Lexpert Magazine

10 LEXPERT MAGAZINE | JANUARY/FEBRUARY 2018 | RECENT DEVELOPMENTS IN BUSINESS LAW | tion itself, was one of them. It was interest- ing to be able to prepare a prospectus that effectively IPOed the LBMT business. We worked hard as a team on the disclosure, and I think it's as thorough an explanation of the industry in Québec, including its risks and opportunities, as you will find in a public document. Katz: As underwriters' counsel, we were not involved in the acquisition other than to re- view the agreement from a disclosure point of view. Announcing a significant acquisi- tion transaction concurrently with a public financing is always challenging. However, with a good collaboration, we were able to get it done in a collaborative manner. … In a financing transaction such as this one, all parties are trying to provide investors with the most complete picture as possible. Deals are easy when everyone keeps this ob- jective in mind. LEXPERT: Would you say this is an example of a Canadian business building alternative markets in Europe and Asia? Roy: Yes, 85 per cent of the world's maple syrup supply originates in Canada. I know for a fact that some large, developing mar- kets like China have not yet developed a taste for maple syrup, but it's a product category that has been progressing every- where else, and this is a business that can definitely develop alternative markets in Europe, in Asia and in Oceania. LBMT notably sells in Australia. Kangaroos love their maple syrup! LEXPERT: Despite LBMT having a US subsidiary, were there concerns about the possibility of trade barriers and restrictive policies, especially with the protectionist atmosphere currently? Roy: e US is an important market, but it is not the only market. In addition, the US sugar industry enjoys trade protection and imposes tariffs on foreign producers, so RSI/Lantic is very familiar with restrictive trade policies. Once in a while, tariffs are lied on sugar, and RSI/Lantic will bene- fit from a quota and sell sugar in the US. Finally, LBMT has a subsidiary that bottles in Vermont, as you pointed out. is is not an element which the deal team focused on too much. Dugas: Pretty minimal. e vast majority of the world's maple syrup comes from Canada, and Canadian maple syrup is cur- rently crucial to meeting demand in the US. In addition, the demand for maple syr- up outside of North America continues to grow. It's hard to imagine a scenario where there would not always be a ready market for what Canada can produce, whether in North America or elsewhere. LEXPERT: What was most memorable or unusual about working on this deal? What will you take away with you? Katz: What was a bit unusual in this trans- action was the fact that LBMT had com- pleted three transactions in the last 12 months before the announcement … and those businesses had not yet been integrat- ed into LBMT's financial statements. We had to find a way to present that financial information … while providing sufficient explanation to reconcile that information with the IFRS [International Financial Re- porting Standards] numbers. Dugas: Our biggest challenge in this file was to ensure we respected the transaction tempo of RSI/Lantic while ensuring we maintained a fast and fluid communica- tion with the investors of LBMT. Roy: I described the feeling of working on this deal to some people as being a control- ler in an airport — I oversaw all the various streams, the acquisition, the capital markets portion, the debt financing and the rep- resentation and warranty insurance process — and all of these planes had to land on the same day, when we announced the acquisi- tion and the bought deal financing. … It has been a real pleasure to be able to assist RSI/ Lantic on this important step. (For a summary and full list of legal advisors, visit Lexpert.ca.) ON THE TREND Canada's Maple Dominance It's no surprise that the country that boasts a maple leaf on its flag would also be the dominant supplier of maple syrup. Canada produces approximately 77 per cent of the sweet stuff across North America, with only Vermont (11 per cent) providing any kind of competition. With global demand rising, the industry is poised to reap the benefits of contained supply. GRAPHIC BY DAVID DIAS: SOURCE: WALL STREET JOURNAL; USDA ECONOMIC RESEARCH; AGRI-FOOD CANADA

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