CALGARY, May 16, 2012 - The first quarter of 2012 saw Bennett Jones involved in a string of high profile M&A deals, after acting in five of the seven biggest Canadian IPOs since January of 2010. In addition, this Canadian law firm continues its dominance of cross-border income trust (CBIT) financings, sometimes known as foreign asset income trusts.
A CBIT is a Canadian yield investment product that derives its distributable income from non-Canadian business assets – usually American. Investors anywhere may participate. CBITs are a response to the Canadian government's rules, announced in 2006, that ended the tax benefits from income trusts with Canadian assets. Investors started looking for a new vehicle that could provide healthy returns as well as the tax shelter they had lost. Richard Clark responded by launching the first CBIT - Eagle Energy Trust - in late 2010 with a $169 million IPO. Eagle was quickly followed by Parallel Energy Trust with its $393 million IPO in April of 2011. Eagle and Parallel have oil and gas assets in Texas and each recently returned to market with follow-on public offerings to finance additional acquisitions. What did these offerings have in common? Bennett Jones lawyers.
"The opportunity to work with Richard Clark from Eagle's beginning, enabled us to leverage our unique expertise and bench strength, earning us a market leading position regarding CBIT transactions.", says Bob McCue, a senior partner in the firm's Income Trust Practice Group. He continues: "Bennett Jones has been involved with virtually every CBIT that has seriously attempted to launch so far. We expect that experience to be particularly valuable to our current and future CBIT and investment banking clients, and have worked hard to systematize our expertise so that it can be easily transferred from one deal team to another, and between our offices."
Bennett Jones is actively involved in the development of early stage CBITs as well, working with a number of management teams and corporate finance firms who are currently considering this structure.
“Bob McCue and David Phillips have been trusted advisors to Eagle from the very beginning. We rely heavily upon them and the Bennett Jones team for a wide range of energy sector legal services, including tax, securities, immigration, employment and governance advice,” said Richard Clark, President and CEO of Eagle Energy Trust, “they are responsive and effective and we appreciate all their hard work on our behalf.”
And Bennett Jones is just getting started it seems. This week Argent Energy Trust filed a prospectus and is looking to raise $325-million to go public in the coming months. More integration seems to be the future for International Capital Markets. The allure of tax breaks and healthy dividends is to the recipe for ongoing success for this relatively new vehicle.
Bennett Jones' CBIT success is an outgrowth of its robust tax, securities and M&A practices. As noted above, the firm has been involved in five out of the seven largest Canadian IPO deals since January of 2010, including MEG Energy Corporation (US$677 million) (acted for issuer), SMART Technologies (US$660 million) (acted for issuer), Gibson Energy (US$511 million) (acted for issuer) and Parallel Energy Trust ($393 million) (acted for issuer).
Bennett Jones LLP is home to more than 360 lawyers and business advisors and 495 staff in seven offices - Calgary, Toronto, Edmonton, Ottawa, Abu Dhabi, Doha and Dubai - and a representative office in Beijing. Operating as an integrated unit across our geographic locations, our business practice is to assign lawyers to work on client files who have the skills and experience that best meet our clients' needs.