Canadian tech private equity firm Klass Capital has won a bet it made on a decade-long investment in Freshii, a health-food restaurant chain that went public this week. Freshii closed its initial public offering on the TSX at the upper end of the price range. It raised more than $125 million, a sum that could increase to $144 million if a greenshoe option is exercised. The IPO is 2017’s first involving a Canadian company backed by a major private investor. And it may herald more to come.
U.S. private equity firm Orion Mine Finance Group is in talks to sell a portfolio of 87 mining royalty, streaming and offtake assets, Orion portfolio manager Douglas Silver said. He declined to comment on a sales price but sources told Reuters the portfolio could fetch as much as US$1 billion. The companies Orion is talking to include Toronto-based Franco-Nevada Corp, Vancouver-based Silver Wheaton Corp and Denver, Colorado-based Royal Gold Inc, the sources said. The portfolio includes 71 royalties, eight streams and eight offtake agreements on gold, silver, base metals and diamond assets spread across 16 countries.
Canada Pension Plan Investment Board and several U.S. private equity firms are interested in acquiring Canadian financial technology services provider DH Corp, sources told Reuters. TPG, Cerberus Capital Management LP and technology-focused Thoma Bravo are some of the U.S. buyout firms looking at DH, the sources said. The moves come more than a month after DH appointed a special committee as it received expressions of interest. The Toronto-based company is currently valued at $2.48 billion.
Emerald Expositions LLC, the largest operator of business-to-business trade shows in the United States, is exploring a sale that could value the company at close to US$2 billion, including debt, sources told Reuters. Canadian private equity firm Onex Corp, which acquired Emerald for US$950 million in 2013, has hired Bank of America Corp to run an auction for Emerald, the sources said. Onex may pursue an initial public offering of Emerald if it is not satisfied with the acquisition offers it receives.
Performance Sports Group Ltd said it would seek approval from a U.S. bankruptcy court for the sale of its assets to Power Corp's Sagard Capital Partners LP and Fairfax Financial Holdings Ltd, after it failed to attract other bids, Reuters reported. Sagard, Performance's biggest shareholder, and Fairfax had agreed in October to act as "stalking horse" bidders to buy most of the Bauer ice hockey gear maker's assets and its North American units for US$575 million. The former chairman of Performance was in talks with U.S. and Canadian private equity firms about submitting a bid for the company.
The OECD recently released a discussion draft entitled the “BEPS Action 6 Discussion Draft on non-CIV examples” to clarify when investors like private equity funds should be entitled to tax treaty benefits. In a PE Hub Canada feature article, Osler, Hoskin & Harcourt LLP Partners Patrick Marley and Matias Milet argue the document does little to dispel uncertainty about the application of rules governing transactions involving PE investors. This, they say, may adversely impact cross-border investment.
Brazil's Cyrela Commercial Properties SA is in talks with Canada Pension Plan Investment Board (CPPIB) for a potential asset swap and joint ventures to invest up to US$400 million in new commercial office space, Reuters reported. Cyrela said in a securities filing that it had signed a non-binding agreement regarding the transfer of a 33 percent equity stake in its office buildings in exchange for CPPIB's 25 percent stake in Cyrela's warehouse business. The deal underscores investors' hopes that falling interest rates will trigger a new round of investment in Brazil's beleaguered commercial real estate sector.
Clairvest Group is seeing a lucrative payday following its sale of a Canadian out-of-home advertising business and the refinancing of a U.S. casino. This month Clairvest sold Cieslok Media, a Toronto operator of large-format digital and static billboards. The sale was preceded by a US$600 million recapitalization of Rivers Casino, a Des Plaines, Illinois, gaming and entertainment complex backed by Clairvest. These two deals, occurring a month apart, brought realized returns of Clairvest Equity Partners IV to 5.4x of invested capital and an IRR of 49 percent.
Fairfax Financial Holdings is in early talks to sell 25 percent of India's largest private general insurer ICICI Lombard in a deal that could fetch up to US$1 billion, as the Canadian firm looks to cash out and start a new insurance joint venture, sources told Reuters. ICICI Lombard is a joint venture formed in 2001 between ICICI Bank, India's second largest bank, and Fairfax, which is led by Canadian billionaire Prem Watsa. Private equity firms, including Blackstone Group and KKR & Co, as well as some Canadian pension funds, have expressed interest in Fairfax's stake, the sources said.
Canada's MEG Energy Corp is testing the capacity for oil-related loans with a US$1.235bn deal that will be used to refinance debt and is part of a capital restructuring, Reuters reported. The company could open the door for other leveraged energy borrowers to tap the loan market. Access to this pool of money has been largely shut off to the sector over the last year after oil prices started plummeting in 2014. With oil stabilizing, private equity firms may also see an opening and look to pull the trigger on buyout situations with the help from the banks that want their business.