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Streetwise

News and analysis on Bay Street and the world of finance
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Entry archive:

Surging activity after U.S. election a boon for RBC capital markets arm

CHRISTINA PELLEGRINI

A surge in client activity after the U.S. election helped bolster the capital markets arm of Royal Bank of Canada in its fiscal first quarter, setting the stage for more growth over the coming months.

Capital-markets earnings accounted for almost 22 per cent of RBC’s total quarterly profit of $3-billion. Net income for the division climbed to $662-million in the period, rising 16 per cent from the same period last year.

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RSA rolls out program to compete more fiercely for customers

JACQUELINE NELSON

RSA Insurance Group PLC is pursuing a transformation of its Canadian business as global chief executive Stephen Hester looks to put a painful multiyear turnaround effort in the past.

After overhauling its beleaguered business, the London-based insurance company is mapping out plans to compete more fiercely for customers. RSA posted a surge in 2016 profits and improved underwriting results on Thursday that boosted the stock, and the company said it would direct attention to how it can grow consistently amid “tough” market conditions.

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Nasdaq takes step toward Canadian exchange

CHRISTINA PELLEGRINI

The Canadian arm of Nasdaq Inc. has applied to operate an exchange in this country.

Nasdaq filed an application to become an exchange with regulators in December, about one year after the New York-based operator announced it had agreed to acquire equities trading venue Chi-X Canada to expand its trading business beyond the U.S. and the Nordic countries.

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After commodities rout, TSX Venture exchange tries to remake itself

CHRISTINA PELLEGRINI

The TSX Venture Exchange is rebuilding from the ground up.

New managing director Brady Fletcher’s top priority is ensuring that Canada’s go-to market for small-cap companies, including junior energy and mining players, has a support system that can weather the next storm.

Commodity prices are recovering, but the junior exchange was hurt by the prolonged rout. As mining deals dried up, smaller dealers that cater to the junior resource space were forced to cut costs or close up shop. Regulations for issuers and brokers have also become stiffer and more costly over the years.

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Lexpert roundup: Bullish on M&A and why the world needs more Canada

Lexpert Roundup on the Business of Law

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 sampling of our latest content.

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Lexpert: Exchange rate and stable oil prices to grow Canada merger activity

LEXPERT

For all the political and economic headwinds around the world last year, 2016 proved to be a surprisingly strong year for Canadian M&A. In fact, figures compiled by Crosbie & Co. show a total of $331.5-billion in announced M&A activity in which a Canadian company was a major party, up from $275.7-billion in 2015.

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Tangerine’s chief strategy officer named new CEO

JAMES BRADSHAW

Tangerine Bank has named Brenda Rideout to be its next chief executive officer, as long-time head Peter Aceto steps aside and the digital bank continues to shake up its senior ranks.

Ms. Rideout is a 17-year veteran of the bank, formerly known as ING Bank of Canada, who served most recently as chief strategy officer. She will take over Tangerine’s top job on March 1.

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ECN Capital looks for acquisition targets after sale to PNC

JACQUELINE NELSON

Steve Hudson’s specialty lender, ECN Capital Corp., is fuelling up for its next round of acquisitions through the $1.25-billion (U.S.) sale of its U.S. commercial- and vendor-finance business.

On Tuesday, ECN said it would unload a business that helps companies lease equipment in the United States – everything from construction diggers to big rigs and even large kitchen appliances for franchises. The buyer is Pittsburgh-based bank PNC Financial Services Group, and the value of the basket of financial leases included in the deal is nearly $1.1-billion.

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Canadian growth companies hurting from lack of capital, TMX study finds

ANDREW WILLIS

Canadian growth companies face a $4-billion funding shortfall compared to U.S. rivals that should be filled by tapping the country’s pension plans, banks and insurers, according to a study due to be released Tuesday and backed by TMX Group Ltd.

A roundtable made up of Canadian venture capitalists, bankers and executives from the country’s largest pension funds found that domestic entrepreneurs are good at launching leading-edge companies but struggle to scale up the businesses compared to peers in the United States and Britain, in part due to a lack of capital.

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Why Lazard CEO Kenneth Jacobs sees an explosion of 'north-south' deals

ANDREW WILLIS

A generation ago, investment bank Lazard began opening offices in China. The timing proved prescient: The 169-year-old firm arrived in cities such as Beijing ahead of a wave of transformative deals that turned Chinese companies into global players.

Last August, Lazard set up an investment bank in Canada, acquiring a 15-employee mergers-and-acquisitions boutique in Toronto run by veteran deal maker Brian Hanson. Was that a sign the New York-based firm expects Canadians to become world beaters?

