Héroux-Devtek sold to Americans | Divergent opinions at the CDPQ and the FTQ Fund

The Caisse de dépôt et placement du Québec (CDPQ) and the Fonds de solidarité FTQ are not on the same wavelength regarding the sale of Héroux-Devtek to an American investment firm. The labour fund does not hide the fact that it would have liked a local solution.

While the Caisse welcomes the “strong commitments” of the buyer, Platinum Equity Advisors, particularly the one surrounding the maintenance of the landing gear specialist’s head office in Quebec, the FTQ Fund did not hide its disappointment on Friday, during a rare public outing.

“This is a company we can be proud of and we understand the desire behind this transaction, but we would have preferred a scenario with local partners,” says the Senior Vice-President of Private Equity and Impact Investments at the Fonds de solidarité FTQ.

The largest shareholder of Héroux-Devtek – one of the major players in the Quebec aeronautics industry – with a 14.3% stake, the nest egg has already given its blessing to the transaction announced Thursday, which values ​​the Quebec multinational at $1.35 billion. The Fonds de solidarité FTQ holds the third largest stake (11%) in the Longueuil-based company.

Mr. Pelletier did not specify whether the workers’ fund will vote for or against the transaction, which will need the approval of more than two-thirds of the Quebec manufacturer’s shareholders. The fund received the “final documents” for the transaction in the “last few hours.”

“Although we do not have control over this matter, we understand that it is impossible to prevent an entrepreneur from selling a business at the time of their choosing,” wrote Mr. Pelletier. “The Fund is multiplying initiatives to encourage takeovers by local people throughout Quebec.”

The Legault government had also expressed its disappointment and surprise at seeing Héroux-Devtek come under American control. The office of Economy and Innovation Minister Pierre Fitzgibbon said it had not been kept informed of the Quebec company’s actions in recent months.

Platinum Equity is offering $32.50 each for the landing gear specialist’s shares, a 28% premium to its closing price on the Toronto Stock Exchange the day before the announcement. On Bay Street Friday, the stock was trading around $31.

Given the support of the CDPQ and the promises of the American investment firm, it is unlikely that a higher purchase offer will be filed, estimates Benoit Poirier, of Desjardins Securities, in a report.

” Several features [de la transaction] are likely difficult for other buyers to replicate, in our view, particularly with respect to cost-reduction synergies related to facilities, offices or other facilities,” the analyst wrote.

Headquartered in Los Angeles, with offices in five other cities, including New York, London and Singapore, Platinum Equity holds interests in approximately 50 companies. Héroux-Devtek is its first major investment in aerospace.

In Quebec, the Quebec manufacturer has 756 employees. The sale of Héroux-Devtek should be finalized in March 2025.