Mill Road Capital Completes Acquisition of Cossette

On December 23, 2009, Mill Road Capital, L.P., a Connecticut-based private equity fund, completed its acquisition of Cossette Inc. by way of an amalgamation between Cossette and an indirect subsidiary of Mill Road. The entity resulting from the transaction will continue as Cossette Inc. The acquisition price of approximately $115 million ($8.10 per share) was financed through a combination of an equity contribution by Mill Road, roll-over equity contributions by senior management of Cossette, senior secured credit facilities provided by Bank of Montreal and an equity contribution and mezzanine debt financing by BMO Capital Corporation.

The transaction was the result of a bid process coordinated by BMO Capital Markets, Cossette's financial advisors. Mill Road's all-cash offer succeeded over a hostile takeover bid that had been made by a group led by Cosmos Capital Inc., a company controlled by François Duffar, former vice chair and president of Cossette.

Cossette is a leading marketing and communications company, with offices in Québec City, Montréal, Toronto, Vancouver, Halifax, New York, Irvine, Los Angeles, London and Shanghai, offering a full range of leading-edge communication services to clients of all sizes, including some of the most prestigious brands in the world.

Mill Road was represented by Davies Ward Phillips & Vineberg LLP with a team that comprised Franziska Ruf, Neil Kravitz, Justin Vineberg, Dan Wolfensohn and Michael Lubetsky (M&A and corporate); Brian Bloom, Fred Purkey and Michael Kandev (tax); Sébastien Thériault, Sylvie Guillemette, Stefan Fews, Annie Gauthier and Marie-Ève Gingras (financing-banking); and Anita Banicevic (regulatory). Mill Road was also represented by regular counsel Foley Hoag LLP in the United States with a team that comprised Peter Rosenblum (corporate) and Nicola Lemay and Eric Belsley (tax).

Cossette's team was led by Kimberley Okell, Vice President, Legal Affairs and Corporate Secretary, and assisted by Fasken Martineau DuMoulin LLP with a team that comprised Robert Paré, Marie-Josée Neveu, Catherine Isabelle, Frédéric Boucher, Pierre-Étienne Simard, Jean Michel Lapierre and Jean-François Séguin (M&A and corporate); Gilles Carli, Alain Ranger and Thomas Copeland (tax); Douglas New (regulatory); Louis Bernier, Jasmin Marcotte and Lyne Duhaime (labour); and Pierre Lefebvre, Eleni Yiannakis and Juliana Fox (litigation).

The Special Committee of the Board of Directors of Cossette was represented by a team from Ogilvy Renault LLP led by Paul Raymond (corporate/M&A) and that consisted of Niko Veilleux, Henrick Simard, Ava Yaskiel, Christine Dubé and Amélie Métivier (M&A/corporate); Sophie Melchers (litigation) and Jean-Charles René (insurance and professional liability).

The syndicate of lenders, led by Bank of Montreal as lead arranger and underwriter, was represented by Borden Ladner Gervais LLP with a team that comprised Benoît Provost, Glen Bowman, Olivier Tardif and Philippe Tardif. The syndicate of lenders, led by BMO Capital Corporation as lead arranger and underwriter, was represented by Fraser Milner Casgrain LLP, with a team that comprised Neil Katz, Jean-Sébastien Dugas and Sofia Ruggiero.

McCarthy Tétrault LLP was counsel to François Duffar and co-counsel to Cosmos Capital Inc. The McCarthy Tétrault team was led by Iain C. Scott and included Frédéric Cotnoir, Fraser Bourne, Laurent Gauthier (corporate and securities) and Mason Poplaw (litigation). HIG Capital, which provided equity financing for Cosmos, was represented by Torys LLP, which also acted as co-counsel to Cosmos Capital Inc. The Torys team included Kevin Morris, Adam Armstrong and Alison Harnick (corporate and securities); Andrew Gray (litigation); Tom Zverina (financing-banking) and Omar Wakil (regulatory).