The Canada Pension Plan Investment Board (CPPIB) and US private equity firm Sterling Partners has agreed to buy Livingston International, a company structured as a Canadian income fund. Various media reports peg the total acquisition price at C$273 million (€175 million; $258 million).
CPPIB, the private equity arm of Canada’s largest pension, will acquire the customs brokerage, transportation and logistics services company for C$8 per unit. The price represents a 29 percent premium over the volume-weighted price of the units over the 30-day trading period ended 7 October.
The deal is subject to approval by two-thirds of Livingston’s unitholders to be held in November. Under the terms of the deal, CPPIB and Sterling will get a $10 million break-up fee if the deal does not close.
Livingston’s unit price has crashed by half since it was trading above $13 last October. The day before the deal was announced, the unit price was lingering around the $6.50 range, and immediately jumped above $8 after the announcement of the deal.
The deal is one of several in recent years of private equity firms acquiring Canadian investment trusts. A change in Canadian law eliminated tax advantages the income trusts had, and many of them have as a result been taken private.
CSS Income Trust was taken private in 2007 in a C$3.5 billion deal by a group of Canadian and American investors, including CAI Capital Partners, Goldman Sachs Capital Partners, Kelso & Company, Vestar Capital Partners, British Columbia Investment Management Corporation and OSS Capital Management. CSS provides services including waste management and remediation to the oil and gas industry.
CPPIB was part of another large transaction in September, when it joined Silver Lake, Index Ventures and Andreessen Horowitz in acquiring a 65 percent stake in eBay’s internet communications division Skype for $1.9 billion in cash and $125 million in debt.