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Streetwise

Streetwise gives you news and analysis on Bay Street and the world of finance
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Entry archive:

Fintech startup Borrowell backed by established financial players in Series A funding round

JAMES BRADSHAW

Financial technology startup Borrowell Inc. has raised $12-million in equity financing and secured millions more in new loan capital as part of a new funding round backed by incumbent financial players.

The Toronto-based online lender, which specializes in small personal loans and free credit scores, secured Series A funding from a consortium that includes Portag3 Ventures LP, the venture arm of Power Corp. of Canada, backed by the influential Desmarais family.

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Streetwise Newsletter: How the Hydro One deal came together, the unexpected numbers on U.S. oil-patch investment

South of the border, Canadian utilities are seen as good friends in tough times. That benevolent view just helped Hydro One Ltd. chief executive officer Mayo Schmidt launch a $4.4-billion takeover that’s the first step in a U.S. expansion strategy. Story (for subscribers)

No Canadian investment banks were hired as financial advisers on Hydro One Ltd.’s $4.4-billion mega deal to buy Avista Corp. – neither on the acquirer’s side, nor the acquired’s – meaning domestic bankers will miss out on a estimated $42-million fee. Story (for subscribers)

This is the daily Streetwise newsletter with headlines chosen by Globe financial services editor Rita Trichur. If you’re reading this on the Web or someone forwarded this e-mail newsletter to you, you can sign up for the Streetwise newsletter and all Globe newsletters here.

After a sharp drop in morning trading, shares of Hydro One Ltd. bounced back as investors warmed to its $4.4-billion acquisition of U.S.-based electricity and natural gas provider Avista Corp. Story (for subscribers)

A mass exodus of U.S. investors from the Canadian oil patch has often been blamed for some of the weakness in energy-company shares since the crude-price collapse began. It doesn’t appear to have happened. Story (for subscribers)

ELSEWHERE IN FINANCIAL SERVICES

U.S.-based payment card companies, including American Express, MasterCard and Visa, are preparing to submit licence requests to operate in China within months. Story

WHAT WE’RE READING

Novacap has closed its fifth mid-market technology fund, securing $840 million with the help of an expanded base of limited partners. Story (PE Hub)

According to CB Insights and PwC’s Canada’s latest MoneyTree report, 2017 is off to a slow start for VC funding in Canada. Story (Betakit)

After eight straight months of positive returns, hedge funds may have finally redeemed themselves in the eyes of investors. Story (Institutional Investor)

Through six months of 2017, U.S. private equity firms are on pace to challenge figures from 2007 – the high-water mark for PE fund raising. Story (PitchBook)

Two whistle-blowers are set to share a record $61 million award from the Securities and Exchange Commission for helping make the case that JPMorgan Chase & Co. failed to disclose to wealthy clients that it was steering them into investments that would be most profitable for the bank. Story (Bloomberg)

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How Hydro One CEO Mayo Schmidt launched a U.S. expansion

ANDREW WILLIS

South of the border, Canadian utilities are seen as good friends in tough times. That benevolent view just helped Hydro One Ltd. chief executive officer Mayo Schmidt launch a $4.4-billion takeover that’s the first step in a U.S. expansion strategy.

Mr. Schmidt took the top job at the newly privatized Hydro One in 2015 with the stated intention of building the business by both consolidating Ontario’s electricity market and moving into new regions.

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Hydro One shuns Canadian investment bankers, turns to Americans for M&A advice

NIALL McGEE and CHRISTINA PELLEGRINI

No Canadian investment banks were hired as financial advisers on Hydro One Ltd.’s $4.4-billion mega deal to buy Avista Corp. – neither on the acquirer’s side, nor the acquired’s – meaning domestic bankers will miss out on a estimated $42-million fee.

Lately Canadians getting shut out – or mostly shut out – of large cross-border mergers and acquisitions (M&A) mandates in the utilities sector isn’t unusual, it turns out.

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Hydro One shares rebound following U.S. acquisition

CHRISTINA PELLEGRINI

After a sharp drop in morning trading, shares of Hydro One Ltd. bounced back as investors warmed to its $4.4-billion acquisition of U.S.-based electricity and natural gas provider Avista Corp.

Shares of the Toronto-based utility declined as much as 5 per cent in the morning, but pared back those losses throughout the day to close at $22.67, up 0.6 per cent.

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There is more to the story of U.S. investment in Canadian energy

Jeffrey Jones

A mass exodus of U.S. investors from the Canadian oil patch has often been blamed for some of the weakness in energy-company shares since the crude-price collapse began. It doesn’t appear to have happened.

U.S. institutional ownership of large Canadian oil and gas companies has actually increased since oil prices began their downward spiral in the second half of 2014, according to a report by Toronto-Dominion Bank.

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Streetwise newsletter: Hydro One inks blockbuster U.S. deal; opposition to Tembec takeover grows

Ontario utility Hydro One Ltd. moved into the U.S. natural gas and electrical transmission business Wednesday by acquiring Washington-based Avista Corp. for $4.4-billion. Story (Andrew Willis, Mark Rendell and Christina Pellegrini)



Proxy advisory firm Glass Lewis & Co. is recommending shareholders vote against the proposed takeover of Canadian forestry products company Tembec Inc. by Rayonier Advanced Materials, throwing more cold water on a deal that appears to be losing traction with investors. Story (Nicolas Van Praet)

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Lexpert: Canadian M&A market thrives amid global uncertainty

Lexpert

Global uncertainty, it turns out, works well for a resilient Canadian mergers and acquisitions market. EY’s most recent Global Capital Confidence Barometer concluded that today’s record M&A market “has shown resilience, which looks set to continue through 2017” and beyond despite the “turbulent” global political climate.

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Streetwise newsletter: Tembec takeover on shaky ground, U.S. investment bank trading slump bodes ill for Canada

The takeover of Canadian forest products company Tembec Inc. by Jacksonville, Fla.-based Rayonier Advanced Materials has been thrown into doubt as major shareholders of the Quebec firm voice their opposition to the friendly $807-million (U.S.) deal. Story (for subscribers)

Trading revenue at some major Wall Street firms tumbled in the second quarter, as low volatility across the fixed-income market resulted in fewer securities changing hands. These results may not bode well for firms based north of the border. Story (for subscribers)

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U.S. investment banks’ trading slump could head north to Canada

CHRISTINA PELLEGRINI and NIALL McGEE

Trading revenue at some major Wall Street firms tumbled in the second quarter, as low volatility across the fixed-income market resulted in fewer securities changing hands.

On Tuesday, Goldman Sachs Group Inc. was the latest U.S. investment bank to report a slump in its trading division for the three months ended June 30, joining J.P. Morgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co.

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Rio Tinto could still take a run at Dominion Diamond: analyst

NIALL McGEE

Anglo-Australian mining colossus Rio Tinto Group still could take a run at Dominion Diamond Corp., which on Monday agreed to a $1.2-billion (U.S.) buyout from Washington Cos.

“Given that Rio’s existing diamond assets are nearing the end of their lives, and the significant operational and tax synergies they could enjoy by tucking in [Dominion] … putting in a rival bid would be a logical move,” Tanya Jakusconek, analyst with Scotia Capital Inc., wrote in a note to clients.

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Toronto accounting startup FreshBooks raises another $54-million

SHANE DINGMAN

Toronto accounting and invoicing software startup FreshBooks has raised an additional $54-million in venture capital from Canadian firm Georgian Partners, with participation from U.S. investors Accomplice and Oak Investment Partners.

“It’s a big, solid investment to further our mission,” says FreshBooks CEO Mike McDerment, who also said the money gives his company an “exciting” opportunity to go shopping for a strategic acquisition, though he expects most of the funding will be needed for internal development. The company continues to invest in new features, such as building collaboration tools into its software for clients and contractors. “We’re now very well capitalized. It sets us up not just to run the plan, to be open for opportunities as we see them.”

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Streetwise newsletter: Home Capital regains footing; higher interest rates won’t stem deal flow

Deposits are steadily returning to Home Capital Group Inc. as the troubled mortgage lender recovers from a crisis of confidence. Story (James Bradshaw)



The era of ultralow borrowing costs may be coming to an end in Canada but observers say the new zeitgeist is unlikely to have much of a dampening affect on the country’s lively mergers and acquisitions (M&A) market. Story (Niall McGee and Christina Pellegrini)

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Streetwise newsletter: This week’s best reads: Caisse, GFL, and Ivanhoé Cambridge

If you only read headlines, you would be forgiven for thinking the Caisse de dépôt et placement du Québec is throwing money at every deal getting done in its home province. Over the course of this week, Montreal-based Cogeco announced a $1.4-billion (U.S.) takeover of a U.S. cable-TV system and revealed the Caisse backstopped the acquisition with a $310-million equity injection. Story (Andrew Willis)

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Quebec’s Caisse gets comfortable with dual investment mandate

ANDREW WILLIS

If you only read headlines, you would be forgiven for thinking the Caisse de dépôt et placement du Québec is throwing money at every deal getting done in its home province.

Over the course of this week, Montreal-based Cogeco announced a $1.4-billion (U.S.) takeover of a U.S. cable-TV system and revealed the Caisse backstopped the acquisition with a $310-million equity injection.

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Streetwise newsletter: Green For Life makes pre-IPO share offering, Ivanhoé Cambridge beefs up U.S. holdings

GFL Environmental launches pre-IPO share sale, valuing company at $4.2-billion

Waste-disposal firm GFL Environmental Inc. and its bright-green garbage trucks are planning to pick up $125-million from institutional investors to fuel North American acquisitions, ahead of a potential initial public offering next year. Story

Ivanhoé Cambridge makes industrial real estate play with deal for 150 U.S. properties

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Manulife to pay $11.7-million in OSC settlement over overcharging investors

NIALL McGEE

Manulife Securities has agreed to repay clients $11.7-million for overpayment of fees as part of a settlement that was approved Thursday by the Ontario Securities Commission.

This was the latest in a long list of similar so-called “no-contest” agreements between the regulator and investment dealers in Canada over fees.

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Ivanhoé Cambridge makes industrial real estate play with deal for 150 U.S. properties

JACQUELINE NELSON

Ivanhoé Cambridge is buying a portfolio of more than 150 U.S. properties, pushing into the industrial real estate sector after many months of circling the space.

The real estate investment arm of the Caisse de dépôt et placement du Québec said on Thursday that it had completed a deal for Evergreen Industrial Properties, a business that builds up warehouses and other industrial hubs within urban areas. No deal value was announced, but the sale price rung up at about $1-billion (U.S.), according to a person familiar with the transaction.

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GFL Environmental launches pre-IPO share sale, valuing company at $4.2-billion

ANDREW WILLIS

Waste-disposal firm GFL Environmental Inc. and its bright-green garbage trucks are planning to pick up $125-million from institutional investors to fuel North American acquisitions, ahead of a potential initial public offering next year.

Toronto-based GFL collects trash from 2.5 million homes and 80,000 businesses in Canada and the United States with its distinctive “Green for Life” fleet. The private company built a network of solid- and liquid-waste disposal and soil-remediation businesses through 60 acquisitions over the past 11 years, including recent takeovers in Manitoba and Alberta.

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Bank of Montreal appoints Andre Hidi as vice-chair of capital markets

CHRISTINA PELLEGRINI

Bank of Montreal has appointed veteran deal maker Andre Hidi to be the vice-chair of its capital markets division.

Mr. Hidi, who has worked at the bank for 13 years, had been the global head of BMO’s mergers and acquisitions (M&A) group, managing an almost 100-person team across Canada and the United States. In his new role, he will work with the firm’s sector coverage and product teams to deepen relationships with corporate clients, the bank said Thursday in a news release.

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IIROC upgrading technology for Canadian market surveillance

CHRISTINA PELLEGRINI

The watchdog tasked with overseeing the surveillance of Canada’s stock and debt markets has a new weapon to crack down on trading violations.

