DUE DILIGENCE

Conference held in Toronto on January 17 & 18, 2007
Chairs: Richard Steinberg, Fasken Martineau DuMoulin LLP; Dana M. Peebles, McCarthy Tetrault LLP; Mark Shoniker, Bank of Montreal and Jason Bullen, Cassels Brock LLP

CD-ROM: Over 8 hours of video presentations

To purchase, please contact Federated Press.

ELEMENTS OF THE DUE DILIGENCE PROCESS

Preparation for conducting due diligence: A key to successful transactions
Andrew Armstrong, National Bank Financial

• When to conduct due diligence
• Acquiring assets and assuming liabilities
• Due diligence in multinational jurisdictions
• Reps and warranties to be considered
• Three key liabilities to bear in mind
• The general macro environment

"The factors involved in the buy side and sell side in the matter of due diligence including the planning, execution and review with the client. Also, the current best practices being used by the client as well as interesting new developments in the realm of due diligence."

Video: 48 minutes

Intergrating the legal and business side of due diligence
Richard Steinberg, Fasken Martineau DuMoulin LLP

• The legal and business aspects of due diligence
• Understanding the risk factors that are appropriate to a certain industry
• Assembling the right due diligence team
• Steps to ensure that due diligence is carried out in a timely manner
• How due diligence should be used
• Due diligence as an exercise that sellers should take part in

"When it comes to the matter of due diligence, it is important to integrate the legal with the business side and to view the two as inextricably linked; to think of the two sides as a fully coordinated and integrated process."

Video: 35 minutes

Integration planning as part of the due diligence process
Robert Noronha, Deloitte & Touche LLP

• What is needed in order to ensure a successful integration between two entities
• Why value gaps occur and methods used that can help eradicate the problem
• Integration planning working hand in hand with due diligence
• The key objectives of integration planning
• The importance of synergies
• Buying at the senior management/executive level

"In regards to integrative planning, the level of detail that project management must adhere to has to be extremely meticulous, for even if the smallest detail is overlooked, it could bring to a standstill the entire process."

Video: 39 minutes

Strategic due diligence: A negotiating tool
Craig C. Thorburn, Blake, Cassels & Graydon LLP

• Strategic due diligence
• Planning for shareholders’ support and understanding the dynamics
• Importance of detailed customer information
• Management Team of target

• Overheads

ROLES AND LIABILITIES

The role of intermediaries in the due diligence process
Mark Borkowski, Mercantile Mergers & Acquisitions Corporation

• The understatement of liabilities
• Hidden asset value
• Kickback
• S.W.O.T. analysis
• The impact of due diligence on deal pricing and financing
• The primary objectives of due diligence

"A key concept to remember is that one should consult with the professionals that do the matchmaking because these individuals possess a great deal of knowledge on the important matters at hand."

Video: 31 minutes • Paper 8 pgs. Word count 846

Roles and liability issues in due diligence
Dana M. Peebles, McCarthy Tetrault LLP

• Roles and liabilities; what can go wrong, and who will take the blame
• Who can sue and under what circumstances
• The steps to follow if sued
• How to document the process
• How to avoid being sued.
• The importance of documentation

"There are things that can be done to defend oneself either from being sued in the case of an unfortunate outcome or to properly protect oneself in the lawsuit."

Video: 34 minutes

Managing the due diligence process
Chris Van Staveren, KPMG LLP

• The importance of clear terms in both of the party's minds.
• Integration risk
• The different components that should be considered in order to make a transaction more efficient
• The importance of keeping in mind the internal components
• The significant roles of debriefing

"It is extremely important to understand and acknowledge the different processes and flows and stakeholders that take part in due diligence and how to be able to judge a good versus a bad transaction."

Video: 37 minutes

In house vs outside counsel for due diligence
Stephanie Chan, Ballard Power Systems Inc.

• Establishing the correct cross sectional working group
• The role of the leader in the working group
• H.R. in regards to being an integral part of due diligence
• I.T. and the issue of roadblocks
• Due diligence steps
• The benefits of electronic data rooms

"To allow for a better understanding on the clients' perspective and how to serve them better, as well as awareness of specific problems that may arise and how to deal with it."

Video: 19 minutes

SPECIFIC TYPES OF DUE DILIGENCE

Environmental due diligence: Purchaser's and vendor's perspectives
Michael Fortier, Torys LLP / Tom A. McIelwain, Golder Associates Ltd.

• The three primary reasons to conduct environmental due diligence
• Deal specific purposes of conducting due diligence
• What a phase 1 ESA really means
• Good communication is especially key in environmental due diligence
• What a vendor has an obligation to disclose
• Key concepts

"The goal of environmental due diligence is to bring together both the legal and technical aspects of environmental issues that tie into the ultimate business issue in terms of purchasing or selling a property or business."

Video: 41 minutes

Pension & goverance due diligence
Tejash Modi, Morneau Sobeco

• Why pensions have to be taken seriously
• The technical aspects of defined benefit plans (DPBs)
• Important documents to look over such as planned closure benefits
• The benefits and drawbacks of a checklist
• Successor employer laws
• Merging pension plan assets

"The various aspects required to collect, evaluate and resolve pension and benefit issues in the context of mergers and acquisitions."

Video: 47 minutes

Real estate due diligence
Andrew Kidd, CBRE Consulting

• Tailoring the process of real estate due diligence
• The importance of due diligence in regards to actual entities
• In cash flow properties, the cash flow is king
• The modified tender process
• Operating costs and gross up factors
• Due diligence and the complex issue of hotels

"There is a disproportionate amount of capital chasing real estate that now where once there were three or four offers on a piece of property, it is now more in the area of fifteen.."

Video: 59 minutes

Financial due diligence
Mark Shoniker, Bank of Montreal

• Early stage and middle stage technology companies
• Explanation of a quality of earnings report and what it pertains to
• Different types of analysis and examples of when each should be used
• Concentrating on the fundamentals
• To normalise has become the norm

"What one should expect on the financial due diligence side is a ton of information, a lot of detail, little in the way of assumptions and in some cases a financial analysis mode. In short, a lot of information, but hard to discern at a high level."

Video: 30 minutes • Paper 14 pgs.

TRENDS IN DUE DILIGENCE

The security of information and the use of virtual data rooms
Jason Bullen, Cassels Brock LLP

• Data security in the MNA context
• Privacy legislation in Alberta and British Columbia
• The opt out process
• The data room
• Privacy law compliance

"The objectives are to discuss data security in the MNA context, privacy law concerns in Ontario in the due diligence context, advantages and disadvantages of virtual data rooms best practices with respect to confidential information, and the Transamerica life decision."

Video: 45 minutes

Due diligence for directors
Martin Elliot Kovnats, Jeffrey K. Merk, Aird & Berlis LLP

• Why directors have to participate in due diligence and their fundamental obligations
• The Pacific Coast Gold Coin Exchange
• The separate homework a board of directors should have to do before a press release goes out.
• Questions and discussion

"Some people believe that the reason for director due diligence is to avoid liability. It should also be thought in the context of; directors have an obligation to research in order to be able to identify and assess risk, assume risk, and to disclose a decision."

Video: 41 minutes