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Streetwise

News and analysis on Bay Street and the world of finance
available exclusively to subscribers of Globe Unlimited

Entry archive:

RBC once again gets lead role in Canadian tech IPO south of the border

Sean Silcoff

The two most hotly anticipated Canadian tech initial public offerings of the year have several things in common: they are both fast-growing cloud-based subscription software companies, they have both chosen to list their shares dually in Canada and the U.S. – and they have both chosen RBC Dominion Securities as a joint lead book runner.

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Daily Deal Roundup: B&G Foods to buy General Mills’ Green Giant

DUNCAN HOOD

DEAL OF THE DAY: B&G Foods to buy General Mills’ Green Giant, Le Sueur for $765-million

Snack-food company B&G Foods Inc. said it would buy General Mills Inc.’s Green Giant frozen-foods and Le Sueur canned-vegetables brands for about $765-million (U.S.) to expand its distribution network and enter the frozen-foods market. Full story

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Race for the runway: Bidders circle airports

JACQUELINE NELSON

Airports have a knack for getting major international private equity and pension-fund investors to line up at the gate.

London City Airport is the latest to attract attention – and Canadians are rumoured to be among the bidders.

Airports are one part of a trend in which institutional interest in infrastructure investing has ramped up in the past few years, driven by the hunt for yield in an environment of lower interest rates and the potential to hold assets for the longer term.

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Dundee Goodman advisers leave for RBC

NIALL McGEE

RBC Dominion Securities Inc. has snatched a number of top-performing investment advisers with sizable books of business from Dundee Goodman Private Wealth.

An RBC spokesperson confirmed that Stephen Sandler, who has been in the business since 1969, and his sons, Scott and Anthony, joined RBC from Dundee last week. Mr. Sandler and his team had a book worth approximately $1.1-billion while they were at Dundee. They worked with high-net-worth retail clients with $1-million or more to invest.

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In Alberta, banks have weathered oil's storm – so far

DAVID BERMAN

Evidence is mounting that Canada’s banks have largely escaped the economic impact of oil’s price plunge over the past year – at least for now.

Even Canadian Western Bank, whose home base is in Alberta, is showing that it is perfectly capable of reporting strong profit and low credit losses. The earnings come on the heels of better-than-expected profits from all of Canada’s Big Six banks last week. But observers aren’t convinced that the good news will last.

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Lexpert: Key players and figures in WSP Global’s acquisition of MMM Group

LEXPERT

Lexpert identifies and reports on emerging business issues and practice areas in the business of law. Whether online, in our magazine or in the DealsWire e-newsletter, we chronicle deals and lawsuits of interest, and cover issues of broad concern to the legal profession and those who purchase legal services. We hope you enjoy this sample of our latest content.

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In the right circumstances, Canada’s English and French aren’t incompatible

ADRIAN MYERS

After returning from a week of gorging himself on foie gras and glamping around Charlevoix, a good friend of mine declared, without equivocation, “Quebec is our greatest province.”

This is the kind of strong take that launches referendums and, though I love Quebec, I am loath to don the clothes of either Wolfe or Montcalm with a federal election looming. I would rather point to the delightfully implausible fact that Lord Durham’s proposal, in his 1839 Report on the Affairs of British North America, to unite French and English Canada did not lead to the English overwhelming the French, but something wonderful and unique.

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Daily Deal Roundup: Teachers buys Amica in generous $578-million deal

Seres Lu and Ahmad Hathout

DEAL OF THE DAY: Ontario Teachers’ subsidiary to buy Amica for $578-million

BayBridge Seniors Housing Inc., a subsidiary of the Ontario Teachers’ Pension Plan Board, is set to acquire luxury senior homes operator Amica Mature Lifestyles Inc. for $578-million. The friendly – and generous – deal will see Amica shareholders get $18.75 per share in cash, which is more than double the stock price at close of trading on Tuesday. Full story

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Lexpert: Another lesson from the Ashley Madison hack

The Ashley Madison hacking scandal has a lesson for everyone. But the high-profile hack has a particular lesson for anyone contemplating a corporate merger or acquisition: Play down the importance of an information-technology due diligence at your peril.

When a company or investor has a target in its sites, the buyer generally expects to pay for a business due diligence that includes things like reviewing financial projections, contracts, agreements, pension and benefits obligations and tax structures.

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Avigilon stock falls after executive shakeup

NIALL McGEE

A new wave of management departures sent shares of Avigilon Corp. plunging Wednesday.

The Vancouver-based maker of high-definition surveillance cameras announced that chief operating officer Bryan Schmode had resigned. In addition, Avigilon said Collis Heath, formerly the company’s senior vice-president of global operations, had left the company.

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Wild markets are good for SPACs, bad for IPOs

NIALL McGEE

It’s arguably the most prosaic acronym in Canadian financial services, but the humble SPAC – which stands for special purpose acquisition corporation – has been one of the main propellers of the Canadian initial public offering (IPO) market in 2015.

