Teranet Income Fund Completes $700M IPO of Trust Units

On June 16, 2006, Teranet Income Fund completed an initial public offering of 70 million units at a price of $10.00 per unit resulting in gross proceeds of $700 million. The fund also granted to the underwriters an option to purchase up to an additional 10,500,000 units for a period expiring 30 days following closing on the same terms and conditions. Teranet is a leading provider of integrated land-based information products and services and operates Ontario's electronic land registration and writs systems.
The fund was created to indirectly acquire all of the issued and outstanding shares of Teranet Inc. from the direct and indirect shareholders of Teramira Holdings Inc., which has owned all of the shares of Teranet since it acquired the 50 per cent interest in Teranet held by the Province of Ontario in August 2003.
A substantial portion of the net proceeds of the offering was paid to the Province of Ontario in satisfaction of its participation rights put in place when it sold its 50 per cent interest in Teranet. The balance of net proceeds will be used to repay existing indebtedness and to fund working capital and other reserves for Teranet. As part of the transaction, the selling shareholders received units of the fund or limited partnership units exchangeable for units and two designees of the Province of Ontario also received units of the fund.
The offering was underwritten by a syndicate of underwriters co-led by RBC Dominion Securities Inc. and CIBC World Markets Inc. and included BMO Nesbitt Burns Inc., Scotia Capital Inc., TD Securities Inc., Canaccord Capital Corporation, Desjardins Securities Inc., Orion Securities Inc., GMP Securities L.P., Sprott Securities Inc. and MGI Securities Inc.
In conjunction with the offering, Teranet Inc. entered into a credit agreement with a syndicate of lenders providing for the establishment of credit facilities in the aggregate amount of $665 million.
The syndicate was led by Royal Bank of Canada and included the Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Bank of Montreal, the Toronto-Dominion Bank, United Overseas Bank Limited, Vancouver Branch and the Bank of Tokyo-Mitsubishi.
Teranet was represented by Pamela Fruitman, general counsel of Teranet, and Cassels Brock & Blackwell LLP, with a team that included Tom Koutoulakis, Jeffrey Roy and Lindsay Clements (securities), Ann Watterworth and Jason Bullen (business law), Marc Mercier, Charles Newman and Candace Chan (financial services), Chris Norton (tax), John Page and Tim Pinos (advocacy) and Bernice Karn (information technology).
Teramira, certain of the selling shareholders and the fund were represented by Fraser Milner Casgrain LLP, whose team included Chris Turney, Mike Kaplan, Gennady Ferenbok and David Gossen (business law), Will Fung, Abbas Ali Khan, Catherine Pham, Ali Naushahi and Maja Czubernat (securities), Peter Shiroky and Jules Lewy (tax), Heidi Clark (financial services) and Robb Heintzman and Matt Fleming (advocacy).
The underwriters and the lenders were represented by Osler, Hoskin & Harcourt LLP with a team that included Christopher Murray, David Pathe, Jaime Larry and Julie Cordeiro (corporate and securities), Michael Matheson, Richard Borins, Tim Meadowcroft and Tara Elliott (financial services), Jack Silverson and Monica Song (tax) and George Valentini (business law). The province was represented by Davies Ward Phillips & Vineberg LLP, with a team that included William Ainley, Carol Hansell, Tarne Whiteley, John Zinn and Michael Disney.