Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/654294
20 LEXPERT MAGAZINE | JANUARY 2013 BIG DEALS COMPILED BY GENA SMITH DEALS ANALYSIS 18 INVESTORS GROUP ACQUIRES Q9 NETWORKS CLOSING DATE: OCTOBER 16, 2012 An investor group comprising Ontario Teachers' Pension Plan (Teachers'), BCE Inc. (Bell), Providence Equity Partners (PEP) and Madison Dearborn Partners LLC (MDCP) announced the completion of its previously announced acquisition of Q9 Networks Inc. (Q9) for a purchase price of $1.1 billion. Of this amount, $430 million was contributed by Teachers', PEP and MDCP collectively, $185 million of the equity funding was pro- vided by Bell and a portion of the acquisition price was funded by new debt financing. Q9 is Canada's leading provider of out- sourced data centre solutions such as host- ing, co-location and cloud computing ser- vices, with headquarters in Toronto and 12 data centres in British Columbia, Alberta and Ontario. Q9 will continue to operate indepen- dently under the continuing leadership of CEO Osama Arafat and President and COO Paul Sharpe. Upon completion of the transaction, Bell, through its Bell Business Markets unit – which provides network con- nectivity, data hosting and other managed services to business clients across Canada – entered into a commercial arrangement with Q9 to en- able the continued growth of their respective businesses and to drive share- holder value. Concurrently with completion of the ac- quisition of Q9 and execution of the com- mercial arrangement, Bell and its partners in the investment transaction settled the $1.2 billion Reverse Break-Fee Proceedings initi- ated in 2008 following termination of Bell's proposed privatization. In consideration of the settlement, Bell received certain non-cash benefits, such as increased equity ownership, and a path to full ownership with an option at a favourable valuation to acquire the partners' entire eq- uity interest in Q9 in the future. Ontario Teachers' Pension Plan Board was represented in-house by Melissa Kennedy, Senior Vice President, General Counsel & Corporate Affairs; and Jeff Davis, Vice Presi- dent and Associate General Counsel; and by Osler, Hoskin & Harcourt LLP. Osler also acted as joint counsel to Teachers', Provi- dence Equity Partners, Bell and MDCP in connection with the purchase and the related debt financing. Osler also jointly represented Teachers', PEP and MDCP in connection with negotiations between those three spon- sors and Bell of the commercial arrangement, shareholders agreement and certain aspects Total Deals Published of the Reverse Break-Fee settlement. Osler's team was led by Geoff Taber and included Chad Bayne, Jeff Murray, Don Gilchrist, Jer- emy Fraiberg, Blair Wiley, Jay Greenspoon, Adam Gutkin and Ryan Sakamoto (business law); Peter Franklyn, Peter Glossop and Matt Anderson (competition); Patrick Marley and Lara Friedlander (tax); Steve Luff and Timo- thy Watson (real estate) and Damian Rigolo (employment). e Osler team that worked on the credit facilities was led by Mike Matheson and included Joyce Bernasek and Ben Leith. Torys LLP acted as litigation counsel to Teachers in the settlement of the Reverse Break-fee Proceedings with a team consist- ing of Linda Plumpton, Sheila Block and Sharon Geraghty. PEP was represented by David Duffell and Sarah Stasny of Weil, Gotshal & Manges LLP. Greg Danilow, also of Weil, acted for PEP on the Reverse Break-Fee litigation matter. MDCP was represented by Kirkland & Ellis LLP, including Jeff Richards in con- nection with the acquisition and shareholder arrangements, Rachel Cantor in connec- tion with tax structuring issues, and Mike Wright, David Milligan and Dean Pettinga in connection with the debt financing. Bell was represented in- house by Michel Lalande, Se- nior Vice-President, General Counsel; Martin Cossette, Assistant General Counsel, Corporate Development and M&A; and by Geneviève 10 Corporate Finance 8 Mergers and Acquisitions 11 Cross-border Transactions BIG DEALS GEOFFREY TABER OSLER, HOSKIN & HARCOURT LLP LINDA PLUMPTON TORYS LLP BRIAN FACEY BLAKE, CASSELS & GRAYDON LLP ANDREW PARKER MCCARTHY TÉTRAULT LLP