Franchise M&A | 3 High-Level Considerations
Corporate / M&A Law, Franchise & Distribution Law

Franchise Mergers & Acquisitions | 4 Key Due Diligence Considerations

The purpose of due diligence is to evaluate the nature and value of what is being acquired as well as to identify potential issues, risks, and liabilities. Put another way, a buyer’s objectives include ensuring that it receives the expected value in exchange for what it paid, evaluating any obstacles that may stand in the way of carrying out its strategic objectives for the business, and avoiding, ameliorating, or allocating as best as possible the risks associated with the acquisition.

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Doing Business in Canada
Corporate / M&A Law

Doing Business in Canada | Canadian M&A Trends and Insights

Some will remember 2018 as a year of rising interest rates, protectionist fears, and increasing political and economic uncertainty. However, recent reports – including reports from Duff & Phelps and PricewaterhouseCoopers – indicate that 2018 was another strong year for mergers and acquisitions activity in Canada facilitated by abundant capital, a growing economy, and low unemployment.

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Private Equity 2019 – Fund Formation | Canada Chapter – Getting the Deal Through
Corporate / M&A Law

Private Equity 2019 – Fund Formation | Canada Chapter – Getting the Deal Through

A limited partnership is typically used for private equity funds in Canada. This allows ‘flow-through’ treatment for investors (ie, income tax is not paid at the partnership level). Limited partnerships are formed provincially and, to be created, a declaration must be filed in the applicable province. However, they do not have a separate legal personality. A Canadian limited partnership is, similar to most other jurisdictions, a partnership with passive investors (limited partners) and a general partner who is charged with the management and operation of the business for the partnership and has unlimited liability for all of the obligations of the limited partnership. Limited partner investors do not take part in the management of the fund and are only liable to the extent of the amount they contribute or agree to contribute.

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Private Equity 2019 – Fund Formation | Canada Chapter – Getting the Deal Through
Corporate / M&A Law

Private Equity 2019 – Transactions | Canada Chapter – Getting the Deal Through

A wide range of private equity transactions is common in Canada, including going-private transactions, private investments in public companies and private company buyouts. In order to effect a direct acquisition of a Canadian target company, a private equity sponsor will almost always incorporate a Canadian acquisition vehicle, which will then acquire the target company by way of an acquisition of the securities or assets. In situations involving a large number of selling shareholders, either an amalgamation (similar to a US merger) or a court-approved plan of arrangement may be used.

The acquisition method (securities, assets, amalgamation or plan of arrangement) is dependent on various factors, including tax and legacy liability considerations, in addition to the parties’ ability to leverage their positions in the negotiations.

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Franchise M&A | 3 High-Level Considerations
Corporate / M&A Law, Franchise & Distribution Law

Franchise Mergers & Acquisitions | 3 High-Level Considerations

Franchise businesses have increasingly become a focus of M&A activity. This is in part due to greater interest and investment from private equity.

The franchise business model is by its nature unique.

Understanding its framework – and its moving parts – is paramount when engaging in any franchise M&A transaction.  

In this inaugural post of the series, we address 3 high-level considerations to bear in mind for a franchise M&A deal.

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Deal Breakers for Investors Looking to Acquire Franchise Systems
Corporate / M&A Law, Franchise & Distribution Law

10 Potential Deal Breakers for Sophisticated Investors Looking to Acquire Franchise Systems

The investment community has been increasingly interested in franchise systems as potential targets. They present a valuable investment proposition for strategic and financial investors. The appeal of robust, long-term, and diversified royalty income streams, proven business concepts, potential for scalability and expansion, shared expansion costs (i.e. with franchisees), and the goodwill and strength of an established brand has caught the attention of private equity funds, family offices, and other sophisticated acquirers. The strategy and structure of investments is also becoming more creative and flexible as investors get more comfortable with the franchise business model, including investments at the master franchise level, and aggregation of brands in the same industry (or similar industries) to achieve economies of scale. However, sophisticated acquirers (as many know), explore, consider, and pass on far more opportunities than they take up. So what are the critical franchise specific considerations that raise red flags for sophisticated investors looking to acquire a franchise system?

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Doing Business in Canada
Corporate / M&A Law, Franchise & Distribution Law

Doing Business in Canada Series – Part 5: Securities Law and Corporate Governance in Canada

Securities Law

Canada has a sophisticated capital markets system. Securities of both Canadian and foreign public companies can be listed and traded on several of Canada’s stock exchanges. The largest stock exchange in Canada is the Toronto Stock Exchange (TSX). Continue reading

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Corporate / M&A Law, Franchise & Distribution Law

Getting the Deal Through – Franchise 2018 – Franchise M&A

Franchise 2018 GTDTFranchise systems present a valuable investment proposition for both strategic and financial investors. The franchise business model as an expansion strategy has been on the rise across the globe for many years, and its growth together with its contributions to national gross domestic product (GDP) and job creation have outperformed other sectors and business models. Moreover, franchise systems have progressed well beyond traditional quick service restaurants to many other industries and sectors. Unsurprisingly, franchise businesses have increasingly become a focus for M&A deals, some of them large and complex. Take, for example, the recent Burger King C$14.6 billion acquisition and tax inversion involving Tim Hortons. Continue reading

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Corporate / M&A Law, Franchise & Distribution Law

Getting the Deal Through – Mergers & Acquisitions 2017 – Franchise M&A

GTDT Mergers & AcquisitionsFranchise systems present a valuable investment proposition for both strategic and financial investors. The franchise business model as an expansion strategy has been on the rise across the globe for many years, and its growth together with its contributions to national gross domestic product (GDP) and job creation have outperformed other sectors and business models. Moreover, franchise systems have progressed well beyond traditional quick service restaurants to many other industries and sectors. Unsurprisingly, franchise businesses have increasingly become a focus for M&A deals, some of them large and complex. Take, for example, the recent Burger King C$14.6 billion acquisition and tax inversion involving Tim Hortons. Continue reading

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