TORONTO – Onex Corp. (TSX:OCX) and its affiliates have agreed to sell The Warranty Group to U.S. private equity firm TPG Capital in a deal that values the provider of extended warranties at US$1.5 billion.
The Canadian private equity firm said its portion of the proceeds, including carried interest, will be about US$385 million, once the deal closes in the third quarter.
Onex and its affiliates made a $498-million equity investment in Warranty Group in November 2006.
Once the deal with TPG closes, Onex and its affiliates will have received about $1.5 billion in proceeds from The Warranty Group, including prior distributions of $403 million.
It estimates that the Warranty Group will represent an 18 per cent rate of return for Onex and its affiliates.