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Onex Reports Second-Quarter 2018 Results

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TORONTO, Aug. 09, 2018 (GLOBE NEWSWIRE) -- Onex Corporation (TSX:ONEX) today announced its consolidated financial results for the second quarter and six months ended June 30, 2018 and an update on matters following quarter-end.

Year to Date Highlights

  • We have invested and committed to invest $1.8 billion in five operating companies, of which Onex' portion is expected to be approximately $690 million:
    • SMG Holdings, a leading global manager of convention centers, stadiums, arenas, theatres, performing arts centers and other venues;
    • PowerSchool Group, a leading education technology platform for K-12 schools;
    • Ryan Specialty Group, a leading international specialty insurance organization, which includes a wholesale brokerage firm and an underwriting management organization;
    • KidsFoundation Holdings, the largest childcare provider in the Netherlands; and
    • Precision Global, a leading global manufacturer of dispensing solutions.
  • We returned approximately $865 million to our limited partners, through realizations and distributions, of which Onex' portion was approximately $335 million, including $21 million of carried interest:
    • We sold Mavis Discount Tire for a gross multiple of invested capital of 3.5 times;
    • We completed a secondary offering for Emerald Expositions and continue to own a majority stake.  Onex Partners' remaining investment is valued at approximately $735 million as of yesterday's closing price, which reflects a gross multiple of invested capital of 2.0 times, including prior realizations; and
    • We completed a secondary offering for Pinnacle Holdings and continue to own a significant minority stake.  ONCAP's remaining investment is valued at approximately C$165 million as of yesterday's closing price, which reflects a gross multiple of invested capital of 3.3 times, including prior realizations.
  • Assets under management in our Credit platform increased by approximately $700 million to $10.5 billion, primarily driven by the closing of our 15th U.S. collateralized loan obligation for approximately $615 million.
  • In the first seven months of 2018, 754,328 Subordinate Voting Shares ("SVS") were repurchased for a total cost of $54 million, or an average cost per share of C$91.77.

Recent Performance

"We're pleased with the pace of our investing activity having found five great businesses so far this year," said Gerry Schwartz, Chairman and Chief Executive Officer of Onex.  "With more than 40% of our private equity investments made in the last two years, our portfolio is still relatively immature.  We believe this sets the foundation of future growth at Onex."

Today, Onex has approximately $8.9 billion of uncalled capital available to deploy for new private equity investments, including $2.5 billion committed by Onex.

Onex management continues to share in the risks and rewards of our businesses through the team's significant investment in everything Onex owns.  Today the team has approximately $2.1 billion invested in the underlying private equity operating businesses, credit funds and Onex shares, including $100 million invested so far this year.

Creating Value for Shareholders

We create value for shareholders by growing both our capital per share and our fee-generating assets.  For the twelve months ended June 30, 2018, Onex' capital per share increased by 4% to $64.59 and our private equity investments grew by 9%.  Over the same period, our fee-generating assets increased by 43% to $21.7 billion largely driven by our success in raising Onex Partners V.  Over the last five years, Onex' capital per share and our fee-generating assets grew by 8% and 18% per year, respectively.  With larger private equity funds and a growing credit platform, we are well positioned to grow the profitability of our asset management business in the years to come.

Onex paid a second-quarter dividend of C$0.0875 per SVS on July 31, 2018 to shareholders of record on July 10, 2018.

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 second quarter, revenues increased by 4% to $6.4 billion compared to the same period of the prior year.  The increase was largely due to the inclusion of revenues from the acquisitions of IntraPac, Laces and SMG.  Net loss for the second quarter of 2018 was $262 million compared to net earnings of $2.7 billion in the same quarter of 2017.  This decrease in earnings was primarily driven by $3.3 billion of gains recognized in the second quarter of 2017 from the loss of control over JELD-WEN and the sale of USI, partially offset by a decrease in the limited partners' interests charge. 

On a consolidated basis for the six months ended June 30, 2018, revenues increased by 5% to $12.5 billion as compared to the same period of the prior year.  Onex reported a consolidated net loss of $426 million during the first half of 2018 compared to net earnings of $1.7 billion in the same period of 2017.  The same factors that contributed to the second-quarter increase in revenues and decrease in earnings drove the changes in revenues and earnings for the first half of 2018.

Prior year comparative information has been restated to conform with IFRS 15, Revenue from Contracts with Customers, which was adopted by Onex retrospectively on January 1, 2018 (refer to Note 1 in the interim consolidated financial statements for further details).

Attached are Onex' unaudited interim Consolidated Balance Sheets at June 30, 2018, December 31, 2017 and January 1, 2017; Statements of Earnings and Information by Industry Segment for the three and six months ended June 30, 2018 and 2017; and Statements of Cash Flows for the six months ended June 30, 2018 and 2017 prepared in accordance with International Financial Reporting Standards.  The complete financial statements, including Management's Discussion and Analysis of the results, are posted on Onex' website, www.onex.com, and are also available on SEDAR at www.sedar.com.  A supplemental information package, which includes the How We Are Invested schedule, Schedules of Fees and Expenses and additional information, is available on Onex' website, www.onex.com.

Webcast

Onex management will host a webcast to review Onex' second-quarter 2018 results on Thursday, August 9 at 11:00 a.m. ET.  The webcast will be available in listen-only mode from the Presentations and Events section of Onex' shareholder website, https://ir.onex.com/investor-relations.  A 90-day on-line replay will be available shortly following the completion of the event.

About Onex

Onex is one of the oldest and most successful private equity firms.  Through its Onex Partners and ONCAP private equity funds, Onex acquires and builds high-quality businesses in partnership with talented management teams.  At Onex Credit, Onex manages and invests in leveraged loans, collateralized loan obligations and other credit securities.  Onex has more than $33 billion of assets under management, including $6.8 billion of Onex proprietary capital, in private equity and credit securities.  With offices in Toronto, New York, New Jersey and London, Onex and the team are collectively the largest investors across Onex' platforms.

Onex' businesses have assets of $48 billion, generate annual revenues of $31 billion and employ approximately 211,000 people worldwide.  Onex shares trade on the Toronto Stock Exchange under the stock symbol ONEX.  For more information on Onex, visit its website at www.onex.com.  Onex' security filings can also be accessed at www.sedar.com.

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.

For further information:
Emilie Blouin
Director, Investor Relations
Tel: 416.362.7711

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