Victor Li, scion of one of Asia's wealthiest families, added to his clan's growing collection of Canadian companies Friday by acquiring Reliance Home Comfort from U.S. private-equity fund Alinda Capital Partners for $2.82-billion.
Reliance provides 1.7 million Canadian households with water heaters, furnaces and air conditioners. Alinda, a private-equity partnership that focuses on investments in infrastructure, bought the company in 2007 by acquiring UE Waterheater Income Fund for about $1.74-billion (U.S.).
Now Mr. Li , the 52-year-old son of Hong Kong billionaire Li Ka-shing and a Canadian citizen for more than 30 years, is taking the reins, through a company called CKP (Canada) Holdings Ltd. If the deal receives regulatory approvals, CKP plans to sell up to 25 per cent of Reliance to Cheung Kong Infrastructure, another company controlled by the Li family trust.
The Li fortune is estimated at more than $30-billion, and the family has built a substantial portfolio in Canada that includes a 30-year investment in Husky Energy Inc. Other Canadian businesses in the portfolio include Park'N Fly, Canadian Power Holdings Ltd., Wex Pharmaceuticals and Santé Naturelle AG. Victor Li offered to refinance Air Canada, in 2003, but walked away from the transaction when the two sides could not agree on terms for the deal.
"I am very happy about the Reliance acquisition. With my close ties in the country, I have always been on the lookout for sizable investments back in Canada," Mr. Li said in a press release. The Li family as a long-time investor in CIBC, and Victor Li worked at the bank in the 1980s, along with executive roles at Husky. He also meet his wife, Cynthia, in Canada.
In common with family controlled Canadian conglomerates, such as Jim Pattison Group and the Desmarais's Power Corp. of Canada, the Li family's approach is to be long-term investors in a mixed bag of businesses, providing capital as needed, and taking a hands-off approach to management by hiring professional executive teams.
"We are thrilled to have CKP as our new investment partner," said Sean O'Brien, CEO of Reliance. "We believe that CKP will help accelerate the momentum we have generated over the last few years where Reliance experienced strong business results over that time."
Outside Canada, the Li family trust has interests in businesses that span 52 countries; including ports, infrastructure, retail, telecommunications, energy and property.
Investment bank Barclays PLC and law firm Stikeman Elliott LLP advised CKP on the acquisition, while Goldman Sachs Group, CIBC and law firm Torys LLP advised Alinda, which is based in Greenwich, Conn.