Toronto Legal Blog

Mergers and acquisitions: A golden future for mining

In certain cases, all that glitters is gold. An industry that was quickly losing its shine has got back some of its sparkle with recent mergers and acquisitions. Recently activity in the gold mining sector in Canada has created some excitement. Newmont Mining Corporation scooped up Goldcorp Inc. creating the world's biggest miners of gold, while Barrick Gold Corp. acquired Randgold Resources Ltd.

The newly-merged Newmont and Goldcorp. said they will sell up to US$1.5 billion in assets in the course of two years. Barrick, on the other hand, says it will steer its focus on assets that generate cash for the company.  Selling assets, though, may not be so easy since the bulk of Barrick's mines are involved in joint ventures and ongoing partnerships.

Business and commercial: Banks lend millions to cannabis growers

Some of Canada's largest banking institutions are cultivating cannabis clients. Some of the biggest business and commercial outlays from these banks are loans to entrepreneurs in Canada invested in the now legal cannabis market. Both the Canadian Imperial Bank of Commerce (CIBC) and the Bank of Montreal (BMO) provided $80 million loan to marijuana cultivator PharmHouse.

That is the largest debt financing loan provided to any privately owned and operated cannabis company. Until now, most banks have shied away from anything to do with the cannabis industry since most of the larger lending institutions hold U.S. assets where cannabis is still federally illegal. The Royal Bank has also got in on some of the action by beginning to advise cannabis companies on reverse takeovers and stock sales. 

Business and commercial news: Canada's railways chugging smoothly

The two major railway companies in the country are on track to weather possible economic fallout from the U.S.-China trade war. Amid business and commercial undertakings in Canada last year, Canadian Pacific Railway and Canadian National Railway actually drove total rail freight traffic up by four per cent in 2018 thanks to shipping more than 20 per cent more petroleum and oil during the year. Even with a pipeline shortage of oil in Canada, crude by railway exports increased.

Both railways are expecting demand for oil to continue, but they learned a hard lesson from contracts being broken by the boom five years ago. They have signed multi-year contracts with minimum volumes and increased fees with oil shippers. So, even if the dynamics of the Canadian oil industry change, the two rail companies will still be transporting oil to stateside refineries.

Recent deal highlights mergers and acquisitions

Toronto Dominion Bank was the pack forerunner when it came to dealmaking in 2018. It was a year in Canada that was replete with mergers and acquisitions deals with TD Bank's securities division outshining its competitors. The slowpoke area of business in 2018, however, seems to have been in equity financing -- the slowest it had been in a decade.

Of the almost $30 billion stemming from public offerings in Canada last year, TD Securities brought in almost $4 billion of that. The institution's roll is expected to continue into 2019.  In fact, TD replaced the Royal Bank as Canada's number one equity dealmaker. In terms of cross-border deals, TD landed two of the biggest -- worth more than $22 billion.

Mergers and acquisitions complexity

An new entity has been created by the coming together of two managed service providers. In mergers and acquisitions news in Canada, Fully Managed Technology Inc. and CareWorx Corporation have merged, giving birth to CareWorx Fully Managed. The new company will have 270 employees under its wing as it takes flight.

CareWorx Fully Managed with have three separate divisions: managed services, senior care and enterprise service management. The company will introducing its branding early in 2019. The merger took about a year to complete and the new company's CEO says an MSP unicorn was created by the marriage in that it is unlike any other managed service provider.

Business and commercial: Province helps out mining industry

The provincial government is investing in the province's northern mining supply and services industry. The business and commercial sectors of Ontario have been given a boost with the recent news that the province will be pumping more than $2 million into businesses in Nipissing from the Northern Ontario Heritage Fund. Money will go to four separate mining supply and service companies and is expected to create 46 full-time and two part-time jobs.

Businesses that were given a financial injection include Foraco Canada Ltd., Drillco Mining and Exploration, Paige Engineering Ltd. and SafeSight Exploration. Monies will be used for expansion, exploration, manufacturing and modifications to existing infrastructure. The province says funds will support  innovation and cutting-edge technology.

Mergers and acquisitions: Canada challenges stateside competition

Marijuana production companies are teaming up to keep ahead of their competitors. Canada has seen numerous mergers and acquisitions deals since the legalization of cannabis this past Oct. 17. Producers are especially keeping and eye on their U.S. competition, but it's too soon to tell who's winning the race. As of the end of November, however, Canada is in the lead.

There are three giant players in Canada's cannabis industry: Aurora Cannabis, Aphira and Canopy Growth. There are some big players stateside as well. In fact, if it wasn't for Canada's jump start in the industry, American companies could have had the edge. For instance MedMen, an American company, had the biggest year-over-year growth compared to the other heavy hitters in production market.

Business and commercial: Major vehicle manufacturer to close

Another major vehicle manufacturer will be closing up shop. The business and commercial world was sent reeling recently as General Motors announced that it would be closing its Oshawa, Ontario plant, leaving 2,800 workers unemployed. The plant is the largest employer in the city, which used to employ 23,000 people in the 1980s.

Over the years, Oshawa has diversified its business, commercial and industrial base. There are some pretty hard-hitting employers in the community now, including those in the education and government sectors. However, the community will profoundly feel the impact of the GM closure. Homeowners are worried about dropping market values on their homes, and some residents and GM employees worry that local businesses like restaurants and bars will have a hard time staying solvent without the patronage of many GM workers.

Business and commercial: Feds intervene in postal strikes

The Liberal government has ordered postal workers to get back on the job. Canada's business and commercial sectors have been taking a hard hit due to rotating strikes imposed by Canada Post employees. The government has given the Canadian Union of Postal Workers (CUPW) 90 days to work with a mediator to come to an agreement, failing which an agreement will be imposed.

Prime Minister Justin Trudeau said the move was a last resort, but his government had to act to protect small businesses and Canadians affected by the strikes. These month-long rotating strikes have caused a backlog of letters and parcels which have been left unsorted at postal outlets. Canada Post has said it would continuing bargaining in  good faith with CUPW members.

Mergers and acquisitions: Three companies invest in KuKoin future

Three technological heavyweights have joined forces to bring another cryptocurrency platform into the mainstream. In terms of mergers and acquisitions news affecting investors in Canada, Neo Global Capital, IDG Capital and Matrix Partners have partnered up with KuCoin, to bring cryptocurrency trading into the mainstream through the KuCoin exchange. The three companies have invested a combined total of $20 million in KuCoin so far.

Cryptocurrencies are continuing to gain worldwide momentum, and the World Economic Forum believes that 10 per cent of the world's GDP will be stored in this fashion by 2027. The three companies each bring their owns strengths to this new venture. The trilateral investment is expected to create more secure, widespread global access to this type of technology.

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