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Canadian Private Market Recap: Nov 8

  • Posted By: Anan Sivapalu

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Market Update

Surging U.S. job growth had a positive impact on the North American indices. The S&P 500 index increased by 1.0% and TSX Composite increased by 0.2%. The U.S. Treasury bond rate increased slightly in anticipation of a federal rate hike in December 2015.  The VIX declined by 4.9%, indicating the market shrugged off the rate hike signal from the Fed.    

 

 

 

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Change From

Capital Markets

 

This Week

Last Week

Year Ago

 

Last Week

Year Ago

Equity Markets

 

 

 

 

 

 

 

S&P 500 Composite

 

2,099

2,079

2,031

 

+1.0%

+3.3%

 

TEV/Forward EBITDA

 

10.3x

10.3x

9.6x

 

-0.0x

+0.7x

TSX Composite

 

13,553

13,529

14,563

 

+0.2%

-6.9%

 

TEV/Forward EBITDA

 

9.5x

9.6x

8.5x

 

-0.1x

+1.0x

CBOE VIX ("Fear Index")

 

14.3

15.1

13.7

 

-4.9%

+4.8%

USD/CAD

 

0.752

0.764

0.875

 

-0.013

-0.123

 

 

 

 

 

 

 

 

 

Debt Markets

 

 

 

 

 

 

 

U.S. 10-Year Treasury Yield

 

2.3%

2.2%

2.4%

 

+0.2%

-0.1%

U.S. Middle Market Loans

 

 

 

 

 

 

 

 

New Issue Clearing Yield ≤ $50 million

 

6.4%

6.2%

6.8%

 

+0.2%

-0.4%

 

Spread to Treasury

 

402 bps

400 bps

442 bps

 

+2 bps

-40 bps

 

Total Debt/EBITDA

 

5.8x

5.8x

5.0x

 

0.0x

+0.8x

 

Weekly Canadian Private M&A Report

This week, Blackberry purchased Good Technology, further cementing its leadership in the Enterprise Server industry.  There were also two separate transactions in the quality and safety provider industry. Here are some of the noteworthy deals from last week:

§  MidOcean Partners and PSP Investments complete Noranco sale

§  BlackBerry buys Good Technology

§  Campus Crest sells evo Montréal joint venture stake

§  OPTrust partners acquires Spain’s Globalvia

§  SomnoMed buys Strong Dental

§  SterlingBackcheck acquires EmployeeScreenIQ

§  PE-backed Kahala acquires Maui Wowi Hawaiian

§  IK-backed TRIGO combines with quality solutions provider PIC

§  Yellow Point’s Bravo merges with Target Safety Services

MidOcean Partners and PSP Investments complete Noranco sale

Midocean Partners sold Noranco Inc to Precision Castparts Corp for US$560 million. Noranco, a Toronto based company, is a manufacturer and solution provider to the commercial and military aerospace sectors.  Ted Virtue, the CEO of MidOcean commented, “Our successful investment in Noranco is a perfect example of MidOcean’s strategy to back strong management teams who leverage our operating resources to drive growth and operating efficiency. Noranco has been a terrific platform to consolidate the highly fragmented aerospace sector and this is a great outcome for our investors.”

BlackBerry buys Good Technology

Blackberry Ltd has purchased Good Technology Corp for US$425 million. The purchase of Good Technology will allow Balckberry to expand its ability to offer services for any mobile platform on any operating system. “BlackBerry’s completion of the Good acquisition brings two leading companies in the mobile security space together to offer a secure cross-platform EMM solution,” said Stacy Crook, Research Director, Enterprise Mobility at IDC. “Good brings additional value to the BlackBerry platform by offering strong application containerization on iOS and Android, and will provide solutions to containerize custom and third-party applications.” The end-user can expect the integration of the two platforms to be seamless and uninterrupted.

Campus Crest sells evo Montréal joint venture stake

Harrison Street Real Estate Capital has purchased an ownership interest in evo Montreal from Campus Crest Communities Inc. for US$1.9 billion. evo is a student housing facility strategically located near campus locations.  “We are pleased to have successfully concluded the sale of the Montreal joint venture. Not only does the sale represent an important step in the merger process, but also reflects the accomplishment of a key goal of the strategic repositioning we initiated last year,” said Aaron Halfacre, President and CIO of Campus Crest. With the sale of its share of the joint venture, Campus Crest has no investments outside of the U.S.

