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

Target: Atrium Innovations Inc.

• Industry: Consumer & Retail
• Acquirer: Nestlé Health Science S.A.
• Target: Atrium Innovations Inc.
• Size: USD 2.3 billion
• Consideration: 100% Cash
• Sourceof Funds: Not Disclosed
• Sell Side Advisors: Morgan Stanley, RBC, William Hood & Company
• Buy Side Advisors: Not Disclosed
• Legal Advisors: Skadden, Arps, Slate, Meagher & Flom LLP; Stikeman Elliott LLP
• Expected Close: Q1 2018

On December 5, 2017, it was announced that Nestlé Health Science S.A. (“Nestlé”) had agreed to acquire Atrium Innovations Inc. (“Atrium”) from Permira Advisers Ltd., Fonds de solidarité FTQ and Caisse de dépôt et placement du Québec for USD 2.3 billion in cash.

Atrium is a health and nutrition developer with a wide product mix including multi-vitamins, fish oils, antioxidants, and other specialty supplements. In 2017 they reached just under USD 700 million in top line sales. At deal close, Atrium will become an independent operating division within the Nestlé Health Science business unit. The company’s full 1,400 employees will be fully absorbed into Nestle and the management structure will remain untouched. Their largest brand, Garden of Life, is the top brand in the American natural supplement industry

For Nestlé this represents growth opportunities in the consumer healthcare space which complements their focus on food and beverage. The diversified product mix and R&D assets are a snug strategic fit moving forwards.

Target: Hyperion Insurance Group Limited

• Industry: Financial Institutions
• Acquirer: Caisse de dépôt et placement du Québec
• Target: Hyperion Insurance Group Limited
• Size: USD 400 million
• Consideration: 100% Cash
• Source of Funds: Cash
• Sell Side Advisor: Morgan Stanley
• Buy Side Advisor: Not Disclosed
• Legal Advisors: Weil, Gotshal & Manges; Linklaters LLP
• Expected Close: Q4 2017

On December 4, 2017, it was announced that Hyperion Insurance Group Limited (“Hyperion”) would receive USD 400 million in an equity round funding by Caisse de dépôt et placement du Québec (“CDPQ”). This represents a significant long-term minority stake in the group, making CDPQ a growth partner alongside General Atlantic. Hyperion management and employees will remain the largest shareholders of the company.

Hyperion is an international insurance group, housing the brokerages of Howden and RKH as well as the underwriting division Dual. In addition to this cash injection, they will be launching a debt refinancing program which will give them the balance sheet they need to execute on their medium term growth strategy. Last fiscal year ended September 30, 2017, Hyperion did EUR 152m in EBITDA.

Target: Goodman Hong Kong Logistics Partnership

• Industry: Real Estate
• Acquirer: Canada Pension Plan Investment Board
• Target: Goodman Hong Kong Logistics Partnership
• Size: CAD 320 million
• Consideration: Not Disclosed
• Source of Funds: Not Disclosed
• Sell Side Advisor: Not Disclosed
• Buy Side Advisor: Not Disclosed
• Legal Advisors: Not Disclosed
• Expected Close: December 7, 2017

On December 7, 2017, Canada Pension Plan Investment Board (“CPPIB”) acquired an interest in Goodman Hong Kong Logistics Partnership (“GHKLP”) for CAD 320 million. This move was part of an overall strategy of increasing exposure to the international logistics sector with the rise of online shopping.

GHKLP has 13 assets worth approximately CAD 4.7 billion including a 50% stake in Goodman Interlink – which is co-owned by CPPIB. Since it was created in 2006, GHKLP has seen strong performance and success in Asia, particularly because of tailwinds from rising demand for Hong Kong real estate.

Target: NAPEC Inc.

• Industry: Industrials
• Acquirer: Oaktree Capital Management L.P.
• Target: NAPEC Inc.
• Size: CAD 320 million
• Consideration: Cash
• Source of Funds: Not Disclosed
• Sell Side Advisor: National Bank
• Buy Side Advisor: Not Disclosed
• Legal Advisors: Stein Monast LLP; Stikeman Elliott LLP; Kirkland & Ellis LLP; McCarthy Tétrault LLP
• Expected Close: Q1 2018

On December 4, 2017, Oaktree Capital Management L.P. (“Oaktree”) entered into a definitive agreement to acquire NAPEC Inc. (TSX:NPC) (“NAPEC”) for approximately CAD 320 million with assumption of debt. NAPEC shareholders will receive CAD 1.95 in cash per share as consideration – representing a premium of 43.9% to the 20-day volume weighted average price on the TSX.

NAPEC is an industrial services company providing construction and maintenance services for the North American markets. The price values the company at an Implied EV/LTM EBITDA of 9.9x.

As the news broke, shares in NAPEC pushed past $1.95 to $2.00, closing at $1.99 at December 11, 2017.

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