Onex Profile
Onex Corporation operates as a diversified company whose subsidiaries operate as autonomous businesses. The company also has a non-controlling ownership interest in ResCare, a provider of residential, therapeutic, job training and education support services to people with developmental or other disabilities.
The company makes private equity investments through the Onex Partners and ONCAP family of Funds. The company operates in various industries, including electronics manufacturing services, aerostructures manufacturing, healthcare, financial services, theatre exhibition, customer support services, personal care products and communications infrastructure.
Segments
As of December 31, 2006, the company operated its business in seven segments – Electronics Manufacturing Services; Aerostructures; Healthcare; Financial Services; Theatre Exhibition; Customer Management Services; and other businesses, including Personal Care Products, Mid-Cap Opportunities, Communications Infrastructure and Real Estate.
ELECTRONICS MANUFACTURING SERVICES SEGMENT
The Electronics Manufacturing Services (EMS) segment consists of the business of Celestica Inc. and its subsidiaries (Celestica). Celestica operates as the electronics manufacturing services companies for original equipment manufacturers (OEMs) worldwide.
Celestica provides electronics manufacturing services to original equipment manufacturers (OEMs). Celestica operates approximately 35 facilities located in Asia, the Americas and Europe. The company has a global manufacturing network with worldwide supply chain management and offers services, including design and engineering, manufacturing and systems integration, fulfillment and after-market services.
Acquisitions and Dispositions
In March 2006, Celestica acquired certain assets in the Philippines from Powerwave Technologies, Inc., which operates in the telecommunications sector. In June 2006, Celestica sold its plastics injection molding business, which it had acquired as part of an EMS acquisition.
Products/Operations
Celestica serves OEMs across the computing, communications, aerospace and defence, industrial and consumer electronics industries. The products that Celestica manufactures would be found in various end products, including networking, wireless telecommunications and computing equipment; handheld communications devices; printers and related supplies and peripherals; storage devices; servers; medical products; audio visual equipment including LCD televisions; gaming products; aerospace and defense electronics, such as in-flight entertainment and guidance systems; and a range of industrial electronics equipment. Celestica’s electronics manufacturing services spans from product design to systems assembly, fulfillment and after-market services.
In addition, Celestica launched its Green Services offering – a suite of services which helps its customers comply with or prepare for environmental legislation, including the EU’s RoHS and WEEE laws and China’s environmental legislations. Celestica holds licenses to various technologies, which were acquired in connection with acquisitions from Fujitsu-ICL, Hewlett-Packard, IBM, NEC and other companies.
Competition
The company’s competitors include domestic and foreign companies, such as Flextronics International; Hon Hai Precision Industry; Jabil Circuit; Sanmina-SCI; and Solectron Corporation.
AEROSTRUCTURES SEGMENT
The Aerostructures segment consists of the business Spirit AeroSystems, Inc. and its subsidiaries (Spirit AeroSystems). Spirit AeroSystems, Inc., the independent non-original equipment manufacturer (non-OEM) designer and manufacturer of aerostructures worldwide. Spirit AeroSystems was formed from the acquisition of the assets of The Boeing Company’s (Boeing) commercial Wichita-Tulsa division.
Spirit AeroSystems operates as a Tier 1 manufacturer of aerostructures and parts for commercial aircraft. The company’s core competencies are designing and manufacturing large-scale structural components for commercial aircraft. Spirit AeroSystems’ core products include fuselage structures, nacelles (the structure that houses the engine and contains the thrust reversers), struts/pylons (structure that attaches the engine to the airplane wing), and wing components. Spirit AeroSystems manufactures aerostructures for all Boeing commercial aircraft, including approximately 70% of the airframe structure for the B737.
Acquisitions and Dispositions
In April 2006, Spirit AeroSystems purchased the aerostructures business unit of BAE Systems, which has operations in Prestwick, Scotland and Samlesbury, England. This business operates as Spirit AeroSystems (Europe) Ltd. Airbus is the customer of BAE Systems’ aerostructures business.
Products/Operations
Spirit AeroSystems designs and manufactures structural components for commercial aircraft. The company’s core competencies are designing and manufacturing aerostructures. It has technical/manufacturing expertise in both metal and composite materials. Spirit AeroSystems’ core products consist of fuselage section structures, nacelles, thrust reversers, struts/pylons, and wing components. The company manufactures components for Boeing’s B737, B747, B767, B777, and B787 aircraft, Airbus’s A320 family (A318/A319/320/A321), A330/A340 and A380 aircraft, and Raytheon’s Hawker 800XP business jet.
