On May 10, 2000, Midnorthern Appliance Inc., an industry leader in major home appliance sales to the new construction and property management trade, acquired over 96 per cent of the shares of Shearhart Corporation, which operates 16 retail appliance stores in Southern Ontario under the “Home & Rural” name. The acquisition was made pursuant to a takeover bid launched by Midnorthern on March 31, 2000 in which Midnorthern offered $1.58 cash for each issued and outstanding share of Shearhart. Midnorthern subsequently acquired the remaining shares of Shearhart in accordance with the compulsory acquisition provisions of the Business Corporations Act (Alberta).
To finance the acquisition and its ongoing operations, Midnorthern obtained a $26 million credit facility from FINOVA (Canada) Capital Corporation and $4 million in subordinate debt and equity financing from HSBC Capital (Canada) Inc.
Counsel for Midnorthern was Lang Michener, led by Eric Friedman (corporate/commercial and lending) and Paul Collins (securities). Shearhart was represented by R. Kenneth Pearce of Blake, Cassels & Graydon LLP. Allison Manzer and Moira Urbanski of Cassels Brock & Blackwell LLP acted for FINOVA, and Donahue Ernst & Young LLP, represented by Kevin McGrath and David Poynton, acted for HSBC.