SPACs have existed in the United States since the 1990s, but only popped up in Canada this year. Typically these blank-cheque, shell companies have two years to make an acquisition. Otherwise they must return their capital to shareholders.

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Daily Deal Roundup: First Mining buys Gold Canyon, PC Gold

SERES LU

DEAL OF THE DAY: First Mining bulks up

First Mining Finance Corp. has agreed to acquire all of the issued and outstanding common shares of Gold Canyon Resources Inc. and PC Gold Inc. Upon completion of the transaction, the former shareholders of Gold Canyon will hold approximately 55.4 per cent of the shares of the resulting company, former shareholders of PC Gold will hold approximately 9.6 per cent of the shares of the resulting company and the current shareholders of First Mining will hold approximately 35 per cent of the shares of the resulting company.

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K+S CFO to meet Toronto investors amid Potash bid

RACHELLE YOUNGLAI

K+S AG’s chief financial officer is due to meet investors in Toronto on Sept. 16 as the $8.7-billion (U.S.) bid from Potash Corp. of Saskatchewan Inc. simmers, according to a memo viewed by The Globe and Mail.

The mid-September trip to Toronto comes after K+S executives made the rounds with its European investors this summer.

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CentriLogic sets sights on big telcos with IT-outsourcing expansion

SEAN SILCOFF

CentriLogic Inc. has established itself as a company to watch in the data centre business after several years of blistering growth (it ranked 58th in Profit Magazine’s list of fastest-growing Canadian companies in 2014) and hiring two big-time executives last year, notably former BMO Nesbitt Burns Inc. investment banker Robert Levine as chief financial officer.

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Why Sprott snapped up star fund manager Dennis Mitchell

CLARE O’HARA

Sprott Asset Management is putting newly-hired portfolio manager Dennis Mitchell at the helm of its push to offer new investment products with a focus on global equities.

“We think we will have a very quick ramp with Dennis and he has very strong following across the country,” Sprott CEO John Wilson told The Globe and Mail. “Global equities is a category we feel is underserved on our platform and an area where Dennis can bring very meaningful business to us, in a very short period of time.”

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Daily Deal Roundup: OMERS explores bid for London City Airport

DUNCAN HOOD

DEAL OF THE DAY: Allianz and Borealis Infrastructure eye London City Airport

German insurer Allianz SE has joined Borealis Infrastructure, which manages investments for Canada’s Ontario Municipal Employees Retirement Systems (OMERS), to explore a bid for London City Airport, a source familiar with the process said. The news was first reported by the Telegraph, which said earlier this month that another Canadian pension fund, Ontario Teachers’ Pension Plan, has partnered with the sovereign wealth fund of Kuwait and Hermes Investment Management to submit an offer to the airport. Full story

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Financial services industry aiming to buff profile of CFA designation

JACQUELINE NELSON

For the CFA Institute, the string of letters that follow a financial adviser’s name are critical. The challenge is convincing investors to care.

The not-for-profit industry group that bestows the chartered financial analyst (CFA) designation is looking to boost standards of investment knowledge – and applicants to its program. But, since the financial crisis, investor skepticism and frustration have made that mission increasingly difficult.

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Best of the banks: The third-quarter scorecard

DAVID BERMAN

The big banks’ third-quarter results were strong, showing decent profit growth relative to the contracting economy and depressed energy sector. But were there standout results as you drilled down into the numbers from individual banks? You bet. Here’s a roundup of our best-of categories.

Best beat: Bank of Montreal, by 7.5 per cent.

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Signs point to major shake-up at Tembec

BERTRAND MAROTTE

Could Tembec Inc.’s days as an independent forest products company be numbered?

There’s certainly enough fresh timber for the rumour mill these days regarding the fate of the Montreal-based lumber, paper and specialty pulp producer.

The shares fell to penny-stock status recently after Standard & Poor’s revised its outlook for the company to negative from stable, and investor jitters ramped up on balance-sheet concerns.

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Neil Selfe’s next project: a ‘private-equity-like’ fund

NIALL McGEE

Neil Selfe doesn’t sit still for very long. The accountant, turned lawyer, turned investment banker, turned hedge fund entrepreneur, turned investment banker again, turned merchant bank founder, has had an eventful year. And we’re only two-thirds done.

In March, after an almost-nine-year run at GMP Capital Inc., he quit and founded Infor Financial Group Inc., a merchant bank and boutique advisory shop. Infor quickly landed lucrative advisory mandates with Element Financial Corp., including being the sole capital markets adviser on its $2-billion-plus stock sale in May. That same month, Mr. Selfe helped raise $230-million from investors for Infor Acquisition Corp., a special-purpose acquisition corporation (SPAC).

