1. Gordie Howe International Bridge Project
It had long occurred to observers that having the Windsor-Detroit road bridge between the two countries owned and controlled by a private U.S. citizen presented a vulnerability – especially for Canada. Plus, there were issues with the state of repair and location of the Ambassador Bridge. Then Prime Minister Stephen Harper wanted a change; and so did Governor Snyder of Michigan – despite opposition.
According to Brian Kelsall, who with Tom Barlow, led the Fasken Martineau LLP team: "with strong leadership on both sides of the border the concept of a crossing agreement between Canada and the United States was developed. This agreement would mandate the creation of an international authority, the Windsor-Detroit Bridge Authority (the “WDBA”) to be overseen by an international board (the “IA”) with representatives from both countries. Canada would pay for the GH Project in its entirety hence avoiding the legislative pitfall in Michigan and in return Canada would receive all of the tolls until it had recouped its investment.
“In addition, and importantly, it was recognized by both Canada and Michigan that the procurement methodology for the GH Project would be a P3 following the Canadian model. This model was seen to be the most effective in allowing all of the various constituents, the two countries, Detroit and Windsor, all of the various municipalities, First Nations, border security, etc. to have a voice while at the same time mandating an independent authority to drive the project to completion. Fasken was hired to represent Canada, the WDBA and the IA for the GH Project in 2010. The Crossing Agreement took shape in around 2012 with amendments through to 2017. With this document in place along with the Presidential Permit, the project was ready to commence procurement.”
The WDBA announced on September 28, 2018, that “we have signed a fixed-priced contract with Bridging North America to design, build, finance, operate and maintain the Gordie Howe International Bridge project. The announcement also signified that all contractual steps have been completed and construction can begin.
“The fixed-priced contract is valued at $5.7 billion (nominal value), which includes the design-build (DB) phase and the operation, maintenance, rehabilitation (OMR) phase. Bridging North America will receive progress payments during construction and a substantial completion payment at the end of construction. They will also receive monthly payments for operations and maintenance over the 30-year concession (operating) period.
“Bridging North America has presented a 74-month construction schedule to complete the four components of the project with the bridge scheduled to be in service by the end of 2024.”
There had been myriad legal challenges over those years, not the least of which was the consistent and litigious opposition of the private citizen owner. There was also the issue of situating the legal border between the two countries. As Kelsall wrote, the border between the two countries was by law in the middle of the river. “Thus, the WDBA and its counsel had to contend with the fact that there were two sets of laws applicable to the construction of the entire project. Picture a truck driving from the Canadian side to the American side and doing work on the American side and then returning. Which Construction Lien Act rules apply, which taxes, which environmental laws?
“To deal with these multiple jurisdictional issues the team had to take cognizance of all of the applicable laws applying to the entire construction site. It was also necessary to seek enabling legislation such as the Bridge to Strengthen Trade Act, a federal statute that was put in place to streamline certain requirements under various types of law for the Canadian side.”
The many lawyers and their stakeholder clients were determined to speak with one voice as they engaged in the bid process. According to Kelsall, at the recent Canadian Council for Public Private Partnership’s annual conference, Nuria Haltiwanger, Global CEO of ACS (part of the winning consortium) “identified that the ability to deal with the WDBA and know that that Authority spoke for all of the various constituents behind the scenes was an absolute imperative without which the transaction could not have been done.”
When it comes to the Canadian-US relationship in 2018, Lexpert and other Canadian publications wrote in worried tones about the break-up of NAFTA, the imposition of stern tariffs, and the Buy American position of the current President. And so we take notice when Kelsall describes this Deal of the Year:
“Lastly, it’s a story of friendship. The project would not have been completed without the friendship and trust that was developed between the two countries and their working teams. It’s a great example of what can be done when friends help each other.
Windsor-Detroit Bridge Authority and Her Majesty the Queen in Right of Canada were represented by Fasken Martineau DuMoulin LLP with a team led by Tom Barlow and Brian Kelsall, and that included Ella Plotkin, Marc Lefler, Doug R. Scott, Barbara Miller, Sean Morley, Kathleen Butterfield and Zackary Burashko, together with Rosalind Cooper, Daniel Fabiano, Gordon Hunter, Louise Kennedy, Alison Lacy, Michael Round, Ryan Schnier, Scott Ma, Neil Smiley, Sean Stevens and others. Windsor-Detroit Bridge Authority was led in-house by Vicky Tuquero and Kathleen Roberts. Advice on US law matters was provided by Warner Norcross + Judd LLP with a team that included Timothy Horner, Charlie Goode, Christopher Meyer and others.
Bridging North America General Partnership and BNA O&M General Partnership were led in-house by Marc Aron, Chief Legal Officer, Mark Platteel, General Counsel, Greg Walters, Vice President, Legal, and Meno Tessema, Associate Vice President, Legal, for ACS, by Steven J. Pascoe, VP Law, for Fluor and by Yonni Fushman, Executive Vice President & Chief Legal Officer for Aecon. Blake, Cassels & Graydon LLP acted as counsel to Project Co with a team that included Catherine Doyle, Mark Johnson, Aaron Palmer, Kathleen Penny, Samantha Rossman and Catherine Youdan, together with Christine Ferguson, Chris Flood, Robert Frazer, Laura Gagnon, Megan Shaw, Aletha Utley, Jon Viner and Joe Zed. Advice as to US Securities Law matters was provided by Skadden, Arps, Slate, Meagher & Flom LLP with a team that included Riccardo Leofanti and Annabelle Gardere.
