Li Ka-Shing Buys Canada's Reliance Home for $2.1 Billion
The purchase of the water heater and air conditioner firm will be made through CKP (Canada) Holdings Ltd. and is conditional on customary approvals, according to a statement Friday. The acquisition will be made with cash on hand and the assumption of Reliance’s debt, the companies said.
CKP is a unit of Cheung Kong Property Holdings Ltd., of which the Li family trust is the largest shareholder. Reliance will continue to be based in Ontario with the existing executive team managing the business, the companies said.
"I am very happy about the Reliance acquisition. With my close ties in the country, I have always been on the lookout for sizable investments back in Canada," said Victor Li, managing director of CKP.
Victor Li, Li Ka-Shing’s son, is also co-chairman of Husky Energy Inc., the Calgary-based oil and gas firm. The Li family trust owns several other Canadian companies including Park’N Fly, Canadian Power Holding Ltd., Wex Pharmaceuticals and Sante Naturelle AG.
Alinda, based in Greenwich, Connecticut, bought Reliance’s predecessor for C$1.74 billion in 2007, according to a statement at the time. Reliance Home Comfort leases and services water heaters, furnaces and air conditioning units for about 1.7 million customers in Canada, according to Alinda’s website.
"We are thrilled to have CKP as our new investment partner. This acquisition will continue to support our offerings to our customers," said Sean O’Brien, Reliance chief executive officer. "We believe that CKP will help accelerate the momentum we have generated over the last few years."
CKP said it intends to sell up to 25 percent of Reliance to CK Infrastructure, another company controlled by the Li family trust, upon obtaining the necessary approvals.
Goldman Sachs Group and Canadian Imperial Bank of Commerce acted as financial advisers to Reliance while Torys LLP provided legal advice.