July 27, 2005
Last week's big fertilizer IPO was a heady cross-border milestone for Torys. With the biggest Manhattan presence of any Canadian player (80 U.S. lawyers and counting), Torys chalked up the distinction of becoming the first adviser to act on both sides of the border for the same issuer in an income securities share offering.
The deal plays into Torys' strategy of being a one-stop cross-border deal shop. In every other such case, Canadian advisers have worked on the Canadian portion of the deal with U.S. lawyers working in tandem on the U.S. side.
Torys' client in the deal, Virginia-based farm chemical distributor Royster-Clark, went public using the income deposit security structure, a U.S.-flavoured income trust designed after the popular Canadian structure. The securities went public on the TSX, but under a U.S. rule known as Rule 144A, Torys was able to sell the non-U.S.-registered units to qualified institutional buyers south of the border.
"This is a space that we're quite familiar with and there have only been a few of these deals," says Kevin Morris, who quarterbacked the deal. "We're the only firm that has done this."
About 20 Torys lawyers—10 on either side of the border—stitched together the C$325-million deal in four and a half weeks. Given all the extra due diligence involved with two firms passing files back and forth, it would normally have taken six to eight weeks to prepare a complex income trust offering. "The real magic was to get this done so fast," says Kevin.