Big names in dealmaking feature PE buyouts, cross-border acquisitions, and billion dollar deals
This week saw some of the top names in the country’s dealmaking scene, with Stikeman Elliott assisting in five deals, Blakes advising in three, and Osler, Fasken, McCarthy Tétrault, Torys, and Goodmans representing firms in two deals each. Norton Rose Fulbright, Davies, Dentons, McMillan, Gowling WLG (Canada), and Bennett Jones are also in this week’s deals roundup.
Royal Bank of Canada closes $13.5 billion acquisition of HSBC Canadian business
On March 28, 2024, the Royal Bank of Canada closed its previously announced $13.5 billion acquisition of HSBC's Canadian business. The deal represents the largest bank acquisition in Canadian history and will result in RBC welcoming 4,500 employees and 780,000 clients from HSBC Bank Canada.
On April 1, RBC reopened HSBC Bank Canada's branches and offices under the RBC banner.
Blake Cassels & Graydon LLP (Blakes) acted as legal advisers to Royal Bank of Canada, alongside Allen & Overy LLP, which acted as RBC’s UK counsel, and Wachtell, Lipton, Rosen & Katz, which acted as RBC’s U.S. counsel.
The Blakes team was led by Corporate and M&A Partner Cheryl Satin and included: Tamara Nachmani, Hani Migally, Michael Elder, Jory Binder, Rebecca Hastings, Marcel Beaudoin, Keneca Pingue-Giles (Corporate/M&A); Brian Facey, Micah Wood, Elder Marques, Julia Potter, Joe McGrade, Olivia Ells (Competition); Paul Belanger, Vladimir Shatiryan, Mena Bellofiore, Alan Fraser, Tracy Molino (Financial Services – Regulatory); Michael Gans, Tim Phillips, Stacy McLean, Tairroyn Childs, Taylor Dickinson (Securities); Holly Reid, Alysha Sharma (Employment); Jeff Sommers, Philipp Knoll (Pensions & Benefits); Jeffrey Shafer, Zvi Halpern-Shavim (Tax); Alexis Levine, Danielle Butler (Financial Services); Silvana D’Alimonte, Daniel Kofman, Rachel Lehman (Real Estate); David Feldman, Robert Percival, Natalie LaMarche (IT); Christopher Hunter, Ankita Kapur, Robert Tremblay (IP); Jeff Galway, Christopher DiMatteo, Andrea Laing, Eric Leinveer (Litigation); Wendy Mee (Privacy).
Duncan Bellamy from Allen & Overy LLP acted as RBC’s lead UK counsel, with assistance from Mahmood Lone (Litigation), Nigel Parker (IT) and Arjun Bhalla (Corporate/M&A).
Derek Tong and Matthew Halliday of Linklaters LLP and Stikeman Elliott LLP acted as legal advisers for HSBC Global.
Montreal fintech firm Nuvei to go private with US-based Advent International for $8.5 billion
Nuvei Corporation, a Montreal-based fintech firm, agreed to be acquired by US private equity firm Advent International, in a deal valued at $8.5 billion (US$6.3 billion). The agreement is supported by Nuvei’s key shareholders, including CEO and founder Philip Fayer, Novacap Management Inc., and CDPQ.
Stikeman Elliott LLP and Davis Polk & Wardwell LLP are serving as Canadian and US legal counsel, respectively, to Nuvei, while the company’s Special Committee is taking the advice of Norton Rose Fulbright Canada LLP and Paul, Weiss, Rifkind, Wharton & Garrison.
Blake, Cassels & Graydon LLP and Kirkland & Ellis LLP are serving as Canadian and US legal counsel, respectively, to Advent International.
Osler, Hoskin & Harcourt LLP is serving as legal counsel to Fayer, Fasken Martineau DuMoulin LLP to Novacap, and McCarthy Tétrault LLP to CDPQ.
Fayer, Novacap, and CDPQ are collectively expected to receive approximately $780 million (US$560 million) in cash for their shares sold on closing. The three parties will indirectly control 24 percent, 18 percent, and 12 percent, respectively, of the equity in the resulting private company.
Fayer will remain Nuvei’s Chair and CEO and will lead the business in all operations, while Nuvei’s current leadership team will also continue following the conclusion of the deal.
The deal is expected to be completed by early 2025.
Canada’s largest pharmaceutical firm Apotex acquires Searchlight Pharma
Apotex Inc., Canada's largest pharmaceutical company, signed a deal to acquire Searchlight Pharma Inc., a specialty healthcare firm headquartered in Montreal. Financial terms were not disclosed.
Goodmans LLP is serving as legal counsel, and Deutsche Bank Securities Inc. as financial advisor, to Apotex. Davies Ward Phillips & Vineberg is serving as legal counsel, and Bloom Burton Securities Inc. as financial advisor, to Searchlight.