BNA Constructors Canada GP was represented in-house by Adam Brody, General Counsel for Dragados Canada Inc., Jonathan van Ginhoven, Senior Counsel for Fluor, and Patricia Skringer, Director, Operations Legal – East for Aecon, with support from DLA Piper (Canada) LLP with a team that included Andrew Burton, Elizabeth Mayer and Natasha Rana.
The underwriters, lenders and hedge providers were represented by McCarthy Tétrault LLP with a team that included Linda Brown, Morgan Troke, Samantha Cunliffe, Robin Mahood, Liezl Behm, Ailbish Skinner and Brianne Paulin.
Alternate bidders that did not ultimately prevail were represented by Osler, Hoskin & Harcourt LLP led by Chris Bennett; and Davies Ward Phillips and Vineberg LLP led by Greg Southam. Stikeman Elliott LLP acted as underwriter’s counsel to the Ellis Don/Bechtel Consortium with Jamie Templeton.
2. Brookfield Infrastructure acquired Enercare Inc.
Cameron Belsher of McCarthy Tétrault called Brookfield’s acquisition of Enercare the “largest go-private this year by a Canadian champion doing a deal in their own backyard.” Oliver Borgers, McCarthy Tetrault LLP, wrote that the “transaction was a very large and complex matter that drew on pretty much every area of expertise among legal counsel. It stands out as a major deal that was flawlessly executed.”
On October 16, 2018, Brookfield Infrastructure and its institutional partners, (collectively, “Brookfield Infrastructure”) completed the acquisition of all the issued and outstanding common shares of Enercare Inc. for $29.00 per common share or, in the case of certain electing Canadian resident shareholders, 0.5509 of an exchangeable limited partnership unit (“Exchangeable LP Unit”) for each common share elected. The Exchangeable LP Units are exchangeable, on a one-for-one basis for non-voting limited partnership units of Brookfield Infrastructure Partners L.P. (“BIP”). The transaction was valued at $4.3 billion, including debt. Enercare’s common shares were subsequently delisted from the Toronto Stock Exchange and Enercare has ceased to be a reporting issuer under applicable Canadian securities laws.
BIP is a global infrastructure company that owns and operates high quality, long-life assets in the utilities, transport, energy and data infrastructure sectors across North and South America, Asia Pacific and Europe. Enercare Inc. is one of North America’s largest home and commercial services and energy solutions companies, as well as the largest non-utility sub-meter provider in Canada.
McCarthy Tétrault LLP advised Brookfield Infrastructure with a core team led by Jonathan See, Jake Irwin and Isabel Henkelman, which included Cameron Belsher, Robert Richardson, Scott Bergen and Nicole Chiarelli, and included Patrick McCay and Yaroslavna Nosikova (Tax), Ian Mak and Noel Chow (Financial Services), Sarit Pandya and Andrejs Mistiouk (Real Property and Planning), Catherine Samuel, Andrew Armstrong, Shauvik Shah, Paulina Bogdanova and Andrea Schneider (Corporate), Oliver Borgers and Jonathan Bitran (Competition/Antitrust), George Veghand Heloise Apestéguy-Reux (Energy Regulatory), Joanna Rosengarten (Environmental), Adam Ship and Paul Kunynetz (Franchise and Distribution), Nancy Carroll (Insurance), Trevor Lawson, Patrick Pengelly and Matthew Demeo (Labour and Employment), Ana Badour(Regulatory), Eric Block and Kosta Kalogiros (Litigation), Deron Waldock and Kelleher Lynch (Pensions and Benefits), John Boscariol and Robert Glasgow (Trade) and Ryan Prescott (Technology and Intellectual Property). White & Case LLP advised Brookfield Infrastructure in the US with a team that included Oliver Brahmst, Samuel Raboy and Adam Cieply (Corporate), and Binoy Dharia and Shana White (Financial Services). Torys LLP with a team led by Karrin Powys-Lybbe acted as counsel to Brookfield Infrastructure, as part of a consortium, including advice on the negotiation of the inter-consortium arrangements, the offering of an exchangeable security option, as well as all HSR filings for the transaction.
Enercare was led in-house by John Toffoletto, Senior Vice-President, Chief Legal Officer and Corporate Secretary with a team that included Chelsea Provencher, Senior Legal Counsel and Monique Lampard, Legal Counsel. Enercare was advised by Davies Ward Phillips & Vineberg LLP with a team that included Bill Ainley, Brett Seifred, Ha Nguyen, and Todd Wierenga (Corporate/M&A), Anita Banicevic and David Feldman (Competition) and Paul Lamarre (Tax).
The acquisition was financed, in part, through a new credit facility entered into between Brookfield Infrastructure and a syndicate of lenders and the Toronto-Dominion Bank (“TD Bank”), as administrative agent and as issuing bank. TD Bank was advised by Stikeman Elliott LLP with a team that included Craig Mitchell, Kelly Niebergall and Laura Von Heynitz.
Stikeman Elliott LLP represented The Toronto-Dominion Bank with a team that included Craig Mitchell, Kelly Niebergall, Laura Von Heynitz (Banking), Sean Vanderpol (Securities), Paul Collins (Competition), Glen Zacher (Regulatory) and Andrea Boctor (Pensions); and in the U.S., Milbank, Tweed, Hadley & McCloy LLP with a team including Mike Bellucci and Ben Eisenstein.
