Tag archives: M&A

M&A Activity: 2020 Outlook

J.P. Morgan’s “2020 Global M&A Outlook” (the Report) reviews what we can expect with regards to M&A activity this year. Some of the key takeaways from the Report include: Anticipated Trends in International M&A: We can expect to see an increase in the global M&A market due to greater geopolitical certainty and financially competitive opportunities … Continue reading

Acqui-hiring: What we know and what we need to know from a Canadian perspective

“Acqui-hire” transactions, which are particularly prevalent in the context of start-up technology-related M&A transactions in the U.S., focus on acquiring a company primarily to obtain its employees and their skills, in addition to other possible assets (see our earlier post on acqui-hires). In these type of transactions, it is thought that the greatest perceived value … Continue reading

Examining data analytics in M&A

The M&A world continues to evolve as transactions are becoming more diverse and complex. Timelines are getting shorter and acquirors have less time to assess their targets but more pressure to justify their acquisitions. Acquirors must simplify the process of acquiring a target, while simultaneously improving the accuracy of their predictions about the acquisition’s profitability. … Continue reading

How to ensure that emails of former employees do not fall through the cracks when purchasing a business

The importance of email in the workplace presents a variety of legal challenges when purchasing a business. Among those are concerns relating to emails and the email addresses of the seller’s employees who are no longer employed by the purchaser after closing. First, there are confidentiality concerns in connection with former employees receiving information they … Continue reading

Let’s see the money! Debt finance options in M&A

In many cases purchasers in an M&A deal will obtain debt financing to cover a portion of the purchase price. Fortunately, in Canada the options for acquisition financing are plentiful. Common ‘types’ include: Senior Debt: the Bank Loan Banks and other senior lenders can design a range of tailored solutions to purchasers’ funding needs. Broadly … Continue reading

NAFTA 2.1: Bringing certainty to an uncertain time

If there is anything that Canadian dealmakers are all too familiar with in 2019, it’s the concept of uncertainty. Raging trade wars, geopolitical tensions, elections, and a forecasted economic downturn are all pervasive in everyday conversation. Despite this, deal flow has remained robust throughout the first three quarters of 2019, as summarized in a recent … Continue reading

Dealing with pending or threatened litigation in M&A

A significant consideration when considering an M&A target can be the impact that pending or threatened litigation has on the proposed transaction. While some organizations may balk at the idea of acquiring a target that is (or is likely to be) the subject of a lawsuit, such companies are often available at significant discounts to … Continue reading

Parties to M&A must be diligent about climate change

Climate change has become a high profile issue that is expected to have significant implications for M&A transactions going forward. As public awareness and scientific understanding of climate change continues to evolve, we are more informed about the climate change-related risks that businesses must grapple with and get ahead of. As a result, businesses need … Continue reading

Canadian M&A Q3 2019 Review: Canadian M&A activity remains strong despite a slight decline in transaction volume

Crosbie & Company’s “Crosbie & Company Canadian Mergers & Acquisitions Report for Q3 2019” (the Report) reviews the minor slowdown in Canadian M&A activity in Q3 2019 following a record-breaking second quarter. While deal activity declined slightly in Q3 (776 announced transactions compared to 886 in Q2), the Canadian M&A market remained robust, posting its … Continue reading

CANADA’S COMPETITION BUREAU IS KEEPING AN EYE ON SMALL M&A DEALS

The Competition Bureau (the “Bureau”) is required to review certain merger transactions that exceed various financial thresholds, based on the size of the business being acquired and the combined size of the buyer, the target business, and their affiliates. The notification thresholds under the Competition Act (the “Act”) are discussed in more detail here. The … Continue reading

5G technology driving M&A activity in the telecommunications sector

The much anticipated rollout of fifth-generation wireless (“5G”) technology and changing consumer habits are expected to drive M&A transactions in the telecommunications sector over the next year. According to EY’s May 2019 Global Capital Confidence Barometer (the “EY Report”) 55% of telecommunications executives expect to actively pursue acquisitions in the next year, a significant increase … Continue reading

