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Canadian M&A Roundup Oct 6, 2017 – Abengoa, Omega Protein, West High Yield Resources,

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

Target: Abengoa SA., Atlantica Yield Plc Stake (NasdaqGS:ABY)

  • Industry: Power & Utilities
  • Acquirer: Brookfield Asset Management Inc. (TSX:BAM.A)
  • Target: Abengoa SA., Atlantica Yield Plc Stake (NasdaqGS:ABY)
  • Size: $830 million
  • Consideration: Not Disclosed
  • Source of Funds: Not Disclosed
  • Sell Side Advisers: Not Disclosed
  • Buy Side Adviser: Not Disclosed
  • Legal Advisers: Not Disclosed
  • Expected Close: Not Disclosed

On October 5, 2017, it was revealed that Brookfield Energy was in talks to buy Abengoa’s 41.5% stake in Atlantica Yield Plc. Brookfield is looking for a swift close in the coming weeks with the stake being valued at an approximate $830 million among competition from other bidders.

The U.K. Atlantica Yield Plc controls 1.44 GW of renewable energy assets (solar power and wind plants), 300 MW of conventional power capacity, electric transmission lines, and water assets (desalination plants). Categorized as a yieldco, Atlantica Yield is a growth oriented company designed to yield steady dividends and predictable cash flows.

If completed, this deal would be a key acquisition for Brookfield’s continued growth in alternative energy markets. In March, they acquired 51% of TerraForm Power, establishing a fully scaled position in solar utilities and distributed generation. The Atlantica Yield stake aligns with their growth strategy of leveraging operating knowledge to mitigate downside risk. Brookfield has a proven history of executing turnarounds for struggling yieldcos and producing well-timed returns. With $3 billion earmarked for investments in hydro, wind, and solar energy, this acquisition represents an attractive opportunity for Brookfield to further strengthen their alternative energy asset base.

Target: Omega Protein Corporation (NYSE:OME)

  • Industry: Consumer & Retail
  • Acquirer: Cooke Inc.
  • Target: Omega Protein Corporation (NYSE:OME)
  • Size: USD $510 million
  • Consideration: 100% Cash
  • Source of Funds: Not Disclosed
  • Sell Side Advisor: JP Morgan Securities
  • Buy Side Advisor: BMO Capital Markets, Deloitte LLP
  • Legal Advisors: Vinson & Elkins LLP; Kelley Drye & Warren LLP
  • Expected Close: Q4 2017

On October 6th, 2017, Cooke Inc. has entered into a definitive agreement with Omega Protein Corporation to acquire all outstanding shares for $22.00 per share at a 32.5% premium from October 5th’s close.

Omega Protein is a nutritional product company and a leader in North America’s omega-3 fish oil and specialty fish meal market. Their operations have a high degree of vertical integration which has helped them find success in the human, animal, and plant nutrition markets.  

Cooke Inc. is a private company that operates subsidiaries in aquaculture, wild fisheries, and seafood. Their operations stretch from the Atlantic coast of North America to Chile, Scotland, and Spain. With businesses spanning a broad spectrum of fishing related services and product lines, this acquisition diversifies the company’s portfolio by strengthening their position in the fish meal and dietary supplements market.

Target: West High Yield Resources Ltd (TSXV:WHY) – Record Ridge South, Midnight, and O.K. Mineral Properties

  • Industry: Metals & Mining
  • Acquirer: Gryphon Enterprises LLC.
  • Target: West High Yield Resources Ltd (TSXV:WHY) – Record Ridge South, Midnight, and O.K. Mineral Properties
  • Size: USD $750 million
  • Consideration: Not Disclosed
  • Source of Funds: Not Disclosed
  • Sell Side Advisers: Not Disclosed
  • Buy Side Adviser: Not Disclosed
  • Legal Advisers: Not Disclosed
  • Expected Close: October 2017

On October 5, 2017, Gryphon Enterprises LLC has signed a definitive agreement to buy 100% of West High Yield’s assets consisting of Record Ridge South, Midnight, and O.K. mineral properties for a price of USD $750 million.

West High Yield is a North American junior miner focused on developing its primary asset – a large deposit at Record Ridge. The property is a low cost high grade magnesium deposit in British Columbia with fully developed infrastructure in place.

Gryphon Enterprises is a privately owned company with holdings in diversified industries spanning financials, real estate, entertainment, biotech, hospitality, oil & gas, telecoms, and tech. Baker & McKenzie law firm is linked to Gryphon.

Shares of West High Yield soared as much as 1,000% after the deal was announced. As of October 6th, 2017, IIROC has suspended trading of West High Yield to investigate the company.

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

Mergers & Acquisitions
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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