Osler, Hoskin & Harcourt LLP acted for one of Canada’s largest pension investment managers in connection with the equity co-investment that supported the funding of the acquisition with a team led by John Groenewegen and Sébastien Savage.
3. Algoma Steel Inc.
Essar Steel Algoma Inc. concludes a three-year restructuring under the CCAA and sale of substantially all of its assets to Algoma Steel Inc.
On November 30, 2018, Essar Steel Algoma Inc. (ESAI) concluded its comprehensive restructuring under the Companies’ Creditors Arrangement Act by way of the sale of substantially all of its assets to Algoma Steel Inc. (ASI), a company sponsored by ESAI’s existing senior secured term lenders and 9.5% senior secured noteholders (the Secured Lenders) pursuant to a restructuring support agreement. In connection with the sale, the Secured Lenders exchanged their existing secured claims for equity in ASI and certain Secured Lenders backstopped and funded a US$285 million exit term loan facility. ASI also obtained a US$250 million revolving ABL facility from a syndicate of third-party lenders led by Wells Fargo Capital Financing Corporation Canada. In addition to ESAI’s assets, ASI also purchased the port assets used at the company’s port facility in Sault Ste. Marie to effectively unwind a 2014 transfer of the port assets which the CCAA court found to be oppressive earlier in the proceedings. Through the restructuring ASI also implemented revised collective bargaining agreements with the hourly and salaried local unions and obtained certain pension relief through legislation and regulations enacted by the Province of Ontario.
Stikeman Elliott LLP represented ESAI in Canada with a team of Ashley Taylor, Maria Konyukhova, Lee Nicholson, Sanja Sopic (Restructuring/Insolvency); John Ciardullo, Billy Rosemberg (Corporate), Peter Hamilton, Meaghan Obee Tower (Banking); Andrea Boctor (Pensions); Larry Cobb, Patrick Duffy (Environmental); John Lorito, Margaret Nixon, Eryn Fanjoy (Tax); Michael Kilby (Competition); Eliot Kolers, Daniel Murdoch, Patrick Corney (Litigation); Andrew Elliott, Neil Shapiro (Real Estate); Lorna Cuthbert, Nancy Ramalho (Labour and Employment); and Justine Whitehead (Intellectual Property). Weil, Gotshal & Manges LLP represented ESAI in the United States with a team of Ray Schrock, Kelly DiBlasi, David Cohen (Restructuring/Insolvency); and Sasha Shulzhenko (Banking). FTI Consulting Inc. acted as Chief Restructuring Advisor to ESAI with a team of John Strek and Robert Del Genio and Evercore Group L.L.C. acted as financial advisor to ESAI with a team of Daniel Aronson, Bo Yi and Akshay Natarajan.
Torys LLP with a team led by Tony DeMarinis and including David Bish (Restructuring), and Patricia Jackson, Andrew Gray, and Jeremy Opolsky (Litigation) acted for Essar group of companies, headed by Essar Global Fund Limited and managed by Essar Capital Americas, Limited, as the sole owner/shareholder of, and provider of key services to, Essar Steel Algoma Inc.
Ernst & Young Inc. acted as Monitor of ESAI and other affiliates with a team of Brian Denega, Sharon Hamilton, Allen Yao, Matt Kaplan, Fiona Han, Matt Budd (Restructuring); Jay Patel, Moshe Deutsch, Robert Stall, Terrance Yeung (Valuations); Brendan Gallagher (Capital Equipment Valuation); Uros Karadzic, Faisal Siddiqi (Pensions); Craig Roskos, Charanjit Girn (Transaction Tax); Sean Kruger (Transfer Pricing); Jan Pedder, Lynne Sangster (Indirect Tax); and Garth Marshall (Geology) and Gowling WLG represented the Monitor with a team of Derrick Tay, Clifton Prophet, Nicholas Kluge, Dom Glavota (Restructuring/Insolvency); Kathleen Ritchie (Corporate); Ash Gupta (Tax); Chris Alam, Kelby Carter (Banking).
Osler, Hoskin & Harcourt LLP represented ASI and certain senior secured term lenders in Canada with a team led by Marc Wasserman and Kevin Morley, Michael De Lellis, Andrea Lockhart, Martino Calvaruso and Sean Stidwill (Restructuring/Insolvency); John MacDonald (Litigation); John Groenewegen, Charlie Zilvytis (Corporate); Laurie Barrett, Jason Pearlstein, Jeremy Burgess (Banking); Paul Litner, Jon Marin (Pensions); Sven Poysa (Labour and Employment); Jennifer Fairfax, Patrick Welsh (Environmental); Firoz Ahmed, Greg Wylie, Alex Klyguine (Tax); Shuli Rodal, Kaeleigh Kuzma (Competition); and Ryan Nielsen (Real Estate). Davis Polk & Wardwell LLP represented ASI and certain senior secured term lenders in the United States with a team of Damian S. Schaible, Christopher Robertson (Restructuring/Insolvency); Stephen Salmon, Bryan M. Quinn, Donald K. Lang (Corporate); J.W. Perry, Jonathan B. Brown, Louis Labriola (Banking); Lucy W. Farr and Tracy L. Matlock (Tax). Rothschild & Co. US Inc. acted as financial advisor to the senior secured term lenders and ASI with a team of Stephen Antinelli, Nic Hooper, Michael Speller, Kevin Glodowski and Rolf Arnold. PricewaterhouseCoopers Inc. also acted as financial advisor to the senior secured term lenders and ASI with a team of John McKenna and Ian Dunlop.
