Investment firm Onex holds equity interests in over a dozen companies across several industries worldwide. It mainly invests in electronics manufacturing services and health care imaging companies, but also in companies that deal in building products, health and human services, insurance, and customer care services. While large-cap private equity is its biggest focus, Onex also invests in debt and credit securities and real estate, including real estate investment trusts, commercial real estate loans, and residential developments. Its ONCAP family of private equity funds invests in mid-cap firms. Altogether, Onex has some $11.8 billion in third-party capital under management and about $22 billion in all.
The company's portfolio includes direct interests in electronics manufacturer Celestica, and business process outsourcer Sitel, in addition to minority stakes in more than a dozen companies, including healthcare companies such as Res-Care, Genesis Healthcare, and Carestream Health. Onex also owns US insurance brokerage firm USI.
Onex is stationed in Ontario, Canada, and has other offices in London and New York. The US accounted for more than 50% of its revenue in 2014, while the rest came from Europe (21%), the Asia and Oceania region (17%), and Canada (5%).
Onex's revenues have been rising in recent years with income-boosting company acquisitions. The firm has been struggling with years of losses, however, as its revenues have been eaten up by high cost of sales and operating expenses combined with amortization expenses on its assets.
The firm's revenue fell by 29% to $19.8 billion in 2014, mostly due to income lost after it sold The Warranty Group, Spirit AeroSystems, and Skilled Healthcare Group during the year.
Revenue declines in 2014 caused Onex to suffer a net loss of $115 million, though losses improved from $354 million in 2013 as the firm's operating costs declined. Onex's operating cash levels fell 38% to $989 million mostly due to unfavorable changes in working capital items and lower cash earnings.
When considering acquisitions, Onex seeks out growth investments, restructurings, and subsidiaries or divisions being sold by large corporations. It prefers to take a controlling position in its holdings, which enables it to make strategic decisions, though Onex does not usually get involved in the day-to-day activities of its companies.
Some of Onex's recent company acquisitions and investments include: its $4.6 billion-purchase of Swiss packaging company SIG Combibloc in 2015; its 2015, $680 million-acquisition of UK-based, mission-critical military equipment provider Survitec; its late-2014, $1.33 billion-purchase of risk and claims management and managed care services provider York Risk Services; its $102 million investment in a 46% stake in Mavis Tire Supply LLC (Mavis Discount Tire) in late 2014; and its late-2014, $204-million investment for a 40% stake in Advanced Integration Technology, which provides automation and tooling, maintenance services, and aircraft components to the aerospace industry.
Regarding add-on acquisitions in 2014, Onex subsidiary USI agreed to acquire more than 40 insurance brokerage and consulting locations nationwide from financial services company Wells Fargo & Company; while subsidiary Schumacher Group acquired Hospital Physician Partners, the fourth-largest provider of emergency and hospital medicine clinical staffing services.
Onex has historically been successful with its private equity exits as well. Since its founding in 1984, the company has made 480 acquisitions with a total value of $53 billion, and has generated an average of 3 times its original investment, representing a 28% gross compound IRR on realized, substantially realized, and publicly-traded investments.
During 2014, the firm and its partners realized $6.1 billion in proceeds (a record year for realizations) after selling its remaining shares in: Allison Transmission Holdings for net proceeds of $770 million (from an original investment of $237 million); Spirit AeroSystems for net proceeds of $1 billion (original investment: $108 million); Gates Corporation for net proceeds of $727 million (original investment: $315 million); The Warranty Group for net proceeds of $509 million (original investment: $157 million); and Mister Car Wash for net proceeds of $168 million (original investment: $23 million).