Canadian M&A Perspectives Private and Public Mergers & Acquisitions | Private Equity

Monthly Archives: January 2013

Defined Contribution Pension Plans: Uncovering the Wolf in Sheep’s Clothing?

Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Strategy

In my last post, I briefly canvassed the differences between defined benefit (DB) and defined contribution (DC) pension plans.  I cautioned that, due to their perceived financial predictability and apparent straightforward nature, DC plans don’t always get the attention that they deserve from buyers undergoing the due diligence review of a target.

While DB plans give rise to greater financial risk, most practitioners agree that DC plans give rise to greater legal risk. For all their complexity, the rules governing DB plans are at least predictable (even if not necessarily “employer-friendly”). The rules governing DC plans in each Canadian … Continue Reading

Advance Notice By-Laws & Defending Against a Surprise Attack

Posted in Public M&A, Shareholders, Strategy

Shareholders typically have three options available to them when looking to nominate directors different than those put forth by the company’s management, (i) a shareholder proposal that is added to the management proxy circular for the applicable shareholder meeting, (ii) the more popular and publicized proxy contest, which generally requires that the shareholder(s) soliciting proxies prepare and mail to shareholders a dissident proxy circular that both identifies the nominees in question and contains certain prescribed disclosure, and (iii) nominating directors from the floor at the company’s annual general meeting (either as a registered shareholder(s) or by way of proxies), usually … Continue Reading

New 2013 Competition Act Merger Notification Threshold

Posted in Private Equity, Private Transactions, Public M&A

The Competition Bureau (Bureau) has announced that the pre-merger notification transaction-size threshold for 2013 will increase to $80 million from the 2012 threshold of $77 million. As per the indexing mechanism set out in the Competition Act (Act), the pre-merger notification threshold is reviewed annually. The 2013 threshold is anticipated to come into effect on January 12, 2013.

The threshold is based on the book value of assets in Canada of the target (or in the case of an asset purchase, of the assets in Canada being acquired), or the gross revenues from sales “in or from” Canada generated by … Continue Reading

New 2013 Investment Canada Act Review Threshold

Posted in Private Equity, Private Transactions, Public M&A

Industry Canada has announced that the Investment Canada Act (Act) threshold for 2013 that applies to most direct acquisitions of Canadian businesses by non-Canadian investors from World Trade Organization (WTO) member countries is $344 million (an increase from last year’s $330 million threshold). The threshold applies to the gross book value of the target’s assets. Note that under the Act, a non-Canadian includes a Canadian-incorporated entity that is ultimately controlled outside of Canada.

The lower threshold of $5 million continues to apply to direct investments that relate to cultural businesses or where none of the non-Canadian parties comes from a … Continue Reading

You Say UCC, We Say PPSA.

A discussion of the Canadian equivalent of the UCC - the Personal Property Security Act in the context of an M&A transaction.

Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Strategy

Although we often think of the regimes that govern registrations made against personal property as a concern to lenders and their counsel, M&A lawyers and business people are unable to escape this area of the law… at least not completely. As part of the legal due diligence process in almost any M&A deal, registrations against the target’s assets will be uncovered. As such, the target and its counsel will want to ensure that any disclosure surrounding these registrations lines up with the representations made in the purchase agreement, and the buyer and its counsel will want comfort surrounding the scope … Continue Reading