Cassels assists in two M&A deals in rare earths, software sectors

Blakes, Minden Gross, King & Wood Mallesons also legal advisors in deals this week

Cassels assists in two M&A deals in rare earths, software sectors

Cassels advised on two M&A deals this week, including the $135-million sale of Ontario-based Neo Performance Materials’ shares to a leading Australian rare earths company. King & Wood Mallesons also assisted in the Neo deal, while Blakes joined Cassels in assisting an acquisition agreement between two software companies, Harris and NexJ Systems Inc. Also included in this deals roundup is Blakes acting as counsel to a Japanese investor and Minden Gross advising Eguana Technologies in a $33-million financing deal.

Neo to sell 22.1 percent stake to Hastings for $135 million

Ontario-based Neo Performance Materials Inc. and Australian firm Hastings Technology Metals Ltd., two global leaders in the growing rare earths permanent magnet sector, entered into an agreement in which Hastings will acquire 22.1 percent share in Neo for $135 million.

The acquisition funding will come from a $134.8 million (AU$150 million) cornerstone investment in Hastings by Wyloo Metals, a privately-owned metals company, Hastings said in a statement filed with the Australian Securities Exchange.

Cassels Brock & Blackwell LLP and King & Wood Mallesons are serving as legal counsel to Hastings Technology Metals, while Barrenjoey is acting as financial advisor and Wyloo Strategic Investment as the sole arranger.

Wyloo CEO, Luca Giacovazzi, said, “Rare earths and the permanent magnets they produce are essential enablers of the energy transition. There is already a shortage of these products, and the upcoming increase in magnet demand will require continued investment. This transaction spans the value chain, from mining to magnet manufacturing, and fits well with our strategy of investing in the stable and secure supply of critical minerals.”

Hastings Executive Chairman, Charles Lew, said, “The acquisition of the Neo stake represents an important strategic milestone for Hastings, providing the company and its shareholders with a unique opportunity to take further steps towards realising the Hastings 2.0 strategy. We are also thrilled to welcome the support of and strategic investment by Wyloo Metals. We see Wyloo’s commitment to Hastings as an important validation of our strategy and objectives.”

Harris to acquire NexJ Systems

Software businesses N. Harris Computer Corporation and NexJ Systems Inc. entered into an agreement in which Harris, a subsidiary of publicly traded Constellation Software Inc., has agreed to acquire NexJ for $0.55 per share.

Cassels Brock & Blackwell LLP is acting as legal counsel to Harris, while Blake, Cassels & Graydon LLP is acting as legal counsel and INFOR Financial Inc. as financial advisor to NexJ.

NexJ CEO, Paul O'Donnell, said, “Constellation's buy and hold investment strategy and commitment to providing customers software for life makes Harris a perfect permanent owner of NexJ. Once NexJ is acquired by Harris, our customers who rely on our technology to support the day-to-day operations of their business will continue to receive exceptional dedicated support and services for all NexJ products.”

The deal is expected to close in the fourth quarter of 2022.

Eguana receives $33-million financing from ITOCHU Corp

Eguana Technologies Inc., an Alberta-based energy storage company, received a $33 million investment in the form of an unsecured convertible debenture from ITOCHU Corporation, a Japanese general trading firm.

Proceeds will be used to fund working capital and general corporate expenditures of Eguana.

Blake, Cassels & Graydon LLP served as legal counsel to ITOCHU in connection with the transaction, while Minden Gross LLP acted as legal advisor and Fort Capital Partners as sole financial advisor to Eguana.

Eguana CEO, Justin Holland, said, “ITOCHU, a key partner of Eguana for many years, remains at the global forefront of the renewable energy transition with expertise and access throughout the entire renewables supply chain. Growth capital of this magnitude will allow us to accelerate key inventory investments across all product lines and expedite Eguana Cloud and battery module/battery management system development.”

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