Goodmans LLP represented the ad hoc committee of 9.5% senior secured noteholders in Canada with a team consisting of Robert Chadwick, Joseph Latham, Bradley Wiffen, Andrew Harmes (Restructuring/Insolvency); Tim Heeney (Corporate); Jeff Citron, Dan Dedic (Banking); David Conklin (Litigation); Glenn Ernst and Alan Bowman (Tax); Ken Herlin (Real Estate); and David Rosner (Competition).
Lenczner Slaght Royce Smith Griffin LLP, Blake, Cassels & Graydon LLP, and Brauti Thorning Zibarras LLP represented GIP Primus, L.P. and Brightwood Loan Services L.L.C. in connection with the sale of the port assets with a team consisting of Peter Griffin, Monique Jilesen, Scott Rollwagen, Matthew Lerner, Chris Trivisonno, Robert Trenker (Litigation), Steven Weisz, Caitlin Fell (Restructuring/Insolvency), Michael Harquail, Charles McRoberts (Banking); Jamie Koumanakos and David Kruse (Corporate); Chris Huband (Real Estate); Paul Stepak and Allan Gelkopf (Tax).
McMillan LLP represented the exit term lenders and exit ABL lenders in Canada with a team of Wael Rostom, Tushara Weerasooriya (Restructuring/Insolvency), Jeff Rogers, Don Waters, Darcy Ammerman, Alex Ricchetti, Julie Han, Emily Csiszar, Rob Scavone (Banking), David Ross, Jennifer Mandel, Alma Borojeni (Real Estate), David Wentzell (Pensions), Ralph Cuervo-Lorens (Environmental), Michael Friedman, Jamie Wilks (Tax), Mary Flynn-Guglietti (Municipal Law), Mike Richmond, Sharon Groom, Paul Boshyk, Geoffrey Kubrick, Paul Davis, and Lyndsay Wasser (Corporate, Energy, and Labour and Employment). Simpson Thacher & Bartlett LLP represented the exit term lenders and exit ABL lenders in the United States with a team of Justin M. Lungstrum, Stephanie A. Rotter, Jeffrey S. Herscott, Juan J. Gonzalez, Michael Peragine, Janet M. Nadile, Jonathan S. Pall (Banking); Sandeep Qusba (Restructuring/Insolvency); Genevieve Dorment (Intellectual Property); Timothy J. Mulvihill (Environmental); Timothy Gallagher (Real Estate); Abram J. Ellis, Mark B. Skerry (Anti-Corruption/Sanctions); Nicole M. Humphrey (Tax); and Jeanne M. Annarumma (ERISA).
Paliare Roland Rosenberg Rothstein LLP represented the USW and its Local 2724 with a team of Massimo (Max) Starnino, Kenneth T. Rosenberg, Lily Harmer, Emily Lawrence and Lauren Pearce (Restructuring/Insolvency and Labour and Employment). Davies Ward Phillips & Vineberg LLP provided transactional legal support, with a team of Robin Schwill and Christopher Anderson (Corporation). FTI Consulting Canada Inc. acted as financial advisor to the USW and its Local 2724 with a team of Paul Bishop, Jim Robinson and Patrick Kennedy and Prism Economics Inc. also acted as financial advisor represented by Ken Delaney.
Cavalluzzo Shilton Mcintyre Cornish LLP represented USW Local 2251 with a team of Michael Wright, Tracey Henry, Amanda Darrach and Alex St. John (Litigation and Labour and Employment).
Ursel Phillips Fellows Hopkinson LLP acted as representative counsel for certain of ESAI’s retirees with a team of Susan Ursel, Karen Ensslen, Katy O’Rourke, Ashley Schuitema and Erin Epp (Litigation and Pensions).
Osler partner, Kevin Morley, wrote that the deal involved “virtually every major Bay Street firm as well as NY advisors, counsel and investors. Both the federal and provincial governments, including the change of governments with the latter and the punitive US tariffs impacting the former, were critical constituents in a resolution which resulted in the salvation of one of two major remaining steel producers in Canada and the City and people of Sault Ste Marie.
McMillan LLP added, “As counsel to exit lenders we needed to provide the lenders comfort that all restructuring efforts made by Algoma and Buyer work for exit lenders and provided appropriate structuring advice.”
4. Teck Resources Limited (“Teck”), closed the sale of its two-thirds interest in the Waneta Dam in British Columbia to BC Hydro for $1.2 billion cash
As of July 26, 2018, according to Teck’s press release: “Teck will record an after-tax gain of approximately $820 million as a result of the sale, with no cash tax payable on the proceeds.
“As part of the sale, Teck Metals Ltd. (“Teck Metals”) holds a 20-year lease to use the two-thirds interest in Waneta to produce power for its industrial operations in Trail. Annual payments will begin at approximately $75 million per year and escalate at 2% per annum, equivalent to an initial power price of $40/MWh based on 1,880 GWh of energy per annum. Teck Metals has an option to extend the lease for a further 10 years at comparable rates.”
