Lexpert Magazine

LEXPERT MAGAZINE | APRIL 2016 15 had worked together on a number of other mandates while partners. is created a higher level of trust which made the final negotiations much smoother. LEXPERT: Given the huge premium and presumably friendly nature of the deal, were there any remaining sticking points that required negotiation? Olley: ere are always points to negotiate. e size of the break fee, the terms of the "spring" and the conditions precedent to closing were all points of discussion, but our process required bidders to present proposed changes to a template arrange- ment agreement, which allowed us to con- sider these points as one of the factors in evaluating the offers. e most serious ne- gotiation was over price, as the board and management really wanted to ensure they were getting best value. LEXPERT: What was the tone of this deal? Amica's CEO seemed very supportive, and if everyone was on board, did this make the meetings more casual and friendly? Less tense? Was there a lot of discussion about what the deal would mean, as opposed to hardball negotiation? Olley: e tone of the deal was professional and polite, and overall co-operative. Meet- ings were polite and friendly. It was very important to Amica's CEO and leadership that the company be acquired by a group who had compatible values. Among coun- sel, the ability to work with old friends in a collaborative fashion on a deal that we knew would be high-profile once an- nounced was a great pleasure. LEXPERT: Despite the friendly offer, this deal still took three months to close. Was that merely a function of the "going-pri- vate" nature of the transaction, and the need to get shareholder approval, or was it more complex than that? Were regulatory approvals required? Olley: e three months were required by BayBridge to ensure it had appropriate regulatory approvals and approvals from CMHC and various mortgage lenders. We were fortunate on the Amica side because a shareholder meeting had already been called for the year end. So we were able to use this date to obtain shareholder approv- al for the transaction, therefore saving con- siderable time. Singer: One notable feature of the transac- tion was the speed with which it was com- pleted from the date of announcement, es- pecially so relative to other acquisitions in the sector. Having participated in a num- ber of the public and private transactions in the assisted-living sector over the past years, we were able to bring a lot of efficiency to the transaction. LEXPERT: Was there any risk at all that this deal might not close? Olley: ere is always some risk to closing, but we assessed the risk as relatively low in this case, given the absence of a financing condition and the quality of purchaser. LEXPERT: What would you say was the most interesting or memorable aspect of this deal? Oppenheim: Two elements really stand out. One was the process that the company en- gaged in to find the most suitable buyer — from deciding who to invite to participate in the process, assessing the relative merits of the proposals received, and then coming to the deal that was ultimately conclud- ed, all while keeping competitive tension among the various bidders to try to ensure the highest price possible for shareholders. e other interesting aspect of this deal was recognizing and navigating our way through the inherent potential conflict be- tween the largest shareholder of the com- pany who was involved in management and its other shareholders. As it turned out, we ultimately got complete alignment be- tween these groups and were able to realize a control premium to everyone's benefit, but this was not necessarily going to be the case when we commenced the process. (For a summary and full list of legal advis- ors, see the March edition of "Big Deals.") ON THE TREND Does market turbulence affect deal timing? In 2008 and 2009, M&A over US$50 million took on average 70 days to close after announcement. The financial crash, however, led to quicker deals as loan covenants came close to breaching GRAPHIC BY DAVID DIAS; SOURCE: THOMSON REUTERS ON THE DEAL

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