Topic: Corporate finance

Weak loonie, no problem for Canadian institutional investors

By Matthew Lippa (Toronto) on March 23, 2016 Posted in Corporate finance, Finance

2015 was not the kindest to the Canadian dollar as it saw its value depreciate by 15% when compared with the U.S. dollar. Despite the weakening Canadian dollar, Canadian companies remained undeterred in their pursuit of foreign acquisitions. According to a recent Bloomberg study, in 2015, Canadian companies acquired $205 billion worth of assets, almost … Continue reading

Human capital considerations in M&A transactions

By Troy Ungerman (Toronto) on March 16, 2016 Posted in Corporate finance, Employment and labour

In any M&A transaction, there are a variety of risks that are associated with human capital. Mercer has recently released a report, People Risks in M&A Transactions (the Report), based on a survey of M&A professionals. It provides an analysis of approximately 450 M&A transactions, and interviews corporate and private equity clients, investment bankers, and … Continue reading

New trend in distressed asset sales? “Pre-pack” sales under the CCAA

By Alexander Schmitt (Toronto) on March 15, 2016 Posted in Corporate finance

Over the past year, we have seen the Companies’ Creditors Arrangement Act (the CCAA) used in a novel way to execute prearranged sale transactions of distressed companies’ assets, potentially indicating a new manner in which companies and their advisors are using the CCAA. In the typical asset sale under the CCAA, the applicant company obtains … Continue reading

Maximizing shareholder value through process: Canada’s new take-over bid rules

By Troy Ungerman (Toronto) on March 9, 2016 Posted in Corporate finance

On February 25, 2016, the Canadian Securities Administrators (CSA), which is the association of provincial and territorial securities regulators, published its final amendments to the take-over bid system, which harmonize the rules across all jurisdictions in Canada. The changes, as reflected in National Instrument 62-104 Take-Over Bids and Issuer Bids and National Policy 62-203 Take-Over … Continue reading

Dealmaking in a negative interest rate environment

By Matthew Lau (Toronto) on March 8, 2016 Posted in Corporate finance, Finance

The term “negative interest rates” was introduced into the Canadian vocabulary on December 8, 2015, when the Bank of Canada announced that it would be willing to use this “unconventional monetary policy tool” in the event of economic crisis. With the current benchmark interest rate of 0.5% already near historic lows, this announcement suggests that … Continue reading

An overview of global M&A activity: 2015 into 2016

By Troy Ungerman (Toronto) on March 3, 2016 Posted in Corporate finance, Energy, Infrastructure, mining and commodities, Pharmaceuticals and life sciences, Uncategorized

2015 was an extraordinary year for global M&A activity. Mergermarket recorded almost 17,000 transactions worth a remarkable US$4.3tn. This topped the previous record set in 2014 by over 30%. The race for top performing sector this year was very close. Energy Mining & Utilities won with US$630bn in deal value; however, the top performers were … Continue reading

Where to register under the PPSA’s new debtor location rules

By Denise Gan (Toronto) on March 1, 2016 Posted in Corporate finance

Changes to Ontario’s Personal Property Security Act (the PPSA) may have an effect on M&A transactions that involve certain security interests. This two-part post will explore how the PPSA’s changes affect security agreements entered into both before and after December 31, 2015. Background On December 31, 2015 new rules came into force (the New Rules) … Continue reading

Year in review: deal drivers in the Americas in 2015

By Troy Ungerman (Toronto) on February 25, 2016 Posted in Corporate finance, Financial institutions, Pharmaceuticals and life sciences, Technology and innovation

Mergermarket recently released its 2015 full-year edition of Deal Drivers Americas (the Review). This comprehensive review of M&A activity in the Americas confirmed that 2015 was a year of mega-deals. Transactions involving giants such as Pfizer, Time Warner Cable, and Kraft contributed to an increase of 30% in M&A value, reaching a total of US$4.28 … Continue reading

2016 outlook for spinoff, carve out and asset sale activities

By Troy Ungerman (Toronto) on February 24, 2016 Posted in Corporate finance

Of the many ways a corporation can divest its assets or shares to create value, asset sales, equity carve outs and spinoffs are some of the most common methods. In an asset sale, a business sells its assets in exchange for cash proceeds or other forms of consideration. An equity carve out is where a … Continue reading

Loonie tunes: will the low dollar attract foreign investors?

By Kassy Corothers (Calgary) on February 11, 2016 Posted in Corporate finance

It is no secret that the Canadian dollar has been singing the blues of late. With the loonie declining more than 30% in the exchange rate against the United States (US) dollar, shopping trips and vacations to our friendly neighbour to the south are likely to become less frequent over the next little while. The … Continue reading

Avoiding tax traps: don’t forget about non-competition agreements

By Troy Ungerman (Toronto) on February 11, 2016 Posted in Corporate finance, Tax

Non-competition agreements can be a valuable tool for purchasers who want to protect their investments in new businesses. However, non-competition agreements can have unintended and unexpected tax consequences, particularly to sellers who grant non-competition agreements to purchasers. The Income Tax Act (Canada) (the Act) contains specific provisions regarding the taxation of “restrictive covenants”, a broadly … Continue reading

