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Canadian M&A Roundup Nov 24, 2017 – BGL Group, East Tank Farm Development from Suncor

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

Target: BGL Group Limited

  • Industry: Financial Institutions
  • Acquirer: Canada Pension Plan Investment Board
  • Target: BGL Group Limited
  • Size: EUR 675 million
  • Consideration: Not Disclosed
  • Sourceof Funds: Not Disclosed
  • Sell Side Advisers: Not Disclosed
  • Buy Side Adviser: Not Disclosed
  • Legal Advisers: Not Disclosed
  • Expected Close: April 2018

On November 30, 2017, it was announced that Canada Pension Plan Investment Board (“CPPIB”) agreed to acquire a 30% stake in BGL Group (“BGL”) for EUR 675 million. This brings the post-money valuation of BGL to EUR 2.2 billion. BGL’s revenue for the previous fiscal year was reported EUR 585 million.

BGL is an insurance distributor in the United Kingdom with brands including BeagleStreet.com and Comparethemarket.com. This is a hit for the London Stock Exchange after a string of large deals broke up. The announcement by BGL’s owner, BHL Group, to float had previously excited investor appetite for a strong IPO. The British IPO market looks weak with a -13% YoY decline against the same period last year.

Target: East Tank Farm Development, Suncor

  • Industry: Energy
  • Acquirer: Fort McKay First Nation, Mikisew Cree First Nation
  • Target: East Tank Farm Development
  • Size: CAD 503 million
  • Consideration: 100% Cash
  • Source of Funds: Senior Debt
  • Sell Side Advisor: RBC Capital Markets
  • Buy Side Advisors: Not Disclosed
  • Legal Advisors: Not Disclosed
  • Expected Close: November 22, 2017

On November 22, 2017, Fort McKay First Nation (“FMFN”) and Mikisew Cree First Nation (“MCFN”) closed a deal with Suncor Energy Inc. (TSX:SU) (“Suncor”) to acquire a 49% stake in the East Tank Farm Development in Alberta. FMFN has a 34.3% stake while MCFN owns the remaining 14.7% stake. Once development has been finished, Suncor will remain the operator of the asset. The transaction will be financed through CAD 545 million of senior secured notes at 4.136%.

A tank farm is an oil depot, built to house liquid petroleum products. In the case of East Tank Farm, the facility would store bitumen from the Fort Hills oil sands project near Fort McMurray, Alberta. This is the largest deal ever made by a First Nation group in Canada.

The Fort McKay First Nation is an 800 member group located near Fort McMurray. They have a track record of successful operations with various mining companies in the area. The Mikisew Cree First Nation are located in Northeastern Alberta and have traditional lands spanning the majority of the Athabasca Oil Sands deposits.

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

William
William
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.
https://www.linkedin.com/in/williamlfip

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