Teck was represented in-house by Peter Rozee (Senior VP, Commercial and Legal Affairs), Nick Uzelac (Corporate Counsel) and Doug Powrie (tax), and was assisted by a team from Fasken Martineau DuMoulin LLP led by Ron Ezekiel, and comprised of Kai Alderson, Steven Catania and Sarah Martin (M&A/Energy), Chris Sharpe (Real Property), Don Dalik (Competition), Brent Lewis (Financing), David Both (Regulatory) and Michael Coburn and Hardeep Gill (Tax). Pamela Anderson (Energy), Michael Carr (Corporate) and Jeff Wyszynski (Real Property) of Perkins Coie LLP also assisted with respect to certain US legal matters.
BC Hydro was represented in-house by Vicki Antoniades (Project Manager, Power Acquisitions and Contract Management), and was assisted by a team from Lawson Lundell LLP led by Lana Shipley, and comprised of Gordon Craig, Jeff Scobie and Jada Tellier (M&A/Energy), Christine Kowbel (Environmental), Ed Wilson (Real Property), Valerie Mann (Competition), Jeff Christian and Clara Ferguson (Regulatory), Keith Bergner (Aboriginal), and Mandeep Dhaliwal and Brenda Lightbody (Financing). Deanna King of Bracewell LLP also assisted with respect to certain US legal matters.
5. BSR Real Estate Investment Trust REIT IPO
BSR Real Estate Investment Trust completed its initial public offering of 13,500,000 trust units at a price of US$10.00 per unit for gross proceeds of US$135 million.
In connection with the offering, the REIT indirectly acquired a 48-property portfolio of multifamily garden-style residential properties (one of which is to be acquired following closing of the offering) located across five bordering states in the Sunbelt region of the United States, held indirectly by BSR Trust, LLC (BSR). The net proceeds of the offering were used by the REIT to repay approximately US$122.3 million of indebtedness owing by BSR and to fund transaction costs associated with the offering.
The offering was underwritten by a syndicate of underwriters led by BMO Capital Markets, and included CIBC Capital Markets, RBC Capital Markets, Scotiabank, TD Securities Inc., National Bank Financial Inc., Raymond James Ltd., Canaccord Genuity Corp., Desjardins Securities Inc., Industrial Alliance Securities Inc. and Echelon Wealth Partners Inc. The REIT granted the underwriters an over-allotment option, exercisable in whole or in part at any time up to 30 days after the closing of the offering, to purchase up to an additional 2,025,000 units at a price of US$10.00 per unit which, if exercised in full, would increase the total gross proceeds to US$155,250,000.
The net proceeds of the over-allotment option, to the extent exercised, will be used by the REIT for capital expenditures on the initial properties, to repay indebtedness or for future acquisitions.
On closing of the Offering, existing members of BSR retained an aggregate approximate 66-per-cent ownership interest in the REIT and will retain an aggregate approximate 63-per-cent ownership interest in the REIT if the over-allotment option is exercised. Certain of these holders are members or affiliates of the Bailey family or are members or affiliates of the Hughes family (collectively, the Bailey/Hughes Holders), who together founded BSR. The Bailey/Hughes Holders together own 17,210,733 class B units of BSR, which are economically equivalent to and redeemable for units of the REIT on a one-for-one basis, and 3,037,159 units of the REIT, together representing an aggregate approximate 51-per-cent ownership interest in the REIT, and an aggregate approximate 49-per-cent ownership interest in the REIT if the over-allotment option is exercised.
Goodmans LLP represented the REIT in Canada with a team led by Stephen Pincus and Brad Ross (Corporate/Securities) that included Emily Weizel and Tara Hunt (Corporate/Securities), Jon Northup and Ken Saddington (Tax) and Francy Kussner (Insurance); and by Mitchell, Williams, Selig, Gates & Woodyard, PLLC in the United States with a team that included Harry Hamlin and Melissa Bandy (Real Estate), Nicole Lovell (Corporate/Securities), Jennifer Pierce (Tax) and Nate Read (Employment).
Blake, Cassels & Graydon LLP represented the Underwriters in Canada with a team that included William Fung, Eric Moncik, Neelu Toor and Raees Nakhuda (Corporate/Securities), and Andrew Spiro and Sabrina Wong (Tax). The Underwriters were represented by Greenberg Traurig LLP in the United States with a team that included Andy White and Barbara Jones (Corporate/Securities), Neil Oberfeld, Nicholas Dyer and Christina George (Real Estate), and Bob Simon and Jennifer Weiss (Tax).
6. Canadian Tire acquisition of Helly Hansen
As of July 3, 2018, Canadian Tire Corporation, closed the acquisition of the company that owns and operates the Helly Hansen brands and related businesses. Helly Hansen is a leading global brand in sportswear and workwear based in Oslo, Norway. Canadian Tire explains:
It “is a family of businesses that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal & Gardening divisions. PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark’s, a leading source for casual and industrial wear; Pro Hockey Life, the world’s largest hockey centric retailer; and FGL (Sport Chek, Hockey Experts, Sports Experts, National Sports, Intersport and Atmosphere), which offers the best active wear brands. The approximately 1,700 retail and gasoline outlets are supported and strengthened by our Financial Services division and the tens of thousands of people employed across the country by the Company and its local dealers, franchisees and petroleum retailers.”
