Private Equity
Coca-Cola Co earlier this month agreed in a non-binding letter of intent to sell its Canadian bottling and distribution business to a joint venture of Larry Tanenbaum, head of Kilmer Group, a Canadian family office, and Junior Bridgeman. No financial terms were released; however, the Globe and Mail reported the value to be about $800 million. The letter of intent, which is subject to the parties reaching a definitive agreement, is expected to result in a deal closed later in 2018. Coca-Cola Refreshments Canada operates five production facilities and over 50 sales and distribution centres. Its sale will wrap up Coca-Cola's refranchising of North American bottling operations.
6 min read · 19 March 2018
Private equity firms are showing an increased interest in acquiring Canadian franchise systems. Many factors make franchise systems particularly enticing targets for investment, including predictable long-term revenue streams, established market penetration and opportunities for growth and synergies. With a huge potential upside, of course, come significant traps for the unwary. In a PE Hub Canada feature article, Osler, Hoskin & Harcourt LLP's Andraya Frith, Dominic Mochrie and Christine Jackson discuss key issues for PE firms when evaluating an investment opportunity in a franchise system as well as key considerations concerning acquisition and exit strategies.
6 min read · 19 March 2018
Commercial real estate firm Brookfield Property Partners LP has submitted a new offer to take over GGP Inc, one of the largest owners and operators of U.S. shopping centres, sources told Reuters. The new bid comes more than three months after a special board committee of GGP rejected a US$14.8 billion cash-and-stock acquisition offer from Brookfield Property, its largest shareholder, as inadequate. Brookfield Property’s new offer has a slightly higher cash component and offers GGP shareholders a new security that will trade as a real estate investment trust. The exact value of Brookfield Property’s new bid could not be learned.
2 min read · 19 March 2018
Cenovus Energy Inc is seeking a partner to fund $1.3 billion in costs to build the supporting infrastructure at its Narrows Lake oil sands project in Alberta, sources told Reuters. The Canadian energy company has been seeking to raise billions to reduce its debt burden after it spent $17 billion on acquiring oil sands and natural gas assets last year. To avoid placing further stress on its balance sheet, Cenovus hopes to secure the funds to build infrastructure supporting the first phase of Narrows Lake from an outside partner, which would finance construction in exchange for a long-term agreement with Cenovus to utilize the assets. Both strategic names and private equity firms could be interested in funding the Narrows Lake infrastructure.
2 min read · 19 March 2018
Calgary-based oilfield service company STEP Energy Services Ltd (TSX: STEP) has closed a bought-deal equity financing, raising proceeds of about $56.3 million. The company plans to use the funds raised for its proposed acquisition of Tucker Energy Services Holdings Inc, a U.S. provider of fracturing and completion solutions. The deal, announced last month, has a total cash consideration of about $350 million (US$275 million). STEP is a portfolio company of Canadian energy private equity firm ARC Financial Corp.
4 min read · 16 March 2018
Swiss packaging maker SIG Combibloc is preparing an autumn stock market listing in Zurich that could value it at about 4.5 billion euros (US$5.5 billion), sources told Reuters. Its Canadian private equity owner Onex Corp has hired Rothschild as an IPO adviser, and other investment banks have also been contacted regarding their interest in helping organize a potential deal. SIG, which makes cartons for beverages and food, was acquired by Onex in 2015 from New Zealand billionaire Graeme Hart in a deal valued at 3.75 billion euros (US$4.62 billion).
2 min read · 16 March 2018
Montréal-based Alithya Group Inc has agreed to merge with U.S.-based Edgewater Technology Inc (Nasdaq: EDGW) to create a new North American digital technology consulting business. The new entity, expected to list in Canada and the United States, will emerge from a shares exchange under the name Alithya and led by Alithya CEO Paul Raymond. With the deal's close, expected in Q3 2018, Alithya investors will hold about 58 percent of the new company's outstanding shares and Edgewater investors will hold the rest. Alithya's backers include Capital régional et coopératif Desjardins, Fonds de solidarité FTQ, IQ, Telus Ventures and iA Financial Group.
10 min read · 16 March 2018
Ontario Teachers' Pension Plan has appointed Datuk Ben Chan to the role of regional managing director, Asia Pacific, effective June 1st. Operating from Hong Kong, Chan will lead Ontario Teachers' investment activity in the Asia-Pacific region and support portfolio companies located there. He joins the Canadian pension fund from Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia, where he served as executive director, investments, as well as co-head of investments, and led deal-making in China.
2 min read · 15 March 2018
Brookfield Infrastructure Partners has closed its sale of a 27.8 percent stake in ETC Transmission Holdings SL, the parent company of Transelec SA, a Chilean power transmission business. The deal, announced late last year, was valued at US$1.3 billion. The buyer was Chinese state-owned China Southern Power Grid International (HK) Co Ltd. Based in Santiago, Transelec is Chile's largest power transmission operation, with more than 10,000 kilometres of electricity lines serving about 98 percent of the population. Brookfield Infrastructure was part of a group that acquired Transelec in 2006.
2 min read · 15 March 2018
Calgary junior energy company Marquee Energy Ltd (TSX-V: MQX) said it has begun a review of strategic alternatives to enhance shareholder value. The company, focused on light oil development and production in the Michichi area of Alberta, said the alternatives may include a sale of all or a portion of its assets, a business combination, a royalty, a joint venture, strategic investment or other deal. Marquee has engaged GMP Securities LP as a financial advisor to support the review. Last year, Marquee secured a $30 million special situations term loan from Crown Capital Partners.
3 min read · 14 March 2018
