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Guide

Canadian PIPE Guide and 2019 Deal Point Study

Fasken
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Fasken is pleased to release its Canadian PIPE (Private Investment in Public Equity) Guide and 2019 Deal Point Study (PDF).

Thumbnail of English PIPES report cover 

The Canadian PIPE Guide and first annual 2019 Deal Point Study is divided into two parts:

  1. An overview of some frequently asked questions about PIPEs and PIPE transactions, including certain legal and Canadian regulatory considerations
  2. A Deal Point Study reviewing publicly available information for PIPE deals completed in Canada in 2019, that aims to inform and answer “What’s market?”

Our PIPE Deal Point Study offers market insights from a review of the 2019 Canadian PIPE deals having a deal size of greater than $10 million and whose deal details are publicly available. Our usable sample catalogue produced a list of 19 deals. We reviewed this sample for (i) basic characteristics of the target and the deal (including market capitalization of the target, industry and transaction amount); (ii) attributes of the acquired securities; and (iii) the investor and issuer rights granted pursuant to the deal.

The Deal Point Study yielded notable trends among others, including:

  • Over 50% of the deals involved the issuance of convertible securities.
  • The most prevalent rights negotiated were board nomination rights (approx. 74% of deals surveyed), followed by anti-dilution protection (approx. 63% of deals surveyed).The volume of board-related contests reached a low point.
  • Information rights and ancillary business rights were also common (approx. 53% and 50% of deals surveyed, respectively).
  • The least common rights granted were specific voting rights, which were only included in approx. 21% of deals surveyed.

If you are interested in transactional trends in Canada, we also recommend reading our Canadian Proxy Contest Study - 2020 Update which offers a review of the country’s proxy contest activity over the past year and follows on from our ground-breaking 2013 Canadian Proxy Contest Study and our annual updates, our 2015 Canadian Hostile Take-Over Bid Study that provided an empirical analysis of all 143 hostile bids for control of a Canadian-listed issuer over the ten-year period ending in 2014, as well as our analysis of hostile bid activity since the 2016 changes to the bid regime.

Our Directors' Handbook: Shareholder Activism provides practical guidance for public company directors and boards looking to bolster their defence against activists.

 

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