Media reports say major Canadian private equity firm Onex Corp. is in talks to sell Husky Injection Molding Systems Ltd. or do an initial public offering for the Bolton, Ontario, maker of injection molding machines, robots, hot runners and tooling.
Onex issued a news release saying it has not made a decision to sell Husky and has not received any offers for the acquisition of the company.
Onex is continually considering potential opportunities for its holdings and does not comment on rumor or speculation, Onex said.
A spokeswoman said Husky had no comment.
Bloomberg.com, citing undisclosed people with direct knowledge of the matter, reported that Toronto-based Onex is in talks with rival buyout firms, and the price could be as high as US$2 billion which would be twice as much as Onex paid to buy the machinery maker three years ago.
Onex has hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to handle the auction, according to the report.
Dow Jones Newswire reported Onex is looking either to sell Husky to another private equity firm or take it public through an IPO. Dow Jones attributed that information to an undisclosed private equity source.
Onex owns 98 percent of Husky.
Private equity firms are buying and selling again, after the recession and financial crisis that dried up credit and slowed deal-making and leveraged buyouts.
That kind of activity didn't grind to a halt, but it really did almost stop. Now it's started to get going again, said economist Bill Wood, who runs Mountaintop Economics and Research Inc. in Greenfield, Mass.
Husky was publicly traded for a decade before Onex bought the firm for US$1 billion in 2007, although Robert and Elizabeth Schad owned or controlled about 44.1 percent of the shares. Financial analysts have speculated that Onex eventually would cash in on the investment through a sale or IPO.
Bloomberg.com also reported that Apollo Global Management LLC and Carlyle Group are among the private equity firms considering whether to bid for Husky.
Under Onex ownership, Husky has focused on its historically strongest area injection presses for thin-wall packaging as the company exited large-tonnage machines for automotive and other markets. Husky also is targeting medical and consumer-electronics markets.
Husky generated 2009 sales of C$1.14 billion (US$994 million). Onex reported that Husky posted earnings before interest, taxes, depreciation and amortization of US$197 million for the fiscal year ended Sept. 30.
This is not the first time Onex has been rumored to be looking to cash in on its investment in Husky. In November 2009, the Toronto Globe & Mail reported Onex was planning an IPO for Husky, potentially raising US$1.3 billion.
That report quoted undisclosed executives close to Onex.