‘SIG’s management team has successfully proven its ability to enter and grow in new markets,’ Nigel Wright said in a statement released by Onex on Monday.ADRIAN WYLD/The Canadian Press
Nigel Wright hasn't wasted any time getting back in the deal mix with two Onex Corp. transactions valued at nearly $5-billion.
Three months after he moved to Onex's London office and more than a year after he resigned as Prime Minister Stephen Harper's chief of staff under the cloud of a Senate expenses scandal, Mr. Wright's fingerprints are evident on both deals.
The first and biggest is a $4.66-billion acquisition of Switzerland-based food packaging maker SIG Combibloc Group AG. The deal is one of Onex's largest deals this year and sources familiar with the transaction said Mr. Wright led the acquisition team.
An Onex spokeswoman and Mr. Wright, an Onex managing director, could not be reached for comment. In a statement Onex released Monday, Mr. Wright trumpeted the acquisition. "SIG's management team has successfully proven its ability to enter and grow in new markets," he said.
The second, and less obvious, is a smaller investment in a Advanced Integration Technology (AIT), a Texas-based maker of high-end engineered parts for the aerospace sector. Onex did not disclose many details, including the value of the AIT investment. But for those who pay close attention to the the buyout company, the deal closely echos two other plays that consumed much of Mr. Wright's time before he left Bay Street for Ottawa in 2010.
Mr. Wright helped oversee Onex's ill-fated investment in Hawker Beechcraft Corp., a Kansas-based maker of aircraft that the buyout firm acquired with a Goldman Sachs affiliate in 2006 for nearly $4-billion (U.S.). Mr. Wright logged a lot of time at the Kansas company negotiating with unions and customers to modernize a company that was ultimately derailed by frail industry demand and shrinking U.S. military budgets. The company filed for bankruptcy protection and was later sold, forcing Onex to writedown some of its investment.
Onex and Mr. Wright had more success with its 2005 investment in Spirit AeroSystems, a U.S. maker of high-end engineering systems and service in the aerospace sector. Onex sold its remaining stake in Spirit earlier this year, logging what it said was a 200-per-cent gross return on its initial investment.
Onex Managing director Tawfiq Popatia lead the AIT investment, but it is a good bet the deal is rooted in the expertise and experience Mr. Wright assembled during his previous 13-year tenure at Onex before he left for Ottawa in 2010.
The SIG acquisition is a classic Onex play. The 163-year-old company, which once made railway cars, is a backroom supplier to a stable end market for milk and juice products. The long term play, according to insiders, is to transfer SIG's European market experience to emerging markets.
By making such a big bet on Europe, Onex joins other big Canadian funds looking for value investments in less competitive European and emerging markets. A number of major pension funds, including Canada Pension Plan Investment Board and Caisse de dépôt et placement du Québec have opened new offices in Europe, Asia and Latin America to diversify their investments away from North America.
Onex's legal adviser on the SIG takeover was Latham & Watkins LLP.