Our global M&A roundup can be found here. Our past Canadian M&A roundups can be found here.

Target: Civica Group Limited

• Industry: Technology, Media & Telecom
• Acquirer: Partners Group, on behalf of its client
• Target: Civica Group Limited
• Size: £1.1 billion
• Consideration: 100% Cash
• Source of Funds: Not Disclosed
• Sell Side Advisors: Goldman Sachs, Nomura International
• Buy Side Advisor: Not Disclosed
• Legal Advisor: Weil Gotshal
• Expected Close: Not Disclosed

Partners Group, on behalf of its client, has agreed to acquire a majority stake in Civica Group Limited from OMERS Private Equity for £1.1 billion on July 24, 2017.

The deal was solicited and friendly. Back in May 2013, OMERS Private Equity acquired a majority stake and Civica’s management acquired a minority stake in the company for a enterprise value of £390 million. This represents a 4.23 year investor holding period and a 2.6x money multiple for OMERS Private Equity.

OMERS successfully integrated 12 highly complementary businesses, expanding the company’s breadth and quality of offerings. Partners Group will continue to work with Civica’s management team to expand Civica both organically and through acquisitions.

Civica is a leading UK-based provider of specialist software, digital solutions and outsourcing services. Partners Group will focus on expanding Civica’s current position in international markets such as Australia, New Zealand, Singapore, and North America.

Target: Traditional Carbonated Soft Drinks & Juice business from Cott Corporation

• Industry: Consumer & Retail
• Acquirer: Refresco Group N.V. (ENXTAM:RFRG) ; Refresco US Holding Inc.
• Target: Traditional Carbonated Soft Drinks & Juice business from Cott Corporation
• Size: $1.3 billion
• Consideration: 100% Cash
• Source of Funds: Senior Debt
• Sell Side Advisor: Barclays
• Buy Side Advisors: J.P. Morgan, KPMG Advisory
• Legal Advisors: CMS Cameron McKenna Nabarro Olswang LLP, Drinker Biddle & Reath LLP, Allen & Overy LLP, Nixon Peabody LLP
• Expected Close: Q4 2017

Refresco Group N.V. and its subsidiary, Refresco US Holding Inc., entered into a definitive agreement to acquire the traditional carbonated soft drinks (CSD) and juice business from Cott Corporation for $1.3 billion (€1.1 billion) on July 24, 2017.

The transaction structure includes the sale of the company’s assets as well as the sale of the stock from the operating subsidiaries engaged in the CSD and juice business. Refresco values the business at an implied EV/EBITDA of 8.6x (excluding synergies) and will finance the transaction with senior debt from its bank.

The CSD and juice business operates in the US, Canada, Mexico and UK. However, the sale does not include the water & coffee solutions business (i.e. DS Services, Eden Springs, Aquaterra, and S&D Coffee & Tea), its Aimia Foods business in the UK, and the RCI global concentrate business. 30% of of Cott’s business will be integrated into Refresco, which will maintain the same leadership team.

As a result of the transaction, Refresco will acquire 19 production sites in the US, 4 in Canada, 1 in Mexico and 5 in the UK with a combined yearly production volume of 12 billion liters. The deal will also provide a synergy potential of €47 million over the next 3 years from improvements to procurement, operational efficiencies, and reduction of overhead expenses. The combined company will also have significant global scale and reach to 12 countries over 2 continents.

The transaction will reduce Cott’s leverage to below 3.5x net debt to 2017 pro forma adjusted EBITDA as the proceeds from the sale will be used to pay off the remaining $250 million of 10% DS senior secured notes, $525 million of 5.375% notes, and pay off Cott’s asset-based lending facility.

The sale will allow Cott’s to shift its focus to the growing categories of water, coffee, tea and filtration. Bottled water consumption has already surpassed soda consumption in the US when comparing the average gallons consumed per year by Americans. The trend towards bottled water steams from increased consumer awareness to the health impact and high sugar content in soda.

Target: ShoreTel, Inc. (NasdaqGS:SHOR)

• Industry: Technology, Media & Telecom
• Acquirer: Mitel Networks Corporation (Nasdaq:MITL, TSX:MNW)
• Target: ShoreTel, Inc.
• Size: $432 million
• Consideration: 100% Cash
• Source of Funds: Cash, Debt
• Sell Side Advisor: J.P. Morgan
• Buy Side Advisors: EA Markets LLC, Jefferies LLC
• Legal Advisors: Osler, Hoskin & Harcourt LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Fenwick & West LLP
• Expected Close: Q3 2017

Mitel Networks Corporation entered into a definitive merger agreement to acquire ShoreTel Inc. for a total enterprise value of $432 million on July 26, 2017. The transaction includes a $531 million consideration to shareholders, $6 million in options, and $104 million in cash and short term investments.

The all cash transaction will pay a consideration of $7.50 per ShoreTel share at an implied EV/EBITDA of 42.7x and an implied P/E multiple of 110.3x.

Mitel will finance the deal with a combination of cash on hand, its existing revolving credit facility and proceeds from a new $300 million term loan maturing in 2023. BMO Capital Markets is leading the new term loan facility. Mitel has also amended the current $146 million term loan and $350 million revolving credit facility to accommodate for the acquisition.

The combined company will be headquartered in Ottawa, Canada, and will operate as Mitel. The deal will generate $60 million in cost synergies over the next two years by optimizing cost of goods sold, R%D, sales, marketing, G&A and other costs such as elimination of duplicate facilities. Mitel has a track record for meeting target synergies and going above and beyond in some cases.

The transaction will also expand the combined company’s customer base to serve small, mid, and large enterprises with a strong focus on the EMEA region and North America. The deal will result in 39% of the combined company’s revenue derived from reoccurring cloud services and will accelerate growth for this business segment. Mitel is also looking to accelerate development in technology and next-gen applications.