Spares: The products manufactured by Spirit AeroSystems are typically fixed structural components, which experience less wear-and-tear than moving components. The majority of Spirit AeroSystems’ spare parts and components are sold to Boeing’s Commercial Airline Services Group (CAS), which is the organization responsible for all of Boeing’s aftermarket sales and service, including spares, maintenance, repairs, refurbishments, upgrades, and modifications. Spirit AeroSystems sells spares for Airbus products to Airbus. Spirit AeroSystems also develops other sales and distribution channels for its spares under license from Boeing and with a parts manufacturing approval (PMA).
Tooling: Spirit AeroSystems possesses the capability to design, build and source assembly tools, composite tools and fabrication fixtures. The company has design capabilities for tooling from raw material and detail tooling operations and a manufacturing centre. Boeing Wichita had provided tooling fabrication for approximately one-third of Boeing’s Commercial Airplanes Division’s (BCA) overall tooling requirements. It is anticipated that Spirit AeroSystems would supply certain tooling to Boeing and would seek to serve new customers.
Military Equipment: Spirit AeroSystems provides select major military equipment to Boeing’s Integrated Defense Systems division (IDS). Products include aircraft parts, assemblies, spares and repairs. Spirit AeroSystems’ potential military-related revenue sources are the B767-Tanker platform for the U.S. Air Force and the B737-MMA for the U.S. Department of the Navy. The B767-Tanker platform requires U.S. Department of Defense and Congressional approvals. The MMA is designed to be an anti-submarine, anti-surface, surveillance and reconnaissance aircraft. The initial contract is for seven test aircraft, to be delivered in 2009 and 2010, with the total order expected to be 112 units, to be delivered beginning in 2011. Spirit AeroSystems has received security clearances, including necessary Defense Department and Department of Commerce approvals to work on classified military-related work.
Competition
The company competes with OEMs, such as Boeing and Airbus.
HEALTHCARE SEGMENT
The Healthcare segment consists of the operations of Center for Diagnostic Imaging, Inc. (CDI) and its subsidiaries; Emergency Medical Services Corporation (EMSC) and its subsidiaries; Skilled Healthcare Group, Inc. (Skilled Healthcare) and its subsidiaries; and Res-Care, Inc. (ResCare) and its subsidiaries.
Emergency Medical Services Corporation provides emergency medical services in the United States. Center for Diagnostic Imaging, Inc. provides diagnostic and therapeutic radiology services in the United States. Skilled Healthcare Group, Inc. operates skilled nursing and assisted living facilities in the United States, specifically in California, Texas, Kansas, Missouri and Nevada, that is focused on treating patients who require a level of skilled nursing care and rehabilitation therapy. Res-Care, Inc. provides residential, training, educational and support services for people with disabilities and special needs in U.S.
Center for Diagnostic Imaging
Center for Diagnostic Imaging, Inc. (CDI) is a premier, physician-led provider of diagnostic and therapeutic radiology services. CDI operates 39 freestanding outpatient imaging centers in 12 U.S. markets concentrated primarily in the central and upper midwest, with additional markets in Florida and Washington. The majority of CDI’s centers are multi-modality, formed in partnerships with local physicians, radiologists or hospitals. CDI provides various imaging procedures for all parts of the human anatomy with subspecialty concentrations in six key areas - musculoskeletal, spine, head and neck, body, cardiovascular, and diagnostic and therapeutic injections (DTI).
PRODUCTS/OPERATIONS: CDI’s centers offer various imaging technology, including Magnetic Resonance Imaging (MRI), Computed Tomography (CT), DTI (image-guided diagnostic and therapeutic injections), Positron Emission Tomography (PET), Positron Emission Tomography combined with CT (PET/CT), ultrasound, nuclear medicine, mammography, fluoroscopy and x-ray. The technology assists CDI with offering targeted product and service lines to approximately 48 different types of referring physicians. CDI provides imaging services to patients via referring physicians and imaging partnerships and collaboration with hospitals, physicians and radiologists.
Imaging Services: CDI’s product lines and procedures are organized in market-oriented, radiologist-championed clinical service lines:
Musculoskeletal - Focused on primary care, orthopedics, orthopedic surgery and sports medicine.
Neuroradiology - Targeted to neurology, neuroscience, neurological surgery, ENT and primary care, the products and services include anatomical and functional imaging.
Diagnostic and Therapeutic Injections (DTI) - Targeted to primary care, orthopedics/surgery, spine practices/surgery, sports medicine and chiropractics.
Body/Oncology - CDI’s abdominal imaging services are focused on primary care, ob/gyn, internal medicine, oncology, urology, pulmonology, and other physician specialties associated with organs and systems. In oncology, the emerging applications of Positron Emission Tomography (PET) and PET combined with Computed Tomography (PET/CT) continue to prove clinically valuable in the diagnosis, staging, restaging and treatment planning of various cancers.
