Category Archives: Private Transactions

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You Can’t Always Get What You Want

Making realistic projections during an auction process

By Robert Hansen and Shane C. D'Souza on May 14th, 2013 Posted in Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

The recent Delaware ruling in In Ancestry.com Inc. Shareholder Litigation provides a cautionary tale relating to a target company developing aggressive projections during an auction process. The Relevant Facts Following the announcement of a going-private transaction, some shareholders of Ancestry.com filed suit in the Delaware Court of Chancery alleging, among other things, that the board… → Read More

Challenges for State-Owned Enterprises Arising From Proposed Amendments to the Investment Canada Act

By Oliver J. Borgers and Michele Siu on May 9th, 2013 Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

The Canadian government’s Bill C-60 contains proposed amendments to the Investment Canada Act that will significantly impact foreign investors whom the Canadian government considers as state-owned enterprises (SOEs). An investor might be an SOE even if a foreign state only indirectly “influences” the investor. Under these amendments, if the Minister of Industry determines that an… → Read More

Ignorance is not bliss: beware minimal due diligence

Lessons from the Quebec Court of Appeal

By Martin Boodman and Shane C. D'Souza on May 6th, 2013 Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

The Quebec Court of Appeal’s decision in Francoeur v. 4417186 Canada Inc., 2013 QCCA 191, provides a cautionary tale on the dangers of entering into a share purchase agreement and subsequently closing a share purchase transaction, without ample due diligence. The one-sided apportionment of risk The Francoeur share purchase agreement (the “SPA”), which was signed… → Read More

A Graceful Exit

Paying Out Credit Facilities in Connection with an M&A Transaction

By Ana Badour on April 19th, 2013 Posted in Private Transactions

It is quite common that an existing credit facility has to be paid out in connection with the completion of an M&A transaction, as a result of, for example, a new credit facility being put in place to finance the acquisition which replaces the purchaser’s existing credit facility, or as a result of both the… → Read More

Doing Business in Canada – 2013 Edition

Buying a Canadian Business, eh? A look back.

By Robert Hansen and Heidi Gordon on April 9th, 2013 Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

Last Spring we announced a special series of blog posts aimed at addressing some of the most significant distinctions between Canadian and US law that ought to be considered in the early stages of the proposed acquisition of a Canadian target. Following the launch of that series our team blogged about important topics like: Financing… → Read More

Good Faith in the Shadow of Contractual Rights

By Brandon Kain on April 5th, 2013 Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Strategy

Most M&A contracts contain provisions that confer discretionary contractual powers on one or both parties to the transaction (e.g., the right to withhold consent to an assignment). One of the most pressing questions in modern contract law is whether the party in possession of such a power must exercise it in good faith. In Bhasin… → Read More

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

By Mark Firman on January 23rd, 2013 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… → Read More

New 2013 Competition Act Merger Notification Threshold

By Oliver J. Borgers and Michele Siu on January 11th, 2013 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… → Read More

New 2013 Investment Canada Act Review Threshold

By Oliver J. Borgers and Michele Siu on January 10th, 2013 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…. → Read More

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.

By Ana Badour and Heidi Gordon on January 3rd, 2013 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… → Read More

Defined Benefit Versus Defined Contribution Pension Plans: The Basics

By Mark Firman on December 19th, 2012 Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Strategy

When purchasing an existing business, many buyers are understandably reluctant to assume obligations under a target’s defined benefit (DB) pension plan. Under a traditional DB plan, members (i.e. plan participants) are entitled to a guaranteed pension amount calculated by a formula. While active employees may contribute to such plans, each Canadian jurisdiction’s laws place the… → Read More

Regulatory Approvals in M&A Deals

Purchasers’ Contractual Covenants related to Regulatory Approvals

By Frederic Cotnoir and Charles-Antoine Souliere on October 31st, 2012 Posted in Private Transactions, Public M&A

Recent proposed mergers blocked by the Canadian government and other regulators, such as the Minister of Industry’s ruling against BHP Biliton’s proposed hostile take-over bid for Potash Corporation in November 2010, the recent CRTC decision to deny BCE’s friendly bid for Astral Media and the initial rejection by the Minister of Industry of the proposed… → Read More

Plugging (You Into) Even More Online M&A Resources

More Online Resources for Deal Makers – What you should know about (Part 2 of 2)

By Ian C. Michael and Lama Sabbagh on October 19th, 2012 Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

In our last post, we looked at six traditional resources and more sophisticated paid services that help bring us up to speed in the M&A world. In this post we will list some of the more contemporary deal commentary resources: NY Times DealB%k: This blog delivers the latest news on mergers, acquisitions, venture… → Read More

Plugging (You Into) Online M&A Resources

Top 6 Online Resources for Deal Makers – What you should know about (Part 1 of 2)

By Ian C. Michael and Lama Sabbagh on October 5th, 2012 Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

