File photo of the Onex Corp. logo.Nathan Denette/The Canadian Press
What do inflatable life rafts and food packages have in common?
More than a place in any well-stocked survival kit. Makers of both product lines now share the same parent: the limited partnership Onex Partners IV.
The fund, which is spearheading the foreign portfolio expansion of Toronto buyout firm Onex Corp., made its second European bet in two months Monday with an agreement to acquire British life raft and survival suit maker Survitec Group for $680-million (U.S.). The acquisition follows Onex's November agreement to buy Switzerland-based food packaging maker SIG Combibloc Group AG for $4.66-billion.
Onex joins a blue chip list of big Canadian pension funds and investors such as Fairfax Financial Holdings Ltd. which are betting that Europe's hot sellers market is cooling as central banks move to rein in credit.
"It's been a very competitive sellers market, now we are seeing a bit of a buyers market," said one person familiar with Onex's strategy.
The Onex Partners fund has raised more than $5-billion and future European investments are expected. Onex signalled its growing interest in Europe last summer when it transferred Nigel Wright, Prime Minister Stephen Harper's former chief of staff, to London to expand a team that has been handed a big budget. Industry sources said Onex managing director Tom Morgan lead the negotiations to acquire Survitec from private equity firm Warburg Pincus.
It is understood Warburg viewed Survitec as a mature investment after backing an ambitious four-year growth strategy, which included the 2014 takeover of offshore oil and gas rig service provider Newfoundland Marine Safety Systems.
While Onex's European push is new, it looks like the buyout firm will be sticking with its 30-year strategy of backing companies in the industrial products, service and technology industries. Survitec traces its history back to 1920 and made its name in the Second World War making inflatable life rafts and life preservers for the British Navy and Royal Air Force. Today it offers a broad range of marine and aerospace products ranging from survival suits to marine navigation systems.