OPTrust partners acquires Spain’s Globalvia

Globalvia Insfraestructuras SA was bought by consortium of pension funds; which included Canada based OPTrust, Netherland based PGGM and U.K based USS. The deal is reported at $606 million. Globalvia is a leading infrastructure concession management company based out of Madrid, Spain. Globalvia focuses on highways and railway infrastructure projects with operations in seven different countries.  A spokesperson for the consortium stated, “We are delighted to acquire 100% of Globalvia on these terms. The transaction represents the next logical phase of our investment and we look forward to growing the business in the future.”

SomnoMed buys Strong Dental

The Canadian subsidiary of Australia’s SomnoMed Ltd. has purchased Strong Dental for $700,000. Strong Dental designs and manufactures dental appliances that alleviate sleep apnea. The transaction will allow SomnoMed exclusive license to all patents held by Strong Dental. “Canada is the last major OECD market where SomnoMed distributed its products primarily through licensees. It is our policy to have our own distribution in all our core markets and thus directly control marketing and sales of our SomnoDent devices. The acquisition of SD in Canada will not only add a highly reputable device to our line of products, which we can offer globally, but it will also give SomnoMed its own service and logistic hub, which is a precondition for selling our SomnoDent products directly in Canada,” said Dr. Peter Neustadt, Executive Chairman of SomnoMed.

SterlingBackcheck acquires EmployeeScreenIQ

SterlingBackcheck, backed by Caisse de depot et placement du Quebec and Goldman Sachs, has acquired EmployeeScreenIQ, a Cleveland, Ohio based provider of employment background checks and substance abuse screening. The financial terms of the transaction were not disclosed.  Les Fishman, the chairman and chief executive officer of EmployeeScreenIQ stated, “EmployeeScreenIQ and SterlingBackcheck are already united by our strong client-driven cultures and our desire to provide the highest quality background check services. By joining SterlingBackcheck, we are able to further expand the range of services and screening capabilities we offer to our customers.” SterlingBackcheck was ranked sixth on the list of America’s fastest growing women led companies by Inc. Magazine.

PE-backed Kahala acquires Maui Wowi Hawaiian

Kahala Brands, a Serruya Canadian Private Equity portfolio company, has bought Maui Wowi Hawaiian, a smoothie and coffee franchise business located in Denver, Colorado. Terms of the transaction were not released. Michael Serruya, Chairman and CEO of Kahala Brands stated, “Maui Wowi, with 400 mobile carts and 29 standalone retail units operated by 200 franchisees, is a perfect addition to our family of smoothie brands and our portfolio of concepts as whole. This purchase further expands our smoothie footprint to more than 800 locations and allows us to be a part of such a fun concept and fantastic food and flavor profile, where we can bring the great tastes of Hawaii to the mainland and around the world.” Kahala plans to consolidate operations and run the merged company from Scottsdale, Arizona.

IK-backed TRIGO combines with quality solutions provider PIC

The TRIGO Group, based out of Paris, France, has joined forces with The PIC Group, based out of Oshawa, Ontario to form the largest provider of quality management services globally. TRIGO is owned by IK Investment Partners (IK), a European private equity firm.  Terms of the merger were not disclosed. Matthieu Rambaud, the TRIGO Group CEO stated, “This merger between TRIGO and PIC will enable us to provide global coverage to our clients. With the distinctive know-how, expertise, and reputation of PIC in North America, we will be able to expand the delivery of our quality services not only geographically for our existing automotive clients, but also better service for our aerospace customers.” While the Founder and President of the PIC Group added, “These are exciting times. This merger will benefit our clients immensely as they will now be able to source one provider to meet their quality needs globally. In addition, given TRIGO’s expertise in aerospace, North American aerospace manufacturers now have a high level solution provider to assist in meeting their stringent quality requirements. A merger of this magnitude will benefit customers and employees alike, taking us to new levels of quality and service.”

Yellow Point’s Bravo merges with Target Safety Services

Yellow Point Equity Partners’ portfolio company, Bravo Oilfield Safety Services LP, merged with Target Safety Services Ltd to form a new entity, Bravo Target Safety LP. No terms of the deal were disclosed. The new entity will provide safety services to the oilfield and industrial sector in western Canada. “This merger is about combining two exceptional organizations into a new growth and customer-oriented company that can offer a more robust suite of services”, said Craig Dore, CEO of Bravo Target.

 

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