Li Ka-Shing to buy Canada's Reliance Home Comfort for $2.1 bn

Li Ka-Shing, Hong Kong's richest man, yesterday struck a deal to buy Canada's Reliance Home Comfort from private equity firm Alinda Capital Partners for $2.1 billion (C$2.82 billion).

The proposed acquisition is being carried out through CKP (Canada) Holdings Ltd, a unit of Cheung Kong Property Holdings Ltd, of which the Li family trust is the largest shareholder.

CKP (Canada) will fund the transaction from cash on hand and an assumption of all of Reliance's existing debt.

Post closing, CKP (Canada) said that it plans to continue to keep Reliance in Ontario with the existing executive team managing the business.

CKP said it intends to sell up to 25 per cent of Reliance to CK Infrastructure, another company controlled by the Li family trust, upon obtaining the necessary approvals.

Last month, Alinda had hired Canadian Imperial Bank of Commerce and Goldman Sachs as financial advisers to advice on the sale. (See: Alinda Capital Partners seeks to sell Reliance Comfort for C$3 bn to C$4 bn)

Connecticut-based Alinda had acquired Reliance's predecessor in 2007 for C$1.74.

Founded in 1997, Reliance Comfort provides heating, cooling, and water heater solutions for homeowners in Canada.

The company sells, rents, maintains, and services heating, ventilation and air conditioning equipment, furnaces, water heaters, air conditioners, and other HVAC products.

It also offers plumbing services, protection and maintenance plans, and furnace and air conditioner services.

''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, president and CEO of Reliance.

"We have been proud owners of Reliance since June 2007 when we took private the income trust UE Waterheater Income Fund. The company has been well led by its management team and its team members have provided exceptional customer service. We believe Reliance and its customers will be in great hands with CKP as the new owners," said, Chris Beale, Alinda's managing partner.

''I am very happy about the Reliance acquisition. With my close ties in the country, I have always been on the lookout for sizeable investments back in Canada,'' said Victor Li, managing director of CKP and co-Chairman of Husky Energy Inc.

The Li family trust has invested substantially in Canada. In addition to Husky Energy, other Canadian businesses in their investment portfolio include Park'N Fly, Canadian Power Holdings Ltd, Wex Pharmaceuticals and Santé Naturelle AG.