Lynx Equity Lands Financing From Labourers’ Pension Fund

Lynx Equity secured 15 million Canadian dollars in debt financing from the Labourers’ Pension Fund of Central and Eastern Canada, said Lynx President Brad Nathan . The Canadian firm will use the additional capital to make more deals rather than increase its typical deal size, he said. While there is no caveat yet for the Labourers’ Pension Fund to fund additional debt, Mr. Nathan expects this to be a long-term relationship. Labourers’ didn’t respond to an inquiry seeking comment.

The Canadian pension fund was introduced to Lynx through a party that works with the firm, Mr. Nathan said. It took about 10 months to complete the due diligence process and secure the financing, he added. “We’re going to stay in the same range and do more deals, rather than going up against more firms in larger spaces,” said Mr. Nathan. Lynx makes investments of C$2 million to C$8 million in companies with earnings before interest, taxes, depreciation and amortization of C$500,000 to C$2 million, according to a news release. The firm follows the same parameters in U.S. dollars for it’s deals based in the U.S. The Toronto firm targets companies that are privately or family owned, and usually have an owner that intends to retire in the near future. The firm funds its deals by issuing high-yield debt, in which investors enter into loan agreements for one to five years. Lynx “has a really good pipeline, and an excellent lineup of transactions we’re going to close based on this financing,” said Mr. Nathan. Founded in 2007, Lynx in the past few years has focused on its expansion into the U.S. Last year, Lynx formed Succession Capital, a subsidiary based in La Jolla, Calif., that makes U.S.-based acquisitions. “We’re still doing deals in Canada, but focus primarily on the U.S.,” said Mr. Nathan. Lynx closed six deals for the 2015 fiscal year ended in July and anticipates closing about five deals for the year ending July 2016. The firm began ramping up its presence in the U.S. to hedge costs because Lynx is exposed to U.S. currency when its portfolio companies buy from the U.S. or China and purchases are in U.S. dollars, the firm told LBO Wire last year. Labourers’ is a multiemployer pension plan established in 1972. It has nearly C$5 billion in assets.

Originally published November 19, 2015 by Lillian Rizzo