Five awards given for capital markets, infrastructure, insolvency, mid-market, and deal of the year
When it came to the categories for top deal at the Canadian Law Awards, there was plenty of excitement as winners were named and happy members of Canada’s legal community went on stage to accept their trophies.
The Definity Financial Corporation IPO walked away with the award for top Capital Markets Deal that closed in 2021.
The largest TSX listing this century and the second largest ever, Definity’s subsidiary Economical Mutual Insurance Company, became the first Canadian property and casualty insurer to demutualize. It raised $2.4 billion through a $1.6 billion IPO and two private placements totalling $800 million.
Definity was advised by a team at Blake, Cassels & Graydon LLP led by Catherine Youdan, in respect of the IPO and private placements, and Paul Belanger in respect of the demutualization.
“It’s been a long journey,” Belanger said, noting that the file was opened more than 11 years go. “We’ve been with Definity long before there was a clear legal path to the finish line, and we worked hard to get there.”
A team at Davies Ward Phillips & Vineberg LLP led by David Wilson acted as counsel to the underwriters for the IPO, the financial advisors for the demutualization and the placement agents for the cornerstone private placements. Stikeman Elliott acted in the deal on behalf of reinsurer Swiss Re.
The judges commented that “the length of time the transaction took, the new rules . . . created and the size and importance of the IPO rank this as the most important capital markets deal of the year."
Innes Dey, Senior Vice-President, Legal and Strategy for Definity, said winning having the Definity deal recognized by lawyers was a fitting conclusion to a “very long and winding process to complete Canada’s first demutualization of a property and casualty insurer.”
In the Infrastructure & Projects Deal of the Year category, the Henvey Inlet Wind LP refinancing top prize, is described as a model for future major renewable energy projects that involve Canadian Indigenous communities.
Led by Sumitomo Mitsui Banking Corporation of Canada and advised by Torys LLP, with Milosz Zemanek and Scott Kraag at the helm, the syndicate of lenders invested in the $1.2-billion project, one of the largest project financings in Canada in 2021. Henvey Wind is also the only major wind project located entirely on First Nations reserve land.
In the insolvency and restructuring category, the CCAA and U.S. Chapter 15 filing for retailer Groupe Dynamite came out on top. McCarthy Tétrault, Gowling WLG, Norton Rose Fulbright and Dentons were the firms in attendance when the deal was named a winner.
Groupe Dynamite, with sales of close to $600 million in 2019, was the first major profitable Canadian retailer to file for protection from its creditors because of COVID-19. The restructuring was aimed at renegotiating leases for more than 300 stores in North America and settling “COVID liabilities,” mostly unpaid rent. Liabilities reported by the debtors at the time of its CCAA filing totalled approximately $359 million, including $149 million owed to a syndicate of secured lenders.
The Quebec-based retailer of clothing and accessories under the Garage and Dynamite brands, completed its cross-border restructuring by obtaining court sanction of its plan of compromise and arrangement, which was approved by 346 of its creditors representing more than 99 percent in number.
Judges’ comments on this deal include: "During its CCAA restructuring process, Dynamite succeeded in renegotiating the vast majority of the leases applicable to its hundreds of retail stores in Canada and the United States.”
Alexandre Forest, a partner at Gowling, which represented many of the landlords involved in the restructuring noted that there were some “heated” moments in a process that was made more challenging by the fact that COVID-19 had closed the stores yet were still operating through means such as curbside delivery. “There was the question of who was supposed to pay rent or assume rent while they company was restructuring.”
Forest’s colleague at Gowling, Francois Viau, said ultimately the intervention of the court and “the wise comments of the judge” helped settle the disputes and allowed for the successful restructuring of the retailer so that everyone “would lose a little, but win in the end.”
One of the more complicated mining deals completed in 2021 was Agnico Eagle’s acquisition of TMAC Resources. Named as the top mid-market deal at the CLA gala, the award recognizes how Agnico seized upon a unique opportunity created by TMAC’s inability to secure regulatory approval of a purchase of the company by China-based Shandong Gold.
Davies Ward Phillips & Vineberg LLP acted for Agnico Eagle Mines Limited, with Patricia Olasker as lead partner.
Agnico managed to engineer a purchase of TMAC, implemented by way of negotiating a court-approved, shareholder-approved plan of arrangement. This involved a three-party negotiation with Agnico Eagle, Shandong Gold and TMAC, and obtaining court approval of the amended arrangement without the necessity for shareholder approval. All this was done in a compressed four-week timeframe between announcement and closing to ensure completion prior to the outside date under the original TMAC/Shandong Gold arrangement agreement.
The final award in the deals category – M&A Deal of the Year – went to Brookfield Infrastructure Partners L.P.’s $13-billion acquisition of Inter Pipeline Ltd. The legal teams behind the purchase and subsequent privatization of the midstream energy company, which closed on October 28, 2021 were McCarthy Tétrault LLP for Brookfield and Burnet, Duckworth & Palmer LLP for Inter Pipeline. Blakes, Davies Ward Phillips & Vineberg, Norton Rose Fulbright, Dentons Canada, Osler Hoskin & Harcourt and Torys LLP also played important roles.
In giving the award to the Brookfield-Inter Pipeline deal, the judges commented on how the transaction “ticked many of the boxes” of a high stakes deal. As well, “given how highly publicized the deal was and the high-profile nature of the parties involved, the deal also presented a number of unique tactics and strategies with respect shareholder and market communication and proxy solicitation which involved significant legal input.”
Canadian Lawyer and Lexpert would like to thank all our esteemed sponsors, attendees and judges in each category who helped guarantee the success of this event.