Canadian Lawyer InHouse

DECEmBEr 2014 20 INHOUSE "We're pretty lean at Tims. My entire legal team is 60 people across Canada and the U.S. So it becomes basically another job. Another intense time consuming job on top of your day job," she says. In the team of over 60, just fi ve were tapped to work on the mega deal that had Canadians beyond Bay Street wondering what would happen to the profi le of the coffee giant in the shadow of Burger King. In August, Tim Hortons agreed to be pur- chased by 3G Capital — an investment company that owns Burger King — for $12.5 billion — a deal that has made it the world's third largest fast-food chain. It has also signifi cantly bumped the Tims share price to all time highs before the closing, approaching $97 per share at the time of this article going to press, expanding the reach of double doubles and maple dipped donuts into entirely new markets. Burger King operates in 98 countries and territories worldwide, including 300 restau- rants in Canada. Tim Hortons is one of the largest public- ly-traded restaurant chains in North Amer- ica, and the largest in Canada. As of June 29, 2014, Tim Hortons had 4,546 system- wide restaurants — the majority — 3,645 — in Canada. Despite the enormity of the deal, Sutton was confi dent she and her team could steer the deal with the help of trusted outside counsel. "I have a really strong team," says Sutton. "The folks we have working in our securi- ties group and corporate practice group came from large law fi rms and all had done transaction-based work in the past. I have that in my background as well — we created a great team and they hit the ground run- ning when I was fi nally able to bring them into the loop and really get them involved." Sutton initially kept the deal very close to her vest. "That was one thing my CEO also signifi cantly bumped the Tims share was confi dent she and her team could steer the deal with the help of trusted outside counsel. "I have a really strong team," says Sutton. "The folks we have working in our securi- ties group and corporate practice group came from large law fi rms and all had done transaction-based work in the past. I have that in my background as well — we created a great team and they hit the ground run- ning when I was fi nally able to bring them into the loop and really get them involved." Sutton initially kept the deal very close to her vest. "That was one thing my CEO DECEmBEr 2014 20 INHOUSE wanted. For this transaction the fi rst pro- posal letter came at the end of March — this was going on for months," she says. Sutton didn't bring in the legal team until early August. Up until then it was primar- ily being stickhandled by the CEO, CFO, and Sutton followed later by the company's investor relations offi cer. "We did the deal with external counsel and our board to a very large extent until we were ramping up due diligence and we started working on the arrangement agreement and plan of ar- rangement itself. So once we started work- ing on those massive documents and get- ting our own due diligence posted and then reviewing the Burger King due diligence I was able to bring in my team and really roll up the sleeves and get going." The transaction was intense but Sutton is no stranger to the fast food wars. She joined Tim Hortons when it was part of rival burg- er company Wendy's and based in Colum- bus, Ohio. She has been with Tims since it was spun off from Wendy's eight years ago and then led the legal team for the repatria- tion of Tim Hortons as a Canadian public company in 2009. The overtures from Burger King arrived on Sutton's door after an intense year in 2013 dealing with activist investors. Certain activists had been putting pressure on Tims to boost returns through debt-funded share buybacks and to scale back in the U.S. Mean- while, another had also issued a report rec- ommending Tims pull out of the U.S., stop spending money, and borrow as much as they could and leverage the company. Despite efforts for years now to expand in the U.S., Tims has been very geographically localized in Michigan and western New York — loca- tions not far from the border as well as its other large market in Columbus, Ohio. "We had resolved those issues substantial- ly with additional leverage we took on and ex- panded share re-purchase programs," says Sutton. "Given the activist activity, we were used to getting fairly aggressive letters and requests." The letter from Burger King was clearly different. "When you fi rst get it you know they are serious but you're not always sure how far it's going to go and what route it's going to take. There's a bit of realization that OK, you're on a path now that '' '' We had resolved those issues substantially with additional leverage we took on and expanded share re-purchase programs. JILL SUTTON

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