The cross-border transaction was led for Canadian Tire by Norton Rose Fulbright‘s Walied Soliman, Terence Dobbin and Troy Ungerman, and included Chris Pearson, Jon Perry, Pierre Dagenais, Bruce Sheiner, Seemal Patel, Trevor Zeyl, Robert Corbeil, Saskia Blokland and Jasper Geerdes (Corporate, M&A and Securities), Adrienne Oliver, Brian Milne, Dominic Stuttaford and Remco Smorenburg (Tax), Kevin Ackhurst and Anastasia Kastelskaya (Competition/Anti-trust), Chris Hunter (Intellectual Property), Robert Percival (Information Technology), Mike Knapper (Regulatory), Lisa Cabel and Senka Grahovac (Employment & Labour), Matthew Findley (Employee Benefits and Executive Compensation), Michael Lieberman and Alex Fane (Real Estate), Noah Schein (Finance), and Sara Josselyn (Insurance).
Osler, Hoskin & Harcourt LLP advised the underwriters on Canadian Tire’s debt offering to partially fund the acquisition with a team led by Michael Innes.
Torys LLP with a team led by Laurie Duke acted for Ontario Teachers’ Pension Plan as Canadian counsel.
7. Coca Cola sale to Kilmer
On September 28, 2018, Coca-Cola Canada Bottling Limited (“CCCBL”), a joint venture established between prominent business person and philanthropist, Larry Tanenbaum O.C., and Junior Bridgeman, a former NBA player, renowned entrepreneur and owner of Kansas City-based Heartland Coca-Cola Bottling Company, completed its previously announced acquisition of Coca-Cola Refreshments Canada Company (“CCRC”) from Coca-Cola Refreshments USA, Inc., a subsidiary of The Coca-Cola Company (NYSE:KO).
CCCBL continues to employ 5,800 CCRC employees and is responsible for all Coca-Cola bottling and distribution operations across Canada, including the operation of five production facilities and over fifty sales and distribution centres. CCCBL will continue to offer a wide variety of beverages, including some of the most popular brands in Canada such as Coca-Cola®, Diet Coke®, Coca-Cola® and vitaminwater®.
The Coca-Cola Company was represented internally by a team led by John Uyham (Senior Counsel - Mergers and Acquisitions) and Brian Henry, VP and Senior Managing Partner, as well as its Canadian in-house counsel Scott Kirkpatrick (General Counsel) and Andrew Brock (Legal Counsel).
The Coca-Cola Company was externally led by transaction counsel, DLA Piper (Canada) LLP. The M&A team in Canada was led by Russel Drew (Toronto) and included Mackenzie Clark, Grace Latimer, Sandra Appel, Mitchell Smith, Melissa Gaul, Christopher Pejovic, Quinlan Winton, Matylda Makulska, Stephanie Blakely, Lauren Storwick, Ryan Walter and Daniel Zajac. The DLA Piper (US) LLP team was led by Jeff Baglio (San Diego).
Blake, Cassels & Graydon LLP provided Tax advice to The Coca-Cola Company in connection with the transaction, with a team led by Jeffrey Shafer, and including Zvi Halpern-Shavim. McMillan LLP provided Competition law advice to the Company with a team led by Casey Halladay and including Neil Campbell and William Wu. Cassels Brock & Blackwell LLP provided Regulatory, Environmental, Real Estate, Employment, Trade and Licensing advice, with a team that included Chandimal Nicholas, Alison Manzer and Richard Ngo (Regulatory/Licensing), Signe Leisk, Adrianna Pilkington and Meghan Rourke (Environmental and Real Estate), Laurie Jessome and Caitlin Russel (Employment) and Brenda Swick (International Trade). Bennett Jones LLP with a team comprising Leonard Griffiths (Environmental), Jane Helmstadter and Alla Segal (Real Estate), Susan Seller (Pensions and Benefits) and Carl Cunningham (Employment) also advised.
CCCBL was represented internally by Gennady Ferenbok, Vice President Legal, Kilmer Group, and Shellie Clausen, General Counsel, Heartland Coca-Cola Bottling Company, LLC, and externally by Goodmans LLP. The Goodmans team was led by Neil Sheehy and Kirk Rauliuk, and included Laura Magisano and Bryan Flatt (corporate/M&A), Ken Herlin, Tyler D’Angelo and Lisa Hawker (Real Estate), Jeffrey Citron, Christopher Payne and Danielle Knight (Finance), Alan Bowman and Michael Royal (Tax), Michael Koch (Competition), John Alton (Pensions and Benefits) and Kate Lyons (Environmental).
Fasken Martineau DuMoulin LLP represented the Lenders (The Bank of Nova Scotia, Bank of Montreal and National Bank of Canada), with a team led by John Torrey and including David Ferris and Dan Conrad (Banking), Allyson Roy (Real Estate), Brad Freelan (Securities) and Chris Steeves (Tax).
8. Scotiabank acquisition of Jarislowsky, Fraser Ltd.
On May 1, 2018, Scotiabank announced the completion of its $950 million acquisition of Jarislowsky, Fraser Ltd. to create the third-largest Canadian active asset manager with $166 billion in assets under management (as of December 31, 2017).
Scotiabank is Canada’s international bank and a leading financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific, with a team of more than 88,000 employees and assets of over $915 billion (as at October 31, 2017).
Jarislowsky, Fraser is one of Canada’s leading independent investment management firms, managing the portfolios of pension funds, foundations and endowments, corporations and individuals in Canada, the United States and internationally—representing more than $40 billion in assets under management.