Equity crowdfunding has arrived in Ontario

By Carole Gilbert (Montreal) on February 10, 2016 Posted in Corporate finance

Crowdfunding has officially been launched in Ontario as of January 28, 2016, enabling Canadian businesses to raise capital at a low cost by reaching out to a large number of investors over the Internet. The new regime, available in Ontario, Québec, Manitoba, New Brunswick and Nova Scotia, is particularly attractive to start-ups and small and … Continue reading

M&A in China amid economic uncertainty

By Troy Ungerman (Toronto) on January 27, 2016 Posted in Corporate finance

To the casual observer, the economic outlook in the Asia Pacific region, and China in particular, has been rosy for a long time, with international attention focused on fast-paced economic growth and emerging wealth in the region. However, the beginning of 2016 has proven to be difficult for Chinese government officials as they contend with tumultuous … Continue reading

New Year’s resolution: buying & selling smart

By nrfdigitalteam on January 26, 2016 Posted in Corporate finance, Energy, Financial institutions, Pharmaceuticals and life sciences, Technology and innovation

2015 was a huge year for global M&A with deal activity reaching $4.2 trillion by the middle of December. If 2016 continues at the same pace, be prepared for a big year of M&A activity. In order to be well equipped for the upcoming year, ask yourself the following two questions when contemplating an M&A … Continue reading

Case update on the common law duty to act honestly

By Troy Ungerman (Toronto) on January 20, 2016 Posted in Corporate finance, Litigation

In 2014, the Supreme Court of Canada delivered a seminal decision, Bhasin v Hrynew (Bhasin), on common law duties of contractual performance. Earlier discussions on the case can be found here and here. In the Bhasin decision, the Court established a general obligation of good faith in the performance of contracts, and a duty of … Continue reading

A global overview of December 2015 M&A activity

By Troy Ungerman (Toronto) on January 12, 2016 Posted in Corporate finance, Finance, Pharmaceuticals and life sciences

According to Mergermarket’s December insider, November 2015 was a record setting month for M&A activity. By the end of the month, global M&A value reached US$3.9tn which surpassed the 2007 full year record by almost 6%. This record came on a drop in volume by 1,228 transactions which further cements 2015 as the year of … Continue reading

Content management in M&A

By Troy Ungerman (Toronto) on January 6, 2016 Posted in Corporate finance

MergerMarket recently published a study on content management throughout the M&A process (the Report), interviewing several business executives who shared their thoughts on the key role of content management in the timing and closing of M&A transactions. The Report highlights the biggest challenges in managing M&A transactions, as well as risks associated with improper content … Continue reading

When committing to a third party, make sure your bank is committed to you

By Noah Schein (Toronto) on December 15, 2015 Posted in Corporate finance, Financial institutions

A recent article in The Secured Lender magazine titled “Avoiding Lender Liability Claims: When Words and Actions Matter” canvassed lender liability claims and the steps lenders should take to avoid being held liable in certain circumstances to a borrower, guarantor or third party. Many of the suggestions are similarly relevant to borrowers (as purchasers in … Continue reading

Global M&A appetite: executives continue to be hungry

By Kassy Corothers (Calgary) on December 8, 2015 Posted in Corporate finance

Executives around the world have a strong appetite to pursue acquisitions, the highest in six years, according to Ernst & Young’s Global Capital Confidence Barometer (the Report), released at the end of October. The bi-annual Report details how despite market volatility, companies have confidence in deal-making and are pursuing growth opportunities and acquisitions at increasingly … Continue reading

Managing the psychological impact of M&A

By Matthew Lau (Toronto) on November 26, 2015 Posted in Corporate finance, Employment and labour

Studies reveal that 50 to 70% of M&A transactions ultimately fail to realize expected synergies and, in fact, many actually dilute shareholder value. One of the causes of M&A failures is that companies often neglect to adequately consider the psychological impact of M&A on their employees. Will I be laid off? Will I be moved … Continue reading

Performance incentives for portfolio companies

By Tommy Wong on November 25, 2015 Posted in Corporate finance

Private equity investors (PEIs) when investing in new portfolio companies, seek to align management’s interests with that of the PEI to grow the value of the portfolio company and achieve a profitable return in the investment upon exit. Typically, PEIs incentivize management to adopt such interests through compensation arrangements in the form of performance incentives. … Continue reading

Cyber security: what the hack?

By Denise Gan (Toronto) on November 19, 2015 Posted in Corporate finance

In a previous blog post, we discussed how to manage cyber security risks during the negotiation and due diligence stages of an M&A transaction. In this post we discuss cyber security insurance as a tool for managing this unwelcome risk. The cyber security risk Although businesses have been ramping up their information security systems, the … Continue reading

The role of the strategic board in value creation

By Andrea Brewer on November 19, 2015 Posted in Corporate finance, Governance and directors' liability

It is not in dispute that the role of the board of directors is to provide oversight of management and advise on the strategic direction of the corporation. However, the delineation of roles and responsibilities between management and directors in setting corporate strategy can often become blurred. In collaboration with The Boston Consulting Group and … Continue reading

2015: the year of the mega-deal

By Troy Ungerman (Toronto) on November 17, 2015 Posted in Corporate finance

Last week’s announcement of a proposed transaction in the food and beverage industry for a staggering US $107 billion does not stand alone as a mega-deal in 2015, according to a recent Mergermarket report. The deal is part of what has been a record year for deal valuations. Through the first three quarters of this 2015, there have been … Continue reading