Edmonton is suddenly the first stop for Canadian executives contemplating big, bold public market deals.
The Alberta capital is home to the $69-billion Alberta Investment Management Corp., or Aimco. Just two years after being launched in a merger of the province's public sector funds, Aimco has emerged as an aggressive manager that is getting involved in some significant deals.
Aimco's willingness to make sizable bets on promising plays was on display yesterday, when it teamed up with Toronto hedge fund Goodwood Inc. to back a $263-million management buyout of JEVCO Insurance, a Montreal-based unit of embattled Kingsway Financial Services.
The deal is meant to establish JEVCO as a deep-pocketed player in Canada's fragmented property and casualty insurance industry. The company focuses on niche markets, such as insurance on snowmobiles and motorbikes, high-risk drivers and construction projects.
JEVCO is being reborn as a unit of a Toronto Stock Exchange-listed company called Westaim Corp. Aimco agreed to invest a minimum of $148-million in Westaim yesterday to help fund the acquisition. The pension fund's total investment could hit $207.5-million. Toronto-based Goodwood and JEVCO management put up $17.5-million.
The JEVO buyout marked the Alberta fund's first major foray into central Canada. Other major investments over the past year were in Western Canadian concerns such as Precision Drilling, Viterra and Canadian Western Bank.
Sources who worked on the JEVCO transaction said they were pleasantly shocked by the pace of this deal. Where several other interested buyers wanted a least 45 days to consider the terms of a deal, Aimco executives made decisions in a week.
The group making these decisions at Aimco includes chief executive officer Leo de Bever, formerly of the Ontario Teachers' Pension Plan and Manulife Financial, along with fellow Teachers alumni George Engman and Brian Gibson.
The last time this team got together, they made some of Teachers' earliest forays into private equity and activist public market deals. Mr. Engman, Aimco's head of private equity, created Maple Leaf Sports and Entertainment, the sports conglomerate that owns the Toronto Maple Leafs and Toronto Raptors and is a financial success, though NHL and NBA championships remain elusive.
Mr. Gibson, who runs the $16.7-billion public equity portfolio, was previously the kingmaker in the high-stakes deals that created Fording Coal, Nexen and WestJet Airlines.
Since arriving at Aimco last year after a brief stint running his own fund, Mr. Gibson - a muscle car collector in his spare time - has led the fund's purchase of a $225-million stake in Viterra Inc. that allowed the Prairie grain handler to fund an Australian acquisition and a $330-million financing for Precision Drilling.
Other Canadian pension funds, including Teachers and the Caisse de dépôt et placement du Québec, are active players in public equity markets. But Aimco, a newcomer when it comes to deal making, has impressed corporate Canada with its ability to commit large amounts of capital for significant stakes in public companies.
Aimco executives were unavailable for comment yesterday as they worked on the Westaim deal.
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