The Canada Pension Plan Investment Board and Caisse de dépôt et placement du Québec (La Caisse) have purchased a minority stake in Canadian engineering firm Genivar for C$160 million (€119 million, $156 million).
Quebec-based Genivar, which is listed on the Toronto Stock Exchange, provides engineering consulting services to Canadian and international companies in the building, industrial and energy, municipal infrastructure and environmental sectors. CPPIB and La Caisse will each invest roughly C$80 million in Genivar for roughly a 10 percent stake each. The investment does not require shareholders’ approval but was approved by the Toronto Stock Exchange.
“[Genivar] has a track record of doing successful tuck-in acquisitions and they have ambition to do more, so we think there are great consolidation opportunities in the industry,” CPPIB head of relationship investments Scott Lawrence told Private Equity International.
La Caisse was not available for comment at press time.
Last month, La Caisse agreed to purchase a 16.5 percent stake in the Colonial Pipeline Company from owner ConocoPhillips in an $850 million transaction. The deal is expected to close in the first quarter of 2012.
One of CPPIB’s private equity investment highlights this year was its partnership with Allianz Capital Partners and the Abu Dhabi Investment Authority in June, acquiring a 24.1 percent stake in gas transportation business Gassled for $3.2 billion. CPPIB said it would be committing an equity investment of C$738 million to the transaction.
Canada’s private equity market has been sending investors something of a mixed message in 2011. During the second quarter of the year, investment activity shot up to levels not seen since late 2008, and the C$5.7 billion put to work exceeded the total amount invested in 2010. In the third quarter, however, deal flow slowed by nearly 20 percent year-on-year, and the C$1.3 billion of transaction values marked a 40 percent decline compared to the same period in 2010.
Still, the erratic behavior from Canada’s buyout industry between April and September is just a snapshot of what has been a robust year overall for private equity in Canada, as the C$9.1 billion of disclosed transaction values during the first nine months of the 2011 already exceeds the C$6.2 billion and C$4.2 billion recorded in 2009 and 2010, respectively.