Onex Corp. is preparing to launch two large companies as publicly traded issues, the Toronto-based private equity investment firm said Monday.
"There is a market there. There's a pretty strong market, particularly in Canada" CEO Gerry Schwartz told CBC News Network's Lang and O'Leary Exchange.
Although he didn't name the companies, there has been wide speculation Onex plans to list Husky Injection Molding Systems and Chicago-based The Warranty Group.
"We have a couple of companies that are very strong. Their performance has been fabulous —even over the period of the miserable economy from 2007 and 2009 — so they're just ready for it," he told host Amanda Lang.
The proceeds would make Schwartz and the firm he founded one of the dominant private equity investors in North America. Onex already has no debt, $900-million in cash and up to $3.7 billion US available from outside investors.
The plan would be to use the money to take over more under-performing companies and turn them around.
Confirmed AIG talks
Schwartz confirmed there's one company he has his eye on.
"We've been negotiating with AIG, which is the very troubled insurer in the U.S., to buy their International Lease Finance Corp., which is their airplane leasing business. We have a pretty substantial aerospace business so if we can do something there it would be a very nice addition to our aerospace group."
Schwartz also said credit markets have improved since the depths of the financial crisis.
"We're in a range of normal," he said. "The credit markets have loosened up tremendously.
"The interesting part is, while money's available again, it's very expensive and the covenants are very tight. The difference is that three years ago, there was lots of money available, no covenants or very loose covenants, and pretty cheap."
The Onex CEO said many hedge funds have left the market.
"I think the big thing that's happened is that there are so many people out of the market of providing funds," he said. "So you're back to a much more normal market in terms of who's making capital available."