. Projected manufacturing output for the newly combined companies is 400,000 tons of recycled paperboard. The deal’s value was not disclosed. Kevin Kwilinski, President and CEO of PaperWorks said “CanAmPac is a leading Canadian integrated paperboard and consumer packaging supplier. Its quality-oriented manufacturing and converting capabilities, coupled with a complementary customer base, make it an ideal addition to the PaperWorks portfolio.”

Quebec Investors Partner with One51 to Buy Majority Stake in IPL Inc

A group of Quebec investors have joined One51 plc, an Irish environmental services and plastics company, in the purchase of plastics company IPL Inc for $280 million. IPL is a Quebec-based injection-moulded plastic producer that manufacturers over 400 different products in the materials handling and environmental industries. In the deal, announced last Friday, One51 will pay $90 million for a 67 percent stake in the company. The Caisse de depot et placement du Quebec is investing $50 million for a 22 percent stake, and the Fonds de solidarite (FDQ) is investing $30 million for an 11 percent share. The remaining capital was provided by a combination of bank financing and a $10 million contribution from the provincial government’s Investissement Quebec.  The deal is expected to close at the end of the month.

Brookfield Asset Management Offers $6.8 Billion Takeover Bid to Acquire Australian Asciano

Brookfield Asset Management (TSX: BAM) has made a US $6.8 billion takeover bid for freight company Asciano (AIO: AX), Australia’s only combined rail freight and port operator. Brookfield Asset Management is Canada’s largest alternative asset management company with a global portfolio comprised of over $200 billion assets under management. It owns a 5,500 km rail network in Western Australia. Brookfield has made a non-binding cash-and-shares offer that values Asciano at $9.05 a share. If the deal is successful, it will be the seventh-largest inbound takeover of an Australian company.

Financing

TMAC Resources Increases Its Final IPO Prospectus to $135 Million

TMAC Resources Inc has filed a revised final prospectus for an IPO of its common shares, showing an increase in its target. TMAC is now planning to raise $135 million in gross proceeds, and up to $155.2 million if the banks sell the entire over-allotment. TMAC is a privately-held Canadian company backed by U.S. private equity firm Resource Capital Funds that acquires, explores and develops precious metal resource properties. Its net IPO proceeds will be used to advance the Hope Bay gold project located in Nunavut. TMAC’s Executive Chairman Terry MacGibbon stated “This significantly oversubscribed Offering, especially in what many believe to be a weak gold market, is truly a great testament to the TMAC management team, its board of directors and the Hope Bay Project.”

Orion Mine Finance to Invest $12.4 Million in Royal Nickel Corp

Private equity firm Orion Mine Finance will invest $12.4 million in Royal Nickel Corporation (TSX: RNX), a Canadian mineral resource company headquartered in Toronto. The investment will be made in exchange for a 0.75 net smelter and return royalty in the Duman Nickel Project, and 10 million of Royal Nickel’s common shares. Royal Nickel Corp will have the right to repurchase 50% of the royalty for US$15 million  on the 3rd, 4th or 5th anniversary of closing. “This financing will allow us to advance our efforts on a number of fronts, including the generation of bulk samples of roasted concentrate to confirm concentrate roasting as a lower cost processing alternative for the Dumont project” said Mark Selby, President and CEO of Royal Nickel Corp.  “We are now working towards completing the capital raising phase of the project in a timely manner to allow us to begin construction activities by early 2016.” 

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