funds. A Canadian dollar at US80¢ is very
attractive for American investors.
e same factors are attracting foreign
strategic buyers, says Marc Barbeau, a
corporate partner and chair of Stike-
man Elliott LLP. "If I look at our deal list
I see a balance of both, which creates an
interesting market for sellers."
Interesting, and crazy busy. "It's been
insane," says Patricia Olasker, an M&A
and corporate partner at Davies Ward
Phillips & Vineberg LLP in Toronto. "I've
been going seven days a week for months."
David Allard, a partner at Lawson
Lundell LLP in Vancouver, calls 2018
e pressure for speed extends to due
diligence.
To get deals closed, clients want due
diligence more condensed and focused
than in the past.
Marc Barbeau of Stikeman Elliott in
Montréal says that coincides with the
growing presence of third-party repre-
sentations and warranties insurers on a
transaction, "which is having an impact
on due diligence."
e insurers essentially enhance or
replace the indemnification given to the
buyer by the seller. "It has been used widely
in private M&A and is heading into the
public M&A space," says Barbeau.
He attributes it, in part, to a broader
understanding and acceptance of this type
of insurance and to new players who have
made pricing more competitive.
Rep and warranties insurers generally
don't do independent due diligence before
writing a policy; they work with the client
and their counsel to review the work
already done. And they aren't shy about
asking the lawyers to dig deeper if their
antennae go up.
As more buyers chase a finite number
of deals, another result is a proliferation of
team-ups and consortium between global
private-equity sponsors and Canadian
pension funds, says Pressman of Osler.
He points to BC Partners and the
Ontario Teachers' Pension Plan Board
acquisition of GFL Environmental
Inc.; the Blackstone-led consortium
including the Canada Pension Plan
Investment Board and global invest-
ment firm GIC for control of omson
Reuters financial and risk business; the
Blackstone and Ivanhoe Cambridge
acquisition of Pure Industrial REIT.
"ere will be more creative solutions
to the limited supply of deals, and the vast
number of private capital pools chasing
those same deals," he predicts.
So what sectors are hot for transactions?
Pressman names one that might surprise
you: mining. Mining was a dirty word
with investors for years, but it's making
a comeback.
"Mining and, in particular, gold
mining has obviously been on a tear
with the Barrick Gold Corp. and
Randgold Resources Ltd. closing in the
first quarter," he says from Toronto. e
"the biggest, broadest-based transactional
year" he can remember.
"Buyers are feeling the pressure to get
deals done faster," he says. "I did a deal a
while ago that five years ago never would
have happened in the way it happened, in
the risk that was taken by the buyer — a
very sophisticated buyer and a very large
transaction. ey just went for it.
"When you've got attractive assets
out there and a lot of investors looking
for good transactions you've got a very
active market. People see being able to
lock a deal up fairly quickly as a competi-
tive advantage."