The deal is expected to boost Apotex’s expansion in the specialty branded pharma market with the addition of more than 60 products from Searchlight.
Searchlight will continue to be based in Montreal, while Apotex plans to expand its operations in the province of Quebec.
The deal is expected to close in the second quarter of 2024, subject to customary regulatory conditions.
Mississauga-based Pride Group Holdings to restructure $1.6 billion in debt
Pride Group Holdings Inc., a Canadian trucking conglomerate based in Mississauga, filed for creditor protection to restructure $1.6 billion in debt, having defaulted on over 40 loans. This move came as financial irregularities were uncovered by bank lenders, led by the Royal Bank of Canada, revealing instances of multiple financings on single trucks. Pride Group's financial adviser also found discrepancies in vehicle purchases and loan repayments.
Owing $1.6 billion to over 20 lenders, with significant ones being Mitsubishi HC Capital Canada, Bank of Montreal, and Daimler Truck Financial Services, Pride initiated restructuring efforts. It proposed Ernst & Young as the court-appointed monitor and appointed Randall Benson as the chief restructuring officer. The Johal brothers, holding full equity, personally guaranteed over $200 million of the debt, further complicating their financial standing with substantial personal financial commitments.
The legal counsel involved in this deal include Thornton Grout Finnigan for the Pride Group, Blakes for the monitor, Bennett Jones for the directors and officers, Dentons for HSBC Bank, BMO and Daimler Truck Financial Services Canada, McMillan for BNS and Roynat, Fasken and Osler for RBC, Chaitons and Osler for Mitsubishi, Pallett Valo for Meridian OneCap, Stikeman Elliott for BNY Trust Company, McCarthys for National Bank of Canada, and Gowling for VFS Canada.
Bridgemarq bolsters market position with strategic acquisition of real estate entities
Bridgemarq Real Estate Services Inc. completed its acquisition of Bridgemarq Real Estate Services Manager Limited and Proprio Direct from Brookfield Business Partners on March 31, 2024.
Stikeman Elliott LLP served as advisors for Bridgemarq, while Goodmans LLP advised Brookfield.
The deal involved issuing 2,920,877 Class B subordinated limited partnership units, exchangeable into Bridgemarq restricted voting shares, to Brookfield. This strategic move aimed to enhance Bridgemarq's brokerage operations and management, potentially boosting revenue and market share.
Post-acquisition, Lorraine Bell became the independent chair of Bridgemarq's board, Spencer Enright was appointed CEO, and key management roles remained with Phil Soper and Glen McMillan. The company also increased its borrowing capacity from $90 million to $95 million.
Alamos Gold acquires Argonaut for $440 million
Alamos Gold Inc. acquired Argonaut Gold Inc. in a deal valued at $440 million (US$325 million), creating one of Canada's largest, lowest-cost gold mines.
The deal, set for court and shareholder approval, was backed by financial advice from CIBC Capital Markets for Alamos and Scotiabank for Argonaut, with legal advice from Torys LLP and Bennett Jones LLP, respectively.
The transaction included Alamos obtaining Argonaut's Magino mine in Ontario, expected to significantly increase Alamos' gold production. Argonaut's assets in the U.S. and Mexico were spun off into a new entity, SpinCo, for its shareholders.
Each Argonaut share was exchanged for 0.0185 Alamos shares and one SpinCo share, reflecting a 34 percent premium based on the closing prices on March 26, 2024. The deal promised operational synergies worth about $697 million (US$515 million), with Alamos' production potentially exceeding 900,000 ounces annually.
Alamos also committed to a $50 million private placement in Argonaut, solidifying its financial and operational footprint in the gold mining sector.
Fairstone Bank merges with Home Trust to create leading Canadian alternative lender
Fairstone Bank of Canada and Home Trust Company signed an agreement to merge their respective business in a deal that is set to create the leading alternative lender in Canada.
Once the deal is completed, Smith Financial Corporation will own a majority interest in the combined entity while Fairstone Bank's current shareholders, Centerbridge Partners, L.P., Ontario Teachers' Pension Plan Board and management, will continue as minority shareholders.
Torys LLP is serving as legal counsel to Smith Financial Corporation, while RBC Capital Markets is acting as financial advisor.
Willkie Farr & Gallagher LLP is serving as legal counsel to Centerbridge Partners, while L.P. Goldman Sachs is acting as financial advisor.
Stikeman Elliott LLP is serving as legal counsel to Ontario Teachers' Pension Plan Board while BMO Capital Markets is acting as financial advisor.
The combined entity will serve over 2 million customers with more than 250 branches, offering a range of financial products like mortgages, personal loans, and digital lending. The merger aims to enhance financial services access for Canadians, especially non-prime consumers, leveraging both companies' strengths and national networks.
The merged company will focus on inclusive financial solutions, capitalizing on growth opportunities and addressing the needs of underserved market segments.
