Onex Corporation (ONEX.TO) | Investment Case

1. Company Snapshot

1.a. Company Description

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions.The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies.It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up.

The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate.It invests in global businesses headquartered in North America, including United States and Canada, or Europe.The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million.

It does not consider size if the company is in an industry in which the firm already has presence.The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds.It seeks to acquire a control position in its portfolio companies.

Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.

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1.b. Last Insights on ONEX

The recent 3-month performance of Onex Corporation was negatively impacted by a fourth-quarter loss of US$2 million, a significant decline in revenue to US$611.0 million (down 44% from FY 2023), and a decrease in earnings per share to US$3.99 (vs US$6.70 in FY 2023). The company's private equity returns were also challenged, despite strong liquidity and credit platform performance. Additionally, the decline in revenue and earnings was a result of weaker investment performance in the fourth quarter.

1.c. Company Highlights

Last Price	104.12
Change Percentage	-0.88%
Open	104.99
Previous Close	105.04
Market Cap ( Millions)	7133
Volume	39564
Year High	131.38
Year Low	86.64
M A 50	112.41
M A 200	112.87

FCF Yield	2.71%
Dividend Yield	0.38%
ROE	7.20%
Debt / Equity	0.38%
Net Debt / EBIDTA	-197.09%
Price To Book	0.59
Price Earnings Ratio	8.42
Price To FCF	36.96
Price To sales	6.99
EV / EBITDA	5.95

2. Onex Corporation's Strategic Shift Yields Positive Q3 Earnings

Onex Corporation reported a significant improvement in its third-quarter earnings, with actual EPS coming in at $6.49, far surpassing the estimated loss of -$8.63396. The company's revenue growth is expected to continue, with analysts estimating a 14.4% increase in revenues for the next year. The company's financial performance was bolstered by its recent acquisition of Convex and new strategic partnership with AIG, marking a transformational step forward for Onex.

Publication Date: Nov -13

                                    📋 Highlights
                                    Convex Acquisition & AIG Partnership:
                                                Onex acquiring Convex for $3.8B, leveraging AIG partnership to enhance long-term shareholder value.
Liquidity Post-Acquisition:
                                                Post-transaction liquidity of ~$500M, with $5B PE investments vs. $750M unfunded commitments enabling near-term net realizations.
FRE Growth Projections:
                                                Exit 2025 with ~$17M run rate FRE, plus $15–20M incremental FRE from AIG’s $2B alternative asset allocations.
Capital-Light Strategy:
                                                OP V’s 10% fund allocation reflects shift to capital efficiency, targeting mid-2026 for OP VI fundraising.
Credit Business Resilience:
                                                Avoided recent sector risks via conservative underwriting, prioritizing low-leverage Convex-like transactions over traditional PE leverage.

                                

Financial Performance Highlights

The company's financial results were characterized by a substantial improvement in EPS, driven by the potential for long-term shareholder value creation through its recent transactions. As Christopher Govan noted, the company expects to generate positive overall FRE going forward, driven by its credit business and private equity investments. The acquisition of Convex is expected to account for 42% of Onex' balance sheet, with the investment funded through a combination of cash, a draw on the new NAV loan facility, and the issuance of Onex shares to AIG.

Valuation Metrics

Onex Corporation's current valuation metrics indicate a relatively attractive profile, with a Price-to-Book Ratio (P/B) of 0.63 and a Free Cash Flow Yield of 4.86%. The company's ROE stands at 6.12%, suggesting a reasonable return on equity. Given that Onex operates in the financial sector, the P/B ratio is a relevant metric, indicating that the company may be undervalued relative to its book value.

Strategic Developments and Outlook

The acquisition of Convex and partnership with AIG are expected to drive long-term value creation for Onex. The company's asset management business is likely to benefit from the new partnership, with AIG allocating $2 billion to Onex' alternative asset strategies, potentially generating incremental FRE of $15-20 million. Onex' private equity investments are also expected to drive medium-term liquidity, with the company having approximately $5 billion of PE investments in the ground, relative to only $750 million of unfunded PE capital commitments.

Fundraising and Capital Deployment

Bobby LeBlanc stated that the new partnership with AIG is expected to be positive for fundraising going forward, although it is not expected to impact the timing of upcoming fundraisers. The company's credit team has demonstrated a "protect the downside" mentality, avoiding recent blow-ups in the private credit space. Onex aims to redeploy capital into Convex-like transactions, potentially with lower to no leverage, and is targeting mid-2026 for the launch of OP VI fundraising.

