PE Deals

OMERS buys Caliber Collision, ONCAP takes home 7.5 times its investment

By
Brad Meikle
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OMERS Private Equity, the investment arm of the Ontario Municipal Employees Retirement System, has acquired Caliber Collision Centers Inc – ending recent speculation about the identity of the buyer of the ONCAP portfolio company. Other private equity firms believed to have been interested in acquiring Caliber included Berkshire Partners and Blackstone Group.

While the financial terms of the OMERS acquisition were not published, net cash proceeds to ONCAP were earlier estimated to be around US$425 million.

The sponsor-to-sponsor transaction appears to be a win-win for the two Canadian private equity firms.

For ONCAP, the mid-market platform of Toronto-based Onex Corp, the exit provides a multiple of capital invested of about 7.5 times. ONCAP originally invested US$58 million in Lewisville, Texas-based Caliber, which operates non-franchised collision repair service facilities across the United States. The ONCAP investment was part of a management buyout led by the firm in Oct. 2008.

According to ONCAP’s website, the 2008 deal aimed at supporting Caliber’s expansion in existing markets, its entrance into new markets, and its ability to take advantage of sector consolidation opportunities. The company appears to have made clear gains in this regard over the past five years. For example, this month Caliber announced the acquisition of nine Global Collision locations in the area of Denver, Colorado, further increasing the number of facilities owned and operated by it to 157. Five years ago, the company had 66 facilities.

For OMERS, the acquisition promises continued upside as Caliber enters its next phase of growth.
“We believe that Caliber will continue to distinguish itself as the market leader in the highly fragmented collision repair industry in the years ahead,”  said OMERS’ senior managing partner Tim Patterson.
Perhaps for this reason, ONCAP managing partner Michael Lay called this week’s deal “a great outcome for everyone involved.”
Penfund, the Toronto-based provider of junior capital to mid-market companies, is another winner here. Penfund invested US$34 million in Caliber around the time of the 2008 management buyout.
Photo courtesy of Shutterstock