Spine - Targets primary care, spine practices/surgery, orthopedics/surgery, sports medicine and chiropractics.
Cardiovascular - Primary care and cardiology are the primary targets for CDI’s non-invasive cardiovascular imaging services, including mobile nuclear medicine, mobile echo and Heart CT. CDI’s clinical service and product lines serve various referring physicians locally and nationally. CDI offers partnership models for three primary audiences - physician groups, radiologists and hospitals.
Emergency Medical Services Corporation
Emergency Medical Services Corporation (EMSC) operates primarily through two businesses - American Medical Response, Inc. (AMR) and EmCare Holdings Inc. (EmCare) and their respective subsidiaries. AMR provides emergency 911 transportation services, primarily under contracts with communities and other local governmental agencies. The services generally require AMR to respond to 911 calls in the designated area within a specified response time determined by the communities.
AMR’s business also includes non-emergency transportation services for patients requiring varying degrees of medical care between healthcare facilities or between healthcare facilities and their homes. AMR provides call centre and dispatch services, event medical services, managed transportation services and other services to public safety agencies, hospitals, communities, fire departments and other healthcare providers, including operating paramedic and EMT training schools. During 2006, AMR entered the aircraft medical transportation services business.
EmCare’s principal activity is providing staffing and management services to hospital emergency departments. EmCare is responsible for recruiting, evaluating credentials and scheduling qualified physicians to staff the emergency departments of contracting hospitals. EmCare also recruits and schedules physicians to provide medical care and treatment of patients in hospital inpatient settings and provides unbundled services, such as billing, scheduling, recruitment and risk management to its customers.
PRODUCTS/OPERATIONS: EMSC provides emergency healthcare services to communities, government agencies, private insurers, and healthcare facilities, including hospitals. EMSC operates in two segments based on the services provided to its customers:
Medical Transport Services: EMSC provides emergency and non-emergency transport services through its wholly owned subsidiary, AMR. AMR provides ambulance response services pursuant to contracts with counties, fire districts and municipalities. The contracts typically appoint AMR as the provider of emergency ambulance services in a designated service area and require AMR to respond to every emergency medical call within that area. Contracts are typically three to five years in length and are generally obtained through a bid process. Non-emergency transport services are generally provided through preferred provider contracts with hospitals and other healthcare facilities and organizations and are typically two years in length. Revenue from AMR’s contracts with communities and healthcare providers is typically collected from invoices generated by AMR for each patient transport.
Emergency Management Services: EMSC provides emergency management services through its wholly owned subsidiary, EmCare. EmCare recruits and schedules physicians and emergency support staff who manage emergency departments. EmCare operates as the recruiter of emergency medicine physicians. Their physician recruiters are trained to identify and pre-screen all candidates and recommend the right physician for each position. EmCare provides its services pursuant to contracts with hospitals. The contracts are usually three years in length. In all cases the hospitals are directly responsible for billing and collecting all non-physician related services.
Skilled Healthcare
Skilled Healthcare provides integrated long-term healthcare services through its skilled nursing and assisted living facilities and rehabilitation and other related healthcare services in California. Skilled Healthcare’s operations are comprised of 61 skilled nursing facilities and 12 assisted living facilities in four states, which are generally clustered in urban or suburban markets.
PRODUCTS/OPERATIONS: Skilled Healthcare subsidiary services focus primarily on the medical and physical issues facing high-acuity patients and are provided through its skilled nursing facilities, assisted living facilities, integrated and third party rehabilitation therapy business and hospice. Skilled Healthcare has two reportable operating segments – long-term care services, which includes the operations of skilled nursing and assisted living facilities and represents the most significant portion of its business, and ancillary services – which include its integrated and third party rehabilitation therapy and hospice businesses.
Long-Term Care Services: Skilled Nursing Facilities - Skilled Healthcare provides skilled nursing care at 61 clustered facilities, having 7,648 licensed beds, in California, Texas, Kansas, Missouri and Nevada. The company has developed programs for and actively markets its services to high-acuity patients, who are typically admitted to its facilities as they recover from strokes, other neurological conditions, cardiovascular and respiratory ailments, single joint replacements and other muscular or skeletal disorders.
Skilled Healthcare uses interdisciplinary teams of medical professionals, including therapists, to provide services prescribed by physicians. The teams include registered nurses, licensed practical nurses, certified nursing assistants and other professionals. Many of its skilled nursing facilities are equipped to provide specialty care, such as chemotherapy, dialysis, enteral/parenteral nutrition, tracheotomy care, and ventilator care. The company also provides standard services to each of its skilled nursing patients, including room ad board, special nutritional programs, social services, recreational activities and related healthcare and other services.
