Private Equity Deals & Transactions

Birch Hill acquires private equity peer

The firm will take Toronto-based Tuckamore Capital private alongside the company’s management team.

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Birch Hill Equity Partners has agreed to acquire Tuckamore Capital in a take-private deal reportedly valued at $65 million, according to a statement.

Birch Hill did not return a request for comment by press time.

Birch Hill, along with certain members of Tuckamore’s senior management team, will buy the remaining shares for $0.75 cents each. The sale price represents a 21 percent premium to the closing price Tuckamore’s last trading day, 2 May and a 39.2 percent premium to the volume-weighted average price of the shares over the last 30 trading days, according to the statement.

The deal is subject to approval from Tuckamore shareholders at a meeting on 15 July and other customary conditions.

Toronto-based Tuckamore is a private equity firm that has seven portfolio companies, including mid-sized oilfield services company ClearStream Energy Services and call centre outsourcing company Gemma, according to its website. The firm has invested more than $700 million in Canadian businesses since inception.

Tuckamore initially listed its shares on the Toronto Stock Exchange in 2005, one year after it was founded. The firm is led by president and chief executive officer Dean MacDonald, chief financial officer Keith Halbert and chief investment officer Adrian Montgomery. MacDonald and Montgomery will work with Birch Hill to take the firm private, according to the statement.

Tuckamore did not return a request for comment by press time.

Birch Hill will fund the investment using capital from its Fund IV, which raised C$1.04 billion in 2011 according to Private Equity International’s Research and Analytics division. Birch Hill returned more than $295 million to limited partners last year, PEI reported last week. The realisations were driven by Birch Hill’s sale of home construction company Carmanah Design and Manufacturing, children’s entertainment company DHX Media and Constellation Software. The three exits generated a return multiple of 5.2x and an average internal rate of return of 23 percent.

Birch Hill invests in Canadian mid-market companies with enterprise values between $30 million and $600 million. The firm was founded in 2005 by partners Stephen Dent and John MacIntyre as a spin-out from the mid-market private equity group within TD Capital.