Other deals this week include M&A, joint venture deals in legal, automotive sectors
Toronto-based Fairfax agreed to spend approximately $2.6 billion (US$2 billion) on a portfolio of US real estate construction loans. Also in this week’s deals roundup are joint venture and M&A deals in the legal and automotive sectors.
Fairfax to acquire US real estate construction loans for $2.6 billion
Toronto-based Fairfax Financial Holdings Limited agreed to acquire a 95 percent interest on a portfolio of real estate construction loans from US-based Kennedy-Wilson Holdings, Inc. in a deal valued at approximately $2.6 billion (US$2 billion).
Shearman & Sterling LLP is serving as legal counsel to Fairfax. Latham & Watkins LLP is acting as legal counsel to Kennedy Wilson.
The portfolio consists of 63 loans, which Kennedy-Wilson agreed to acquire in May 2023 from Pacific Western Bank. The loans consist of 70 percent multifamily or student residences and 30 percent mix of industrial, hotel and life sciences office space.
In addition to the loans, Fairfax is also making a separate equity investment in Kennedy-Wilson worth approximately $268 million (US$200 million). This investment marks the third major cash infusion Fairfax has provided to Kennedy-Wilson, following a US$100 million investment in 2010 and US$300 million in 2022.
Fairfax chairman and CEO Prem Watsa said, “We are excited to continue our great partnership with Kennedy Wilson, led by Bill McMorrow, and to acquire an interest in a stable and attractive loan portfolio that further strengthens the foundation of interest and dividend income-generating assets that will benefit Fairfax over the next two to three years.”
The deal is expected to close in the third quarter of 2023, subject to customary regulatory approvals.
Loopstra Nixon, Macdonald Sager merge to form mid-market powerhouse
Toronto law firms Loopstra Nixon LLP and Macdonald Sager LLP agreed to merge in a deal that will form one of the largest mid-market corporate law and commercial lending and lending enforcement practices in the city.
Upon deal completion, the combined firm will retain the 'Loopstra Nixon LLP' name. It will have over 100 lawyers and a total headcount of over 200 professionals across four offices in the Greater Toronto Area.
Loopstra Nixon's co-founder Sandy Nixon said, “the combination with Macdonald Sager in our view creates the most complete mid-market legal team in the GTA and combines our suburban strengths with deep relationships in the downtown core built over 30 years.”
“It comes down to client services,” says Steven Sager, managing partner of Macdonald Sager told Law Times. “You want the clients to feel comfortable. Whether you’re a 20-lawyer firm or a 100-lawyer firm, you want them to feel that they're getting value for their money. We can now offer more services, as opposed to having to refer clients out. That's great for us and for the client.”
The merger is expected to take effect on the 1st of July 2023.
Automotive Properties REIT, StorageVault acquire Quebec automotive dealership facility
Automotive Properties Real Estate Investment Trust and StorageVault Canada Inc. entered into a joint venture agreement to acquire an automotive dealership facility in Brossard, Quebec from a third-party vendor.
As agreed, Automotive Properties REIT and StorageVault each paid 50 percent of the 16.1 million purchase price, which included related expenditures.
The Brossard Property consists of a 50,415 square-foot, full-service automotive dealership facility situated on approximately 3.4 acres of land and is currently under triple-net leases with Groupe Park Avenue Volvo and Jaguar Land Rover.
