Clairvest Group has set an $800 million target for its sixth mid-market fund, which would be the largest in the private equity firm’s 31-year history. Clairvest Equity Partners VI is expected to begin fundraising in Q1 2019, Vice Chairman and Managing Director Jeff Parr and President and Managing Director Michael Wagman told PE Hub Canada. Closing on $800 million would give CEP VI 33 percent more committed capital than its predecessor, which raised $600 million in 2014. The Toronto firm will do this by expanding its base of North American limited partners. Clairvest will launch fundraising with momentum, thanks to a series of lucrative exits over the past 23 months.
Thomson Reuters Corp has completed the sale of a majority stake in its Financial & Risk (F&R) unit to U.S. private equity firm Blackstone Group LP, Reuters reported. The news and information provider agreed in January to sell a 55-percent stake in the business, which provides data and news primarily to financial customers, in a deal which values the total F&R business, now called Refinitiv, at about US$20 billion. It gives Thomson Reuters, controlled by Canada’s Thomson family, an ally as it seeks to reinvigorate a business facing challenges from a shrinking and budget-conscious customer base. Canada Pension Plan Investment Board and GIC invested in the deal alongside Blackstone.
Toronto private equity firm Argosy Partners is seeking up to $50 million for its fourth shotgun fund, according to a news release. Shotgun Fund IV, like its predecessors, is earmarked for purchases of equity from selling shareholders when a shotgun clause or buy-sell agreement is executed. This specialized financing helps owner-operators of mid-market companies resolve shareholder disputes and gain liquidity. Fund IV's launch follows the winding up of a prior shotgun fund as a result of last month’s sale of Logistik Unicorp, a Saint-Jean-sur-Richelieu, Québec, provider of uniform solutions, to Wynnchurch Capital.
The recent reshaping of indemnification norms in U.S. private M&A deals caused by the exponential growth and widespread acceptance of representations and warranties (R&W) insurance is the most significant shift in the North American market since the death of the financing in the mid-2000s. That's the view of Osler, Hoskin & Harcourt LLP Partners Michael Budabin McQuown, Marc Kushner and Chad Bayne and Associate Jillian Mulroy. In a PE Hub Canada feature article, they argue that for a growing number of dealmakers in Canada and the United States, the question regarding R&W insurance is when, not whether, to take the plunge.
Canadian food retailer Empire Co Ltd has agreed to acquire privately held grocer Farm Boy Inc for an enterprise value of $800 million to increase its presence in Ontario, Reuters reported. Ottawa-based Farm Boy, which specializes in “farm-to-table” wholesale, will be acquired from Berkshire Partners, following which it will be set up as a separate company within Empire’s structure. “It will be a growth vehicle in urban and suburban markets,” Empire CEO Michael Medline said, adding that he expected Ebitda to double in five years. Berkshire, a Boston private equity firm, invested in Farm Boy in 2012.
Distressed investor Marble Ridge Capital LP said in a letter to Neiman Marcus Group Ltd LLC that the U.S. luxury department store company may be in default on its debt after it moved its Mytheresa business into an entity belonging to the retailer’s private equity owners, Reuters reported. Buyout firm Ares Management LP and Canada Pension Plan Investment Board (CPPIB) acquired Neiman Marcus for US$6 billion in 2013, saddling the retailer with about US$4.7 billion in debt. Neiman Marcus said this week it moved the Mytheresa online business to an entity owned by Ares and CPPIB.
Walter Capital Partners has hired Sam Ramadori as a managing partner, according to a news release. Ramadori joins the firm from Dundee Sarea, a mid-market special-situations investor launched in 2015. Ramadori was one of Dundee Sarea’s managing partners. Previously, Ramadori spent nearly eight years as a vice president in the private equity group of Brookfield Asset Management. Montréal-based Walter Capital was established three years ago by its parent, family office Walter Group of Cos, to invest in the growth strategies of small and midsized companies in a range of industries in Canada. Last December, Walter Group doubled its commitment to the firm to $200 million.
Toshiba Corp is in talks with Canada’s Brookfield Asset Management for the potential sale of its U.K. nuclear unit NuGen, a source told Reuters. Brookfield has emerged as one of several new candidates since Korea Electric Power Corp lost its preferred bidder status in July, the source said. The NuGen project in Moorside, northwest England, was expected to provide around 7 percent of Britain’s electricity, but faced setbacks after Toshiba’s nuclear arm Westinghouse Electric Co LLC went bankrupt last year. Brookfield's private equity group acquired Westinghouse earlier in 2018 for US$4.6 billion.
The term loan financing backing U.S. private equity firm Blackstone Group’s purchase of a 55 percent stake in Refinitiv, Thomson Reuters’ Financial and Risk division, has been increased to US$9.25 billion from US$8 billion and the high-yield bonds have been reduced, Reuters reported. A strong response from the loan market, particularly from the United States, also allowed pricing to be cut, and relatively minor investor-friendly changes to be made to the documents. The successful conclusion of the jumbo new-money loan is expected to set a positive tone for the market until the end of the year, bankers said.
Public-style private deals, or private company M&A deals that have risk allocation constructs that are similar to public company acquisitions, are increasingly being seen in Canada, especially in large and high profile private equity transactions, writes Shahir Guindi, national co-chair of Osler, Hoskin & Harcourt LLP. As a result, sellers have sometimes been able to insist on placing more risk on the buyer. In a PE Hub Canada feature article, Guindi says it’s important for PE firms and other buyers to understand the implications of this trend, and for sellers to understand the opportunity.