Canadian Lawyer InHouse

June/July 2021

Legal news and trends for Canadian in-house counsel and c-suite executives

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22 www.canadianlawyermag.com/inhouse FEATURE CANADIAN COMPANIES HAVE seen a surge in activity in mergers & acquisitions in 2021 as businesses start to recover from the pandem- ic-driven economic downturn, so many in-house counsel are navigating deals in the new landscape. Moreover, a healthy pipeline of deals attracts interest as financing conditions remain favourable. "There is no question that we're currently in a robust M&A environment with high deal volumes across almost all sectors," says Alex Gorka, a partner at Osler Hoskin & Harcourt LLP. "While there's still some uncertainty regarding COVID, it's less uncertain than it was a year ago, and folks have grown more accustomed to conducting their business within that risk environment." While technology, commodities and mining industries are particularly active, Gorka has seen increased M&A activity across almost all sectors. Canadian market still ripe for M&A Software acquisition company Valsoft Corporation saw an uptick in acquisitions in 2020 with 13 deals closing during the year — up from nine in 2019, and the high volume of activity is continuing into 2021. "From an M&A standpoint, we didn't see a slowdown at all in 2020," says David Felicissimo, general counsel at Valsoft Corp. and Valnet Inc. "Sellers who were on the fence were suddenly more willing to sell, and we also saw a lot more consolidation in the market and more players acquiring when interest rates were very low." Despite the buoyant market, a lack of face-to-face meetings did present certain obstacles and slowed down transactions. "Personal meetings build a sense of trust and connection, so, without that, the deals did drag on a little bit longer," says Felicissimo. "We've even walked away from deals where we can feel it falling apart because of the lack In-house counsel discuss deal-making strategies in the pandemic landscape with Lucy Saddleton of face to face." Felicissimo cites one ongoing deal that Valsoft has been trying to close with a U.K.-based company. The negotiations have been "very tense" due to the lack of face-to- face interaction between parties. Gorka suggests general counsel adopt creative strategies to compensate for the lack of in-person meetings and on-the-ground diligence, which can help move a deal forward. "If you can't do boots-on-the-ground diligence, for example, we've seen folks getting drones to do inspections of real estate assets," he says. "There are creative solutions that in-house counsel can help to devise, given that they are familiar with the business and the resources available to them." Canadian cannabis company Canopy Growth Corporation has also been particularly active in M&A this year. "The pandemic certainly hasn't slowed our M&A activity because we've been ebbing and flowing as we've tried to rationalize our own assets and find our feet with some early "While the first phase of cannabis legalization was a bit of a frenzy of acquisition, now I think we have the opportunity to be a little bit more thoughtful." Sam Carsley, Canopy Growth

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