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Canadian Private Market Recap: Mar 24

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

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Market Update

An 11% decline in Q4 corporate profits drove North American equity indices down last week, halting the winning streak seen over the last few weeks.  In the large cap markets, valuation multiples remain at or near 10-year highs, despite recession fears and continued weakness in the energy sector. This sentiment has seeped into the credit markets, increasing mid-market credit spreads.

 

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Change From

U.S. Middle Market Loans

This Week

Last Week

Year Ago

 

Last Week

Year Ago

 

 

 

 

 

 

 

 

New Issue Clearing Yield ≤ $50 million

7.2%

7.0%

6.7%

 

+0.2%

+0.4%

 

Spread to Treasury

526 bps

507 bps

486 bps

 

+19 bps

+40 bps

 

Total Debt/EBITDA

4.9x

5.1x

5.0x

 

-0.2x

-0.1x

 

 

 

 

 

 

Valitas Insights: How to Retain Key Employees During a Sale Process

The months it takes to complete the sale of a business are stressful and uncertain for a business owner.  Keeping the key members of the internal deal team focused and motivated can be a real challenge.  The sale of a business is not a time to have disengaged employees or untimely departures in important positions. If not managed properly, poor deal team engagement can harm the sale price, or worse, kill the deal. It’s in the owner’s best interest to motivate these people to support the sale process.  Click here for an overview of options and best practices applied by the most sophisticated sellers.

 

Weekly Canadian Private Market M&A Report

Announced Deals

Centerbridge to sell Carefree Communities to Sun Communities

Headquartered in Southfield, MI, Sun Communities Inc. (NYSE: SUI) has agreed to buy Carefree Communities Inc., an owner and operator of senior manufactured housing communities and destination RV resorts concentrated in California, Florida, and Ontario. No financial terms were disclosed for the cash-and-stock deal, which is expected to close in July. David A. Napp, Carefree CEO and Co-Founder said, “Through our partnership with Centerbridge, we have not only grown to a best-in-class company but have also provided our guests a memorable experience through communities that offer vibrant resort style living, friendly and helpful associates, well maintained facilities, and efficient operations.”

PE-backed Premium Brands to acquire C&C for $146 million

Canadian specialty foods producer Premium Brands Holdings Corp. (TSX: PBH) has agreed to acquire C&C Packing Inc. and its affiliate Premier Meat Packers (2009) Inc. The $146 million purchase price includes a $102 cash payment. Montréal-based C&C is a leading supplier of fresh and frozen meat products to retailers and food service distributors in central and eastern Canada. Mr. George Paleologou, Premium Brands’ President and CEO said the deal, expected to close in August, will allow it to create a national protein distribution and trading platform. Vancouver-based Premium Brands is a portfolio investment of Canadian family-backed private equity firm Pender West Capital Partners.

Closed Deals

Canadian affiliate of PE-backed Univar acquires Nexus Ag

The Canadian subsidiary of Univar Inc. (NYSE: UNVR) has acquired the assets of Nexus Ag Business Inc., a Saskatoon-based wholesale fertilizer distributor in Western Canada. No financial terms were released. Mike Hildebrand, President, Univar Canada, said the deal expands its agriculture product offering with micro-nutrients and specialty fertilizers. It also enlarges the company’s agricultural distribution network in Canada to 16 facilities in four provinces.

Harbour Group’s Cleaver-Brooks buys Camus Hydronics

St. Louis based Cleaver-Brooks Inc., a portfolio company of U.S. private equity firm Harbour Group focusing on making condensing hydronic boilers and heaters, has acquired Camus Hydronics Ltd., a Canadian designer and manufacturer of hydronic boilers and water heaters for residential, commercial and industrial applications. No financial terms were released. Based in Mississauga, Ontario, Camus sells its products in North America, China and Eastern Europe. Bart Aitken, President and Chief Executive Officer of Cleaver-Brooks said the acquisition will help it to provide a more complete solution to customers. Based in Thomasville, Georgia, Cleaver-Brooks was bought by Harbour Group in December 2012.

Venture-backed Zymeworks closes buy of Kairos Therapeutics

Vancouver based Zymeworks Inc. has closed its previously announced acquisition of Kairos Therapeutics Inc., a specialist in antibody drug conjugates. No financial terms were disclosed. The merger of the two Vancouver-based companies creates “one of the industry’s leading biologics drug discovery and development organizations,” said John Babcook, President & Chief Scientific Officer of Kairos. Zymeworks, a developer of antibodies and antibody drug conjugates for the treatment of cancer, autoimmune and inflammatory diseases, secured about $87 million (US$61.5 million) in a series A financing in January. The round was co-led by BDC Capital and Lumira Capital.

VC-backed AppDirect makes Xendo its sixth strategic acquisition

San Francisco-based AppDirect, a cloud service commerce platform, has bought Xendo, a San Francisco-based provider of hosted enterprise search solutions, for an undisclosed sum. The acquisition, AppDirect’s sixth to date, follows its buy of Montréal’s Radialpoint in January. Daniel Saks, President and Co-CEO of AppDirect, said the Xendo deal will allow it to integrate unified search capability into its platform and thereby eliminate fragmentation and create interoperability between apps.

Venture-backed Influitive acquires angel-backed Triggerfox

Toronto based Influitive, has acquired Triggerfox, another Toronto-based startup mobile relationship management application. No financial terms were disclosed. According to Influitive’s CEO, Mark Organ, the deal gives the company product management and development expertise in building mobile products. An advocate marketing software provider, Influitive is backed by Atlas Venture, BDC Capital, Georgian Partners, Hummer Winblad Venture Partners, Leaders Fund, Relay Ventures and other investors.

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