Onex Reports Third-Quarter 2012 Results

TORONTO, ONTARIO--(Marketwire - Nov. 7, 2012) -

All amounts in U.S. dollars unless otherwise stated

Onex Corporation ("Onex") (TSX:OCX) today announced its consolidated financial results for the third quarter and nine months ended September 30, 2012 and an update on matters following quarter-end.

Highlights

• Onex completed the $813 million acquisition of SGS International, a global leader in design-to-print graphic services to the consumer products packaging industry.
  
  
• Onex agreed to acquire KraussMaffei, a leading manufacturer of plastic and rubber processing equipment, in a transaction valued at EUR568 million.
  
  
• Onex opened an office in London, England to support continued growth of its investing activities.
  
  
• Onex established a strategic partnership with Neil Fiske, an experienced executive in the retail industry.
  
  
• Onex completed the sale of Center for Diagnostic Imaging, resulting in a multiple of invested capital of 2.0 times.
  
  
• Onex Credit Partners priced its second collateralized loan obligation ("CLO") offering in a private placement transaction that will raise $521 million including $26 million from Onex.
  
  
• Including realizations and distributions, the value of Onex' interest in Onex Partners' and ONCAP's private investments grew by 10% and 11%, respectively, in the first nine months of 2012. Overall, Onex' proprietary capital, including $1.5 billion of cash and near-cash items, grew by 7% on a per share basis during the first nine months of the year to $39.38.
  
  

Acquiring and Building Businesses

"The past several months have been busy for us. We announced two acquisitions and continue to broaden our sourcing capabilities," said Gerald W. Schwartz, Chairman and Chief Executive Officer of Onex. "The SGS International investment resulted from several years of work in the consumer and packaging industries and KraussMaffei was a joint effort between our Toronto and London teams."

Based in Louisville, Kentucky, SGS International provides design-to-print graphic services for multiple packaging variations for food, beverage, personal care and other brands. The company has long-standing relationships with many of the world's leading consumer packaged goods companies and the printers that service them. SGS International has significant growth potential and under Onex' ownership, has already completed one add-on acquisition to extend its service offering to retail point-of-purchase displays and in-store banners. The acquisition of SGS International was completed in mid-October and the equity investment by Onex Partners III was $260 million, of which Onex' share was $66 million as a limited partner in the Fund. Onex Partners III and management of SGS International own 100% of the company.

Based in Munich, Germany, KraussMaffei makes machines and systems for forming plastic products used in automotive, consumer packaging and construction applications. The company holds a leading position in many of the segments it serves. Prior to agreeing to acquire KraussMaffei, we worked with the management team to identify meaningful opportunities for improving the operations and free cash flow profile. Onex Partners III is expected to make an equity investment of approximately $340 million, of which Onex' share is $86 million as a limited partner in the Fund. Upon closing, expected by March 31, 2013 and subject to customary conditions and regulatory approvals, Onex Partners III and management of KraussMaffei will own approximately 97% of the company. Including this acquisition, Onex Partners III will be approximately 60% invested.

While the private equity origination market has improved this year, it is still very competitive. Although it is difficult to predict investment pace, Onex is well-positioned to respond to opportunities. The parent company continues to be in excellent financial condition with no debt and approximately $1.5 billion of cash and near-cash items at September 30, 2012. Onex now has $2.2 billion of uncalled committed third-party capital for future acquisitions by Onex Partners III and ONCAP III.

The outlook for the global economy is still uncertain. Despite the challenging operating environment, Onex' interest in Onex Partners' and ONCAP's private companies grew by 10% and 11%, respectively, during the first nine months of 2012. These increases were achieved by executing our investment theses and creating equity value through cash flow improvements and debt reduction. Overall, Onex' proprietary capital, including $1.5 billion of cash and near-cash items, grew by 7% on a per share basis during the first nine months of the year.

