ONCAP, the mid-market private equity arm of Onex Corp, has made its first new investment in a year, agreeing to acquire commercial roofing company Tecta America for about US$130 million.
The deal, announced today by Onex, was struck this month by ONCAP III in partnership with other investors and the company’s management team.
(Update: Following the publication of this story, ONCAP said it agreed to buy Tecta for US$280 million. The firm and its partners will invest about US$130 million of equity in the deal.)
The seller is Oaktree Capital Management, a U.S. private equity firm. Oaktree bought Tecta for an undisclosed sum in July 2013.
Founded in 2000, Rosemont, Illinois-based Tecta is one of the largest roofing contractors in the United States. Operating from more than 50 locations across North America, it provides installation, replacement and repair services. The company is led by President and CEO Mark Santacrose.
Tecta is ONCAP’s first platform investment since mid-2015, when the firm acquired stakes in Chatters Canada, a specialist in hair-care products and services, and Ingersoll Tools Group, a maker of agricultural-equipment components.
ONCAP also closed a major add-on deal last year, partnering with the founders of portfolio company Mavis Tire Supply to buy Somerset Tire Service, a U.S. tire retailer.
The Tecta acquisition, expected to close in the third quarter, will bring the number of operating companies in ONCAP III’s portfolio to eight.
Buyouts reported in May that Onex was preparing to launch ONCAP IV, since its predecessor was approaching full investment. Onex did not give a target size for the new fund.
ONCAP III, which raised $800 million in September 2011, is currently more than 75 percent invested.
At the end of June, ONCAP III’s portfolio was showing a gross return of 28 percent and a net return of 18 percent, Onex noted in its second-quarter 2016 report. In the same period it was showing a gross multiple of 2x invested capital and a net multiple of 1.6x.
Both Onex and ONCAP have headquarters in Toronto.
Photo courtesy of Tecta America Corp