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Calgary's Tervita looking to launch huge IPO

An aerial view of an oil sands mine facility near Fort McMurray, in Alta.

Jeff McIntosh/CANADIAN PRESS

Tervita Corp., the big energy services firm once better known as CCS Income Trust, is looking to go public again.

Despite rocky equity markets and a volatile oil price, Tervita hopes to launch a large initial public offering in the coming months, according to people familiar with the discussions. Final details are still being hashed out.

But while the size of both the banking syndicate and the deal itself have yet to be determined, the offering will likely be worth a figure north of $500-million, and Bloomberg noted it could be as high as $1-billion. In March, Tervita said it has over $5-billion in annual revenues.

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However, there are no guarantees of size in this market. Gibson Energy, the big energy services firm to go public, launched with an ambitious plan for a $500-million IPO last year. Though the deal got done, there had to be a price cut on the shares.

Once known solely as an energy services firm, CCS changed its name to Tervita in March. Not only did the rebranding give the firm a new image after a number of acquisitions (Hazco, Concord, Beck), it also repositioned Tervita as both an environmental and energy services company. The environment-friendly angle is surely something that will be talked about during a road show.

Tervita, or CCS, has been a private company since unitholders accepted a $3.5-billion management led buyout back in 2007. That deal was led by founder David Werklund, and included CAI Capital Partners, Goldman Sachs Capital Partners, Kelso & Co., Vestar Capital Partners, British Columbia Investment Management Corporation and O.S.S. Capital Management. The buyout was contentious because the company's cash flows had been growing steadily, and some argued the $46 per unit offer price was far too low.

As a private company Tervita's transactions were rarely discussed, but in June 2011 the firm did try to issue $675-million in new debt to repurchase expensive bonds. That deal didn't go so well and the firm pulled the deal because of adverse market conditions, something it will be wary of with the IPO. The debt offering would have allowed the firm to repurchase $612-million (U.S.) of debt that pays 11 per cent interest annually.

Tervita would not comment on the looming IPO. "This is market rumour. We do not comment on market rumours or speculation," a spokesperson said.

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