Newspaper article The Canadian Press

Private Equity Firm Onex Corp. Posts Q2 Net Profit on Flat Revenues

Newspaper article The Canadian Press

Private Equity Firm Onex Corp. Posts Q2 Net Profit on Flat Revenues

Article excerpt

Onex Corp. has Q2 net profit, revenues flat


TORONTO - Onex Corp. (TSX:OCX) says it's well-positioned to make new acquisitions as part of a long-term buy-and-sell strategy.

"We have never been in a better position to acquire world-class businesses," chairman and chief executive Gerry Schwartz said Wednesday as the private equity company reported its second-quarter earnings.

At the end of June, Onex had $2 billion of cash -- up $200 million from the end of March. Since the second quarter ended, Onex has generated a further $1 billion of cash from sales of several assets.

The Toronto-based company has also recently agreed to acquire York Risk Services Group, a U.S.-based provider of property, casualty and workers compensation insurance, in a deal valued at $1.35 billion.

The Toronto-based company had $39 million of net income in the second quarter, including $447 million of net earnings from discontinued operations such as Wichita-based Spirit AeroSystems, which Onex has divested in stages.

Onex said its second-quarter results included a gain of $310 million recognized on the partial sale of Spirit AeroSystems in June. The gain doesn't include proceeds from the sale of its last remaining Spirit shares. Onex said Aug. 7 that its portion of the 2005 investment in Spirit was US$108 million and it has received a total of US$975 million in proceeds over the nine years since.

Onex's continuing operations -- which have invested in numerous companies in various industries including manufacturing, insurance, health-care and real estate -- lost $408 million in the three months ended June 30. A year earlier, Onex lost $718 million, including $93 million from discontinued operations and $625 million from continuing operations.

Its revenues were largely unchanged compared with the same period last year at $5.2 billion.

"As we have indicated before, our consolidated financial results will be lumpy as we acquire, build, and subsequently realize on the businesses we own," Onex chief financial officer Donald Lewtas told analysts in a conference call Wednesday. …

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