* Will sell to private equity buyers for first time
* Raised C$1 bln fund in January
* Has made two acquisitions under new fund, more pending
By Pav Jordan
VANCOUVER, May 26 Birch Hill Equity Partners, a
mid-market Canadian private equity player, expects to have
distributed some C$700 million to its partner investors in the
first six months of the year after selling assets to strategic
buyers, a senior company executive said.
Stephen Dent, a partner with the fund, told Reuters on
Thursday the firm also has a number of other sale processes
underway, and that at least three could close before the end of
"Of those, two I would say will go to private equity buyers
and one will go to a strategic buyer, and of the other
transactions we've had this year, three would have gone to
strategic buyers," Dent said on the sidelines of the Canadian
Venture Capital and Private Equity Association annual conference
Sales of assets between private equity funds are gaining
momentum as the firms seek to deploy capital raised before the
global financial crisis, and as leverage returns to the market
and debt markets recover.
Those factors have made valuations on private equity assets
rise, and players say the market favors sellers over buyers.
Birch Hill has some C$2 billion in capital under management.
It has 20 partner companies and has seen 27 fully realized
investments since 1994.
Dent said the sale processes this year to other private
equity buyers would be a first for Birch Hill, which
historically has exited about half its investments through
initial public offerings and the other half through sales to
strategic, or corporate, buyers.
Late last year Birch Hill sold Kitchener, Ontario-based
Atria Networks, the owner of 5,600 km of fiber optic cable, to
Rogers Communications (RCIb.TO), Canada's biggest wireless
Dent said that Birch Hill made some C$355 million on the
deal after debt, on C$85 million of investment.
Birch Hill, with its Birch Hill Equity Partners IV fund of
slightly over C$1 billion in January, is also an active buyer,
although Dent said finding good deals in the current market was
"We've made two investments at this point in time," said
Dent, a Canadian who got his start in private equity as a summer
student at Toronto-Dominion Bank , Canada's
"And we'll probably announce some new transactions shortly
as we are actively looking to invest that fund right now."
Dent could not provide many details about the investments,
saying only that they would be valued at between C$25 million
and C$100 million, roughly in Birch Hill's sweet-spot range.
(Editing by Muralikumar Anantharaman)