Cheung Kong Property Holdings Limited (CKP), controlled by Victor Li, the elder son of Hong Kong billionaire Li Ka-shing, agreed to acquire Canada’s Reliance Home Comfort from Greenwich, Conn.-based private equity firm Alinda Capital Partners for C$2.82 billion (USD$ 2.11 billion) in cash, including the assumption of Reliance existing debt.
Reliance owns a portfolio of Canadian heating, ventilation and air conditioning (HVAC) equipment primarily leased to over 1.7 million residential and commercial customers.
“We are thrilled to have CKP as our new investment partner. This acquisition will continue to support our offerings to our customers,” said Sean O’Brien, President & CEO, Reliance. “We believe that CKP will help accelerate the momentum we have generated over the last few years where Reliance experienced strong business results over that time.”
“We have been proud owners of Reliance since June 2007 when we took private the income trust UE Waterheater Income Fund,” said Alinda’s Managing Partner Chris Beale. “The company has been well led by its management team and its team members have provided exceptional customer service. We believe Reliance and its customers will be in great hands with CKP as the new owners.”
Alinda has over $9 billion in assets under management, primarily invested in infrastructure businesses in the United States, Canada, the United Kingdom, Germany, the Netherlands, Belgium and Poland.
“I am very happy about the Reliance acquisition. With my close ties in the country, I have always been on the lookout for sizeable investments back in Canada,” said Victor Li, Managing Director of CKP and co-Chairman of Husky Energy Inc. “For our Group, Canada has always been an important market. We have had very positive experiences nurturing Canadian businesses like Husky Energy and Park’N Fly.”
The Li family trust has a substantial investment portfolio in Canada. In addition to Husky Energy, other Canadian businesses in their investment portfolio include Park’N Fly, Canadian Power Holdings Ltd, Wex Pharmaceuticals and Santé Naturelle AG. CKP is rated A2 by Moody’s and A- by S&P and Fitch.
Upon completion, Reliance is expected to continue being based in Ontario with the existing executive team managing the business. The deal is subject customary approvals under the Investment Canada Act and the Competition Act.
Goldman, Sachs & Co. served as Alinda’s lead financial advisor and CIBC Capital Markets served as Alinda’s financial co-advisor. Torys LLP served as Alinda’s legal counsel.
Photo: Victor Li and Li Ka-shing. (South China Morning Post)