Canadian financial conglomerate Onex Corporation has used its new private equity fund, Onex Partners, to acquire a 30 percent stake in ResCare for $83 million (€67.7 million).
According to the statement, the purchase includes a $50 million investment in a treasury issue of a new class of convertible preferred stock and the purchase of $33 million in common stock from certain ResCare shareholders, including the founding shareholder. Onex’s stake allows it to nominate four of the nine company directors.
The transaction is expected to close in the third quarter of 2004, the statement said.
ResCare, founded in 1974, provides residential, therapeutic, job training, educational and support services to individuals with special needs, including those with mental retardation and other developmental disabilities. The company has headquarters in Louisville, Kentucky, and provides services in 33 states in the US, Washington DC, Puerto Rico and Ontario, Canada. In 2003, ResCare generated approximately $960 million in revenues, according to the statement.
This is Onex’s second purchase since it launched its private equity fund in March 2003. In January, the firm announced a $101 million investment in managed healthcare organization Magellan Health Services, giving Onex a 24 percent interest in the company.
Onex Corporation is one of Canada’s largest companies with global operations in service, manufacturing and technology industries. The company has annual revenues of approximately $14 billion and assets worth approximately $12 billion, according to the statement. In December, Onex held a first close on Onex Partners $1 billion. The fund is seeking a total of $1.6 billion.