In 2004, Skilled Healthcare introduced its Express Recovery program, which uses a unit within a skilled nursing facility to deliver a rehabilitation regimen to high-acuity patients. Each Express Recovery unit typically has 12 to 36 beds and provides skilled nursing care and rehabilitation therapy for patients recovering from conditions, such as joint replacement surgery, and cardiac and respiratory ailments. Skilled Healthcare operates 23 Express Recovery units with 620 beds and plans to complete the development of 3 additional Express Recovery units with approximately 105 beds by the end of 2007.
Long-Term Care Services: Assisted Living Facilities - Skilled Healthcare complements its skilled nursing care business by providing assisted living services at 12 facilities with 794 licensed beds. Skilled Healthcare’s assisted living facilities provide residential accommodations, activities, meals, security, housekeeping and assistance in the activities of daily living to seniors who are independent or who require support, but not the level of nursing care provided in a skilled nursing facility.
Ancillary Services: Rehabilitation Therapy Services - Skilled Healthcare provides physical, occupational and speech therapy services to each of its 61 skilled nursing facilities and to approximately 107 third-party facilities through its Hallmark Rehabilitation subsidiary. The company provides rehabilitation therapy services at its skilled nursing facilities as part of an integrated service offering in connection with its skilled nursing care. Skilled Healthcare believes that an integrated approach to treating high-acuity patients improves its ability to achieve successful patient outcomes and enables it to identify and treat patients. The company’s partnership approach to providing rehabilitation therapy services for its third-party operators is in contrast to emphasize treatment and successful clinical outcomes.
Ancillary Services: Hospice Care - Skilled Healthcare provides hospice services in California and Texas through its Hospice Care of the West business. Hospice services focus on the physical, spiritual and psychosocial needs of both terminally ill individuals and their families and consist of palliative and clinical care, education and counseling. Skilled Healthcare’s Hospice Care of the West business received licensure in California and Texas.
ResCare
In June 2004, Onex equity investment in Res-Care, Inc. (ResCare) was approximate 28% interest in the company. ResCare provides residential, therapeutic, job training and educational support to people with developmental or other disabilities, to youth with special needs and to adults who are experiencing barriers to employment. The acquisition was undertaken through Onex Partners. Onex’ share of this investment was for 7% interest in ResCare.
FINANCIAL SERVICES SEGMENT
The Financial Services segment consists of the business The Warranty Group, Inc. (The Warranty Group) and its subsidiaries. The Warranty Group, Inc. operates as an integrated underwriters and administrators of extended warranties. With operations in 33 countries, The Warranty Group offers extended warranties on various consumer goods, including automobiles, consumer electronics and home appliances.
The company also provides credit insurance and other specialty insurance products. Through an internal sales force and independent agents and brokers, The Warranty Group markets its products to a network of automobile dealerships, consumer electronics retailers and manufacturers, financial service providers and real estate agencies which sell the company’s products along with the underlying product the warranty covers. The Warranty Group serves its customers and distributors by operating in two capacities - as a third-party administrator (TPA) responsible for processing claims and as an underwriter responsible for pricing the warranty or credit insurance and ensuring future claims payments. In November 2006, Onex, Onex Partners I and Onex Partners II acquired The Warranty Group. Onex, Onex Partners I and Onex Partners II invested for an initial 98% ownership interest.
Products/Operations
The Warranty Group is managed by geography and in business segments.
NORTH AMERICA – Automotive: The Warranty Group’s North American Automotive division operates as a third party provider of automotive extended service contracts in North America. Acting as both an extended warranty underwriter and administrator, The Warranty Group serves approximately 7,000 dealerships in North America. The company’s products are sold through finance and insurance departments (F&I) of auto dealerships, and include extended service contracts, guaranteed asset protection and credit life and disability insurance. The Warranty Group also provides training and consulting services to improve the sale of warranty products and the overall profitability of its customer dealerships.
NORTH AMERICA –Consumer and Related Products: The Warranty Group’s North American Consumer and Related Products segment provides extended warranties on consumer products and specialty insurance products. Acting as both an extended warranty underwriter and administrator, The Warranty Group serves traditional electronics and appliance retailers and specialty finance companies. The Warranty Group also underwrites and administers specialty insurance products for financial services firms and travel companies. The company offers credit card enhancement products, such as collision/loss damage waiver and product return guarantee benefits. The Warranty Group provides travel companies with trip cancellation/interruption insurance and evacuation and repatriation services for sale to the consumer. The company also offers a collection of miscellaneous products, such as involuntary unemployment insurance and deductible reimbursement products related to insured mortgage loans.
