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Oaktree Capital Management funds to acquire NAPEC in C$320M deal

Funds managed by Oaktree Capital Management LP have agreed to acquire all of the issued and outstanding common shares of NAPEC Inc. for C$1.95 in cash per share.

NAPEC is a company operating in the energy sector that provides construction and maintenance services to the public utility and heavy industrial markets, mainly in Quebec, Ontario, and the eastern U.S.

The purchase price represents a premium of 35.4% to NAPEC's Dec. 1 closing stock price and a 43.9% premium to the 20-day volume weighted-average price on the Toronto Stock Exchange. The total transaction value is approximately C$320 million, including the assumption of debt.

NAPEC's board has unanimously approved the transaction. Oaktree will retain NAPEC's management team, led by President and CEO Pierre Gauthier, and will maintain NAPEC's head office in Quebec.

A termination fee of C$7.0 million would be payable by NAPEC to Oaktree in certain circumstances, including if it fails to exercise its right to match in the context of a superior proposal supported by NAPEC. Oaktree has agreed to pay NAPEC a termination fee of C$7.0 million if the transaction is not completed in certain other circumstances.

The transaction is subject to customary closing conditions, including the expiration or early termination of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt of court approval pursuant to the Canada Business Corporation Act and NAPEC shareholders' approval.

The transaction is supported by a waiver from the NAPEC's existing bank group and is not subject to any financing condition and is expected to close by the end of the first quarter of 2018.

National Bank Financial Inc. is acting as financial adviser to NAPEC and Stein Monast LLP and Stikeman Elliott LLP are acting as its legal counsel. Kirkland & Ellis LLP and McCarthy Tétrault LLP are acting as legal counsel to Oaktree.