In a strategic move that underscores the global appetite for Canadian infrastructure assets, two prominent Australian institutional investors are entering the fray for Information Services Corporation (ISC), a major player in real estate data services based in Regina. The potential acquisition is set against a backdrop of increasing competition from Canadian pension funds, signalling a robust interest in this sector.
Australian Giants in the Bidding Arena
Queensland Investment Corporation (QIC) and Macquarie Asset Management, both titans in Australia’s investment landscape, are reportedly engaged in discussions to acquire ISC. This comes as the Canadian pension fund landscape, particularly the Ontario Municipal Employees Retirement System (OMERS), also vies for a stake in the company. OMERS, which already has a foothold in the land-registry market through its ownership of Teranet, is well-positioned to leverage its experience in a similar business.
Sources close to the negotiations, who chose to remain anonymous, indicate that Melbourne-based Plenary Group is collaborating with the Caisse de dépôt et placement du Québec on a prospective bid as well. The growing interest from both Australian and Canadian firms highlights the competitive dynamics at play in the current bidding war.
Strategic Review and Market Dynamics
ISC has been undergoing a strategic review since last autumn, prompted by an activist investment campaign led by Plantro Ltd., under the direction of entrepreneur Matthew Proud. The review aims to assess the company’s future direction and has set the stage for the current bidding process. Notably, ISC was initially established as a Crown corporation by the Saskatchewan government in 2000 and transitioned to public trading on the Toronto Stock Exchange in 2013.
The firm derives stable revenue from fees tied to real estate transactions, a characteristic that aligns well with the long-term investment strategies of pension funds. Currently, the largest stakeholder in ISC is the Crown Investments Corporation of Saskatchewan (CIC), which holds a 29.3% share and is reportedly open to selling its stake, provided that the new ownership guarantees the company’s headquarters remain in Regina.
Financial Projections and Valuation Targets
Advisors from RBC Capital Markets and law firm Stikeman Elliott LLP are managing the strategic review process, urging bidders to propose offers of at least $60 per share, which would translate to a valuation of approximately $1.11 billion. As of the latest trading session, ISC shares were valued at $44.13, reflecting a market capitalisation of $825 million.
This valuation comes in light of ISC’s ambitious expansion strategy, which aims to double the business size by 2028. Recent financial forecasts suggest that ISC anticipates revenues between $273 million and $283 million for the current year, with adjusted EBITDA projected to fall between $100 million and $107 million. The company has also diversified its service offerings, having won contracts like the one with the Irish Charities Regulator to manage charity registrations in Ireland.
Global Investment Trends
The increased interest from Australian fund managers points to a broader trend where these entities have evolved into global infrastructure investors since the 1990s. Following the privatisation of public assets, such as airports and power utilities, they have expanded their portfolios internationally. For instance, QIC recently financed the development of a terminal at Montreal Metropolitan Airport, while Macquarie has invested significantly in Canadian data centres and pipelines.
With substantial assets under management—QIC oversees AU$131 billion (approximately C$126 billion), and Macquarie manages AU$945 billion (approximately C$910 billion)—these firms are well-equipped to make significant investments in Canadian infrastructure.
Why it Matters
The intense competition for ISC signifies not only the value placed on Canadian digital infrastructure but also reflects a broader trend of international capital seeking stable, long-term investments in the sector. As federal and provincial governments face mounting challenges in financing infrastructure projects, the willingness of global investors to commit substantial funds may provide a critical lifeline. The outcome of this bidding war could set important precedents for future investments and the overall landscape of infrastructure ownership in Canada.
