Shoppers Drug Mart Acquires MediSystem Technologies

On November 11, 2006, Shoppers Drug Mart Corporation, one of the leading players in Canada's retail drug store marketplace, completed the acquisition of MediSystem Technologies Inc., a provider of pharmaceutical products and services to long-term care facilities in Ontario and Alberta. The acquisition is valued at approximately $90 million.

Following the negotiation of a support agreement with the board of MediSystem and lock-up agreements with certain of its shareholders in July 2006, the transaction was structured as a takeover bid for all issued and outstanding common shares of MediSystem by Shoppers. Under its takeover bid offer, Shoppers offered $3.80 in cash per each MediSystem share or $0.05 in cash and the remainder in an equivalent value of common shares of Shoppers, or a combination of the foregoing. The take-over bid was commenced on August 14, 2006 and extended by Shoppers on September 20, 2006. More than 90 per cent of the outstanding common shares of MediSystem were tendered to the takeover bid at its expiry on October 6, 2006, following which Shoppers proceeded to exercise its statutory right to compulsorily acquire the remaining common shares of MediSystem, and to have the shares of MediSystem delisted from the Toronto Stock Exchange.

Shoppers was represented by an in-house team led by Richard Alderson, senior vice-president, legal affairs, general counsel and assistant secretary, and Frank Pedinelli, senior legal counsel, and by Osler, Hoskin & Harcourt LLP with a team that included Douglas Bryce, Adam Taylor and Ivan Pankoff (corporate) and Alex Pankratz and Ted Citrome (tax).

MediSystem was represented by Daniel Wilson, outside counsel to MediSystem. The independent committee of the board of MediSystem was advised by Blake, Cassels & Graydon LLP, with a team that included Ross McKee, Leslie Johnson, Shlomi Feiner, Elizabeth Sale, Leslie Morgan (tax) and Jason Gudofsky (competition).