Onex Corporation
TSX : ONEX

Onex Corporation

May 12, 2017 07:00 ET

Onex Reports First-Quarter 2017 Results

TORONTO, ONTARIO--(Marketwired - May 12, 2017) -

All amounts in U.S. dollars unless otherwise stated

Onex Corporation ("Onex") (TSX:ONEX) today announced its consolidated financial results for the first quarter ended March 31, 2017 and an update on matters following quarter-end.

Highlights

  • We acquired Parkdean Resorts for £1.35 billion. Onex' share of the investment as a Limited Partner in the Fund and as a co-investor was $166 million.
  • We announced the sale of USI Insurance Services for an enterprise value of $4.3 billion, resulting in a gross multiple of capital invested of 3.4 times and a gross IRR of approximately 34%. Onex' portion of the sale proceeds will be approximately $563 million, including carried interest of $65 million.
  • We took JELD-WEN (NYSE:JELD) and Emerald Expositions (NYSE:EEX) public at enterprise values of approximately $3.5 billion and $1.8 billion, respectively. Onex' combined proceeds from the offerings were $72 million, including carried interest of $9 million. We continue to control and own majority stakes in both businesses. Based on yesterday's closing prices:
    • Onex' remaining stake in JELD-WEN is valued at $502 million and the multiple on invested capital, including prior distributions, is 3.0x our total investment; and
    • Onex' remaining stake in Emerald Expositions is valued at $274 million and the multiple on invested capital is 2.5x our total investment.
  • We completed our first European collateralized loan obligation for approximately EUR360 million. Our credit platform now manages approximately $8 billion.
  • We launched fundraising for Onex Partners V, targeting a fund size of $6.5 billion, of which Onex will be the largest limited partner with a commitment of approximately $2.0 billion.
  • In the first four months of 2017, 818,048 of Subordinate Voting Shares ("SVS") were repurchased for a total cost of $58 million (C$78 million), or an average cost per share of C$94.97.
  • Yesterday, Onex increased its quarterly dividend by 9% to C$0.075 per SVS beginning with the dividend declared by the Board of Directors payable in July 2017.

Recent Performance

"We've had a very good start to the year across both private equity and credit. Our successful realizations are testaments to the great businesses we've purchased and the value we have created in partnership with wonderful management teams," said Gerry Schwartz, Chairman and Chief Executive Officer of Onex. "We've also reached an important milestone with our credit platform through the pricing of our first European CLO."

Onex remains in an excellent position to capitalize on investment opportunities. In addition to $1.4 billion of cash and near-cash, the company has approximately $2.0 billion of uncalled committed capital available from limited partners.

Onex management continues to share in the risks and rewards of our businesses through the team's significant investment in everything Onex owns. At March 31, 2017, the team had an investment of $2.0 billion in underlying private equity operating businesses, credit funds and Onex shares.

Creating Value for Shareholders

We create value for shareholders by growing both our capital per share and our fee-generating assets. For the twelve months ended March 31, 2017, the company's capital per share increased by 10% to $60.77 and our fee-generating assets increased by 9% to $16.3 billion. The growth in our fee-generating assets was primarily driven by the successful fundraise of ONCAP IV and growth at Onex Credit. Over the last five years, Onex' capital per share grew 9% per year and our fee-generating assets grew by 14% per year.

Over the long term, we believe Onex' shares will reflect both the growth in the value of our investments and the growing contribution from managing investments for limited partners and other investors. For the twelve months ended March 31, 2017 our share price increased by 18% (21% in Canadian dollars).

Onex paid a first-quarter dividend of C$0.06875 per SVS on April 28, 2017 to shareholders of record on April 10, 2017.

Consolidated Results

Onex' quarterly and full-year consolidated financial results do not follow any specific trends due to acquisitions and dispositions of businesses, changes in the value of its publicly traded and privately held operating companies and varying business cycles at its operating companies.

On a consolidated basis for the first quarter, revenues increased by 38% to $6.5 billion compared to the same period of the prior year. The increase was largely due to the inclusion of revenues from the acquisitions of Clarivate, Save-A-Lot and WireCo. Net loss for the first quarter of 2017 was $937 million compared to a net loss of $175 million in the same quarter of 2016. This increase in net loss was driven by two accounting charges. The $519 million limited partners' interest charge primarily reflects the fair value increase of our operating companies ultimately attributable to our limited partners. The $104 million loss from discontinued operations stems from a fair value increase of USI Insurance Services that required a mark-to-market charge in respect of the USI Insurance Services' employee equity plans. Both of these charges would be expected to reverse as gains in Onex' income statement if the relevant operating companies were ultimately sold at their current fair market values.

Attached are the Consolidated Balance Sheets, Statements of Earnings, Statements of Cash Flows and information by industry segment for the quarters ended March 31, 2017 and 2016 as prepared under International Financial Reporting Standards. The complete financial statements, including Management's Discussion and Analysis of the results, are posted on Onex' website, www.onex.com, and are also available on SEDAR at www.sedar.com. A supplemental information package, which includes the How We Are Invested schedule, Schedules of Fees and Expenses and additional information, is available on Onex' website, www.onex.com.

Webcast

Onex management will host a conference call to review Onex' first-quarter results on Friday, May 12 at 11:00 a.m. ET. A live webcast of this conference call will be available in listen-only mode on its website, www.onex.com.

About Onex

Onex is one of the oldest and most successful private equity firms. Through its Onex Partners and ONCAP private equity funds, Onex acquires and builds high-quality businesses in partnership with talented management teams. At Onex Credit, Onex manages and invests in leveraged loans, collateralized loan obligations and other credit securities. Onex has approximately $25 billion of assets under management, including $6 billion of Onex proprietary capital, in private equity and credit securities. With offices in Toronto, New York, New Jersey and London, Onex invests alongside its fund investors and is the largest limited partner in each of its private equity funds.

Onex' businesses have assets of $46 billion, generate annual revenues of $31 billion and employ approximately 166,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol ONEX. For more information on Onex, visit its website at www.onex.com. Onex' security filings can also be accessed at www.sedar.com.

This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

Please click here to view the Onex Q1 2017 Financial Statements.

Contact Information

  • Onex Corporation
    Laura Carrigan
    Director, Investor Relations
    416.362.7711