Streetwise reporter Niall McGeePeter Power/The Globe and Mail
DEAL OF THE DAY
Element Financial to sell non-core units
Element Financial Corp. on Wednesday said it would exit its non-core Canadian commercial and vendor-financing operations to focus on its key fleet management business.
Element, which earlier this year agreed to buy the fleet assets of General Electric Co.'s GE Capital financial unit for about $8.6-billion (U.S.), said it had hired an adviser to study strategic options for the business and expects to complete the process by the first quarter of 2016. Story
Is Infor sizing up Element's 'for sale' assets?
Neil Selfe and Steve Hudson, the chief executive officer of Element Financial Corp., go way back. When Mr. Selfe was an investment banker at GMP Capital Inc., he helped raise money for Element when it was just a puppy.
Earlier this year, when Mr. Selfe left GMP to start his own merchant bank, Infor Financial Group, Mr. Hudson sent lucrative advisory mandates Mr. Selfe's way. For example, Infor was the sole capital markets adviser on Element's $2-billion-plus stock sale in May.
Mr. Hudson, meantime, is a board member with Infor Acquisition Corp., the special-purpose acquisition corporation (SPAC) that Mr. Selfe brought public earlier this year. One of the responsibilities of board members is to help Infor find an acquisition. On Wednesday, Element announced it is considering strategic options for parts of its business. Do you see where I'm heading with this? Infor is in the market for an acquisition. Mr. Hudson needs to find a buyer for some of Element's assets. Is an Infor buyout of the Element assets a match made in heaven? Or potentially too cozy of a deal to get done?
Let's look at whether Infor would even consider buying a business like Element's Canadian commercial and vendor division, before getting down to any stumbling blocks.
"Our ideal company is a private company with great management, or a carve-out from an existing public company that has decent organic growth," Mr. Selfe said in an interview with The Globe and Mail in August, when opining on a potential acquisition for Infor.
The assets that Element has up for sale fit the "carve-out" and "decent organic growth" criteria. Infor is looking at buying a business with an enterprise value of up to $1-billion. No problem there either with the Element assets.
But what about the potential conflicts of interest that could come out of Infor doing a deal with Element? Apart from Mr. Hudson, Richard Venn, vice-chairman of Element, also sits on Infor's board and is a shareholder. Element Investco, a subsidiary of Element Financial, is another shareholder. It is unclear whether such conflicts would prevent Infor from doing a deal. I reached out to Mr. Selfe to clarify, but he declined to comment.
Interestingly, Infor was not named as an adviser for Element's strategic review. Instead, Barclays Capital Inc. got the nod. That may be bad news for Infor on the advisory fee side, but it would alleviate any potential conflict of interest in that regard should Infor actually end up as a bidder for the assets.
INITIAL PUBLIC OFFERINGS
Jack Dorsey's Square files for IPO
Square Inc., the mobile payments company co-founded by Twitter CEO Jack Dorsey, intends to sell shares on the public stock market, according to an initial public offering filing with the U.S. Securities and Exchange Commission.
The official IPO filing comes after reports of a confidential filing sparked rumours this summer. Mr. Dorsey could soon be running two publicly traded companies unless Twitter announces a permanent leadership change. Story
MERGERS AND ACQUISITIONS
Jarden to acquire Visant Holding Corp.
Consumer goods company Jarden Corp. has agreed to acquire Visant Holding Corp. from investment funds managed by KKR & Co., aPriori Capital Partners and other stockholders for $1.5-billion (U.S.), according to a release. Story
Blucora to buy brokerage HD Vest Financial
Blucora Inc., the onetime Internet giant known as InfoSpace that became a poster child for the excesses of the dot-com boom, agreed to pay $580-million (U.S.) for HD Vest Financial Services, one of the few brokerages that specialize in helping tax advisers become licensed to sell investment products. Story
FINANCINGS
Goldman said to be struggling with Concordia debt
Goldman Sachs Group Inc. is facing an uphill battle in selling almost $2.8-billion (U.S.) of debt for Concordia Healthcare Corp. amid a drug-pricing controversy in the pharmaceutical industry, according to people with knowledge of the matter. Story
VENTURE CAPITAL
Venture capital investment spikes in Canada
Venture capital (VC) investment into Canadian companies totalled $2.4-billion in the first three quarters of 2015. That's the highest since 2002, according to preliminary data released Wednesday from Thomson Reuters. VC investment in the pharmaceuticals sector accounted for a quarter of all deals.
INSIGHT
Prominent derivatives adviser sets up shop in Canada
A surge in infrastructure, pension fund and private equity deals has lured a growing global derivatives adviser to Canada. JCRA Group, which specializes in risk management, opened its first Canadian practice this week, adding to its existing North American offices in New York and San Francisco. Story
Got any Bay Street buzz? If you have any story suggestions for the Daily Deal Roundup, e-mail us at deals@globeandmail.com ornmcgee@globeandmail.com.
Niall McGee