Value Unleashed

Last week, the S&P 500 Index advanced from the previous week (+2.1%). Strong quarterly performance by Microsoft, Google and Amazon helped push the index higher. Newly planned stimulus by E.U and China reassured the markets.  However, future interest rate action by the Federal Reserve, the weakness in Chinese growth and U.S. Government budgetary brinkmanship added to the fear index (+0.2%). While in Canada, the TSX index advanced slightly compared to the previous week (+0.8%); helped by rebounding share price of Valeant Pharmaceutical International (TSX: VRX).  The credit markets remained relatively unchanged.

Canadian M&A Overview

KDC continued its expansion toward the West Coast with its acquisition of Cosmetics Technologies and Concordia strengthened its international presence with the acquisition of Amdipharm. Here are some noteworthy deals from last week:

BV Investment Partners acquires stake in geoLOGIC systems
Novacap-led investors fund KDC’s purchase of Cosmetic Technologies
Concordia closes Amdipharm Mercury buy, Cinven investment
Nelson Education completes sale to lenders, overhauls board

BV Investment Partners acquires stake in geoLOGIC systems

Last week, BV Investment Partners acquired the shares of geoLOGIC founders, Joe Harris and Denise Harris. David Hood, the CEO of geoLOGIC will retain his interest in the company.  The financial terms of the transaction were not disclosed. The company, located in Calgary, Alberta, provides integrated data and decision support software to the oil and gas exploration industry. Its systems are fully integrated in multi-million dollar projects and are seen as critical by the industry. geoLOGIC has been active in Western Canada for over 30 years. David Hood stated, “I can’t think of a better partner for geoLOGIC. BV has demonstrated a deep understanding of geoLOGIC’s core values and we look forward to working together to further expand our offerings in areas that are important to our customers.” BV Investment Partners are expected to provide additional capital to support geoLOGIC’s growth initiatives.

Novacap-led investors fund KDC’s purchase of Cosmetic Technologies

Knowlton Development Corp (KDC) has acquired Cosmetics Technologies, a California based manufacturer of beauty and personal care products for an undisclosed sum. This transaction follows last week’s acquisition of Kolmar and the acquisition of ChemAid ten months earlier. The latest acquisition by KDC will allow it to service customers in the West Coast. “We were particularly impressed with Cosmetic Technologies’ highly-skilled management team and their deep industry experience and relationships, including an R&D staff with top chemical engineering talent,” said Nicholas Whitley, President and CEO of KDC. Ron Lewis, President and Founder of Cosmetic Technologies added, “We are already well-positioned to handle such growth with our advanced technical expertise and substantial equipment and infrastructure investments already completed, but KDC offers us the expertise, sales force, facilities and network to achieve this objective.” KDC’s objective to become a world-class manufacturer of health and beauty-care product is supported and funded by its institutional investors led by Novacap.

Concordia closes Amdipharm Mercury buy, Cinven investment

Last week, Concordia Healthcare acquired Amdipharm Mercury for $3.3 billion. Amdipharm is a U.K. based pharmaceutical company with a strong presence in Europe. The combined company holds 200 products and services over 100 countries. “This is a tremendous milestone for Concordia. This acquisition has transformed us from a predominantly U.S. business to a leading, international pharmaceutical company,” said Mark Thompson, Concordia’s CEO. After the acquisition, Concordia’s share of the revenue from the U.S. is expected to decline to 40% of total. The combined company is expected to see significant organic growth for the next several years; led by Amdipharm’s 60 new product launches.

Nelson Education completes sale to lenders, overhauls board

After seeking creditor protection, Nelson Education has completed the transfer of ownership to its lenders, Ares Management, Murdrick Capital Management and Sound Point Capital Management. Nelson Education has also appointed new directors. “We are pleased to announce Nelson’s new Board of Directors, who collectively bring diverse skill sets, and a clear understanding our strategic direction as we focus on enhancing shareholder value. As experienced and accomplished individuals we look forward to their contributions to our long term success,” said Greg Nordal, CEO of Nelson. Greg Nordal further added, “Nelson is very well positioned to build on our market-leading presence in Canada as we continue with our mission of enabling the success of students and educators through the provision of innovative learning tools – in both digital and print formats– to assist learners of all ages.”