By transforming under-valued businesses into industry leaders, Onex has generated a 28-year gross IRR of 28% and an average multiple of 2.9 times invested capital from realized, substantially realized and publicly traded investments. Success is strengthened through a meaningful alignment of interests. At September 30, 2012, the value of the team's investment in Onex' shares and its businesses was approximately $1.5 billion.

Managing and Growing Third-Party Capital

Onex earns recurring management fees and/or carried interest on $8.3 billion of third-party assets under management. At September 30, 2012, the value of Onex' unrealized carried interest was approximately $49 million based on the traded market values of Onex Partners' public companies and a further $77 million based on the quarter-end valuations of the private businesses. The actual amount of carried interest realized by Onex depends on the ultimate performance of each Fund.

In October, Onex Credit Partners priced its second CLO offering, which is expected to close in the fourth quarter of 2012. This private placement will raise $521 million including $26 million from Onex, and will increase Onex Credit Partners' third-party capital under management to $1.8 billion. In the last few years, the market for CLOs has significantly consolidated and favours well-capitalized, diversified sponsors like Onex. We're committed to growing this platform and, as market conditions permit, we expect Onex Credit Partners to launch additional CLOs, which will include investments from Onex. This would represent an additional source of recurring management fee income for Onex.

Consolidated Results

Onex' quarterly and full-year consolidated financial results do not follow any specific trends due to acquisitions and dispositions of businesses, changes in the value of its publicly traded and privately held operating companies and varying business cycles at its operating companies.

On a consolidated basis for the third quarter, revenues increased 12% to $6.7 billion compared to the same period of the prior year. The acquisitions completed in 2011, including JELD-WEN, contributed to this year-over-year revenue increase. Onex reported net earnings of $104 million compared to $184 million in the third quarter of 2011. The decrease in net earnings for the quarter was primarily due to forward-loss charges recorded by Spirit AeroSystems on certain new programs, partially offset by a net gain recorded by Spirit AeroSystems related to an insurance settlement.

On a consolidated basis for the nine months ended September 30, 2012, revenues increased 15% to $20.5 billion. Net earnings for the period were $116 million compared to $1.7 billion for the nine months ended September 30, 2011, which included $1.7 billion of earnings relating to the sales of Husky International and Emergency Medical Services Corporation. Cash flow from operations was $1.3 billion for the first nine months of 2012 compared to $481 million for the same period last year.

The Company paid a third-quarter dividend of C$0.0275 per Subordinate Voting Share on October 31, 2012 to shareholders of record on October 10, 2012.

For the 10-month period ended October 31, 2012, Onex repurchased 438,657 Subordinate Voting Shares under its Normal Course Issuer Bids for a total cost of C$17 million or an average cost per share of C$37.88.

Attached are the Unaudited Interim Consolidated Balance Sheets, Statements of Earnings, Statements of Cash Flows and information by industry segment for the quarter and nine months ended September 30, 2012 and 2011 as prepared under International Financial Reporting Standards. The complete financial statements, including Management's Discussion and Analysis of the results, are posted on Onex' website, www.onex.com, and are also available on SEDAR at www.sedar.com. Also attached is the "How We Are Invested" schedule, which details Onex' $4.8 billion of proprietary capital and provides private company performance information.

Webcast

Onex management will host a conference call to review the Company's results for the third quarter and nine months ended September 30, 2012 at 4:30 p.m. ET today. A live webcast of this conference call will be available in listen-only mode on its website, www.onex.com.

About Onex

Onex is one of North America's oldest and most successful private equity firms committed to acquiring and building high-quality businesses in partnership with talented management teams. Onex manages investment platforms focused on private equity, real estate and credit securities. In total, the Company manages approximately $14 billion, of which $9.6 billion is third-party capital. Onex invests its $4.8 billion of proprietary capital directly and as a substantial limited partner in its Funds.

Onex' businesses have assets of $39 billion, generate annual revenues of $34 billion and employ approximately 235,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. For more information on Onex, visit its website at www.onex.com. The Company's security filings can also be accessed at www.sedar.com.

This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

ONEX

How We Are Invested