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Canadian insurers foresee benefits amid Trump policy shift

JACQUELINE NELSON

As markets grow increasingly optimistic that the U.S. economy will get a lift from promised regulatory reforms and corporate tax cuts, Canadian insurers are calculating how those changes could boost their bottom lines.

Despite the uncertainty surrounding policy changes expected from U.S. President Donald Trump, insurance companies – several of which reported earnings this week – cautiously foresee benefits coming their way.

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Veteran TD oil field services analyst returning to energy industry

JEFFREY JONES

TD Securities Inc.’s veteran oil field services analyst is leaving the bank to return to the energy industry.

Scott Treadwell has signed on with an as-yet unnamed energy services provider as vice-president, capital markets and strategy, according to a letter to colleagues on Friday. He takes up is new position next month.

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Growth fund to offer small companies help in exchange for minority stake

CHRISTINA PELLEGRINI

A leading proponent of a proposed growth fund for Canadian companies offered new details Thursday about how the initiative could work.

Victor Dodig, chief executive officer at Canadian Imperial Bank of Commerce, said that the so-called Canadian Business Growth Fund would connect small and medium-sized companies to the cash they need in exchange for a minority equity stake. The companies would also be provided with access to expert advisers. This network would include active and retired executives, academics and specialists in certain areas, such as how to sell goods and services abroad.

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Canada Goose spreads wings with IPO

ANDREW WILLIS AND CHRISTINA PELLEGRINI

Parka maker Canada Goose Holdings Inc. filed paperwork Wednesday for an expected $200-million (U.S.) initial public offering, the third debut in the past six months from a Canadian company that sells trendy consumer products.

Toronto-based Canada Goose, which sells parkas that start at $800, is currently owned by its founding family and U.S. private equity fund Bain Capital. These backers plan to take the company public with a dual class share structure, with management and Bain Capital initially maintaining control of a company valued at about $2-billion, according to Bloomberg News.

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Lexpert: The top 10 business decisions of 2016

LEXPERT

Last year’s top business decisions from the courts reflected the continuation of a balanced approach to business.

After the disappointing legal judgments for Canadian business in 2015, the landscape evened out this past year. Still, while five of our top 10 business decisions can be regarded as decidedly pro-business, four did not favour the business community and one can be regarded as mixed.

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Investment banker joins Canaccord to head up financial institutions group

CHRISTINA PELLEGRINI

Investment banker Mike Shuh is joining Canaccord Genuity Corp. to run its financial institutions group.

He will work with investment banking and advisory teams across all regions at Canaccord to provide advice to asset managers, alternative lenders, investment funds and special purpose acquisition companies (SPACs), according to an internal staff memo.

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PayPal to buy Vancouver fintech TIO Networks in $304-million deal

Sean Silcoff

One of Canada’s unheralded financial-technology success stories is cashing out. Vancouver-based consumer payments processing firm TIO Networks Corp. has been sold to Silicon Valley giant PayPal Holdings Inc. in a $304-million all-cash deal, 20 years after it was co-founded by Iranian immigrant Hamed Shahbazi.

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BHP Billiton parting ways with Chilean copper mine Cerro Colorado

RACHELLE YOUNGLAI

BHP Billiton Ltd. has put one of its smaller Chilean copper mines on the chopping block, according to people familiar with the matter, in what will likely be a difficult sale.

Although copper is one of the mining giant’s core businesses, BHP has started shopping Cerro Colorado around to potential buyers, sources said.

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Canadian utilities exploited ‘lazy’ balance sheets at U.S. rivals

ANDREW WILLIS

CEOs at Canada’s largest utilities would be reluctant to admit it publicly, but for the past year, they’ve taken advantage of what they privately like to call “lazy” balance sheets at their U.S. rivals to stage a series of bold takeovers.

Led by massive acquisitions from pipeline companies Enbridge and TransCanada, six domestic businesses spent approximately $87-billion in the past 12 months snapping up U.S. firms. These are transformative deals, as each buyer vaulted to the leading ranks of North American utilities. For Canadians, the takeovers are a refreshing reverse of the trend that saw local champions in sectors such as mining and manufacturing picked off by foreign buyers.

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CPPIB taps two new directors in boardroom shuffle

JACQUELINE NELSON

The Canada Pension Plan Investment Board is making two new additions to its board, as two veteran directors prepare to exit.

Finance Minister Bill Morneau said Monday that Ashleigh Everett and John Montalbano, two business leaders with experience in Western Canada, would join the pension plan’s governance team.

