Kirk Falconer
Canadian private equity firm Persistence Capital Partners has completed a new investment in mdBriefCase, an online continuing health education company. The deal, the financial terms of which were not released, is the fifth done in the past twelve months by the Montréal-based firm. It is also the fifth platform investment of its second mid-market healthcare partnership, Persistence Capital Partners II LP, which completed an initial close in 2013.
By all accounts, 2014 will be a banner year for Canada's private equity market. The whole story will be told when Thomson Reuters publishes its year-end market report in the coming weeks. In the meantime, peHUB Canada has compiled a list of the likely top 10 (disclosed) Canadian deals in 2014. As expected, the Tim Hortons' merger topped the list, however, as peHUB Canada reported in December, many of the biggest transactions were located in the energy industry.
Catalyst Paper Corp (TSX: CYT) has closed its previously announced acquisition of the Biron paper mill in Wisconsin and the Rumford pulp and paper mill in Maine. The final purchase price was US$62.4 million. Following the deal, the Richmond, British Columbia-based Catalyst said it has become "a larger and stronger company" with five facilities across North America and an estimated production capacity of 2.1 million tons of paper and 500 thousand tons of pulp. Last November, U.S. distressed debt investor Cyrus Capital Partners grew its stake in Catalyst, taking indirect control of around 43.3 percent of the company’s shares.
OMERS Private Equity has agreed to sell the Canadian operations of healthcare information technology company Logibec Inc to U.S. private equity firm GI Partners. The deal, the financial terms of which were not released, is expected to close in the first quarter of 2015. Following the close, OMERS said it will continue to own Logibec's U.S. division MatrixCare, an electronic health record provider. The Montréal-based Logibec specializes in clinical and administrative information systems for the health and social services sectors. Founded in 1982, OMERS took the company private in 2010 for $237 million. Earlier this month, OMERS also sold Accelerated Rehabilitation Centers.
Fulcrum Capital Partners has wrapped up the first close of its fifth partnership, Fulcrum Capital Partners V LP, securing $180 in committed capital. That’s 60 percent of the way to Fund V’s $300 million target, which the firm expects to reach in the first quarter of 2015. In that event, the new fund would be 55 percent larger than Fulcrum Capital Partners IV LP, which closed at $193 million in 2012.
U.S. private equity firm Clayton Dubilier & Rice has completed its previously announced purchase of convertible preferred shares in CHC Group Ltd (NYSE: HELI). The deal, which totaled $600 million according to the original agreement, will be used by the company to reduce debt and other fixed charges. Based in Vancouver, CHC is a commercial operator of helicopters that provides flight services to oil and gas companies and government search-and-rescue agencies, as well as other services. It has been backed by U.S. private equity firm First Reserve Corp since 2008.
Private equity ratcheted up its activity in Canada’s oil patch in 2014, signalling a potentially dramatic shift in the energy industry’s funding sources. To date this year, 46 oil and gas deals have absorbed $6.3 billion in disclosed values, according to Thomson Reuters' data. Pentti Karkkainen, co-founder of and senior strategy advisor to KERN Partners, said that record investment shows private equity is rapidly filling much of the void that has recently been left by traditional public market sources.
The deal activity of Brookfield Asset Management’s private equity group took several directions in 2014, but it appears to mostly focus on North America’s energy industry. If that’s surprising, it’s because only one transaction has been disclosed to date. In fact, Brookfield PE has been active in several deals involving Calgary's Ember Resources and bankrupt U.S. utility Energy Future Holdings (EFH).
Ainsworth Lumber Co Ltd (TSX: ANS) has agreed to merge with Norbord Inc (TSX: NBD) in a deal valued at $762.6 million. Brookfield Asset Management, the majority owner of both Canadian companies, has committed to vote in favour of the transaction, which when completed will see it own around 53 percent of the new entity. Minority investor approval will be sought at special meetings to be held in January 2015. Ainsworth and Norbord said the deal will create a leading global wood products business focused on oriented strand board. Earlier this year, a planned US$1.1 billion sale of Ainsworth to Louisiana-Pacific Corp was cancelled due to conflicts with regulatory authorities about required divestitures.
U.S. private equity firm Aquiline Capital Partners recently purchased a majority equity interest in Beach & Associates Ltd, a specialty reinsurance intermediary based in Toronto. The financial details of the acquisition were not disclosed. Jonathan Beach, the company's founder and chairman, will retain a significant investment stake. Beach's senior partners have invested alongside Aquiline and will own approximately 15 percent of the company. Beach, which was founded in 1988, said the deal will provide it with expertise and capital to strengthen the business.