Indigo Merges with Chapters

Indigo Books & Music Inc. and Chapters Inc. completed their merger on August 14, 2001, following the recent acquisition of Chapters by Trilogy Retail Enterprises LP, a company controlled by Gerald Schwartz, and the negotiation of the merger by independent committees of the boards of directors of the two companies. The new company was renamed Indigo Books & Music Inc.

Torys acted for Chapters in the merger, with a team that included Peter Jewett, Philip Brown, William Charnetski, Adam Armstrong and Jonathan Boulakia in the firm’s Toronto office, and Andrew Beck in the New York office. Stikeman Elliott acted for the former Indigo with a team led by Rod Barrett and Nathalie Mercure, which included Dean Koumanakos (corporate/securities), Shawn Neylan (competition) and John Lorito (tax).

The merged company also amended and restated the existing Chapters credit facilities in order to reflect the merger of Chapters and Indigo and refinance certain existing debt of Chapters and Indigo, including $54 million of medium term notes issued by Chapters. The amended and restated credit facilities made available by The Bank of Nova Scotia and Royal Bank of Canada total $179 million and are secured by first priority security over all the assets of the merged company and its principal wholly owned subsidiaries. Peter Birkness and Sarah Lerchs of Torys acted for the merged company. Bruce Fowler, Carlyn Klebuc and Colin Simpson of Borden Ladner Gervais LLP acted for the banks on the amendment and restatement of the credit facilities. Krystyna Price of Sherman & Associates acted for the merged company with respect to real property matters. Steve Watson of Goodman and Carr LLP acted for the holders of Chapters’ medium term notes.