McCarthy, Osler, Fasken advising M&A deals in energy, biology sectors this week
Stikeman Elliott and Blakes served as Canadian counsel in the sale of the Quebec-based assets of Lowe’s Companies, a US retail company, in a deal valued at $541.4 million (US$400 million). Also in this deals roundup is McCarthy Tétrault, Osler, and Fasken advising two M&A deals in the energy and biology sectors.
Lowe's to sell Quebec retail business to Sycamore Partners for $541.4 million
US firms Lowe's Companies, Inc. and Sycamore Partners entered an agreement in which Lowe’s will sell its Quebec-based retail business to Sycamore Partners for $541.4 million (US$400 million).
The Quebec business services approximately 450 corporate and independent affiliate dealer stores.
Stikeman Elliott LLP and Cleary Gottlieb Steen & Hamilton LLP are serving as Canadian and US legal counsel, respectively, to Lowe's, and Goldman Sachs & Co. LLC is acting as financial advisor.
Blake, Cassels & Graydon LLP and Kirkland & Ellis LLP are serving as Canadian and US legal counsel, respectively, to Sycamore Partners, with RBC Capital Markets acting as financial advisor.
“The sale of our Canadian retail business is an important step toward simplifying the Lowe's business model,” said Marvin R. Ellison, Lowe's chairman, president and CEO. “By executing this transaction, we will intensify our focus on enhancing our operating margin and ROIC, taking market share in the US and creating greater shareholder value. I want to thank our entire Canadian team for their hard work and dedication to our customers. We look forward to working with Sycamore Partners in executing a seamless transition.”
“We are honoured to partner with Lowe's to establish Lowe's Canada and RONA as a standalone company headquartered in Boucherville, Quebec,” said Stefan Kaluzny, Sycamore Partners Managing Director. “We look forward to working with the company's management team to build on its 83-year history as a leading Canadian home improvement business serving families, builders, and contractors in their communities across the country.”
“We are excited to work with Sycamore Partners on this next chapter of growth for our business.” said Tony Cioffi, president of Lowe's Canada. “Together, we will remain committed to supporting our associates, our Canadian- and Quebec-based vendors and our dealer network.”
The deal is expected to be completed by early 2023, subject to customary closing conditions and regulatory approvals.
Surge Energy to acquire Saskatchewan assets from Enerplus for $245 million
Oil and gas companies Surge Energy Inc. and Enerplus Corporation entered an agreement in which Surge will acquire oil assets within the Sparky and Southeast Saskatchewan core areas from Enerplus in a deal valued at $245 million.
McCarthy Tétrault is serving as legal counsel to Surge, Peters & Co., National Bank Financial as financial advisors, and ATB Capital Markets as strategic advisor.
The assets are expected to deliver $68 million of cash flow from operating activities and more than $50 million of free cash flow after expenditures required to maintain current production levels.
“We are very excited about this accretive, strategic, long life, core area acquisition,” said Surge President and CEO, Paul Colborne. “This is one of the highest quality, low decline, asset packages that we have seen in my nine years at Surge. Over the past eight years, Surge has established a dominant position in its Sparky core growth area. With the acquisition, we have added to that position and now have ownership and control of more than one billion barrels of net OOIP in the company’s Sparky core area, with a 12-year drilling inventory. More recently, Surge Management has strategically targeted SE Saskatchewan as a new core area of growth, based on its high value light oil operating netbacks, low-cost production efficiencies, quick drilling payouts, and consolidation opportunities. Surge’s operational track record of execution in SE Saskatchewan, combined with its proven in-house technical expertise, make this an exciting growth area for the company.
The deal is expected to close on or around December 19, 2022.
NuChem Sciences buys IniXium
Contract research organizations (CROs) NuChem Sciences, based in Montreal, and IniXium, headquartered in Quebec, entered a deal in which NuChem Sciences will buy IniXium.
Investments from Fonds de solidarité FTQ supported the deal.
Fasken Martineau Dumoulin LLP served as legal counsel to NuChem Sciences. Osler, Hoskin & Harcourt LLP acted as legal counsel to IniXium. Blake, Cassels & Graydon LLP served as legal advisor to Fonds de solidarité FTQ.
NuChem Sciences has the largest team of chemical scientists among North America's drug discovery CROs.
Drug discovery is the process of designing and synthesizing new molecules with biological or therapeutic activity that could potentially become new drugs.
IniXium is a CRO that offers services such as recombinant protein production, biophysical characterization, protein crystallography, fragment screening, and biologics and biosimilars.
NuChem CEO Marc LeBel said, “With more than 250 scientists and support staff, NuChem Sciences is proud to bring together all these researchers in five locations in three cities in Québec.”
IniXium officers René Coulombe and James Féthière said, “We are happy to be joining forces with NuChem to help make Québec a leader in drug discovery. Since both organizations are intensively recruiting right now, this merger will not result in any job losses.”
“NuChem's technology and expertise are unrivalled,” said Fonds de solidarité FTQ Private Equity and Impact Investing Senior Vice-President, Dany Pelletier. “With the IniXium acquisition, NuChem has all the tools to expand its service offering and boost its growth. The Fonds will be there every step of the way to support NuChem's development plan. This transaction shows once again our desire to help grow Québec's science sector.”