NORTH AMERICA – Home Warranty: Through its Home Warranty segment, The Warranty Group provides extended warranty coverage for non-structural home systems, (e.g., major appliances and systems such as heating and air conditioning). The Warranty Group’s home warranty products are distributed through real estate brokers, TPAs and, directly through utilities and financial services companies. In the real estate segment, The Warranty Group’s home warranty products are typically attached to the sale of an existing home and are usually one-year contracts. In this channel, The Warranty Group competes primarily with regional or local providers, and with American Home Shield.
EUROPE – Automotive: The Warranty Group provides pan-European automotive extended warranties to all EU countries. The company primarily offers extended warranties and related administrative products on used cars through manufacturer-owned and independent dealerships throughout Europe.
EUROPE –Electronics: The Warranty Group’s European Electronics segment underwrites and administers extended warranties for electronic (Electrical appliances, cellphones and PCs) retailers, distributors and manufacturers throughout Europe, with 81% of volume concentrated in the United Kingdom. The Warranty Group is the provider of Pan European PC insurance scheme; (20+ countries). The Warranty Group expands geographically into the new EU states and Eastern Europe. Products are distributed by the European Electronics segment in a manner similar to the North American consumer products business. Most of The Warranty Group’s distribution partnerships are similar to the ‘wholesale’ arrangements the company has in the U.S.
EUROPE – Credit Insurance: The Warranty Group provides credit insurance contracts in Ireland and the Netherlands. The products principally include life, disability and involuntary unemployment policies sold by retail banks and finance companies in conjunction with personal, and automotive loans. The policies are written as both multi-year and monthly contracts. Its operations are geographically diversified primarily in the U.K., Continental Europe and in Ireland.
LATIN AMERICA AND ASIA: Within Asia and Latin America, the primary countries in which the company operates are Japan, South Korea, Malaysia, Brazil, Argentina and Mexico. The Warranty Group has been operating in the markets, often as the first provider of extended warranties, and has established customer relationships and local market knowledge.
Competition
The company’s competitors in the North American automotive market include manufacturers and third parties, such as Jim Moran & Associates and Universal Underwriters. Its competitors for consumer and related products in the North American market include consumer electronics retailers and electronics and appliance manufacturers, such as Sony and Whirlpool; newer channels include retailers and manufacturers of other consumer products, such as musical instruments or jewelry. The Warranty Group competes in this market with other insurers, such as AIG and Assurant in addition to local and national TPAs. The company’s competitors in the European market for its Credit Insurance include Picture Finance, Allied Irish Bank and PostBank.
THEATRE EXHIBITION SEGMENT
The Theatre Exhibition segment consists of Cineplex Entertainment Limited Partnership, (Cineplex Entertainment) and other operations of Cineplex Odeon, not included in Cineplex Entertainment (collectively are referred to as Cineplex). Cineplex operates as the exhibitor in Canada operating theatres under the Cineplex Odeon, Coliseum, Colossus, Famous Players, Galaxy and SilverCity brands. Cineplex owns, operates or has an interest in 130 theatres with 1,305 screens in six provinces.
In July 2005, Cineplex Entertainment acquired Famous Players, a division of Viacom Canada, Inc. In connection with the Famous Players acquisition, Cineplex Entertainment entered into a Consent Agreement with the Commissioner of Competition that required the sale of 34 theatres with a total of approximately 282 screens. As of December 31, 2006, CGIF indirectly held 59.7% of the LP Units. Pursuant to its limited partnership agreement, Cineplex Entertainment would make distributions of its distributable cash to holders of the LP Units, including Onex and indirectly, CGIF. As of December 31, 2006, Onex and the other holders of LP Units controlled by Onex (Onex Group) collectively held 39.6% of the LP Units.
Products/Operations
Cineplex’s revenues are primarily generated from box-office and concession sales, which in turn are driven by attendance and price levels.
Box-office and concessions revenues: Cineplex provides its patrons with a premium movie going experience, including a level of customer service. This level of service, combined with targeted film selection and the overall appeal of those films, drives attendance at Cineplex’s theatres. Tickets are sold at Cineplex’s theatres through box offices and automated ticketing machines, and remotely via the Internet. Cineplex also offers corporate sales, group ticketing and gift certificates. Cineplex’s theatres appealing primary concession stations designed for various services. Auxiliary concession stations offer various products located throughout Cineplex’s theatres for additional sales.
Ancillary revenues: Cineplex develops and expands its revenue streams from sources other than box-office and concession revenues. Some of the ancillary revenues include advertising, games revenues and other.
