Private Equity
Senior participants are warning that today’s market could be as good as it gets, despite a robust global economic backdrop and buoyant mood in the private equity and leveraged loan markets, Reuters reported. Comparisons to 2007’s pre-crisis conditions are becoming more common and industry figures are debating whether today’s robust conditions constitute a bubble, as purchase prices rise, jumbo buyouts proliferate and deal terms become more aggressive. Leveraged buyout purchase price multiples hit a record high of 11.2 times average Ebitda in 2017 and average buyout sizes also hit a new record of US$675 million in the third quarter of 2017, up from 10 times in 2016, according to a recent report by Bain & Co.
4 min read · 12 March 2018
Higher oil prices and a positive earnings outlook for energy companies are expected to fuel a rebound in North American oil and gas initial public offerings in 2018, with bankers betting investors will remain optimistic about the sector even if the broader stock market remains volatile, Reuters reported. IPOs in the United States and Canada could reach their highest in four years, and oilfield services companies are seen leading the recovery, given their pressing capital needs. Potential Canadian exploration and production candidates for IPO include Canbriam Energy and Velvet Energy, two sources said. Calgary's Canbriam and Velvet are both private equity-backed.
4 min read · 12 March 2018
At least three bidders are expected to submit final offers for global miner Rio Tinto’s Hail Creek and Kestrel coal mines in Australia, which could fetch up to US$2.5 billion, sources told Reuters. The Anglo-Australian mining company made a strategic decision in 2017 to exit coal and focus on growth in iron ore, copper and its aluminum division. Hail Creek and Kestrel are Rio Tinto’s last two coal mines. The expected bidders include a consortium led by U.S. private equity firm Apollo Global Management and that includes Canada Pension Plan Investment Board, strong>Xcoal Energy & Resources and a former Glencore executive.
3 min read · 09 March 2018
Canadian private investment firm Legado Capital has acquired Kivuto Solutions Inc, an Ottawa-based provider of academic software, e-texts and other digital resources. No financial terms were disclosed for the deal, which saw Legado partner with a group of investors led by Canadian private equity firm Roynat Equity Partners. Founded in 1997 by Ram Raju to simplify software management and distribution in the higher education sector, Kivuto today distributes its solutions to users in over 195 countries. Legado Managing Partner Carlos Meza said his firm, Roynat and the other partners will support Kivuto's continued global growth.
3 min read · 09 March 2018
Purpose Financial LP, the parent company of Purpose Investments and other affiliates, has agreed to buy Thinking Capital Financial Corp, a Montréal-based provider of small business loans and funding solutions online. No financial terms were released; however, the Globe and Mail said the cash-and-securities deal is valued at over $200 million. Purpose Financial, a Toronto-based financial services firm led by CEO Som Seif, said the buy will create an innovative financial services platform with a "significant balance sheet strength, strong financial backing, and a diversified funding model." TorQuest Partners, which has backed Thinking Capital since 2014, will retain a stake in the business.
3 min read · 09 March 2018
Canadian specialty tea and tea accessory retailer DavidsTea Inc (Nasdaq: DTEA) said Herschel Segal, who co-founded the company in 2008, has resigned from the board. In a letter to the board on behalf of Rainy Day Investments (RDI), Segal announced the beginning of a process to explore a privatization deal for DavidsTea. RDI, which is controlled by Segal, will present a proposal to buy out minority investors or pursue an alternative deal. Montréal-based DavidsTea went public in 2015. U.S. growth equity firm Highland Consumer Partners backed the company prior to the initial public offering and continues to hold a stake.
3 min read · 09 March 2018
Healthcare of Ontario Pension Plan (HOOPP) reported an investment rate of return of 10.88 percent last year, which exceeded its portfolio benchmark by 2.99 percent. The pension fund's 10-year annualized return is 9.55 percent, while its 20-year annualized return is 9.01 percent. Investment income, which reached $7.6 billion at the end of 2017, helped push HOOPP's net assets to $77.8 billion. Strong performance was shown by most asset classes, HOOPP reported, including private equity, which returned 19.6 percent on a currency-hedged basis.
3 min read · 08 March 2018
Toronto-based mining company Victoria Gold Corp (TSX-V: VIT) has agreed to a $505 million financing package to fund development of its Eagle Gold project in Yukon through to commercial production. The package, which includes credit facilities, equipment financing, royalty financing and a private placement, will be backed by U.S. private equity firm Orion Mine Finance Group, Osisko Gold Royalties Ltd and Caterpillar Financial Services Ltd. Orion's contribution will consist of US$175 million of project finance and subordinated debt facilities and $75 million of equity. First gold pour from the Eagle project is expected in the second half of 2019.
7 min read · 08 March 2018
Ontario Teachers' Pension Plan has agreed to sell a majority interest in U.S. dental support organization Heartland Dental to KKR. No financial terms were disclosed for the deal, which will see Ontario Teachers' retain a "sizeable ownership". It is expected to close in the second quarter. Founded in 1997, Effingham, Illinois-based Heartland provides non-clinical administrative support services to U.S. dental offices representing a network of over 1,300 dentists. Ontario Teachers' acquired control of the business in 2012 in a deal reportedly valued at US$1.3 billion. Since then, the number of dental offices supported by Heartland more than doubled.
5 min read · 07 March 2018
Calgary crude oil producer Cona Resources Ltd (TSX: CONA) has agreed to a proposal to be taken private by Waterous Energy Fund, the company's majority investor. Waterous, a Canadian energy private equity firm, proposed to acquire the common shares it does not already hold for $2.55 per unit. Cona's board, excluding Adam Waterous, managing partner and CEO of Waterous, approved the proposal but said a definitive agreement must still be reached. Last year, Waterous acquired a 67 percent interest in the company, then known as Northern Blizzard Resources Inc, for $244 million. The sellers were Riverstone Holdings and NGP Energy Capital Management.
3 min read · 07 March 2018
