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Tag Archives: due diligence

Ontario’s Bulk Sales Act has been repealed

Posted in Contractual Matters, Private Equity, Private Transactions, Strategy

On March 22, 2017, Ontario’s Bulk Sales Act (BSA) was repealed, bringing to an end bulk sales legislation in Canada.1 The BSA was enacted in 1917, and was intended to protect unpaid trade creditors (i.e. the people a seller is indebted to for goods, money or services furnished for the purpose of enabling the seller to carry on his or her business) from “bulk sales” by a seller of all or substantially all of its assets over a short period of time.

The BSA was an important consideration for both the buyer and the seller in an Ontario … Continue Reading

Is the Death of Ontario’s Bulk Sales Act upon us? It looks like it may be.

Posted in Contractual Matters, Private Equity, Private Transactions, Strategy

On June 8, 2016 Bill 218 (the Burden Reduction Act, 2016) passed first reading. The Bill is part of a provincial government initiative to, in part, reduce the regulatory burden on Ontario businesses. Schedule 3 of the Bill repeals Ontario’s Bulk Sales Act (BSA). The BSA was enacted in 1917, and is intended to protect unpaid trade creditors (i.e. the people a seller is indebted to for goods, money or services furnished for the purpose of enabling the seller to carry on his or her business) from “bulk sales” by a seller of all or substantially all of its assets … Continue Reading

Thinking of Buying or Selling a Fintech Target? Due Diligence Issues Unique to Fintech M&A

Although many of the same considerations related to the acquisition or sale of any technology company apply, regulatory and compliance considerations are key in the fintech space.

Posted in Canadian Market Entry, Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

Fintech M&A activity, in both the Canadian market and globally, is expected to be on the rise over the next few years. In its 2016 Report, FinTech: Prepare for a Wave of M&A, UK-based investment bank FirstCapital, predicts that fintech M&A deal flow will increase “as financial incumbents look to catch up with widespread innovation from new entrants, the internet majors scale up in financial services and the technology/software majors add new technology to deepen their offerings in this sector”.

Like with the acquisition or sale of any technology company, strategic due diligence is a critical component of the … Continue Reading

Cybersecurity and M&A – Part Three: Cyber Insurance

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

In the second installment of this series we offered a brief review of cybersecurity provisions and considerations in M&A transaction agreements, and in the first installment of this series we offered a brief review of cybersecurity issues that can arise in the course of M&A transactions and discussed the importance of cybersecurity due diligence by the buyer. This third installment will focus on cyber-insurance and some specific considerations relating to cyber insurance that targets and acquirers should make in the context of M&A transactions.… Continue Reading

Four Due Diligence Issues in Insurance M&A Transactions

Posted in Private Transactions, Public M&A, Strategy

Insurance M&A activity, in both the Canadian market and globally, has been on the rise since the 2008 financial crisis, and is expected to continue to increase. Deloitte recently reported that there were 399 insurance M&A transactions in Canada and the United States during 2014, an increase of 27% over 2013. The consulting firm Optis Partners reported that the first half of 2014 was the most active M&A period since they started tracking transaction information in 2008. In a survey published in 2014 by the professional services firm Towers Watson, over 85% of North American insurance executives said that they … Continue Reading

Ignorance is not bliss: beware minimal due diligence

Lessons from the Quebec Court of Appeal

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 by parties the court characterized as “fierce competitors”, contained the following key provisions.

  1. The purchaser acknowledged that (a) until closing, it did not have access to certain “key documents” held under seal, (b) it had not undertaken any due diligence, and (c)
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Overseas Financing and Acquisitions: The Increasing Importance of Anti-Corruption Due Diligence

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 in general.

Corrupt practices can result in criminal charges, unlimited monetary penalties, reputational consequences, derivative shareholder claims and class actions, and may even undermine the rights and benefits to which a company is entitled in a foreign jurisdiction.

Due diligence conducted in advance of foreign … Continue Reading

Eight Things To Do Before Selling Your Business – Part 1 of 2

Posted in Private Equity, Private Transactions, Strategy

When selling your business, it pays to plan ahead. Don’t forget these important – but sometimes overlooked – strategies for maximizing value and deal certainty.

  1. Clean up! I learned a great lesson from a great chef: “You consume 70% with your eyes”. Just like the artfully plated dishes that would emerge from his kitchen, the appearance of your premises says a lot about your outlook, attention to detail and dedication. It’s easy to let things slip when you’re focused on day-to-day emergencies, but invest the time to inspect and refresh your offices and other premises. Dump the dog-eared National Geographics
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Confidentiality Agreements – Part 1 – Some Initial Considerations

Posted in Contractual Matters

How often are you called upon to sign a confidentiality or non-disclosure agreement? Want to participate in the sale process for a business you’re interested in acquiring? Sign this confidentiality agreement first. Need access to important commercial information? Sign a confidentiality agreement. Want to meet with key executives as part of your due diligence? Not before you commit to the terms of this non-disclosure agreement. They are everywhere. And yet, they rarely get much attention until issues arise.

Ensuring confidentiality throughout the M&A process is essential to a successful deal. This is the first in a series of blog posts … Continue Reading