Scotiabank was represented internally with a team that included Ian Arellano (EVP & General Counsel), Anita Mackey (SVP & Associate General Counsel), Alex MacMillan and Doug Robertson (Senior Counsel, Strategic Transactions). Torys LLP provided external legal support with a team led by (Ricco) A.S. Bhasin and which also included Susan Nickerson, Richard Johnson, Cameron Koziskie, Robert Fatt, Michael Meguid and Marko Trivun.
Stephen A. Jarislowsky (founder of Jarislowsky, Fraser Ltd.) and S.A. Jarislowsky Investments Inc. were represented by Davies Ward Phillips & Vineberg LLP with a team that included William Rosenberg, Justin Vineberg, Brian Bloom, Olivier Désilets, Adam Fanaki and Christina Sauro.
Jarislowsky Fraser Ltd. was represented by Blake, Cassels & Graydon LLP with a team that included Peter MacGowan, Navin Joneja, Howard Levine and Kathleen Penny.
The partners of Jarislowsky Fraser Ltd. were represented by Stikeman Elliott LLP with a team that included André Roy, Michel Gélinas (then at the firm), Julien Robitaille-Rodriguez, Luc Bernier, Adam Drori, and Hélène Bussières.
Stephen A. Jarislowsky (founder of Jarislowsky, Fraser Ltd.) and S.A. Jarislowsky Investments Inc. were advised by Richard Lewin from Wildeboer Dellelce LLP on Tax matters relating to the sale.
9. Boat Rocker Media Inc., including for its acquisition of a majority stake in Insight Productions
Boat Rocker Media Inc. has come to describe itself as “a global entertainment company that creates, produces and distributes premium media content for all platforms and develops brands and IP for worldwide monetization. Under its banner are Boat Rocker Studios (which includes Temple Street, Crooked Horse, Proper, Jam Filled Entertainment and Radical Sheep), Boat Rocker Rights (which includes Boat Rocker Brands), and Boat Rocker Ventures (which includes investments in Industrial Brothers, MarcoPolo Learning, Serial Box, The Outline, and CAA Creative Labs). A selection of its recent projects includes Orphan Black (BBC AMERICA, Space), Killjoys (Syfy, Space), X Company (CBC), Being Erica (CBC, SOAPnet), Masterchef Canada (CTV). “It was pleased to join with Insight, a leading television production company headquartered in Toronto, in announcing: “Effective immediately, this investment enables Insight to increase and diversify its content offerings and move more aggressively into digital content while signifying Boat Rocker’s continued growth in the Canadian market and around the world.”
Goodmans represented Insight Productions with a team that included Jonathan Feldman, Emily Ting and Sarah Macchione (Corporate/M&A), Tara Parker (Entertainment), and Mitch Sherman (Tax).
Stikeman Elliott acted for Boat Rocker Media (on Matador Content, LLC; and FremantleMedia’s Kids & Family Entertainment division deals) with a team led by Simon Romano, Marie Garneau and including Paul Neville and Martyna Wolska.
10. The Cannabis sector is Deal #10
Most notably, Constellation Brands, the maker of Corona and Modela beers, increased its stake in Canopy Growth by an additional $4 billion (on top of its acquisition of a smaller stake earlier in the year). CNBC reported:
“With this latest investment and the execution of some warrants, Constellation says its stake will become 38 percent of Canopy. Constellation also received an opportunity over the next three years to buy up to 139.7 million in new shares, which represents up to $5 billion in additional funding. If Constellation utilized those warrants, it could raise its total stake in Canopy to more than 50 percent.
“Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space,” Constellation Brands CEO Rob Sands said in a statement.
“We think the premium paid as well as the size of [Constellation’s] investment reflects the long-term attractiveness of the global cannabis opportunity,” Cowen analysts said in a note Wednesday. The firm says Constellation’s expectation for the deal to be accretive by fiscal year 2021 is also encouraging.”
LaBarge Weinstein LLP acted as sole legal counsel to Canopy Growth Corp. with a team led by Shane McLean and Debbie Weinstein, and including Brigitte LeBlanc-Lapointe and Tayyaba Khan; Davies Ward Phillips & Vineberg LLP led by Patricia Olasker advised Canopy on Competition Act and Investment Canada Act matters. Osler, Hoskin & Harcourt LLP represented Constellation Brands, led by Manny Pressman and James Brown.
On September 5, 2018, Canopy had completed its acquisition of Hiku Brands Company Ltd. (Hiku) by way of plan of arrangement.
Pursuant to the Arrangement, Canopy acquired 100% of the issued and outstanding common shares of Hiku and Hiku shareholders received 0.046 of a Canopy common share in exchange for each Hiku share held immediately prior to the closing. Hiku is focused on building a portfolio of engaging cannabis brands with a national retail footprint led by Tokyo Smoke.
Cassels Brock & Blackwell LLP acted for Canopy with a deal team that included Paul Stein, Jeffrey Roy, Jamie Litchen, Jonathan Sherman and Miriam El Ofir (Securities, M&A and Cannabis), Carla Potter (Financial Services), Ardy Mohajer and Kwaku Tabi (Real Estate), Chris Hersh (Competition), James Morand (Tax) and Brigeeta Richdale (Litigation).
Dorsey & Whitney LLP acted as United States counsel for Canopy.
Wildeboer Dellelce LLP acted for Hiku with a deal team that included Jeff Hergott, Rob Wortzman, Rebecca Cochrane and Amir Torabi (Corporate and Securities) and Katy Pitch (Tax).
