UPDATE 1-Onex Corp posts profit, sees seller's market cooling

Fri May 16, 2014 1:43pm EDT

(Adds details from call on buyout market)

TORONTO May 16 (Reuters) - Onex Corp, one of Canada's biggest private equity firms, reported a profit for the first quarter, and the company's CEO said he was beginning to see signs of an end to the current buyout seller's market.

"We've been in the thick of a seller's market for some time. And as in any seller's market, the other side of the coin is it's tough to be a value buyer," Gerry Schwartz, the company's founder and chief executive, said on a conference call. "We're beginning to see some reasons to believe a shift might occur before too long."

The company, which routinely buys and sells assets, has been more active on the selling side of late, taking advantage of high demand as yield-hungry investors prop up the credit market.

In April, Onex and the Canada Pension Plan Investment Board said they would sell industrial conglomerate Gates Corp to private equity firm Blackstone Group LP for $5.4 billion.

That followed the announcement in March that Onex would sell The Warranty Group, a provider of extended warranty contracts, to an affiliate of TPG Capital Management for an enterprise value of about $1.5 billion.

Schwartz said his belief that the market may turn is fueled by signs such as several recent overheated bids for middling companies.

Toronto-based Onex owns stakes in several companies, including electronics manufacturer Celestica Inc, and manages a handful of private equity funds.

First-quarter net income was $99 million, compared with a year-earlier loss of $271 million. Revenue rose 3 percent to $6.5 billion, while capital per share increased by 18 percent, above the company's long-term goal of 15 percent.

(Reporting by Cameron French; Editing by Lisa Von Ahn and Gunna Dickson)