Advertising - Advertising represents Cineplex’s source of ancillary revenues. Cineplex’s in-theatre advertising programs consist of rolling stock and a digital pre-show (which are shown before feature presentations), Famous magazines, video monitors, display signage, third-party branding and product sampling. Cineplex offers advertisers various packages that include options, such as on-screen and in-lobby advertising, and third-party branding and product sampling. Cineplex also acts as an agent on a commission basis for selling in-theatre advertising for various other theatre exhibition circuits. The addition of digital delivery and projection technologies would improve the quality of the media that Cineplex offers for sale to advertisers, enable Cineplex to streamline the delivery of advertising content, allow for interactive and targeted marketing and an expanded advertising base. In-theatre advertising is used by advertisers in international markets than it is in Canada.
Games revenue - Cineplex’s theatre experience is complemented by games rooms featuring various game machines. The game machines are owned by third-party suppliers, with Cineplex receiving a percentage of all sales. The third parties service and rotate game machines on a regular basis.
Other - Cineplex also generates ancillary revenues by leasing its theatres for motion picture premieres and screenings, other entertainment related events, corporate events and private parties. Some of Cineplex’s theatres have earned reputations as the ‘preferred’ theatres for the events within their markets. Cineplex also has promotional partnerships, which improve its marketing capabilities. The company is exploring additional ancillary revenue opportunities, including the sale of naming rights for certain locations.
Markets
Cineplex is the theatre exhibitor in Canada and owns, operates or has an interest in 1,305 screens in 130 theatres in six provinces.
CUSTOMER MANAGEMENT SERVICES SEGMENT
The Customer Management Services segment consists of the business of SITEL Worldwide Corporation and its subsidiaries (SITEL). This business was formerly known as ClientLogic Corporation (ClientLogic). Onex has 67% ownership interest in SITEL.
In January 2007, ClientLogic acquired 100% of SITEL Corporation (SITEL), a global provider of outsourced customer support services that handles approximately two million daily customer interactions. The company was merged with ClientLogic and renamed SITEL Worldwide Corporation.
SITEL meets clients’ customer care and transaction processing needs through approximately 67,000 associates in 28 countries. The new company provides solutions from on-shore, nearshore and offshore locations across approximately 145 facilities throughout North America, South America, Africa and Asia Pacific.
SITEL was acquired to increase ClientLogic’s market share, expand ClientLogic’s geographic footprint, and increase the offerings of ancillary services. The combined organization, named SITEL Worldwide Corporation, would have 67,000 associates working from approximately 145 locations in 28 different countries. In January 2007, ClientLogic acquired the 49% minority equity interest in Contact World, Inc. (Contact World). The transaction was funded through ClientLogic’s credit facility agreement.
Products/Operations
SITEL’s clients are primarily engaged in providing Internet access and telephone service, computer hardware and software manufacturing, retailing, consumer goods manufacturing, media services, transportation services, and financial services.
The company operates contact centers that provide customer support, technical support, sales support and order processing, primarily by responding to inbound telephone calls. Customer communications are also received via the Internet, mail and fax. SITEL also performs outbound customer communications and ancillary services, such as order and item processing, billing and collections for clients as part of a customer management solution.
The company has various contracts and billing arrangements with its clients. Clients also place a premium on suppliers that offer a global solution that would be customized to their needs, thus minimizing the number of supplier relationships they are required to manage. The company, through SITEL, operates the U.K., Belgium, Germany, Italy, Spain, Nordics, France, and The Netherlands. The company has presence in 28 countries across North America, South America, Europe, Asia and Africa.
Competition
The company’s third-party competition includes APAC Customer Services; Convergys; SR Teleperformance; Sykes; TeleTech Holdings; and West Corporation.
METAL SERVICES BUSINESS
The Metal Services business consists of the business of Tube City IMS Corporation and its subsidiaries (TCIMS). The company acquired TCIMS in January 2007. TCIMS provides outsourced services to steel mills. The company, which provides services at 67 mills sites throughout the U.S., Canada and Europe, through its Tube City and IMS divisions, provides raw materials procurement, scrap and materials management, surface conditioning, and slag processing services.
Principal Products/Operations
TCIMS provides outsourced services to steel mills providing services critical to steel mill operations. TCIMS does not produce steel, but provides services in other stage of the steel making process, from initial raw materials procurement through finished goods handling. TCIMS’s services provide long-term customer contracts that normally range from five to 10 years in length. The services TCIMS provides are divided into services that are performed in the process prior to the production of raw steel (pre-production services) and services performed after the production of raw steel (post-production services).
Pre-production services include:
Raw Materials Procurement: TCIMS operates on a basis and acts on behalf of customers to purchase approximately seven million tons of raw materials inputs annually, including scrap metal and scrap substitutes for use in the steel production process worldwide. TCIMS delivers raw materials to its customers, concurrently arranges to purchase and sell raw materials at specified prices, typically locking in a margin.
