Private Equity Looks South

Canadian financial institutions are doing better than their U.S. counterparts, so they are buyers in cross-border mergers and acquisitions. They are acquiring capital and expertise while the global economy works in their favor. Law firms that figure prominently in these deals include Blake, Cassels & Graydon, and Torys LLP from Canada, and White & Case, Latham & Watkins and Watchtell, Lipton, Rosen & Katz, from the United States.

Canada’s TD Bank Group made several acquisitions. Its most recent purchase was the purchase of MBNA’s $8.5 billion Canadian credit card portfolio from Bank of America. Before that, in April of 2011, TD spent $6.3 billion to acquire Chrysler Financial Services from Cerberus Capital Management.

Deal activity in the middle market continues strong, with private equity firms seeking reliable cash-producing businesses. Companies that are at a stage where they are ready to grow but might need additional capital or expertise will likely be targets for private equity firms, according to Michael Gans, of Blake, Cassels & Graydon. A recent example is CI Capital’s purchase of IntraPac, for an undisclosed sum.

Canadian utilities also looked south. Canadian companies Fortis Inc and Gaz Metro fought to acquire Central Vermont Public Service (CVPS) last year. Gaz Metro won, and it acquired Central Vermont for $666 million. Fortis recently announced the acquisition of CH Energy for about USD $1.5 billion. Fortis has said that it will look to the United States to grow, due to the abundance of U.S. takeover targets.

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