DUE DILIGENCE

Conference held in Toronto on February 1, 2 & 3, 2006
Chairs: Tom A. McIelwain, Golder Associates Ltd., Larry Swartz, Morneau Sobeco, Perry Schuldhaus, Enbridge Pipelines Inc., Michael P. Whitcombe, McMillan Binch Mendelsohn

CD-ROM: Ov. 10 hours of video presentations

To purchase, please contact Federated Press.

STARTING THE PROCESS

• Industry Environment Assessment
• Assessing Materiality Thresholds
• Documentation Checklist
• Liabilities in Transactions
• Third-Party Consent

"Getting the environmental consultants, getting the accountants and actuaries up to speed quickly is just a paramount of importance. So that ultimately from a principal stand point you can make a go or no go decision right up front."

Video: 34 minutes • Overheads

Financial due diligence
Andrew C. Harington, Cole & Partners

• Key Areas of Financial Due Diligence Process
• M&A Process
• Projections and Assumptions
• Deal Pricing
• Dealing with "What If" Scenarios

"Know what the integration is going to look like in order to have any credibility."

Video: 41 minutes • Overheads

Panel: Integrating the legal & business side of due diligence
Martin Elliot Kovnats & Andrew J. Wilder, Aird & Berlis LLP; David Keith McGown, Canadian Imperial Bank of Commerce

• Due Diligence Process Using External & Internal People
• Six Elements of Transaction
• The Role of Virtual Data
• Third Party Verifications
• Risk Assessment
• Maintaining Proper Documentation

"When you look at a financial statement start reading the notes first, don't look at the numbers. Read the notes. Unless you understand what's in the notes you can't interpret the numbers."

Video: 56 minutes • Overheads •  Paper 25 pgs. (5,438 words)

Professional opinions and civil liability in due diligence
Tom A. McIelwain, Golder Associates Ltd.

• Environmental Aspect of Due Diligence
• Providing Professional Advice
• The Important Role of Materiality
• Reliance & Risk Management
• Exposure to Liability

"The consultant’s role is to provide advice that is relevant in the client’s context to assist the client in making its own decisions."

Video: 46 minutes • Overheads

SPECIFIC TYPES OF DUE DILIGENCE

Real estate due diligence
David N. Ross, McMillan Binch Mendelsohn LLP

• The Importance Of Due Diligence For Both The Vendor And The Purchaser
• Environmental Insurance
• Legal Basis for Due Diligence
• Identify and Improve Problem Areas of the Property
• Obtaining Important Documents for Lender & Purchaser
• Duty of Care
• List the Property When the Title Clears

"Due diligence is important for both purchasers and vendors. If due diligence does reveal problems, the deal should not collapse until the parties attempt to find solutions that will allow for completion."

Video: 36 minutes  • Paper 12 pgs. (1503 words)

Environmental due diligence: Perspectives of both purchaser & vendor
Michael J. Fortier, Torys LLP

• Assessing Environmental Due Diligence
• Environmental Management System
• Determine the Lender's Requirements
• Obligation of A Vendor
• Officer & Director Liability

"The environmental consultant is probably your key to good environmental due diligence."

Video: 46 minutes • Overheads

Pension and governance due diligence
Larry Swartz, Morneau Sobeco

• Involve Pension & Benefits Team Early
• Identify Risks & Respond
• Uncover Hidden Liabilities
• Educating Team on Background to Transaction
• Use A Checklist to Keep And Revise For Future Acquisitions

"Identify pension and benefits policy differences between purchaser and vendor."

Video: 41 minutes • Overheads

Human & organizational assets due diligence
John B. Sanders, Hewitt Associates

• M& A Due Diligence
• Role of HR in M&A
• Value Creation Activities and Challenges
• Market Success and Failures
• Merger Integrations
• Focus Areas: Leadership, Culture Fit & People Practices

"The role of the HR expertise in Due Diligence is directly proportional to what you wish to achieve as synergies, as value creation targets through the acquisition."

Video: 34 minutes

Integration planning as part of the due diligence process
Steven M. Glick, Thomson

• Educating and Involving Employees in the Plan
• Defining Hard & Soft Due Diligence
• Communication is Critical Throughout the Process
• Embracing Cultural Differences in Business
• Integrate, Retain and Motivate the Senior Management Team

"Research has demonstrated that "success" in the M&A world generally comes from the approach to and execution of integration planning."

Video: 38 minutes • Overheads

Roles and liability issues relating to due diligence
R. Paul Steep, McCarthy Tétrault LLP

• Hierarchy of Decision Making
• Corporate Statuary Duties
• Duty of Care
• Legal Obligations & Requirements
• Corporate Governance
• Standard of Due Diligence

"If you cause a result that is unfairly prejudicial, even if you've been acting honestly and in good faith, there is a basis for liability to be found against the officer or the director."

Video: 42 minutes • Overheads  • Paper 1 pgs. (words 7326)

Case study: Conducting due diligence in a changing environment
Perry Schuldhaus, Enbridge Pipelines Inc.

• Definition and Role of Due Diligence
• Environmental Trends
• Planning for Integration
• Due Diligence Best Practices
• Process and Outcome

"Practical realities make it expensive and time-consuming to achieve "optimal" level of due diligence."

Video: 34 minutes • Overheads

Intellectual property due diligence
Tom Griffiths, Fairmont Hotels & Resorts

• The Use of Electronic Dada Rooms
• Obtain & Review the Fundamentals of Intellectual Properties
• Understanding the Business Objectives of the Acquirer
• IP Asset Valuation
• Due Diligence Ckecklist on Intellectual Property

"Identify all products and services of the target business that are important to the valuation of the deal or the business plans of the Acquirer."

Video: 57 minutes • Overheads • Checklist

DUE DILIGENCE TECHNIQUES AND WARNING SIGNS

Specific due diligence focus areas
Robert Noronha, Deloitte & Touche LLP

• EBITDA Due Diligence
• Transaction Value Drivers
• Non-Recurring and Non-Cash Income & Expense Items
• Asset Valuation Considerations
• Profitability/Operational Performance

"Note that accretion expense recorded in connection with ARO accounting is an operating item and is a part of EBITDA."

Video: 40 minutes • Overheads

Strategic due diligence: A negotiating tool
Craig C. Thorburn, Geac Computer Corporation Limited and Blake, Cassels & Graydon LLP

• Target Management Performance
• Online Information Tools
• Reports from Industry Consultants
• Third Party Services
• Building Strategic Alliance
• Public Source Information

"Due Diligence now becomes a tool in the negotiating process to enhance the acquirer's leverage to reduce the indicative price; and achieve the most favourable contractual terms."

Video: 30 minutes • Overheads

Special due diligence issues: A Novartis case study
Michael P. Whitcombe, McMillan Binch Mendelsohn; Paul E. Leger, Novartis Pharmaceuticals Canada Inc.

• Due Diligence Checklist
• Establish Business Objectives
• Data-room Access
• Effective Legal Team
• Confidentiality Agreement
• Local Environmental Regulatory Antitrust
• Exclusivity Period
• Maintain Open Communication

"We need an effective legal representation to ensure we get access to all the information we need on a timely basis to make those assessments. A well structured Confidentiality Agreement and well-managed data room access is critical to a successful due diligence review."

"It is critical to have outside counsel well instructed of the business objectives of the transaction so that the due diligence efforts and the contract negotiations are conducted with those objectives in mind."

Video: 47 minutes • Overheads • Paper 17 (pgs.) 3,096 words