Raw Materials Optimization: TCIMS developed and markets and operates on a fee-per-ton basis software packages that are proprietary, real-time raw materials optimization systems that include materials planning procurement and utilization platforms. The packages and services are designed to allow steel producers to optimize their input of materials to obtain the lowest liquid steel cost for a desired type and grade of steel, based on market conditions, raw materials availability and each steel mill’s operating characteristics.
Scrap Management and Scrap Preparation: Pre-production scrap management composes of three functions: receiving and inspecting, preparation and sorting, and transportation of raw materials to melt shops. TCIMS is responsible for on-site management of customers’ raw materials and delivery of prepared raw materials to customers’ melt shops. TCIMS’s on-site operations are integrated within the steel mill’s production process.
Post-production services include:
Slag Processing, Metal Recovery and Sales: During the steel production process, slag, a by-product, accumulates inside the mills’ melt shops and must be removed. TCIMS removes and processes the slag to recover metallic material that is either reused in the production of steel by the host mill or sold. The remaining non-metallic materials typically are sold to third parties as aggregates for use in cement production, road construction and agricultural applications.
Semi-Finished and Finished Material Handling/Product Handling: TCIMS handles and transports semi-finished and finished steel products using operations specific equipment. TCIMS owns and operates slab, billet and pallet carriers to transport semi-finished and finished materials within a mill. Material handling equipment is also used to move finished products from the mill into inventory and from inventory onto rail cars, trucks or barges for shipment to the mill’s customers.
Surface Conditioning: Surface conditioning is a process that removes imperfections from steel mill products so that they would be used in applications, such as household appliances and automotive products.
Markets
Geographically, TCIMS’s business in concentrated in North American with additional markets in France, Belgium, Eastern Europe and a presence, though a joint venture relationship, in China. TCIMS operates in North America by offering services.
Competition
In North America, the company’s primary direct competitors include Harsco Corporation through its MultiServ division; Edward C. Levy Co.; the David J. Joseph Company; and Stein Steel Mill Services, Inc. In Europe, South America and Asia, the company’s competitors include local contractors, including Gagneraud Industries SAS and Egon Evertz KG in Europe.
COMMUNICATIONS INFRASTRUCTURE BUSINESS
The Communications Infrastructure business consists of the business of Radian Communication Services Corporation and its subsidiaries (Radian). Radian is a North American communications infrastructure and integrated network services company serving the telecommunications and broadcast industries.
Radian’s services include - wireless network design, installation, management and optimization, tower engineering, manufacturing and broadcast systems. Radian’s deployment expertise ranges from projects, such as a broadcast facility to network deployment on a nationwide basis for wireless communications systems.
Principal Products/Operations
Radian offers services to deliver integrated field and network deployment solution. Its services include project management, network and system hosting, tower services, aerial services, wireless engineering services, wireless field deployment, and broadcast services. Radian has broadcast and technical services capabilities in Canada. Radian’s services are available either individually or as solutions, enabling customers to outsource the entire delivery of communications infrastructure and/or services.
Competition
The company’s competitors in the Carriers/OEMs segment are divided into five business groupings - service and network companies, such as Westower, SPX; general contractors, such as Bechtel, General Dynamics; OEMs, such as Nortel, Ericsson, Alcatel; Wireless Carriers In-house Staff; and Tower Consolidators, such as Crown Castle, American Tower, SBA. The company’s competitors in the broadcast market segment include – manufacturers, such as ERI, Stainless, Tower Innovation; Tower Consolidators, such as Crown Castle, American Tower; In-house Engineering Staffs; and Broadcast OEMs.
PERSONAL CARE PRODUCTS BUSINESS
The Personal Care Products business consists of the business of Cosmetic Essence, Inc. and its subsidiaries (CEI). CEI provides supply chain management (SCM) services and other integrated outsourced solutions to the United States personal care and household products industries.
CEI’s broad SCM service offering incorporates various value-added services, including - research, development and formulation (R&D); package design, development and sourcing; manufacturing and filling; packaging and assembly; and logistics and distribution. The company’s product capabilities include the production of - alcohol-based fragrance products, such as perfumes, colognes, and splashes; cremes and lotions, such as moisturizers, body washes, and cleansers; color cosmetics, such as pressed and loose powders, lip products, and liners; other ancillary personal care products, such as specialty hair care and select over-the-counter (OTC) products; and household products, such as shoe care.
Principal Products/Operations
CEI provides supply chain management services and other outsourced solutions to marketers and retailers of personal care and household products. The company offers a value proposition to its customers by delivering improved and products, and by providing services for developing, branding, marketing, and retailing products. The company’s SCM service offering includes - R&D; package design, development, and sourcing; manufacturing and filling; packaging and assembly; and logistics and distribution services.
Research & Development: The breadth of CEI’s R&D capabilities includes product conceptualization, formulation, testing, and pilot production across multiple product platforms.
