Counsel Corp (TSX: CXS) has divested most of the core holdings of Knight’s Bridge Capital Partners Fund, the mid-market private equity fund managed by its subsidiary Knight’s Bridge Capital Partners (KBCP). Significant holdings which have been sold or are available for sale include Authentic Brands Group LLC, which KBCP and Leonard Green & Partners backed in 2010. KBCP exited Authentic Brands in 2014, along with Polaroid Corp. The remaining significant fund asset is an interest in Robert Graham Designs LLC. The Toronto-based Counsel announced in 2013 that it planned to divest its non-core businesses in order to focus exclusively on financial services.
Counsel Announces Progress on Winding Down Knight’s Bridge Portfolio
TORONTO, Feb. 9, 2015 /CNW/ – Counsel Corporation (“Counsel” or the “Company”) (TSX: CXS), a financial services company, today announced that it has successfully divested most of the core holdings in the Knight’s Bridge Capital Partners Fund (the “KBCP Fund”), which is managed by its wholly-owned private equity subsidiary, Knight’s Bridge Capital Partners Inc. (“Knight’s Bridge”).
The monetization of the KBCP Fund portfolio has occurred on or ahead of schedule and has generated positive returns for Counsel’s shareholders and third party investors in the Fund. Significant holdings which have been sold or are available for sale include Authentic Brands Group LLC, which Knight’s Bridge exited in August, 2014; Polaroid Corp., which was exited in December, 2014; and TubeMogul (TUBE-N), which became available for exit on January 14, 2015, after the expiry of the KBCP Fund’s hold period following TubeMogul’s IPO in July, 2014. The remaining significant holding in the Fund is its interest in Robert Graham Designs, LLC, a high end apparel company.
For the nine months ended September 30, 2014, Counsel recorded a fair value appreciation of $17.8 million ($7.1 million net of third party investors’ interest) related to the KBCP Fund, which it consolidates, compared to $10.1 million ($3.2 million net of third party investors’ interest) for the year ended December 31, 2013.
In 2013, Counsel announced it would begin to divest its non-core businesses in order to focus exclusively on financial services, specifically residential mortgages, through its wholly owned subsidiary Street Capital Financial Corporation (“Street Capital”). Street Capital’s portfolio of mortgages under administration grew by 46% in 2013 and by 17% for the first nine months of 2014. Street Capital is currently the 4th largest lender in the mortgage broker channel.
“Our strategy of monetizing our private equity investments has been successful, with our shareholders and Fund investors realizing significant capital appreciation,” noted Allan Silber, CEO of Counsel Corporation. “Our plan to realign the Company’s focus solely on financial services through Street Capital is essentially complete. Looking ahead, we expect our strong market position and disciplined approach to lending to drive further positive results.”
Since January 2013, Counsel has successfully divested its non-core holdings in Terra Firma Capital Corporation, Heritage Global, Inc. and Fleetwood Fine Furniture, as well as its real estate investments.
About Counsel Corporation (www.counselcorp.com)
Counsel Corporation (TSX: CXS) is a financial services company operating in residential mortgage lending through its wholly owned subsidiary, Street Capital Financial Corporation, one of the largest non-bank mortgage lenders in Canada.
The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical facts, which address Counsel Corporation’s expectations, should be considered as forward-looking statements. Such statements are based on knowledge of the environment in which Counsel Corporation currently operates, but because of the factors listed herein, as well as other factors beyond Counsel Corporation’s control, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that may cause actual results to differ from anticipated results include, but are not limited to, obtaining necessary approvals and other risks detailed from time to time in the Company’s securities and other regulatory filings.
SOURCE Counsel Corporation
For further information: Counsel Corporation: Stephen Weintraub, EVP, Secretary & CFO, firstname.lastname@example.org, Tel: (416) 866-3058; TMX Equicom: Jennifer Wood, email@example.com, Tel: (416) 815-0700 ext. 226
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