Velan Inc. is set to change hands after its controlling shareholder agreed to sell a majority stake to funds managed by Birch Hill Equity Partners Management Inc.
Velan Holding Co. Ltd. has entered into an agreement to sell its 15,566,567 multiple voting shares and one subordinate voting share, representing about 72.1 percent of Velan’s outstanding shares and 92.8 percent of its aggregate voting rights, to Birch Hill at a price of $13.10 per share. The transaction values the stake at $203,922,040.80 in aggregate gross proceeds payable to Velan Holding and two other entities associated with its shareholders.
Founded in Montreal in 1950, Velan is one of the world’s leading manufacturers of industrial valves, generating sales of US$295 million in its most recently reported fiscal year. The company employs roughly 1,200 people and operates manufacturing plants in nine countries.
Birch Hill, a Toronto-based private equity firm with a 30-year track record, positions itself as a long-term investment partner focused on the mid-market growth companies in Canada and the United States.
As part of the deal, Birch Hill says it plans to maintain Velan’s significant presence in Quebec, including its Montreal head office. The firm intends to keep Velan active in the local industrial sector while supplying the resources and capital needed for the company’s next phase of growth in Canada and abroad.
Under an investor rights agreement, Birch Hill will have the right to appoint up to four of seven board nominees so long as it maintains ownership of more than 40 percent of Velan’s voting rights.
“Birch Hill's demonstrated success supporting Canadian leaders aligns with our strategy and values,” Velan CEO James A. Mannebach said in a press release. “By combining their deep operational expertise and improved access to capital, we will be in a strong position to focus on accelerating execution of our business plans and working to deliver exceptional value to our customers, employees, shareholders and other stakeholders.”
“We have immense respect for the 75-year legacy the Velan family has built, rooted in decades of engineering excellence and manufacturing expertise across critical global industries,” said Birch Hill partner and COO Pierre Schuurmans. “We are proud to invest in a company with such strong Quebec heritage and international presence.”
On the advisory side, Davies Ward Phillips & Vineberg LLP is serving as legal counsel to Velan, with National Bank Financial as the financial advisor. Norton Rose Fulbright Canada LLP is serving as legal counsel to the special committee, and McCarthy Tétrault LLP as legal advisor to Velan Holding. Stikeman Elliott LLP is serving as the legal counsel to Birch Hill, with TD Securities as financial advisor.
The deal is expected to close in the first half of 2026, subject to regulatory approvals and other customary closing conditions.
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