18 LEXPERT MAGAZINE
|
JANUARY/FEBRUARY 2017
BIG DEALS
DEALS ANALYSIS
18
18
Total Deals Published
6
Corporate Finance
21
12
Mergers & Acquisitions
21
7
Cross-border Transactions
21
BIG DEALS
TRANSACTION VITALS
ANNOUNCED: 10/7/2016
CLOSED: 10/7/2016
TECHNIQUE: PRIVATELY
NEGOTIATED PURCHASE
ATTITUDE: FRIENDLY US ACQUIRER
SOUGHT: UNDISCLOSED MINORITY STAKE
JOHN LEOPOLD
STIKEMAN ELLIOTT LLP
TORONTO
(FOR OAKTREE IN CANADA)
PATRICIA OLASKER
DAVIES WARD PHILLIPS
& VINEBERG LLP
TORONTO
(FOR SUNOPTA)
On October 7, 2016, SunOpta Incorporated, a global organice foods
company listed on the Nasdaq and Toronto Stock Exchange, complet-
ed a cross-border private investment in public equity (PIPE) transac-
tion involving a private placement of US$85 million in exchangeable
preferred shares (Shares) to private equity funds managed by Oaktree
Capital Management, Limited Partnership. SunOpta Inc. completed
the transaction with the support of shareholders Tourbillon Capital
Partners and Engaged Capi-
tal following a review of stra-
tegic alternatives conducted
by SunOpta's board of direc-
tors (Board).
e transaction involved
the issuance of preferred
shares by a subsidiary in the United States. ese shares are struc-
tured so as to be exchangeable into common shares of the parent
public company. rough a voting trust arrangement, as long as the
preferred shares are held by affiliates of Oaktree, the holders of the
preferred shares have the right to vote on an as-exchanged basis with
common shareholders.
Oaktree obtained governance rights in the public company and
the right to nominate two new Board members. SunOpta has an-
nounced, in addition, the appointment of a representative of Engaged
Capital, SunOpta's second largest shareholder, to the Board. e net
proceeds from the Shares were used to repay a portion of the principal
owing under one of SunOpta's credit agreements.
e transaction represents a novel use of a cross-border exchange-
able preferred share structure by a Canadian company. is structure
allows a Canadian company to effectively issue a form of equity se-
curity comparable to the type of voting, convertible preferred stock
common in the United States private equity and private investment
in public equity (PIPE) market in a manner that respects Canadian
tax and regulatory constraints that have historically made such trans-
actions unachievable in Canada.
Kirkland & Ellis LLP acted as counsel to Oaktree Capital
Management with a team including Hamed Meshki, Dennis My-
ers, Wayne Williams, Craig Garvey, Kevin Behseresht, Alexander
Schwartz and Dilveer Singh Vahali (corporate/capital markets), Dave
Nemecek and Nisha Kanchanapoomi (debt finance) and Russell
Light and Brett Willis (tax).
Stikeman Elliott LLP acted as Canadian counsel to Oaktree with
a team including John Leopold, Simon Romano, David Massé, Jer-
emy Sculnick, Jordan Altman and Michael Ball (corporate/capital
markets), Jeffrey Brown and Ryan Sheahan (competition/regulatory)
and Frank Mathieu and Philippe Kattan (tax).
Davies Ward Phillips & Vineberg LLP represented SunOpta In-
corporated, with a team that included Patricia Olasker, Alex Moore,
Mindy Gilbert, Steven Harris, Geoff Rawle, Jared Solinger and Jona-
than Bilyk (mergers and acquisitions/corporate), Raj Juneja and Peter
Glicklich (taxation).
Stoel Rives LLP provided legal advice to SunOpta Incorporated
on matters pertaining to United States corporate and securities law,
with a team that included Reed
Topham, James Kearney and
Sara Benzion.
Rothschild Financial Advi-
sory acted as financial adviser
to the Special Committee of the
Board of SunOpta.
COMPILED BY GENA SMITH
E-Commerce Construction & Engineering
Consumer Staples
SUNOPTA FORMS STRATEGIC
PARTNERSHIP WITH OAKTREE
