| Industry: |
Aviation |
| Investment date: |
April 2001 |
| Acquired by: |
ONCAP I |
| Investment: |
C$112 million(1) /
C$63 million from Onex |
| Status: |
Realized |
| Final realization: |
March 2007 |
| ONCAP Value Realized: |
C$475 million /
C$270 million by Onex |
| Gross IRR: |
35% |
| Head office: |
Ville St-Laurent, Quebec |
(1) Includes co-investment of $42 million from Onex.
The amounts above include Onex’ share of the carried interest and are net of any payments under the Management Investment Plan.
CMC Electronics Inc. was a world-class leader in the design, manufacture, sales and support of high technology electronic products and systems for the military and commercial aviation markets. The company supplied products and systems to major defence contractors and subcontractors, government agencies, major North American and international commercial airlines and other commercial customers.
In March 2007, ONCAP I sold 100% of its stake in CMC Electronics bringing its total realized proceeds to C$475 million. Onex, which also had a direct investment in CMC Electronics, realized total proceeds of C$270 million on its investment in CMC Electronics.
More detail is available in our
case study.
CMC Electronics – Case Study
Leveraging a strong market position
CMC Electronics Inc. – formerly Canadian Marconi Company – was acquired in April 2001 in a management buy-out led by ONCAP. CMC was a world-class leader in the design, manufacture, sales and support of high technology electronic products and systems for the military and commercial aviation markets. The company supplied products and systems to major defence contractors and subcontractors, government agencies, major North American and international commercial airlines and other commercial customers. CMC’s principal operating facilities were located in Montreal, Quebec (corporate headquarters); Ottawa, Ontario; and Sugar Grove, Illinois.
CMC provided ONCAP with the opportunity to build a dynamic aerospace and defence electronics business by leveraging the Company’s well-known reputation, leading technologies, strong market positions, significant cash flow and talented management and employees. As part of the business plan developed by CMC and ONCAP, CMC divested non-core assets and acquired businesses that augmented the company’s core aviation, infrared and space electronics units. CMC also enhanced its operating performance through aggressive internal initiatives such as improving working capital utilization, research and development effectiveness and production process efficiency.
In March 2007, ONCAP completed the sale of CMC to Esterline Technologies Corp. (NYSE: ESL) for approximately C$392 million, which together with previous distributions received from CMC, represented a multiple of 4.2x ONCAP’s investment.
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