TORONTO, ONTARIO — (Marketwired) — 05/10/13 — All amounts in U.S. dollars unless otherwise stated
Onex Corporation (“Onex”) (TSX: OCX) today announced its consolidated financial results for the first quarter ended March 31, 2013 and an update on matters following quarter-end.
Highlights
Acquiring and Building Businesses
“After investing $1.5 billion in five businesses in the fourth quarter of last year, we have been busy working with our management teams to execute our investment plans,” said Gerald W. Schwartz, Chairman and Chief Executive Officer of Onex. “The first couple of years following an acquisition are often the busiest for Onex. For each of the five businesses just acquired, we have a specific plan for improvement and growth.”
“As we build value at our existing businesses, we also continue to look for new acquisition opportunities. Earlier this week, we announced the acquisition of Nielsen Expositions from its parent company,” said Mr. Schwartz. “Corporate carve-outs are probably our favourite type of transaction, and we believe that this business will be in a stronger position to grow as a stand-alone company under our ownership.”
Based in San Juan Capistrano, California, Nielsen Expositions produces more than 65 business-to-business tradeshows and conference events each year across nine diversified end-markets. Its strength is evidenced by its high renewal rates, long-standing exhibitor relationships, and the brand strength of the underlying shows. Onex Partners III will make an equity investment of approximately $350 million, of which Onex- share is approximately $85 million as a Limited Partner in the Fund. The transaction is anticipated to close in the second quarter, subject to customary closing conditions.
By transforming good businesses into industry leaders, Onex has generated a 29-year gross IRR of 28% and an average multiple of 2.8 times invested capital from realized, substantially realized and publicly traded investments.
At Onex, we all share in the success and failure of our operating companies through the team-s significant investment in everything we buy. At March 31, 2013, the value of the team-s investment in Onex- businesses and its shares was approximately $1.8 billion.
Managing and Growing Third-Party Capital
Onex earns recurring management fees and/or carried interest on $9.4 billion of third-party assets under management. In 2012, combined management fees and carried interest received offset ongoing operating expenses.
At March 31, 2013, the value of Onex- unrealized carried interest was approximately $58 million based on the traded market values of Onex Partners- public companies and a further $104 million based on the quarter-end valuations of the private businesses. The amount of carried interest ultimately realized by Onex depends on the overall performance of each Fund.
Including the pending acquisition of Nielsen Expositions, Onex Partners III will be more than 90% invested. We are in a position to begin fundraising for Onex Partners IV sometime this year.
We continue to grow our credit investing platform. In March, Onex Credit Partners completed its third CLO offering, raising $512 million, including $24 million from Onex. This increased Onex Credit Partners- third-party capital under management to $2.3 billion. As market conditions permit, we expect Onex Credit Partners to launch additional CLOs, which would represent an additional source of recurring management fees to Onex.
Creating Value for Shareholders
Over time, we hope that the value of Onex- shares reflects both growth in the value of our assets and the intrinsic value of our asset management capabilities. At March 31, 2013, Onex- Subordinate Voting Shares closed at C$48.44, a 16% increase from December 31, 2012. This compares to a 10% increase in the S&P 500 and a 3% increase in the S&P/TSX Composite Index.
The Company paid a first-quarter dividend of C$0.0275 per Subordinate Voting Share on April 30, 2013 to shareholders of record on April 10, 2013. On May 9, Onex- Board of Directors approved a 36% increase in the quarterly dividend to C$0.0375 per Subordinate Voting Share, reflecting the Company-s success and ongoing commitment to its shareholders. The increased dividend is payable on July 31, 2013 to shareholders of record on July 10, 2013.
In the first four months of 2013, Onex repurchased 945,400 Subordinate Voting Shares under its Normal Course Issuer Bids for a total cost of C$42 million or an average cost per share of C$44.41.
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 6% to $7.2 billion compared to the same period of the prior year. Onex reported a consolidated net loss of $271 million compared to net earnings of $173 million in the first quarter of 2012. Cash used in operations was $68 million in the first quarter of 2013 compared to $263 million of cash generated from operations in the same period of 2012.
Attached are the Unaudited Interim Consolidated Balance Sheets, Statements of Earnings, Statements of Cash Flows and information by industry segment for the quarter ended March 31, 2013 and 2012 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, , and are also available on SEDAR at . Also attached is the “How We Are Invested” schedule, which details Onex- $5.1 billion of proprietary capital and provides private company performance information.
Webcast
Onex management will host a conference call to review Onex- first-quarter 2013 results on Friday, May 10 at 11:00 a.m. ET. A live webcast of this conference call will be available in listen-only mode on its website, .
About Onex
With offices in Toronto, New York and London, Onex is one of the oldest and most successful private equity firms. Onex acquires and builds high-quality businesses in partnership with talented management teams. The Company has approximately $16 billion of assets under management, including $5 billion of proprietary capital, in private equity, credit securities and real estate. Onex invests its proprietary capital directly and as a substantial limited partner in its Funds.
Onex- businesses have assets of $44 billion, generate annual revenues of $37 billion and employ approximately 243,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. For more information on Onex, visit its website at . The Company-s security filings can also be accessed at .
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.
The securities sold in the third CLO offering have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration under that Act. Any future CLO offerings will be made in similar private placement transactions subject to the same restrictions.
Contacts:
Onex Corporation
Emma Thompson
Vice President, Investor Relations
416.362.7711