CML Healthcare Inc. completed a plan of arrangement on February 23, 2004, that resulted in the creation of two new entities, CML Healthcare Income Fund, an income trust owning CML’s diagnostic services business, and Cipher Pharmaceuticals Inc., a pharmaceutical corporation owning CML’s drug development and pharmaceutical research business. Units of the fund and shares of Cipher began trading on the TSE on February 25. When the transaction was announced on December 15, 2003, CML shares had a market value of approximately $730 million. Nine weeks later, former holders of CML’s common shares received securities and cash with an aggregate value of approximately $1.25 billion, consisting of four units of the fund, one share of Cipher and cash proceeds in the amount of $7 per CML share. As part of the arrangement, CML also entered into new credit facilities in the amount of $200 million with a syndicate of lenders.
CML was represented by Davies Ward Phillips & Vineberg LLP, with a team that included Shawn McReynolds, Patrick Moyer and Donna Aronson (corporate/securities), Ian Crosbie, Siobhan Monaghan and Paul Lamarre (tax), Scott Hyman, Sonny Bhalla and Jim Nikopoulos (banking), Don Stanbury (real estate), Tim Youdan (trusts) and James Doris (litigation) in Toronto, Alain Roberge (banking) in Montreal and Gerald Shepherd (securities) in New York.
BMO Nesbitt Burns Inc., CML’s financial advisor, was represented by Aird & Berlis LLP, with a team that included Martin Kovnats, Allan Bronstein, Andrew Wilder and Kyler Wells (corporate/securities) and Barbara Worndl (tax). The bank syndicate was represented by Gowling Lafleur Henderson LLP, with a team that included David Cohen, Rachel Conway and Kelly Murray (lending), Steven Willard (real estate) and Tim Wach (tax) in Toronto, Pierre-André Hamel (lending) in Montreal, Irene Stewart (lending) in Vancouver and Tom Cumming (lending) in Calgary.
CML’s largest shareholder was represented by Wes Brown of Morrison Brown Sosnovitch LLP in Toronto.