LEXPERT MAGAZINE
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JULY/AUGUST 2016 59
us, without knowing that there would be
a successful acquirer, guidance that helped
shape our thinking in terms of who ought
to be in that field of potential bidders.
"By personal experience, we found the
early engagement with ISED to be invalu-
able in achieving our end objective and pre-
venting us from making mistakes."
In November, MTS announced it had
a deal to sell Allstream to Colorado-based
Zayo Group for $465-million cash.
It sent ISED the 45-day pre-review no-
tification required under the Investment
Canada Act, which automatically sparks
a look at whether a security review is war-
ranted. e approval was granted with
no objection or request for delays on the
government's part. "ere was some mis-
information reported aer the fact that
this meant they had not conducted their
security review," says Beauregard. "To the
contrary, they had been really diligent in
the months, weeks and even years leading
up to the sale process.
"ISED had been with us doing their
security review alongside us every step of
the way so that when the 45-day period
elapsed, they found no need to extend it.
eir work was done."
Paul Halucha, ISED Associate Assis-
tant Deputy Minister, who is also Deputy
Director of the Investment Canada Act,
says it is enormously useful when companies
embroiled in transactions come in early —
and that can mean before they have all their
ducks in a flock, much less a row.
"It's helpful for us and I think it's fun-
damentally helpful for the Canadian busi-
ness or the foreign investor," she says. "e
phrase people in Ottawa use to talk about
it is 'socializing the idea,' which means
coming in to give us a sense of what the
transaction is, what the target is.
"Sometimes it can be an early-stage in-
troduction to see what the government's
view could be on a topic. Other times it can
be more involved where a company is go-
ing through a sales process and keeps us in
the loop on who the bidders are and what's
happening, so it can take different forms.
"But we're always clear about this: e
way the regime is set up there's no point at
which we can clear companies without hav-
ing all the information pertaining to that
investment. So we're never in a position to
say: 'You're good to go, we guarantee you
a green light.' But we do have the ability
to signal areas that can be of concern, or
whether the investment may have chal-
lenges — and I think that's proven effective
to companies."
ISED gets notifications of more than
700 transactions a year involving foreign
investors — some sales, some control in-
DANY ASSAF
>
TORYS LLP
…when you're looking at
these deals you have to think
of how national security is
integrated between these
allies and others and how any
part of your deal may impact
the national security concerns
of any one of those countries.
You have to assume they'll
talk to one another and
that will be a relevant
consideration.
| IN-HOUSE ADVISOR: NATIONAL SECURITY REVIEWS |
