Blakes, McCarthy Tétrault, Stikeman Elliott, Fasken, Torys, Goodmans legal counsel this week
Deal: Hamilton steelmaker Stelco to sell to US-based Cleveland-Cliffs
Value: $3.4 billion
Blakes, McCarthy Tétrault and Stikeman Elliott are serving as legal counsel in the $3.4 billion M&A agreement between US-based Cleveland-Cliffs and Hamilton steelmaker Stelco. Also in this deals roundup are Fasken, Torys, and Goodmans as legal advisors.
Hamilton-based steelmaker Stelco Holdings Inc. is set to be acquired by U.S.-based Cleveland-Cliffs Inc., North America’s largest flat-rolled steel producer and supplier of iron ore pellets, in a deal valued at $3.4 billion.
McCarthy Tétrault LLP and A&O Shearman LLP are serving as legal counsel to Stelco, with BMO Capital Markets acting as financial advisor. Stikeman Elliott LLP is serving as legal counsel and RBC Capital Markets as financial advisor to the Special Committee of Stelco’s Board of Directors.
Blake, Cassels & Graydon LLP and Davis Polk & Wardwell LLP are serving as legal counsel to Cliffs, with Wells Fargo, J.P. Morgan and Moelis & Company LLC as financial advisors.
Upon deal completion, Cliffs shareholders will own approximately 95 percent and Stelco shareholders will own approximately 5 percent of the combined company, on a fully diluted basis.
As part of the agreement, Stelco’s headquarters will remain in Hamilton
“The enterprise value of this transaction is significantly lower than the cost of building an equivalent replacement mill in the United States, and the cost structure is lower than what a new U.S. mill would provide us,” said Cliffs Chairman of the Board, President and CEO Lourenco Goncalves. “Stelco is a company that respects the Union, treats their employees well, and leans into their cost advantages. With that, they are a perfect fit for Cleveland-Cliffs and our culture. We look forward to proving that our ownership of Stelco will be a net benefit for Canada, the province of Ontario, and the cities of Nanticoke and Hamilton.”
“This sale crystallizes a 32% CAGR on a Stelco common share investment since our IPO in 2017. Most importantly, we have revitalized Stelco and restored it to its iconic status in Canada,” said Stelco Executive Chairman of the Board and CEO Alan Kestenbaum. “One of the important drivers for this transaction was receiving a meaningful portion of the consideration in Cliffs shares. I have strong belief and optimism in the North American steel market. I believe that Lourenco and his team have created a winning platform.”
The deal is expected to be completed in the fourth quarter of 2024, subject to approval by Stelco shareholders, receipt of regulatory approvals and satisfaction of other customary closing conditions.
Quebec-based aircraft landing gear maker Héroux-Devtek Inc. has agreed to sell to U.S. private-equity firm Platinum Equity Advisors in a deal valued at $1.35 billion.
Fasken Martineau DuMoulin LLP and Hogan Lovells LLP are serving as legal counsel to Héroux-Devtek, with National Bank Financial Inc. and Scotiabank as financial advisors.
Stikeman Elliott LLP and Latham & Watkins LLP are serving as legal counsel to Platinum Equity, with BMO Capital Markets as financial advisor.
Upon deal completion, Héroux-Devtek will keep its headquarters and other operations in Quebec.
“We have come a long way since my business partner and I bought Héroux Inc. in 1985,” said Héroux-Devtek Executive Chairman of the Board Gilles Labbé. “Thanks to the hard work and dedication of our employees and the trust of our customers and business partners, we have grown into a leading international manufacturer of aerospace products and the world’s third-largest landing gear manufacturer. In the coming years, our Saint-Hubert R&D Centre will pursue its mission by developing innovative solutions and products aligned with our customers’ evolving needs.”
“Héroux-Devtek has established an impressive and well-deserved reputation for delivering innovative, high-quality products for the international aerospace and defence market,” said Platinum Equity Managing Director Delara Zarrabi. “We believe the company has an opportunity to make an even larger impact on a global stage and we will deploy our financial and operational resources to help the company grow organically and through strategic acquisitions.”
The deal is expected to close before the end of the company's current financial year on March 31, 2025, subject to customary closing conditions.
Peloton Capital Management (PCM), a Toronto-based private investment firm with a long-term investment philosophy made a strategic minority investment in Lakefield Veterinary Group (Lakefield), a family-owned veterinary hospital and veterinary practice acquisition company.
Torys LLP served as legal counsel to PCM. Goodmans LLP and Stoel Rives LLP served as legal counsel and BofA Securities, Inc. as the exclusive financial advisor to Lakefield.
As part of the agreement, the Desmarais family will retain majority ownership of Lakefield, ensuring the independence and local legacy of their veterinary partners.
Lakefield Executive Chairman Alexandre Desmarais said, “We are excited to partner with Peloton who brings deep multi-site healthcare and veterinary expertise along with a collaborative, relationship-first approach to partnership that is consistent with our values and focus on a best-in-class veterinary culture.”
Lakefield CEO and Co-Founder Mollie Hoff said, “Together with Peloton, we are excited to enter the next phase of growth for our business while continuing to put pets first, provide exceptional care, and make positive contributions to the field of veterinary medicine.”
PCM Managing Partner Steve Faraone said, “The Peloton team looks forward to partnering with the Desmarais family and leveraging our experience in the veterinary industry to support management in further building out Lakefield’s regionally focused footprint of general, emergency, and specialty hospitals while exploring new markets and service opportunities.”