Whether you’re a seasoned deal maker or just starting out, we all rely on various resources to stay apprised of the cutting edge developments in M&A. Given that the latest information is driven by online resources, we thought it would be appropriate to put together a list of our favourite resources that help keep us… → Read More

Hot Off the Press – Updated Canada Tax Service Quick Reference Guide 2012

By McCarthy Tétrault LLP on August 20th, 2012 Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

For those interested, the updated edition of McCarthy Tétrault’s 2012 biannual Canada Tax Service Quick Reference Guide is now available on Thomson Reuters/Carswell’s website. The handy booklet is an excellent reference tool for tax practitioners, financial advisors, businesses and individuals seeking pertinent tax rates and facts. Ylang Ha, Douglas Cannon, Frédéric Harvey, Nigel Johnston, Gabrielle… → Read More

Competition Tribunal Releases its Decision in the CCS Merger Case

By Donald Houston and Marilyn Leblanc on July 11th, 2012 Posted in Private Equity, Private Transactions, Public M&A

On June 15, the Competition Tribunal (Tribunal) released its decision in Commissioner of Competition v. CCS Corporation. The Tribunal ordered CCS Corporation (CCS) to divest the shares or assets of Babkirk Land Services Inc. (Babkirk), concluding that the merger was likely to prevent competition substantially in the market for the supply of secure landfill services for… → Read More

The Rising Trend of Reverse Break Fees

By Leila Rafi and Tyler McAuley on June 26th, 2012 Posted in Contractual Matters, Private Transactions, Public M&A, Strategy

Break fees have for many years been a conventional deal protection feature of public M&A transactions. These fees, often referred to as termination fees as they are tied to the termination provisions in the contract containing the deal terms, are typically payable by a target company where it elects to end an agreement for an… → Read More

The Investment Canada Act – Recent Announcements

By Oliver J. Borgers and Emily Rix on May 31st, 2012 Posted in Private Transactions, Public M&A

Recently, the Government of Canada issued a flurry of announcements relating to the Investment Canada Act. Here are some highlights that we thought would be of interest to our M&A Blog followers: The government is proposing a legislative change that would require the Minister of Industry to give reasons for any rejection under the Investment… → Read More

Overseas Financing and Acquisitions: The Increasing Importance of Anti-Corruption Due Diligence

By Paul Michael Blyschak, John Boscariol and Sony Gill on May 30th, 2012 Posted in Private Transactions, Public M&A, Strategy

The recent commitment of the Canadian government to the enforcement of the Corruption of Foreign Public Officials Act marks a new period in foreign investment transactions and necessitates a re-evaluation of the legal due diligence strategies employed by financiers and prospective acquirers alike, as well as by issuers and other companies operating in foreign jurisdictions… → Read More

Under the Hood: Guidelines for Drafting Material Adverse Change Clauses

By Tyler McAuley on May 28th, 2012 Posted in Contractual Matters, Private Transactions, Public M&A, Strategy

There are a number of ways in which a MAC clause can be drafted. Typically, these provisions begin with a broad definition of the type of event that will constitute a “material adverse change” on the business or assets being acquired. This is often followed by a list of explicit “carve-outs” which designate the events… → Read More

MAC Primer: An Overview to the Material Adverse Change Clause

By Tyler McAuley on May 4th, 2012 Posted in Contractual Matters, Private Transactions, Public M&A, Strategy

In most acquisitions, the distance between signing and closing is measured in weeks, if not months. During this interim period the buyer’s ability to safeguard or control the target’s business is limited. This is an uncomfortable position that can be exacerbated if the transaction is consummated between strategic competitors or in a market with substantial… → Read More

MAC-Ademy: An Introduction to the Material Adverse Change Clause

By Cristian Blidariu, Waleed Elgohary and Tyler McAuley on April 30th, 2012 Posted in Contractual Matters, Private Transactions, Public M&A, Strategy

Recently, a curious team of our M&A bloggers presented an internal roundtable discussion aimed at understanding some of the key issues regarding material adverse change (otherwise known as “MAC”) clauses. Part of what came out of that discussion is a presentation that provides an introduction to the MAC clause and some analysis regarding current trends… → Read More

Financing the Acquisition of a Canadian Business: Cross-Border Credit Transactions

By Ana Badour on April 19th, 2012 Posted in Contractual Matters, Private Transactions, Public M&A

The acquisition of a Canadian business by US-based purchasers is often financed by way of a cross-border credit transaction involving a Canadian borrower (such as when the US purchaser sets up a Canadian company to make the acquisition, often for tax reasons), possibly also a US borrower (or as is common when a new Canadian… → Read More

Buying a Canadian Business, eh? An Introduction to a Special Series

By Robert Hansen and Heidi Gordon on April 12th, 2012 Posted in Private Transactions, Public M&A

We’re often called upon to provide Canadian legal advice to US-based purchasers contemplating the acquisition of a Canadian business. In many transactions, we act directly for the purchaser; in others we’re asked to provide Canadian support to the acquirer’s US legal counsel. There are many similarities between Canadian and US law but if we had… → Read More