News

— Buyout conglomerate Onex Corp. said Thursday that its second quarter profit more than tripled and said it is optimistic about its ability to finance deals despite recent debt-market turbulence.

Onex, which has investments in industries as diverse as electronics manufacturing, cosmetics and aerospace, said it earned $166-million, or $1.29 per share, in the three months ended June 30. That was up from a profit of $48-million, or 36 cents a share, in the same period a year earlier.

Toronto-based Onex, headed by chief executive officer Gerald Schwartz, also reported that revenue jumped to $5.87-billion from $4.62-billion a year earlier.

During the quarter, Onex took in $361-million in proceeds from the sale of some of its shares of Spirit AeroSystems . A fund Onex operates also sold stock, from which it received part of the proceeds. It said this brought the total value that Onex has received on the Spirit deal, as well as the value of its continuing ownership in the company, to more than $1-billion – eight times its investment.

As well, Skilled Healthcare completed an initial public offering in May in which Onex and one of its funds also sold shares. It said it received $43-million from the deal.

Problems with easy liquidity and access to financing in the credit markets have raised questions about buyout firms' ability to continue completing acquisitions. Many recent deals have used debt as a key financing component.

But in a statement, Mr. Schwartz appeared unfazed by debt market woes.

“Despite recent challenges in the credit markets, we are very optimistic about our continuing ability to find, acquire, finance and build good businesses for the benefit of our shareholders and our partners,” he said.

“We are also confident that Onex will continue to record gains from the carried interest on third-party capital.”

Onex has recently either walked away from or failed to make a number of potential purchases. In June, reports emerged that it had dropped out of one of the consortiums that was seeking to privatize BCE Inc., Canada's biggest telecom company.

And in May, a consortium that included the firm gave up on a bid to buy Australia's Qantas Airways Ltd. The same month, a bid by Onex and auto parts maker Magna International Inc. to buy the struggling Chrysler Group failed.

Onex released its results after markets closed. During the day its shares fell $1.36, or 4 per cent, to $32.51 on the Toronto Stock Exchange.