From entertainment to student housing and health-care technology – a quick peek at recent deals that are charting our course for the future
1: Big Thrills
When and Where: June 2019; U.K.
The Deal: A consortium partnership with KIRKBI and Blackstone, who have agreed to the terms of a recommended offer to Merlin Entertainment, at a price of 455 pence per share.
The Players: Merlin is a global leader in location-based, family entertainment and operates over 130 attractions, 19 hotels, and seven holiday villages in 25 countries and across four continents. KIRKBI is the holding and investment company of the Kirk Kristiansen family. Blackstone is one of the world’s leading investment firms.
The Upshot: The recommended offer values Merlin at approximately £4.77 billion, providing Merlin’s shareholders with the certainty of cash at a 37% premium to the closing price of 333 pence per Merlin share, on May 22, 2019.
The Strategy: The Consortium recognizes that significant, long-term investment is required to ensure the longevity of the existing assets and to drive continued growth for the Company and its stakeholders.
2: Best-in-class Payments Technology
When and Where: July 2019; Canada and United States
The Deal: The EQT VIII Fund (EQT) and CPP Investments have acquired a majority stake in Waystar, a provider of cloud technology that simplifies the payment reimbursement process for healthcare providers and patients, from Bain Capital Private Equity.
The Players: EQT is a leading investment firm with more than €61 billion in raised capital across 29 funds and around €40 billion in assets under management; Bain Capital is one of the world’s leading multi-asset alternative investment firms; Waystar provides critical Revenue Cycle Management software for healthcare systems and providers.
The Upshot: The transaction will support Waystar’s continued growth by leveraging EQT, CPP Investments and Bain Capital’s deep healthcare and software expertise and providing capital to invest in continued innovation and transformative M&A. The terms of the agreement value Waystar at $2.7 billion.
The Strategy: The investment provides CPP Investments with access to a best-in-class platform that delivers critical services and improves efficiency for a broad array of healthcare providers.
3: Student Success
When and Where: July 2019; U.K. and Canada
The Deal: Sale of Liberty Living, a wholly owned student accommodation business, to the Unite Group Plc (Unite Students), in which the net proceeds are expected to be approximately C$1.3 billion and a retention of a 20% shareholding in the combined group.
The Players: Unite Students is the U.K.’s largest manager and developer of purpose-built student accommodation, serving the country’s world-leading higher education sector.
The Upshot: On completion, the combined group will manage a total of over 73,000 beds across 173 properties in 27 U.K. towns and cities. CPP Investments will hold one seat on the board of Unite Students.
The Strategy: Through this transaction, we can continue our investment in the student housing sector within the U.K. across a broader, more diverse and stable portfolio, and with additional development exposure, which fits well within our global real estate strategy.
4: Advancing Health Research
When and Where: May 2019; Canada
The Deal: Acquisition of a portion of LifeArc’s royalty interests on worldwide sales of Keytruda (pembrolizumab), for approximately US$1.3 billion.
The Players: LifeArc is a self-funded medical research charity, aimed to advance translation of early science into health care treatments or diagnostics that can be taken through to full development and made available to patients. Keytruda is an anti-PD-1 therapy developed and commercialized by Merck, approved for use in 85 countries worldwide.
The Upshot: This transaction will help make LifeArc one of the U.K.’s leading medical research charities by size of investment, and allows it to significantly expand its mission of advancing research that directly benefits human health.
The Strategy: This investment in Keytruda provides us with the opportunity to continue expanding CPP Investments’ global intellectual property program. Alternative assets related to intellectual property help to diversify the Fund through income streams that are typically uncorrelated to the broader capital markets.
5: Highway to Growth
When and Where: August 2019; Canada
The Deal: CPP Investments acquired a 10.01% equity stake of 407 International, which holds a concession over the 407 Express Toll Route (407 ETR), from SNC-Lavalin Group Inc.
The Players: SNC-Lavalin is a global professional services and project-management company, and a major player in the ownership of infrastructure; 407 International Inc. is the Ontario-based owner of the 407 ETR, the world’s first all-electronic, open-access toll highway.
The Upshot: CPP Investments has been an investor in 407 International since 2010, when it acquired control of a 40% holding in the business through two separate transactions. Upon completion of this transaction, CPP Investments controls a 50.01% stake.
The Strategy: CPP Investments invests in global infrastructure assets that offer predictable, resilient income streams in attractive locations. Toll roads provide the opportunity to benefit from urbanization trends and invest in assets that benefit from the growth of a region. The 407 ETR remains a good strategic fit with CPP Investments’ portfolio and exceptionally long investment horizon.