Topic: Corporate finance

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Weak loonie, no problem for Canadian institutional investors

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

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

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

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

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

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

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

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

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

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

M&A in China amid economic uncertainty

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

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

A global overview of December 2015 M&A activity

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

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

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

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

Performance incentives for portfolio companies

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?

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

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

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
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