3. NewsRoom

Onex Reports Fourth Quarter and Full Year 2025 Results

Feb -20

Source: globenewswire.com

Onex Completes Final Realization of Ryan Specialty, Delivering Strong Investing Results

Dec -08

Source: globenewswire.com

Onex Partners Announces Completion of Strategic Investment in OneDigital by Stone Point Capital and CPP Investments

Dec -04

Source:

Onex Corp (ONEXF) Q3 2025 Earnings Call Highlights: Strategic Moves and Financial Performance

Nov -08

Source:

Onex Reports Third Quarter 2025 Results

Nov -07

Source:

AIG Reports Excellent Third Quarter 2025 Results

Nov -04

Source:

Has Onex’s Private Equity Activity Justified Its 20.5% Rally in 2025?

Nov -03

Source:

AIG to acquire minority stakes in Convex Group and Onex Corporation

Oct -31

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.76%)

6. Segments

Investing

Expected Growth: 12.3%

Onex Corporation's private equity investments in various industries, strategic acquisitions, and operational improvements drive growth, with a focus on value creation and long-term returns.

Asset and Management

Expected Growth: 10.2%

Onex Corporation's Asset and Management segment is poised for growth driven by increasing demand for private equity and credit management services, coupled with the company's strong track record of investing and managing capital on behalf of investors.

7. Detailed Products

Aircraft Leasing

Onex Corporation provides aircraft leasing services to airlines, offering a range of aircraft types and flexible leasing options.

Private Equity Investing

Onex Corporation invests in and advises private equity funds, focusing on mid-to-large-sized companies in various industries.

Credit Investing

Onex Corporation provides credit investment solutions, including direct lending and credit fund investments, to companies and financial institutions.

Real Estate Investing

Onex Corporation invests in and manages real estate assets, including commercial and residential properties.

Wealth Management

Onex Corporation offers wealth management services, including investment advice and portfolio management, to high net worth individuals and families.

8. Onex Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Onex Corporation operates in a diversified portfolio of industries, which reduces the threat of substitutes. However, the company's exposure to the aerospace and industrial sectors makes it vulnerable to substitutes in certain product lines.

Bargaining Power Of Customers

Onex Corporation's diversified customer base and long-term contracts reduce the bargaining power of customers. However, the company's exposure to the aerospace and industrial sectors makes it vulnerable to customer concentration risks.

Bargaining Power Of Suppliers

Onex Corporation's diversified supplier base and long-term contracts reduce the bargaining power of suppliers. However, the company's exposure to the aerospace and industrial sectors makes it vulnerable to supplier concentration risks.

Threat Of New Entrants

Onex Corporation operates in industries with high barriers to entry, which reduces the threat of new entrants. However, the company's exposure to the aerospace and industrial sectors makes it vulnerable to new entrants in certain product lines.

Intensity Of Rivalry

Onex Corporation operates in highly competitive industries, which increases the intensity of rivalry. The company's diversified portfolio and long-term contracts help to mitigate this risk, but the company still faces intense competition in certain product lines.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	31.48%
Debt Cost	3.95%
Equity Weight	68.52%
Equity Cost	11.71%
WACC	9.27%
Leverage	45.95%

11. Quality Control: Onex Corporation passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Invesco

A-Score: 6.4/10

Value: 7.6

Growth: 2.9

Quality: 6.7

Yield: 7.0

Momentum: 8.5

Volatility: 6.0

1-Year Total Return ->

Franklin Resources

A-Score: 5.6/10

Value: 5.0

Growth: 2.8

Quality: 4.3

Yield: 8.0

Momentum: 5.5

Volatility: 8.0

1-Year Total Return ->

Hamilton Lane

A-Score: 4.7/10

Value: 1.6

Growth: 6.1

Quality: 8.3

Yield: 4.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

Onex

A-Score: 4.6/10

Value: 4.4

Growth: 2.1

Quality: 6.9

Yield: 0.0

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

TPG

A-Score: 4.1/10

Value: 1.1

Growth: 1.6

Quality: 6.0

Yield: 7.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

StepStone Group

A-Score: 4.1/10

Value: 4.2

Growth: 1.9

Quality: 2.5

Yield: 5.0

Momentum: 5.5

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

16.75%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.27%

Onex Corporation - CA68272K1030

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ONEX

1.c. Company Highlights

Strong Momentum

Lower Growth

Average Yield

Lower Yield

Medium Volatility

Better Quality

Expensive

Fairly Valued

Stable Momentum

2. Onex Corporation's Strategic Shift Yields Positive Q3 Earnings

Financial Performance Highlights

Valuation Metrics

Strategic Developments and Outlook

Fundraising and Capital Deployment

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.76%)

6. Segments

Investing

Expected Growth: 12.3%

Asset and Management

Expected Growth: 10.2%

7. Detailed Products

Aircraft Leasing

Private Equity Investing

Credit Investing

Real Estate Investing

Wealth Management

8. Onex Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Onex Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

104.12$

Current Price

104.12$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA