The Canadian capital markets allow public companies, including
those with businesses based in the U.S., to efficiently raise
capital through "bought deal" offerings. For several
decades, this mechanism has been routinely used by many issuers to
fund growth, as well as by significant shareholders to obtain
The simplicity of the Canadian bought deal process, the
minimization of execution risk (the underwriters assume marketing
risk on announcement) and the short time frame to closing (usually
one to three weeks from announcement) provide significant
flexibility in executing a growth or monetization strategy.
A good example is yesterday's offering by Milestone
Apartments REIT, which was upsized by 65% to C$165 million (C$181
million if the over-allotment option is exercised in full). Using a
shelf prospectus, Milestone's bought deal is expected to be
completed in approximately one week. Click here for the news release.
Milestone, which owns 72 multifamily residential properties
located in the U.S., completed its initial public offering on the
Toronto Stock Exchange in 2013 as the first ever non-U.S. entity in
the world to qualify as a U.S. REIT.
Milestone has completed five bought deals since going public.
These offerings have facilitated its growth by acquisition strategy
(Milestone has acquired over C$1.0 billion in assets during that
period), while also providing liquidity to its legacy shareholder
to gradually monetize its interest as planned. Milestone's
equity market capitalization has grown from approximately C$500
million at the time of its IPO to approximately C$1.2 billion
Goodmans represented Milestone on its IPO and all of its
offerings to date.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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