While controversial, mini-tenders are permitted in the Canadian markets. This blog provides a brief overview of mini-tenders and summarizes two recent examples, which demonstrate the considerations surrounding whether or not a mini-tender will succeed. What is a mini-tender? A mini-tender is an unsolicited and widely disseminated offer to purchase less than 20% of the outstanding … Continue reading
Retail investors are becoming an increasingly significant source of capital on public markets, and dealmakers should be aware of how this development can impact M&A transactions and the decision to go public. After the latest garnering of widespread attention in the news, the retail investment community has been estimated to constitute as much as 25% … Continue reading
According to Axios, the first half of 2020 saw special purpose acquisition companies (“SPACs” for short) in the U.S. raise over US$20 billion, easily eclipsing the US$13.3 billion raised in all of 2019. A SPAC is a special purpose vehicle that does not have any assets or operations, but exists solely for the purpose of … Continue reading
While continued economic uncertainty has dampened M&A activity in the past months, the transition from crisis management to recovery mode in the short to medium term will likely see many companies explore potential divestitures in an effort to dispose of underperforming assets, to increase cash on hand and business resiliency and to mitigate risk. When … Continue reading
Since the beginning of March, 15 companies within the S&P/TSX Composite Index have gone to market to raise capital. All but one did so by raising debt. By comparison, of the largest LSE listed issuers, 23 have raised equity and 10 have raised debt. It is clear – European issuers are favouring equity during this … Continue reading
The turbulent economic environment resulting from the COVID-19 pandemic has affected the M&A world in numerous ways. Among them is the increased focus on earnout provisions, both those in place from legacy deals and those being considered for inclusion in an upcoming transaction. This post provides an overview of the earnout mechanism and describes the … Continue reading
In a previous post, we discussed the impact of COVID-19 on private equity transactions and how companies can prepare for upcoming economic changes. While opportunities for new investment are on the horizon with private equity funds presently flush with cash, movement on existing investments is likely to slow as sellers wait until markets stabilize before … Continue reading
On August 1, 2019, the Canadian Securities Administrators (CSA) released CSA Staff Notice 51-358 in efforts to clarify the scope of disclosure for reporting issuers, specifically for smaller issuers. Securities law in Canada requires reporting issuers to disclose material risks affecting their business and, where applicable, the financial impacts of such risks. While this notice … Continue reading
The Canadian Venture Capital & Private Equity Association (the CVCA) recently published its 2019 first half (H1 2019) report on Canadian venture capital (VC) and Canadian private equity (PE) investment. Over the past year, Canadian VC investment has continued its ascent, reaching unprecedented heights and experiencing its strongest first half performance on record. Conversely, Canadian PE … Continue reading
As competition and asset multiples increase, private equity (“PE”) firms must find new ways to put their money to work. One way to create new value is through a sponsor-to-sponsor deal. Sponsor-to-sponsor deals involve PE firms on both sides of a transaction – buy side and sell side. Due to their high cost and complexity, … Continue reading
Traditionally, commodity pools existed as unique investment vehicles which, contrary to other Canadian public investment funds, were excluded from the investment restrictions and limitations codified in National Instrument 81-102 Investment Funds (NI 81-102). Earlier this year, as part of the final phase of its Modernization of Investment Fund Product Regulation Project, the Canadian Securities Administrators … Continue reading
Impact investing represents a continuation of Canada’s ongoing commitment to social finance, an “approach to mobilizing private capital that delivers a social dividend and an economic return to achieve social and environmental goals”, as defined by the Government of Canada. The rapid growth of impact investing is driven largely by investor demand for addressing the … Continue reading
The Canadian Venture Capital & Private Equity Association (the CVCA) has recently provided insights into Canadian investment trends for the first quarter of 2019 (Q1 2019). The CVCA has indicated that Private Equity (PE) deals have slowed in Q1 compared to their Venture Capital (VC) counterparts. VC investments have almost doubled since Q1 2018, whereas PE investments have … Continue reading
A recent report released by the Canadian Venture Capital Private Equity Association (CVCA) entitled “VC & PE Canadian Market Overview 2018” (the Report) reviews the current strength of Canadian venture capital (VC) investment and very recent mega-deal trend in Canadian private equity (PE). Highlights of the Report Total VC investment remains remarkably high: a total of … Continue reading
Private equity funds are increasingly turning to a “buy-and-build” (B&B) approach to boost revenues, realize value and increase returns. The B&B approach, also referred to as an “add-on” strategy, involves the purchase of a platform company, followed by the purchase of multiple related and complimentary targets through share or asset acquisitions. B&B strategies offer an … Continue reading
Intangible assets are the non-monetary, non-physical assets of a business, including its rights, goodwill, overarching brand, and other intellectual property (IP) (i.e., patents, trademarks, copyrights, trade secrets). These types of assets represented 52% of the global enterprise value in 2018; however, 80% of that value went wholly undisclosed on companies’ balance sheets. Why are businesses’ … Continue reading
As mentioned in our first blog post on eSports, the eSports industry has experienced, and is projected to experience substantial growth. As the eSports industry continues to develop at a rapid pace, we are starting to see risks that are specific to the industry. In assessing whether a target is worth its price tag and … Continue reading
PwC and CB Insights recently released their Q3’18 “MoneyTree Canada report” (the Report), which provides an overview of investments in Canadian venture-backed companies. According to the Report, after an exceptional H1’18 (which we’ve covered in an earlier post), Q3’18 has seen a decrease in the number of deals, as well as in dollars invested. General … Continue reading
Tokenization refers to the process of converting the right to an asset into a digital token, issued, stored, and transferred on a blockchain (the latter of which we’ve covered previously). Many real world assets can be tokenized, including fine art and real property. Of particular interest in corporate finance is the tokenization of securities, such … Continue reading
A vendor take-back (VTB) (or “vendor financing”) is a potential supplementary method of financing an acquisition transaction. It is often documented by a vendor take back note or promissory note. A VTB may be used as a type of non-consideration in conjunction with other forms of financing in order to facilitate an acquisition. In a … Continue reading
On September 18, Deloitte released a new report which outlines a roadmap for the competitive business climate in Canada. Included in the report is a warning that “Canada may have a zombie problem.” Luckily, Deloitte isn’t raising concern about hordes of flesh-eating undead, but rather the relatively large number of “zombie companies” that exist on … Continue reading
The Canadian Venture Capital & Private Equity Association recently published its 2018 first half (H1 2018) report on Canadian venture capital (VC) and Canadian private equity (PE) investment. While Canadian PE investment remains feeble, Canadian VC investment has continued to climb to incredible heights. A review of the increasing trends in Canadian VC investment, with respect … Continue reading
In secured financing transactions, cash is a popular and useful form of collateral. It is fully liquid, readily available and transferrable, and its value is always known. A debtor holding cash in a deposit account may wish or be required to use it as collateral for obligations such as loans, repurchases and derivative transactions. In … Continue reading
On June 11, 2018, the Canadian Securities Administrators (“CSA”) published Staff Notice 46-308 Securities Law Implications for Offerings of Tokens (“Notice”). The Notice follows from the CSA’s previous guidance in Staff Notice 46-307 Cryptocurrency Offerings, where the CSA explained that many cryptocurrency offerings involve the distribution of securities and are therefore subject to securities laws … Continue reading