Toronto investment firm Onex Corp. says it and a group of investors have agreed to sell their 31 per cent stake in Emergency Medical Services Corp. for $878-million (U.S.).
Onex will see net proceeds of $339-million from the sale, which is expected to close in the second quarter.
The $64 per share price is a discount from EMS' $70.66 closing price on Friday, but Onex says the value is 10 times the original purchase price of $6.67 each.
Onex says it has voted in favour of a merger agreement that would see Clayton Dubilier & Rice LLC become EMS's new owner.
Emergency Medical Services outsources doctors and runs an ambulance service in the United States.
"EMSC's performance is a testament to our approach to identifying attractive businesses and partnering with excellent management teams to build industry-leading companies," Robert Le Blanc, managing director of Onex, said in a statement.
Onex manages about $12-billion in a diversified portfolio of assets and resumed making deals in 2010 as credit markets thawed and more opportunities arose.
It is best known for acquiring and attempting to turn around businesses that have fallen on hard times, often because of industry over-expansion or consolidation.
It often only owns a minority equity interest but retains voting control that allows it to manage the business on behalf of itself and its partners, which include pension funds and other institutional investors.
Last year, Onex and the Canada Pension Plan Investment Board struck a $5-billion deal to acquire Tomkins PLC, a British engineering and manufacturing company with operations across Europe. It also completed the acquisition of Sport Supply Group, a leading manufacturer and distributor of sporting goods in the United States, in a transaction valued at $200-million.
Then in December, Onex acquired part of ResCare, which provides at home care for seniors and those with disabilities. Onex Partners III contributed $120-million.
Onex is one of Canada's largest and most diversified companies, with investments in everything from electronics manufacturing services through Celestica Inc., to automotive and aerospace manufacturing, to real-estate, health-care and financial services. Its companies generate annual revenue of $31-billion, have assets of $36-billion and employ more than 210,000 people worldwide.
Last year, Onex executives said they were skeptical that a lasting economic recovery has taken hold, but felt more confident about a recovery in credit markets after securing the money for Tomkins.