Deal Law Wire

Insight and perspectives on developments in mergers + acquisitions

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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 overview According to the Report, Canadian venture capital (VC) funding has decreased for the second quarter this year,…
Raising money is exciting. Complying with securities legislation, however, is not quite as exciting, but it is necessary. It is a pain, at the best of times, and a constant struggle between lawyers, who would like every investor in your company to fill out a fifty page document detailing exactly how risky the investment is, and their clients, who would like the money now, please. A big part of my job is seeking exemptions for…
SRS Acquiom recently published its first Buy-Side Representations and Warranties Insurance (RWI) Deal Terms Study. The study analyzed the terms of 588 private-target acquisitions that closed between 2015 and 2017, the majority of which are not required to be publicly disclosed. As Canadian M&A deals continue to use RWI at an increasing pace, insights from firms such as SRS Acquiom offer valuable perspective on popular terms in RWI covered deals. Some of the study’s…
No one would ever suggest international tax law is simple, but with Canada’s impending ratification of the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI“), a new layer of complexity has been added when determining whether a taxpayer is eligible to receive a particular treaty benefit. The recent decision in Alta Energy Luxembourg S.a.r.l v The Queen[1](“Alta Energy“) might be a new high-water…
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 error shut down all Visa transactions in the UK and Europe demonstrate that even large, sophisticated companies are at…
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 as bonds, stocks, and derivatives. A crucial feature of security tokens is that they would be issued in…
A recent report Bloomberg indicates the increasing relevance of buyers staying away from a “#MeToo company” in M&A transactions – i.e., a company facing sexual misconduct allegations. This does not suggest that buyers are staying away. Instead, buyers are developing novel ways of addressing the risk brought upon by a “#MeToo company.” The first method that has seen increased prominence is by incorporation of a legal representation in the M&A agreement, requiring the target company…
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 VTB financing arrangement, the purchaser satisfies a portion of the purchase price through financing, typically by issuing a note to…
Considering the robust global M&A markets of the last few years, it is unsurprising that activist investors have increasingly sought to leverage these transactions for their own gain. To that end, shareholder activists have developed a variety of M&A-related strategies. Most commonly, they either seek to catalyze transactions by pressuring companies into a merger or acquisition, or to scupper deals that would otherwise have gone ahead. Another commonly-used strategy involves agitating for better deal terms.…
Investors are struggling to price market uncertainties, with widely fluctuating market prices in both the United States and Canada. West Texas Intermediate, a U.S. crude benchmark, slid 2.9% during the first week of September, following a jump of more than 7% in August and has remained turbulent ever since. Meanwhile, Canadian energy stocks have failed to see any gains despite crude oil prices maintaining a nearly nine-week high. The discrepancy in the Canadian market…