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STEP Energy Services mulls IPO as deal activity in the oil patch picks up

JEFF LEWIS

STEP Energy Services Ltd. is mulling an initial public offering this year to capitalize on a turnaround in the oil services sector as crude prices rise.

STEP, owned by Calgary private equity firm ARC Financial Corp., bought the Canadian hydraulic fracturing, coiled tubing and well-cementing business from financially troubled Sanjel Corp. after that company was broken up under court supervision last year.

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Canadian startup scene had a hot 2016

SEAN SILCOFF

Despite a global slowdown in venture-capital investing in 2016, the Canadian startup scene had its best year since the heart of the dot-com boom.

New figures from Thomson Reuters show 459 Canadian companies raised a combined $3.7-billion in venture financing last year. That amounted to a 15-year high in dollars raised and a 36-per-cent increase over the previous year, “a year-over-year leap not seen since the year 2000,” the information company said.

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Manulife closes book on long-held $4-billion profit target

JACQUELINE NELSON

Manulife Financial Corp. is finally closing the book on a long-held profit target, underscoring the company’s effort to overcome market pressures since the Great Recession.

Canada’s largest insurance company by assets said Thursday that it achieved an earnings goal that’s been in its sights since 2010, posting just a bit more than $4-billion in adjusted “core” profits for 2016. Manulife introduced this non-standard measurement in 2012 to strip out accounting volatility and other exceptional items. The insurer says the metric better reflects underlying business performance, although some analysts and investors have taken issue with the transparency and usefulness of the metric.

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Pengrowth in talks with Infor to sell Alberta oil and gas assets, sources say

ANDREW WILLIS and NIALL MCGEE

Debt-heavy Pengrowth Energy Corp. is in talks to sell approximately $500-million in Alberta oil and gas assets to Infor Acquisition Corp., the latest sign of financial companies stepping up for energy assets, according to people familiar with the matter.

Pengrowth has $1.6-billion of debt that includes a $400-million (U.S.) loan coming due in July. While the Calgary-based company has enough cash on hand to pay those bills, it is expanding its oil sands operations and has been attempting to raise money by selling two holdings in central Alberta for more than a year.

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Lexpert: Top deals of 2016 defied the odds

LEXPERT

With low oil prices and an unfavourable exchange rate, forecasters may have predicted a discouraging environment for Canada’s deal makers. But 2016’s top deals defied the odds.

Lawyers said their “Canadian Champion” clients, be they Canadian-owned or otherwise, were faced with a lack of domestic targets. So, in order to take their businesses to the next level, they had to move out or expand their footprint in the United States and other countries. Fortis’s acquisition of Michigan-based ITC Holdings and Enbridge’s acquisition of Spectra Energy are prime examples.

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London Stock Exchange makes play for Canadian listings

CHRISTINA PELLEGRINI

A major European stock exchange is trying to bolster its equity listings business by making a play for Canadian companies.

London Stock Exchange PLC has added three new issuers with ties to Canada so far in 2017, bringing its total to 22 such companies. Most of these companies are interlisted, meaning their shares trade in both London and Toronto.

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Lexpert roundup: Top deals of 2016 and CSA’s proxy voting protocols

Lexpert Roundup on the Business of Law

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 sampling of our latest content.

More »

Fairfax bids for New Zealand-based insurer in global push

JACQUELINE NELSON

Fairfax Financial Holdings Ltd. is preparing a bid to acquire New Zealand-based insurance company Tower Ltd. in a deal valued at about $140-million (U.S.), according to people familiar with the sale process.

The acquisition would give Fairfax a foothold in an insurance market that is evolving in the wake of major earthquakes, and would further the company’s reputation as a consolidator on the global stage.

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Mining banker David Shaver joins CIBC

RACHELLE YOUNGLAI

Canadian Imperial Bank of Commerce has added a new mining banker to its team, as banks hustle for work amid the commodities downturn.

David Shaver joined CIBC in November and reports to Chris Gratias, the bank’s head of global mining investment banking.

Mr. Shaver previously worked at Royal Bank of Canada as the bank’s mining group managing director. He lost his job when RBC shuffled its investment banking team.

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TMX pitches Saudi Aramco on benefits of a Toronto listing

CHRISTINA PELLEGRINI

Canada’s dominant stock-exchange operator is vying for a role in what could be the world’s largest initial public offering.

TMX Group Ltd. is pitching the benefits of a listing on the Toronto Stock Exchange to state-owned Saudi Arabian Oil Co., the biggest energy firm in the world. Exchange officials have travelled to Saudi Arabia on two occasions – first in October and again last month – to meet with “Saudi officials of significant influence,” the Toronto-based company said in an e-mailed statement on Tuesday.

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