The Investment Industry Organization of Canada (IIROC) will announce Thursday it is upgrading the technology it uses to monitor trading and detect potentially abusive or manipulative activity. By switching to a newer version of Nasdaq Inc.’s popular SMARTS system, IIROC will gain greater visibility into what is taking place across sectors, asset classes and investment dealers. Securities commissions, in turn, will benefit as they rely on IIROC to feed them tips about potential violations such as insider trading.

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Streetwise newsletter: Canadians brace for costlier borrowing; OSFI faces calls to delay mortgage rules

Canadians brace for higher borrowing costs

It will take very little time for many Canadian borrowers to feel the effects of the first rate hike in seven years. Story (Tim Shufelt and James Bradshaw)



OSFI faces calls to stall mortgage rule changes

Canada’s banking regulator is facing calls to delay new changes in mortgage rules in the face of Wednesday’s interest-rate hike as industry experts say a series of recent measures could go too far to cool the country’s hottest housing markets. Story (Janet McFarland)

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Lexpert: Donald Trump is the wild card in global trade talks

Lexpert

In any discussion about the impact of U.S. President Donald Trump’s trade policies and the opportunities these policies may present for Canada , there are two macro-truths that remain even in the face of the President’s unpredictability.

Canada has established itself as a champion of the free-trade movement just as the U.S. leads the protectionist surge; uncertainty regarding the precise distance between these two positions will remain the order of the day for the foreseeable future.

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Streetwise newsletter: Infrastructure bank could be global 'blueprint'; Manulife settles with OSC

UBS chair says Canada’s infrastructure bank could be global ‘blueprint’

The chairman of Swiss banking giant UBS AG is throwing his support behind Canada’s plans to create a federal infrastructure bank, saying aspects of the plan could provide a “blueprint” for financing global investments. Story (James Bradshaw)

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Lexpert roundup: M&A outlook, Couche-Tard buys Holiday, Cogeco’s MetroCast deal

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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Ottawa investment bank moves into Toronto; Sampford Advisors targets technology deals

NIALL McGEE

Ottawa-based investment bank Sampford Advisors is expanding and hoping it can make a dent in the competitive Toronto market for mergers and acquisitions (M&A) advice.

Sampford recently opened a Toronto office and is targeting private technology deals in the $10-million to $100-million range – a niche that the firm’s founder says is underserved.

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Manulife Securities to settle with OSC over client overcharges

CHRISTINA PELLEGRINI

Manulife Securities has reached a settlement with the Ontario Securities Commission after charging some clients incorrect investment fees for certain mutual-fund products and fee-based accounts for more than a decade.

In a statement of allegations published Tuesday, the OSC said the excess of fees charged were found in client accounts at the investment dealer Manulife Securities Inc. and mutual fund dealer Manulife Securities Investment Services Inc., two subsidiaries of Canadian insurance giant Manulife Financial Corp.

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Streetwise newsletter: Cogeco, CIBC expand U.S. push

Cogeco expands U.S. footprint with cable deal

Cogeco Communications Inc. is making a bigger bet on its U.S. strategy, looking for subscriber growth in mid-sized markets with a $1.4-billion (U.S.) deal to acquire the remainder of the MetroCast brand of cable assets it does not already own. Story (Christine Dobby)

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Streetwise newsletter: Last week’s best reads: Jamieson, Paramount, Liquor Stores

Jamieson Wellness owner makes huge return in IPO

Shares in vitamin and health-products producer Jamieson Wellness Inc. rose swiftly in its stock-market debut on the Toronto Stock Exchange with its U.S. private-equity backer among the big winners. Story

Calgary-based Paramount’s stock sinks after purchase of Apache assests

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Calgary-based Paramount’s stock sinks after purchase of Apache assests

JEFF LEWIS

Paramount Resources Ltd. shares dropped nearly 8 per cent Friday after the Calgary-based oil producer agreed to pay $459.5-million for Canadian assets held by U.S.-based Apache Corp.

Paramount said after markets closed on Thursday that it would also merge with Trilogy Energy Corp., offering one of its shares for every 3.75 Trilogy shares that it doesn’t already own. Both companies are controlled by Calgary oilman Clayton Riddell and his family.

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