Blake, Cassels & Graydon LLP acted as Competition and Litigation counsel for Hiku with a deal team that included Navin Joneja and Jim Robson (Competition) and Sean Boyle (Litigation).
But there were other transactions that made the news in the Cannabis space. Particularly those done by Aurora Cannabis, one of the world’s largest and leading cannabis companies with sales and operations in 14 countries across five continents.
On May 2, 2018, Aurora Cannabis completed its $1.23 billion (US$950 million) takeover bid for all of the outstanding shares of CanniMed Therapeutics Inc. In addition to product synergies and broader product portfolio, the combination also provides for expanded geographies. The CanniMed Shares were acquired for consideration of approximately 72.7 million Aurora shares and $140 million in cash. The CanniMed Shares were de-listed from the Toronto Stock Exchange at the close of business on May 1, 2018.
McMillan LLP acted as counsel to Aurora Cannabis with a team led by Desmond Balakrishnan and comprising Cory Kent, Leo Raffin, Paul Davis, Ravipal Bains, Leila Rafi and Kosta Kostic (Capital Markets and M&A), Herb Ono (US Securities), Geoff Moysa, Brett Harrison and Charlotte Conlin (Litigation), Peter Botz (Tax), Francois Tougas and Ryan Gallagher (competition), with assistance from Dorsey & Whitney LLP (US Tax and Securities).
Borden Ladner Gervais LLP acted as counsel to CanniMed Therapeutics with a team led by Philippe Tardif and comprising Jason Saltzman, Andrew Powers, Mark Wheeler, Colin Cameron-Vendrig, Pierre Permingeat, Joseph Di Ponio, Rocky Swanson (Capital Markets and M&A), Denes Rothschild (Competition), Danny Lang (Tax), Jim Douglas, Cait Sainsbury, Graham Splawski and Ashley Thomassen (Litigation), with assistance from Dickinson Wright LLP (US Corporate and Securities).
Stikeman Elliott LLP acted as counsel to the special committee of the board of directors of CanniMed Therapeutics with a team led by Donald Belovich and comprising Simon Romano, Mihkel Voore, Ryan Kirvan, Logan Copen, David Tardif, Victor MacDiarmid, Spencer Burger, Peter Buckles (M&A and Securities), Peter Howard, Samaneh Hosseini, Sinziana Hennig, Zev Smith (Litigation), Michael Kilby (Competition) and Dean Kraus (Tax).
Not much later, on July 25, 2018, Aurora Cannabis Inc. completed the acquisition of MedReleaf Corp. in a transaction valued at US$2.5 billion. The transaction was supported by certain key shareholders of MedReleaf and announced in May 2018. The friendly all-stock acquisition was finalized pursuant to a court ordered plan of arrangement in the Ontario Supreme Court of Justice.
The new entity has more than 1,200 employees and is designed to become the largest Canadian cannabis producer with presence across Canada and internationally.
MedReleaf is an R&D-driven company focused on the production of top-quality cannabis and is Canada’s most awarded licensed producer of medical marijuana.
Aurora has established a uniquely advanced, consistent and efficient production strategy, based on purpose-built facilities that integrate leading-edge technologies across all processes, defined by extensive automation and customization, resulting in scale production of high quality product at ultra-low costs.
McMillan LLP acted as counsel to Aurora Cannabis with a team led by Desmond Balakrishnan and comprising Cory Kent, Stephen Wortley, Ravipal Bains, Michael Reid, Morgan McDonald, Lindsay Dykstra, Maneesha Dhaka, Brandon Deans, Sandra Zhao (Securities) with support from Herb Ono (US Securities), Peter Botz and Michael Friedman (Tax), François Tougas and Ryan Gallagher (Competition), and Brett Harrison (Litigation).
Dorsey & Whitney LLP acted as US Tax counsel to Aurora Cannabis with a team led by John Hollinrake.
Stikeman Elliott LLP acted for MedReleaf Corp. with a team comprising Stewart Sutcliffe, Sean Vanderpol, Sidney Horn, Daniel Borlack, Katarina Zoricic, Chres Lee, Billy Rosemberg, Peter Buckles and Patricia Joseph (Securities) and Dean Kraus and Jonathan Willson (Tax), Michael Kilby and Megan MacDonald (Competition), Neil Shapiro (Real Estate), Andrea Boctor (Benefits), and Kathleen Chevalier and Alex Lemoine (Employment).
Davies Ward Phillips & Vineberg LLP acted as legal counsel to shareholders of MedReleaf with a team led by Patricia Olasker and including Ghaith Sibai.
Lexpert also notes that MedMen Enterprises became a publicly traded company through a reverse takeover. OutdoorPartner Media Corporation is an unlisted Canadian public company. BLG represented Eight Capital in that deal with a team led by Andrew Powers that included Philippe Tardif, Cameron MacDonald and Ben Keen.
McCarthy Tétrault LLPs Ranjeev Dhillon predicts that 2019 will see more consolidation, as companies from other sectors, and strictly cannabis companies, will need to demonstrate that they can execute on their strong business plans, or face the threat of competition. Victor Liu, at Goodmans LLP, strikes a similar chord, There are more refined US companies coming forward now, with a history of profitability. General predictions are that marijuana will not be fully, federally legalized in the U.S. before the next election. But after that, all bets are off.