On October 27, 2017, Toromont Industries Ltd. (Toromont) completed the largest acquisition in its history — a $1.07-billion purchase of the businesses and net operating assets of the Hewitt Group of companies (Hewitt) in exchange for cash and shares of Toromont. This was a transformative transaction for Toromont, significantly expanding its Caterpillar dealership network and market opportunities. It added 45 branches and 2,000 employees in Québec and the Maritimes. Toromont’s Caterpillar dealership now operates 120 branches in Ontario, Québec, Manitoba, Nunavut, New Brunswick, Prince Edward Island, Nova Scotia, and Newfoundland and Labrador, giving the company one of the largest sales territories in the Caterpillar dealership network.
To finance the acquisition, Toromont completed a $500-million marketed private placement of senior unsecured notes on October 27, 2017, through a syndicate of agents led by TD Securities, CIBC Capital Markets and BMO Capital Markets. In addition, Toromont entered into an amendment and restatement of the credit agreement governing its existing credit facility with a syndicate of lenders co-led by Canadian Imperial Bank of Commerce, Toronto Dominion Bank and Bank of Montreal to provide for a term facility of up to $250 million and a revolving facility of up to $500 million. Toromont funded the cash portion of the purchase price for the Hewitt acquisition through a combination of the net proceeds of the note offering, borrowings of approximately $310 million under the credit facility, and available cash on hand.
Toromont was represented in-house by David Wetherald, Vice-President, Human Resources and Legal, and externally by Davies Ward Phillips & Vineberg LLP with a team that included Cameron Rusaw, Steven Cutler, Jared Solinger, Jeffrey Li, Janet Ferrier, Sylvie Samson and Xavier Plamondon (M&A), David Wilson, Geoffrey Rawle and Evan Kenyon (capital markets), Scott Hyman (bank financing), John Bodrug and David Feldman (competition), Alexandria Pike, Laura Weingarden and Marie-Claude Bellemare (environmental), David Reiner, Ioana Hancas and Joseph Jarjour (real estate), Jessica Bullock (employment and pensions), and Raj Juneja and Andrew Ellis (tax).
McInnes Cooper acted as local transaction counsel to Toromont with a team that included George Monroe, Jonathan Pendrith, John Hennessey, Frank Hughes and Robert Hickey (real estate).
Hewitt was represented by McCarthy Tétrault LLP with a team that included David McAusland, Karl Tabbakh, Hadrien Montagne, Louis-Charles Filiatrault, Bianca Déprés and Tamara Shabazova (M&A), Cindy Vaillancourt (environmental), Dominic Thérien (competition), Sebastien Thomas (real estate), Jacques Rousse, Diana Theophilopoulos and Lorraine Allard (employment and pensions), Marie-France Gagnon and Eve Tessier (banking financing), and Christian Meighen and Marie-Soleil Landry (tax).
Stewart McKelvey acted as local transaction counsel to Hewitt with a team led by Maurice Chiasson.
The syndicate of agents for the note offering was represented by a separate McCarthy Tétrault LLP team that included Andrew Parker, Scott Bergen and Vanessa Chung (capital markets) and Patrick McCay (tax).
The lenders under the amended and restated credit agreement were represented by Blake, Cassels & Graydon LLP with a team that included Simon Finch, Aimee Yee and Shubhreen Kaur.