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Daily Deal Roundup: Brookfield’s $112-million India venture

SERES LU

DEAL OF THE DAY: Brookfield consortium invests more than $112-million in India

Canada’s Brookfield Asset Management Inc. made its first significant investment in Indian infrastructure, buying six road and three power projects on Friday from India’s Gammon Infrastructure Projects Ltd. A consortium composed of Brookfield and Core Infrastructure India Fund Pte. Ltd. is buying the projects, six of which are operational. The deal includes an immediate cash payment of 5.63 billion rupees ($112-million) and future undisclosed sums based on certain performance targets being met. Full story

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Why the rise of fintech startups has Canada’s big banks on edge

SEAN SILCOFF

Canada’s big banks have sailed through earnings season reporting better-than-expected results despite concerns about the global economy, slumping commodities prices and the overheated domestic housing market. But could even bigger threats to the banks loom from a band of scrappy high-tech startups?

You may have heard the term “fintech” recently; expect to hear it a lot more in the future. The loose definition refers to firms that are looking to leverage software and the Internet to bring new efficiencies and competition to the financial services sector, and there are a lot of them.

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Daily Deal Roundup: Canadians among bidders in $12-billion Australia energy sale

DUNCAN HOOD

DEAL OF THE DAY: Viterra buys Quebec oilseed plant for $190-million

Viterra Inc., the agriculture segment of Glencore PLC, said on Thursday that it agreed to buy Eastern Canada’s largest oilseed processing plant from Malaysia’s Felda Global Ventures Holdings Bhd. Felda, the world’s third-largest palm plantation operator, said it would sell the TRT-ETGO plant at Bécanour, Que., to Viterra for $190-million. Full story

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CIBC’s Belsher to retire in executive shakeup

DAVID BERMAN

Canadian Imperial Bank of Commerce’s co-head of wholesale banking, Geoff Belsher, is retiring from the bank at the end of September as part of a broad executive reorganization at the lender under new chief executive officer Victor Dodig.

Harry Culham, who shared the wholesale banking role with Mr. Belsher, was named group head of the division.

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McRock Capital adds another major global investor to first fund

SEAN SILCOFF

Toronto-based venture capital fund McRock Capital has added a third big global investor to its first fund, which has closed after raising $65-million, the top end of its target.

McRock, which seeks to back early-stage companies focused on the “industrial internet of things” sector, closed out the McRock iNFund LP with a $10-million commitment from the HarbourVest Canada Growth Fund, managed by global private markets giant HarbourVest Partners LLC. The HarbourVest fund joins McRock backers Électricité de France and Cisco Investments as well as Canadian backers Alberta Enterprise Corp., BDC Capital, Export Development Canada, Kensington Venture Fund LP, and Teralys Capital Innovation LP.

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RBC loses fixed-income ground as BMO drives hard

NIALL McGEE

RBC Dominion Securities Inc.’s long-term lock on underwriting and trading fixed income in Canada is under siege.

“There is only one story in Canadian fixed income this year, and that story is BMO,” according to a Greenwich Associates report released Wednesday. BMO Nesbitt Burns Inc. has “closed the previously precipitous gap.”

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OSC investment funds head departs for an asset manager

CLARE O’HARA

Long-time regulatory executive Rhonda Goldberg has joined the asset management industry she has spent the past 16 years overseeing.

Ms. Goldberg, a former director with the Ontario Securities Commission, will assume the role of vice-president of regulatory affairs for investment powerhouse IGM Financial Inc., parent company of Mackenzie Financial Corp. and Investors Group Inc., on Sept. 15.

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The inside story of the mess at AGF

Tim Kiladze

In early December of last year, as the investment community was starting to gear down for the holidays, Blake Goldring quietly prepared to drop a bomb. As a dim morning light spread over Bay Street, the CEO of AGF Management Ltd. got ready to announce the most contentious move of his 15-year reign.

A fierce debate among investors and analysts had presaged the decision. Simple math suggested there was no other option but to cut AGF’s dividend: By December, quarterly payments to shareholders ate up virtually all of AGF’s free cash flow, leaving nothing to invest back in the business. Still, there was a major unknown: Would Goldring have the nerve to chop the payout? Few things irk investors more than dividend cuts, and the CEO was already under siege for AGF’s ugly investment performance.

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Daily Deal Roundup: Tricon Investment Partners files IPO

AHMAD HATHOUT

DEAL OF THE DAY: Schlumberger to buy Cameron International

Schlumberger Ltd, the world’s top oil field services company, is set to acquire oil field equipment maker Cameron International Corp in a deal valued at $14.8-billion (U.S.). Cameron’s shares shot up to $61.94 in premarket trading on Wednesday, while Schlumberger’s shares rose 1.4 per cent to $73.57. Full story

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The Man Who Shorted Canada on why his view hasn’t changed

SEAN SILCOFF

The Man Who Shorted Canada is as pessimistic as ever about the country’s prospects.

In fact, Vijai Mohan foresees a downturn for this country that could rival the early 1990s recession in its severity.

In April, 2013, his San Francisco-based hedge fund, Hyphen Partners LP, had made a big bet against the Canadian economy, amassing short positions against bank shares and the loonie, betting their value would fall sharply. At the time, he was an outlier, although others joined the “Sell Canada” bandwagon.

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