Packaging and Assembly: CEI maintains packaging and assembly capabilities throughout its network of facilities. Traditional packaging and assembly services include cellophane shrink wrapping, labelling, inkjet coding, carton sealing, bar coding, and gift set assembly. The company also provides secondary packaging services, including the design, manufacture, and assembly of custom thermoformed packaging and rigid set boxes for the personal care industry.
Logistics and Distribution: CEI’s global logistics and distribution services include order fulfillment; flexible delivery from ‘customer pick-up’ to direct store delivery; outsourced MIS; and logistics management.
MID-CAPITALIZATION BUSINESS
The Mid-Capitalization business consists of the business of ONCAP L.P. (ONCAP I) and its related companies and ONCAP II L.P. (ONCAP II). ONCAP II has interests in the businesses of CSI Global Education Inc. (CSI), based in Toronto, Ontario; and Environmental Management Solutions Inc. (Environmental Management Solutions), based in Burlington, Ontario.
ONCAP operates as a private-equity fund formed by Onex to invest in mid-capitalization, North American-based companies. ONCAP’s provides the capital and management expertise necessary to grow small public or private companies into companies to take advantage of the investor appeal, valuations and increased attractiveness to strategic buyers of capitalization companies.
In January 2006, ONCAP II acquires CSI Global Education Inc. (CSI), a provider in Canada of financial education and testing services designed for the financial community. CSI provides various educational solutions and custom training programs to financial institutions, financial professionals and individuals seeking to pursue a career in finance.
In March 2006, ONCAP II made an investment in Environmental Management Solutions Inc., an environmental services company specializing in the management, treatment, reuse and disposal of organic waste and contaminated soil, with an emphasis on beneficial reuse. In November 2006, ONCAP II made an add-on investment in Environmental Management Solutions. The proceeds of which were used to partially finance Environmental Management Solutions’ acquisition of Biogenie S.R.D.C.
Products/Operations
CSI Global Education: CSI’s product offering includes financial courses, testing services, custom training and in-class seminars. CSI’s products are created in cooperation with financial industry regulatory authorities and are recognized in Canada and internationally, including the United States, Japan, China, and the U.K. CSI’s courses are primarily offered on-line, in both English and French, with various learning options available. In addition to the core product offerings, CSI creates customized learning for its clients, which would range from completely new subject matter to a minor modification of an existing product. The company operates out of two leased offices, including the CSI head office in Toronto, which houses senior management, sales, curriculum and content experts, and operations staff and an office in Montreal, which includes a sales staff, French language customer support, and a French translation team.
Environmental Management Solutions, Inc.: Environmental Management Solutions, Inc. is an integrated environmental services company specializing in the management of organic-based waste streams and contaminated soils, with an emphasis on beneficial re-use. EMS offers solutions to municipal, commercial and industrial clients in Canada, the northern United States, England and France through its subsidiaries. Providing environmental contracting, off-site treatment and recycling of contaminated soil, and remediation of contaminated or degraded sites in North America, the United Kingdom and France. EMS also provides environmental services, including the land application, composting or disposal of organic wastes and eco-product sales in Quebec and Ontario. EMS provides tank precision leak testing and statistical inventory reconciliation, compliance testing, and facility compliance and tank system audits across Canada.
REAL ESTATE BUSINESS
The Real Estate business consists of the business of Onex Real Estate Partners and all its related subsidiaries.
Onex Real Estate Partners
In January 2005, Onex established Onex Real Estate Partners, a partnership acquiring and improving real estate assets in North America. During 2006, Onex Real Estate Partners formed three partnerships with Camden Property Trust: Camden Norfolk Plaza LP, Camden Jamboree LP and Camden College Park LP (collectively ‘The Camden Partnerships’).
Camden Norfolk LP is a development project of 271-unit apartment community in Houston, Texas. Camden Jamboree LP is a development project of 290-unit apartment community in Irvine (Orange County), California. Camden College Park LP is a development project of 508-unit apartment community in College Park, Maryland (near Washington D.C.).
In December 2006, Onex Real Estate Partners formed a partnership with Cronus Capital to acquire housing communities in New York City. The business plan is to acquire assets and through capital improvement and active property management, Onex and Cronus. As of February 14, 2007, Onex Real Estate Partners had acquired 7 properties.
Significant Events
Town and Country Trust: In March 2006, Onex Real Estate Partners, in a joint venture with Morgan Stanley Real Estate and Sawyer Realty Holdings LLC, acquired Town and Country Trust (Town and Country). Town and Country owned and operated 37 apartment communities in the Mid-Atlantic States and Florida. In February 2007, OREP sold its Town and Country properties.
History
Onex Corporation was founded in 1980.
