2. Raising Capital in Canada
February 10, 2010
Methods of going Public in
Canada: An Israeli Law
Perspective
3. Introduction
Yigal Arnon & Co.
- One of the largest/most dynamic law firms in Israel.
- 110 lawyers including 39 partners.
- For over 50 years: Providing legal services to a
variety of clients (Fortune 500 companies, emerging
growth companies, investor groups and individuals).
February 10, 2010
4. Introduction
Yigal Arnon & Co.
- Full service firm in numerous industries including
information technology, biotechnology, banking, real
estate, telecommunications, insurance, energy and
automotive.
- Represent numerous publicly traded companies on
exchanges around the world, including NYSE,
Nasdaq, London, AIM, Frankfurt, etc.
February 10, 2010
5. Introduction
Simon Weintraub, Adv.
- Partner in the Tel-Aviv international corporate
department, originally from Toronto.
- Practice Areas: corporate representation to privately
held companies, emerging growth companies in all
stages of business and publicly traded companies
including large multinational corporations.
- Experience representing Israeli Companies on
NASDAQ.
February 10, 2010
6. Introduction
Simon Weintraub, Adv.
- Industries of expertise include technology, biotech,
banking, international real estate and medical
devices.
- Areas of expertise include corporate finance,
venture capital financing, M&A, public offerings, joint
ventures and secured lending.
Contact Info
Tel: +972-3-6087864 Email: simonw@arnon.co.il
February 10, 2010
7. Three Possible Ways to Structure
Going Public on TSX/TSE 1) The Share Swap
CPC – Incorporated (not
necessarily in Canada)
and offered on the TSX
or TSE under more
lenient offering rules.
Shares Shares
ISRAEL CANADA
CO. CO. CPC
ASSETS
February 10, 2010
8. Three Possible Ways to Structure
Going Public on TSX/TSE 1) The Share Swap
Shares
CanCo.
Shares
Shares
IsraCo.
Shares
ISRAEL CANADA
CO. CO. CPC
ASSETS
February 10, 2010
9. Three Possible Ways to Structure
Going Public on TSX/TSE 1) The Share Swap
Israeli Company
stays private Shares Shares
company under
Israeli law.
IsraCo.
Shares
ISRAEL Shares
CANADA
CO. CO. CPC
ASSETS
February 10, 2010
10. Shares
Three Possible Ways to Structure 2) The Reverse
Going Public on TSX/TSE Triangular Merger
CANADA
CO. CPC
NewCo. – CPC
subsidiary incorporated
in jurisdiction of target
Shares company.
ISRAEL NewCo.
CO.
ASSETS February 10, 2010
11. Shares
Three Possible Ways to Structure 2) The Reverse
Going Public on TSX/TSE Triangular Merger
Shares CANADA
CO. CPC
Shares
ISRAEL Amalgamation NewCo.
CO.
ASSETS February 10, 2010
12. Shares
Three Possible Ways to Structure 2) The Reverse
Going Public on TSX/TSE Triangular Merger
Shares CANADA
CO.CPC
IsraCo.
Shares
ISRAEL
CO.
ASSETS February 10, 2010
13. Three Possible Ways to Structure
Going Public on TSX/TSE 3) IPO
Shares
ISRAEL Toronto Stock
CO. Exchange
ASSETS February 10, 2010
14. Three Possible Ways to Structure
Going Public on TSX/TSE 3) IPO
Public Public
Shares Float IsraCo
Shares
ISRAEL Application
Toronto Stock
CO. Exchange
ASSETS February 10, 2010
15. 1) Share Swap
Three Possible Ways to Structure 2) Reverse Triangular Merger
Going Public on TSX/TSE
3) IPO
Some Notes…
Israeli company not
Models 1 & 2
“public company” under
common approach Israeli law **
Israeli companies law & sec laws apply
Public company regulations will not.
“Public Company” – a company the shares of which are registered for
trade in a stock exchange, or were offered to the public in a prospectus as
defined in the Israeli Securities Law, or were offered to the public outside
of Israel based on a public offering document required by law outside of
Israel, and are held by the public.”
** Unless original CPC is Israeli
February 10, 2010
16. The Share Swap
The Israeli Perspective
• Structure: share exchange agreement + ancillary
documents.
• Review Israeli target’s Articles of Association
thoroughly! Check for rights limiting the transaction
(veto, ROFR, bring along).
• No bring along in AOA IsraCo subject to statutory
bring along provisions! New law = 80% Old law = 90%!!!
• Note: Class votes…
February 10, 2010
17. The Reverse Triangular
Merger
The Israeli Perspective
Depends How It’s Done
Regular (Sec. 320) Court (Sec. 350)
• BOD Approval • Petition to court for order to
• Merger proposal: send notice thereof to call a general meeting.
creditors who can petition the court to delay • Majority in actual number,
or prevent the merger.
and 75% in interest, of those
• New law – majority approval of present.
shareholders present and voting
• Class votes…
• Old law – 75% in interest of those present
and voting • File second petition for
• Class votes… approval of merger.
• Certificate of Merger - Wait 30 days after
shareholder meeting (or 50 days after
sending info statement – the latter). February 10, 2010
18. The IPO
The Israeli Perspective
Israeli Securities Law - 1968
Section 15
• An offer to the public cannot be made unless under a prospectus, approved
by the ISA.
• A sale to the public cannot be made unless under a prospectus, approved by
the ISA.
Section 15A
• Private placements to 35 or less investors in a 12 month period is excluded.
Section 35(31)
• Special reporting requirements for an Israeli company traded in a jurisdiction
outside of Israel and listed in the Law (e.g. Nasdaq & NYSE), i.e. dual listing.
February 10, 2010
19. The IPO
The Israeli Perspective
Corporate Requirements of Israeli Public Company
New External
AOA Directors
Audit Special
Committee requirements for
approval of
interested party
transactions
February 10, 2010
