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Canadian M&A Roundup Nov 10, 2017 – 333 West 34 Street New York, AuRico Metals

Our previous Canadian Mergers & Acquisitions roundups can be found here. Our previous global M&A roundups can be found here.

Target: 333 West 34 Street Property in New York

  • Industry: Real Estate
  • Acquirer: Brookfield Asset Management Inc. (TSX:BAM.A)
  • Target: 333 West 34 Street Property in New York
  • Size: USD$255 million
  • Consideration: 100% Cash
  • Sourceof Funds: Cash
  • Sell Side Advisors: Not Disclosed
  • Buy Side Advisors: Not Disclosed
  • Legal Advisors: Not Disclosed
  • Expected Close: Q4 2017

On November 9th, 2017, Brookfield Asset Management entered into an agreement to acquire 333 West 34th Street Property in New York from New York REIT, Inc. (NYSE:NYRT) for USD $255 million.

After several years of strategic ambiguity, NYRT decided to pursue a liquidation strategy to lock in returns for shareholders. Last year they began their strategy of selling off their considerable portfolio. At the time they owned approximately 19 residential and office properties located primarily in Manhattan with around 3.3 million square feet in leasable space.

Share price in NYRT slid 6% to $6.88 at the close of November 9th, 2017. Analysts had estimated $11 as a low case for distributions, however management revealed the final number to be $7.93 per share.

Target: AuRico Metals Inc.

  • Industry: Metals & Mining
  • Acquirer: Centerra Gold Inc. (TSX:CG)
  • Target: AuRico Metals Inc. (TSX:AMI)
  • Size: CAD $310 million
  • Consideration: Cash
  • Source of Funds: Cash, Senior Debt
  • Sell Side Advisor: Macquarie Capital
  • Buy Side Advisor: Scotia Capital
  • Legal Advisors: Fasken Martineau DuMoulin LLP; Stikeman Elliott LLP
  • Expected Close: Jan 2018

On November 7th, 2017, Centerra Gold (TSX:CG) (“Centerra”) entered into a definitive agreement to acquire AuRico Metals Inc. (TSX:AMI) (“AuRico”) from Alamos Gold Inc. (TSX:AGI) for approximately CAD 310 million ($1.80 per share). This represents a 38% premium to AuRico’s share price before the previous close. The acquisition will be financed in part using a new $125 million credit facility.

Centerra is a Canadian gold mining company with operations around the world including North America and Asia. This deal represents a low-risk opportunity to balance their portfolio and gain exposure to strengthening copper markets. They did a similar deal last year with their acquisition of Thompson Creek Metals, a US-based miner with the Mount Milligan copper-gold play in B.C.

AuRico Metals is a mining firm operating in Canada and Australia with a low-cost brownfield play in Kemess as well as royalty stakes with generous cash flows across the two countries. The Kemess property is a low-cost brownfield asset representing stable prospects and quality ore.

To better understand our M&A write-ups, please refer to the following:

Mergers & Acquisitions
Typical M&A Process Walkthrough
Types of M&A Auctions
Cash or Stock Consideration for M&A
Accretion/Dilution Part I: EPS, Earnings Yield & All-Stock Transactions

Accretion/Dilution Part II: Math and Breakeven Premiums

Accretion/Dilution Part III: Using Debt for Acquisitions
Accretion/Dilution Part IV: Synergies & Sources of Funds

Will is an economics and accounting student from UBC. He is currently a corporate finance intern at Dassault Systemes and has previously worked in equity research for Canalyst. Outside of school, he is an alpine ski racer in the winter and a triathlete in the summer.

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