Keep an eye out for our global M&A roundup, our past ones can be found here. Our past Canadian M&A roundups can be found here.

Target: Coast At Lakeshore East from Magellan Development Group

• Industry: Real Estate
• Acquirer: Morguard North American Residential Real Estate Investment Trust (TSX:MRG.UN)
• Target: Coast At Lakeshore East
• Size: $287.5 million (US$222.5 million)
• Consideration: 100% Cash
• Source of Funds: Internal Cash, Debt
• Sell Side Adviser: Not Disclosed
• Buy Side Adviser: Not Disclosed
• Legal Adviser: Not Disclosed
• Expected Close: Not Disclosed

Morguard North American Residential Real Estate Investment Trust acquired the Coast at Lakeshore East asset from Magellan Development Group for $287.5 million on July 10, 2017.

The transaction will be partially financed using $158.3 million of debt financing with a fixed term of eight years and an interest rate of 3.49%.

Coast at Lakeshore East is a residential real estate property located in a prime, high growth Chicago submarket by the Chicago River and was built in 2013. The 515-suite apartment is a LEED Silver candidate and includes 19,000 square feet of amenity space and 18,000 square feet of commercial retail space.

Magellan Development Group develops, constructs, and operates residential and commercial real estate properties. The Morguard North American Residential Real Estate Investment Trust was established in 2012 to invest in the Canadian and US residential real estate markets with a diversified portfolio of multi-suite residential rental properties.

Magellan’s decision to sell off the property stems from their strategic interests to sell off any non-core business assets. The deal presents an opportunity for Morguard to improve the asset’s cash flows by investing in building upgrades and potentially hiking up rents. Many new developments with premium amenities and finishes have intensified competition in the area.

Back in March of 2017, Miami developer Crescent Heights agreed to purchase the property for US $230 million. The deal fell through after the buyers and sellers could not agree on a final price.

Target: Pengrowth Energy Corporation, Olds/Garrington Area Assets in Central Alberta

• Industry: Oil & Gas
• Acquirer: Private Buyer
• Target: Pengrowth Energy Corporation, Olds/Garrington Area Assets in Central Alberta
• Size: $300 million
• Consideration: 100% Cash
• Source of Funds: Not Disclosed
• Sell Side Adviser: Not Disclosed
• Buy Side Adviser: Not Disclosed
• Legal Advisers: Not Disclosed
• Expected Close: August 1, 2017

Pengrowth Energy Corporation has entered into an agreement to sell off their Olds/Garrington area assets in Central Alberta to an undisclosed buyer for $300 million on July 11, 2017. The private buyer is owned by a large Canadian life insurance company.

The sale includes oil and gas facilities and gathering systems on the property and is expected to generate an average daily production of 13,875 barrels of oil equivalent per day (BOE/D) in 2017. As of December 31, 2016, the property has Proved plus Probable (2P) reserves of 78 million boe.

Pengrowth has been involved in various asset sales in order to pay down their debt with no debt maturities until 2018. After the deal closes, Pengrowth will focus their efforts on the Lindbergh thermal project and Groundbirch Montney play. These two assets will provide a long-term focus for the company and will provide $9.0 billion of low risk, high netback development opportunities.

Target: OnX Enterprise Solutions Ltd.

• Industry: Technology, Media and Telecom
• Acquirer: Cincinnati Bell Inc. (NYSE:CBB)
• Target: OnX Enterprise Solutions Ltd.
• Size: $199 million
• Consideration: 100% Cash
• Source of Funds: Debt
• Sell Side Advisers: Raymond James, Stephens Inc.
• Buy Side Advisers: Moelis, Morgan Stanley
• Legal Advisers: Cravath, Swaine & Moore LLP, Law Offices of Thomas W Bosse PLLC, Morgan, Lewis & Bockius LLP, Schulte Roth & Zabel LLP
• Expected Close: Q4 2017

Cincinnati Bell entered into a definitive merger agreement to acquire OnX Enterprise Solutions for $201 million on July 10, 2017.

The transaction will be financed through a $950 million senior secured Term Loan B and $150 million revolving credit facility committed from Morgan Stanley Senior Funding. The term loan has a maturity of seven years and the revolving credit facility has a maturity of five years. The deal values OnX at an implied EV/EBITDA of 6.9x.

The transaction will expand Cincinnati Bell’s product portfolio with storage, server and data center products and an improved geographic footprint in markets beyond Cincinnati. OnX will provide Cincinnati Bell with over 2,000 enterprise customers in the US, Canada, and the United Kingdom.

Cincinnati Bell’s investment into OnX fits into their view of the future of network as homes, people, and businesses become more connected through the Internet of Things and 5G networks. This will require robust and effective network solutions for customers who will become more dependent on networks for home automation, banking, and connecting with businesses.

The deal will also provide $8 million in annualized operating cost synergies due to improved operational efficiencies and $2 million in annualized vendor and outsourced cost synergies.

Cincinnati Bell will maintain separate management teams to focus their investment strategies on each business segment. Tom Signorello, CEO of OnX, will join Cincinnati Bell after the deal closes.

In a related transaction, Cincinnati Bell also entered into definitive merger agreement to acquire Hawaiian Telcom for $663 million on July 10, 2017. The deal will expand Cincinnati Bell’s fiber assets to provide customers with better speed, agility and security for data, video and internet devices. Post-acquisition, Cincinnati Bell will focus 50% of their efforts on their Network group and 50% on IT Services.