Onex Corporation
TSX : ONEX

Onex Corporation

August 10, 2017 07:58 ET

Onex Reports Second-Quarter 2017 Results

TORONTO, ONTARIO--(Marketwired - Aug. 10, 2017) -

All amounts in U.S. dollars unless otherwise stated

Onex Corporation (TSX:ONEX) today announced its consolidated financial results for the second quarter and six months ended June 30, 2017 and an update on matters following quarter-end.

Highlights

  • We completed 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 34%. Onex' portion of the net sale proceeds was $563 million, including $65 million of carried interest.
  • We sold 15.7 million shares of JELD-WEN (NYSE:JELD) in a secondary public offering at $30.75 per share, compared to the recent IPO at $23.00 per share. Onex' portion of the net proceeds was $135 million, including $20 million of carried interest.
  • Having launched fundraising for Onex Partners V in April, we held a first close in July, raising aggregate commitments of $5.2 billion towards our $6.5 billion target, including $2.0 billion from Onex.
  • In May, we held a first close for our direct lending platform fund, reaching aggregate commitments of approximately $290 million towards our $500 million target, including $100 million from Onex.
  • Laurence Goldberg joined as a Managing Director in the New York office to lead Onex Partners' investing activities in the technology sector.
  • We priced our thirteenth U.S. collateralized loan obligation ("CLO") for approximately $610 million.
  • In the first seven months of 2017, approximately 886,005 of Subordinate Voting Shares ("SVS") were repurchased for a total cost of $64 million (C$85 million), or an average cost per share of C$95.35.

Recent Performance

"It is interesting to note that due to a substantial amount of prior charges being reversed in the quarter, Onex reported an after-tax profit of $2.7 billion. Although not a typical area of focus, the result was a significant increase in shareholder capital," said Gerry Schwartz, Chairman and Chief Executive Officer of Onex.

Mr. Schwartz added, "Given our strong balance sheet and liquidity position coupled with our recent fundraising success in both our private equity and credit platforms, we've never been in a better position to invest. We remain disciplined and continue to employ the same investing strategies we've had success with for decades."

In addition to $2.0 billion of cash and near-cash, Onex has $5.6 billion of uncalled committed capital available from limited partners. This capital base provides Onex with the strength and flexibility to invest in opportunities that lie ahead.

Onex management continues to share in the risks and rewards of our businesses through the team's significant investment in everything Onex owns. At June 30, 2017, the team has approximately $2.1 billion invested in the 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 June 30, 2017 the company's capital per share increased by 12% to $62.50 and our fee-generating assets increased by 2% to $15.1 billion. This figure excludes limited partner capital of $3.1 billion from the first close of Onex Partners V. Over the last five years, Onex' capital per share grew 11% per year and our fee-generating assets grew by 13% 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 our fund investors. For the twelve months ended June 30, 2017 our share price increased by 31% (also 31% in Canadian dollars).

Onex paid a second-quarter dividend of C$0.075 per SVS on July 31, 2017 to shareholders of record on July 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 second quarter, revenues increased by 48% to $6.2 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 Analytics, Parkdean Resorts, Save-A-Lot and WireCo. Net earnings for the second quarter of 2017 were $2.7 billion compared to $367 million in the same quarter of 2016. This increase in net earnings was driven by $3.3 billion of gains from the loss of control over JELD-WEN and the sale of USI, partially offset by an increase in the limited partners' interest charge. The gains recognized for JELD-WEN and USI include a recovery of the previously recognized limited partners' interest charges associated with these investments. Excluding the impact of the limited partners' interest, the gains are approximately $875 million.

On a consolidated basis for the six months ended June 30, 2017, revenues increased 46% to
$11.9 billion as compared to the same period of the prior year. Onex reported consolidated net earnings of $1.7 billion during the first half of 2017 compared to $192 million in the same period of 2016. The same factors that contributed to the second-quarter increases in revenues and earnings drove the increase in earnings for the first half of 2017.

Attached are the unaudited Consolidated Balance Sheets, Statements of Earnings, Statements of Cash Flows and information by industry segment for the three and six months ended June 30, 2017 and 2016. The complete financial statements as prepared under International Financial Reporting Standards applicable to the preparation of interim financial statements, and 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' second-quarter results on Thursday, August 10 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 $24 billion of assets under management, including $7 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 $44 billion, generate annual revenues of $30 billion and employ approximately 163,000 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 Q2 2017 Financial Statements.

Contact Information

  • Onex Corporation
    Laura Carrigan
    Director, Investor Relations
    416.362.7711