German industrial group Siemens is likely to decide this week to pursue a multi-billion dollar rail merger with French rival Alstom rather than Canada’s Bombardier, two sources familiar with the matter told Reuters. Siemens Mobility is expected to be merged into Alstom, in which Siemens would hold 50 percent-plus-one share, while the chief executive would be Alstom’s current boss Henri-Poupart Lafarge. The combined business would have sales of about 15 billion euros (US$18 billion). The decision would be a blow for planes-and-trains maker Bombardier, which faces a separate battle this week to protect aerospace jobs in Québec and Northern Ireland amid a subsidy row with Boeing. Caisse de dépôt et placement du Québec owns 30 percent of Bombardier’s rail business.
Skidmore Development Group and SouthPac Partners have joined forces in the inaugural deal of both firms, investing in a maker of gourmet cinnamon rolls. Skidmore and SouthPac last week announced their acquisition of Calgary's Cinnaroll Bakeries for an undisclosed sum. The plan is to build on the company's 30 years of growth, Skidmore Managing Director and CFO Jas Boparai and SouthPac Managing Partner Jeremy South told PE Hub Canada. The Cinnaroll deal officially introduces Skidmore, the family office of British Columbia's Thomas Skidmore, and SouthPac, a Vancouver private equity firm, to the market.
Struggling retailer Sears Canada Inc’s top executive is negotiating a private-equity backed deal that could be valued at more than $650 million (US$533 million), Reuters reported, citing a Wall Street Journal story. The retailer’s Executive Chairman Brandon Stranzl last month stepped away from day-to-day operations to focus on plans for the company, which filed for creditor protection in June. A potential deal by Stranzl would be financed partly through private-equity capital sourced by Vadim Perelman, the founder of Baker Street Capital Management, and with debt financing, sources told the Wall Street Journal. The proposed offer would reduce the company's store footprint by more than half.
Canadian lifestyle retailer Roots Corp said this week it filed a preliminary prospectus with the securities regulatory authorities in Canada for a proposed initial public offering of its common shares, Reuters reported. The company, known for its casual wear and leather goods with a distinctive beaver logo, said New York-based private equity firm Searchlight Capital Partners LP and founders Michael Budman and Don Green are selling their stake. The retailer is seeking to raise about $200 million in the share sale this month and could have a market value of about $700 million (US$574 million) after listing, Bloomberg reported. Searchlight acquired a controlling stake in Roots in late 2015.
Cabot Credit Management’s planned 1 billion pound (US$1.3 billion) initial public offering has been delayed by the resignation from its board of the former boss of Provident Financial, Reuters reported. Cabot, which is Britain’s biggest debt collection business, had planned to announce its intention to float in London this week. The company is still planning to press ahead with its flotation this year, the source said. A second source told Reuters that Canada Pension Plan Investment Board and U.K. private equity firm Apax Partners had separately expressed interest in buying Cabot this year, although the talks did not develop. Apax and CPPIB declined to comment.
Austrian real estate company Signa Holding is considering a bid for Germany’s Galeria Kaufhof, a department store chain owned by Hudson’s Bay Co, sources told Reuters. Signa is working with an investment bank to line up financing for a takeover offer, the sources said. Signa’s potential bid coincides with Hudson’s Bay executives mulling a possible deal of their own. Canada's Hudson’s Bay has reportedly hired a financial adviser to review strategic options, including the possibility of taking the company private. Hudson’s Bay is under pressure from U.S. activist hedge fund Land and Buildings Investment Management.
China’s 3SBio Inc has agreed to buy the contract development and manufacturing unit of Canada’s Therapure Biopharma Inc for US$290 million, part of a push by the Chinese biotech company into the North American market, Reuters reported. The deal, being done through a venture set up by 3SBio and CITIC Private Equity investment, fits with a push by Chinese drug-makers and biopharmaceutical companies to increase their role in the global market. The acquired unit will continue to operate under the Therapure brand and be led by Therapure’s current CEO, Nick Green. Mississauga, Ontario's Therapure was launched in 2008 by Canadian private equity firm Catalyst Capital Group. Catalyst will retain ownership of Therapure’s plasma protein and therapeutic products business as a separate entity.
Anglo-Australian mining giant BHP Billiton Ltd is considering selling a 25 percent interest in its Canadian potash mine project, a stake that could be worth close to US$2 billion, sources told Reuters. The move comes as U.S. hedge fund manager Elliott Management Corp has been pushing the company for changes. BHP is working with an investment bank for the potential stake sale in its partly built Jansen, Saskatchewan potash project, the sources said. BHP laid out options for the Jansen project in an investor presentation dated August 22, saying it could wait, find a partner, divest or optimize it.
Institutional investors hoping to profit from cobalt, this year's high-flying metal, are buying into companies that are smaller than their usual fare to gain exposure to an industry supplying the burgeoning electric car market, Reuters reported. Small cobalt-focused companies are mushrooming, mostly in Canada, a long-time hub for mining startups, but only one, Toronto's Cobalt 27 Capital Corp, concentrates entirely on the mineral. Cobalt 27, which in June raised $200 million in an initial public offering, the Toronto Stock Exchange's biggest mining IPO since 2012, is backed by Swiss mining private equity firm Pala Investments.
AreaOne Farms wrapped up its third farmland private equity fund, raising $130 million thanks to institutional investors seeking initial access to agricultural assets. AreaOne Farms Fund III exceeded by 30 percent its $100 million target in a close last month, Joelle Faulkner, president and chief executive of AreaOne, told PE Hub Canada. The fund secured 4x the combined total raised by its two predecessors over 2013-2014. The Toronto firm achieved this by signing up more limited partners, including first-time institutional backers.