AI as a solution for cybersecurity problems in M&A deals

Artificial Intelligence (AI) has immense potential as a solution for cybersecurity vulnerabilities in M&A deals. Generally, M&A deals generate value and as such, understanding vulnerabilities on the acquirer and target sides is important for completion of the transaction. With the common usage of networks and servers to store high volumes of data by corporations, vetting for cybersecurity attacks has become a … Continue reading

Global payments industry: frantic M&A activity not slowing down

A payments industry that was stagnant and stale for decades has recently entered a transformational and disruptive period of innovation, with seemingly boundless growth ahead. Payments players have engaged in record-setting levels of global mergers and acquisitions (M&A) activity over the course of the past few years, but 2019 is poised to be yet another … Continue reading

A-I Captain! Know the legal risks of buying an AI company… or go down with the ship

On February 21, 2019, Blackberry completed its acquisition of Cylance, a privately-held artificial intelligence (AI) and cybersecurity company. Acquisitions of AI companies like Cylance are becoming increasingly common as businesses seek to realize the opportunities in offering much-improved products or services to their customers. Canada, in particular, has become a hotspot for activity in the … Continue reading

Managing information technology risk to improve M&A outcomes

An organization’s technology systems are an integral part of its business. Integrated into all aspects of its operations, the possible failure of these systems has been the top concern in Allianz Group’s survey of over 1,900 risk management experts for six straight years. High profile incidents such as the Visa service outage, where a systems … Continue reading

Vendor take-backs: a useful tool for financing M&A transactions

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

Speed matters: four tactical approaches to speeding up divestitures and maximizing value

With pressure to increase shareholder value from low productivity assets, many companies are exploring the idea of divestures. Yet, a recent article by McKinsey & Company suggests that only 29 percent of divestitures achieve win-win scenarios, whereby both the parent company and divested business achieve excess total returns to shareholders (TRS) following the separation. What … Continue reading

Pension plan considerations in the M&A context

In any acquisition, whether for shares or assets, employee benefits and obligations must be taken into account. One of the potentially most onerous obligations includes the provision of pension benefits to employees – this makes it all the more important for companies contemplating acquisitions to consider potential employee pension plan implications. In a share purchase … Continue reading

Increased M&A activity predicted as insurance industry evolves

The insurance industry is an evolving landscape. The emergence of new technologies and increased competition has created pressure to innovate while casting doubt on the viability of focusing on strategies emphasizing organic growth. These factors may drive an increase in M&A activity in the insurance industry, according to a report from KPMG International. The report, … Continue reading

Shareholder responsibility over auditor tenure

Concerns about the term or length of auditor tenure have returned to relevance following the recent fall of industry giants, providing good reason for Canadian companies to reconsider their audit and governance practices. In 2016, the European Union implemented mandatory rotations of audit firms for public companies, which was similarly considered, though rejected, in the United … Continue reading

Will Canada soon be a global leader in the cannabis space?

Recently, the Cannabis Act was granted Royal Assent, resulting in the official passing of the legislation for legalizing cannabis in Canada. The Act is expected to be in force as of October 17, 2018. The Canadian government’s decision to legalize recreational marijuana may significantly impact capital markets and M&A deals. The decision to legalize recreational marijuana … Continue reading

Evaluating the risks of open source software in M&A transactions

Open source software (OSS) has emerged as a significant market disruptor in recent years. OSS serves as an alternative to commercial software licensing wherein the licensee does not need to pay for the license. This tends to make it particularly attractive to start-ups attempting to keep their costs down. However, the free use of the … Continue reading

Competition Bureau opens consultation on revised immunity and leniency programs

Last month, the Competition Bureau issued its revised immunity and leniency programs for public consultation (open until June 29), an important development as it represents the culmination of a process that began in 2015. An initial draft of the immunity program, published last fall, was subject to public consultation and the Bureau made further revisions … Continue reading
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