Private Equity
Neptune Wellness Solutions Inc (TSX, Nasdaq: NEPT), a Laval, Québec-based cannabis extraction business, has completed a private placement, generating about $54.1 million (US$41.4 million) in proceeds. The offering was led by U.S. life sciences hedge fund manager Perceptive Advisors, the company's largest shareholder. A portion of the proceeds will be used to help fund Neptune's acquisition of the assets of SugarLeaf Labs LLC and Forest Remedies LLC, together a Conover, North Carolina-based hemp company. The US$18 million deal is expected to close this month. Neptune specializes in the extraction, purification and formulation of cannabis products.
4 min read · 22 July 2019
M&M Refrigeration LLC has acquired Carnot Refrigeration, a Trois-Rivières, Québec-based provider of carbon dioxide (CO2) transcritical systems, for an undisclosed amount. Founded in 2008 by CEO Marc-André Lesmerises, Carnot provides its systems for North American commercial and industrial applications, such as data centres, food processing facilities, cold-storage warehouses, supermarkets and ice rinks. M&M, a Federalsburg, Maryland-based maker of industrial refrigeration systems, said the deal creates a global "leader in CO2-based refrigeration." M&M was acquired last year by U.S. mid-market private equity firm Source Capital.
2 min read · 22 July 2019
Westinghouse Electric Co has acquired NA Engineering Associates Inc, a Stratford, Ontario-based provider of engineering solutions, including for the nuclear sector. No financial terms were disclosed. NA Engineering Associates has been led since its founding in 1994 by President and CEO Nick Aroutzidis. Westinghouse, a Pittsburgh-based supplier of nuclear power plant products and technologies, said the deal grows its footprint in Canada and diversifies its engineering capabilities. Last year, the private equity group of Brookfield Asset Management acquired Westinghouse for US$4.6 billion. The prior owner was Toshiba Corp.
2 min read · 22 July 2019
Toronto-based waste management company GFL Environmental Inc has filed a registration statement with the U.S. Securities and Exchange Commission and a preliminary prospectus with Canadian securities regulators for an initial public offering (IPO). The number and price of subordinate voting shares to be sold have not been determined. The Globe and Mail reported GFL is looking to raise about $1.96 billion (US$1.5 billion). Following the IPO, GFL will have two classes of shares: subordinate voting shares and multiple voting shares. The latter will be held by Founder and CEO Patrick Dovigi. Last year, GFL was recapitalized by an investor group led by BC Partners (BC), Ontario Teachers’ Pension Plan (OTPP) and others. The deal valued the business at $5.1 billion.
2 min read · 22 July 2019
Calgary-based energy infrastructure company AltaGas Ltd (TSX: ALA) has agreed to sell its portfolio of U.S. distributed generation assets to TerraForm Power Inc (Nasdaq: TERP), an affiliate of Brookfield Asset Management. AltaGas said the deal, expected to close in Q3 2019, will result in proceeds of about $940 million. The portfolio, held by WGL Energy Systems Inc and WGSW Inc, consists of 322 megawatts of distributed generation assets in 20 states and the District of Columbia. In a separate release, TerraForm, a New York-based owner and operator of solar and wind assets, said the acquisition will make it one of the largest distributed generation businesses in the United States.
2 min read · 22 July 2019
Nemaska Lithium Inc (TSX: NMX), a Québec City-based lithium hydroxide supplier to the lithium battery market, has received a $600 million investment offer from Pallinghurst Group, a U.K. metals and mining private equity firm. Pallinghurst proposed to invest $200 million through a private placement as well as $400 million through a rights offering. The parties agreed to a three-month period to finalize an agreement. Nemaska shareholders will vote on a deal no later than October. The proceeds are intended to fund the company's Whabouchi project, which includes a lithium spodumene mine and electrochemical plant in Québec. Nemaska last year struck a US$150 million streaming deal with Orion Mine Finance.
7 min read · 19 July 2019
99 Cents Only Stores LLC, a Commerce, California-based discount retailer, has completed recapitalization deals intended to eliminate US$300 million of debt and enhance the company's liquidity position. As part of the transactions, 99 Cents Only Stores and its sponsors, Ares Management and Canada Pension Plan Investment Board (CPPIB), entered into stakeholder agreements to convert all second lien debt and 92.1 percent of third lien debt into new preferred and common equity. Following the transactions, Ares and CPPIB continue to hold 73 percent ownership and majority control. Ares and CPPIB acquired 99 Cents Only Stores in 2012 for US$1.6 billion.
3 min read · 19 July 2019
Entrepreneur Capital has carved out a niche in Québec’s active private equity market, targeting small-cap opportunities often missed by other investors. Last month, Entrepreneur closed its fifth platform deal, acquiring a controlling stake in Spencer Supports Canada, a Montréal- and Stanstead, Québec-based apparel business. Partner André La Forge told PE Hub Canada the company’s unique competitive position in a fast-changing sector makes it a fit in Entrepreneur’s strategy. “In an industry that’s shrinking, Spencer has an edge as a high-volume, private-label garment business,” La Forge said. Entrepreneur plans to leverage Spencer’s “unexploited potential,” La Forge said, by looking into “new avenues of development,” such as acquisitions.
3 min read · 19 July 2019
Canadian private equity firm Onex Corp has agreed to sell Jack’s Family Restaurants LP, a Homewood, Alabama-based operator of quick-service restaurants. The financial terms of the deal, along with the buyer, were not disclosed. Last month, the Wall Street Journal reported Jack's was exploring a sale that could value it at US$800 million or more. Onex acquired Jack’s in 2015, investing US$234 million. With the deal's close, expected in Q3 2019, the firm will have received proceeds of about US$835 million, resulting in a gross multiple of invested capital of 3.6 x and a 38 percent gross return.
3 min read · 18 July 2019
Thomson Reuters (TSX, NYSE: TRI) has acquired HighQ, a London, U.K.-based collaboration platform for the legal and regulatory market. No financial terms were disclosed. Launched in 2001, HighQ provides a secure cloud-based platform for business collaboration, workflow automation and client engagement to more than 400 global customers. In 2016, the company raised US$50 million from One Peak Partners, Morgan Stanley Merchant Banking and Goldman Sachs Private Capital. Thomson Reuters, a Toronto-based provider of business information services, said the deal will expand its cloud-based software offerings and help it meet demand from legal professionals.
3 min read · 18 July 2019
