When undergoing a merger or acquisition (M&A), it is common for the Canadian Competition Bureau to issue a Supplementary Information Request (SIR) if it is perceived there could be a negative effect to the competitive landscape in the area of the combined businesses. For example, the Bureau concluded Metro’s $4.5 billion acquisition of the Jean Coutu Group in 2018 would likely lead to substantially higher prices or decreases in services related to medications and other pharmacy products in eight regions across Quebec. As a result, Metro agreed to sell properties or leases to another party as part of the deal.
Why the sudden rise in M&A in Canada?
In 2020, Canada saw the lowest number of M&As since 2011. Much of this is believed to be directly tied to the pandemic. According to David Savard, head of M&A at National Bank Financial, COVID-19 hit pause on many deals as companies focused inward on their own restructuring.
However, that won’t be the case for long. While overall M&A deals were down last year, nearly $80 billion in deals were announced in the fourth quarter — the most active period observed in the past five years. This figure suggests that Canadian businesses have assessed their current state and recognized that coming back from the pandemic will require downsizing and/or acquiring new lines of business.
How to prepare for a Supplementary Information Request
Having personally participated in the response of 12 SIRs, I can confidently say firsthand that the process is no easy feat. It’s tedious, at times frustrating and requires an “all-hands-on-deck” approach during the 90-day window of time given by the Bureau in which the companies must respond. While receiving a SIR during an M&A can be anticipated, Canadian businesses never truly know what to expect until one is issued. The only guarantee is the very limited timeframe you will be given to execute on a set of requests — some expected and some not.
By the time a SIR lands in your office, the chance to organize your data will have passed. As part of an overall litigation readiness strategy, it is important to take the opportunity to organize your data early for a quick and effective response to any corporate legal issues. Regardless of the state of your data, you will need to be prepared with scalable resources that can handle whatever comes down the pipe during the SIR process. A SIR impacts every lawyer and internal business unit involved in the merger process; they will be doing nothing else but working on the all-consuming request.
How Third-Party eDiscovery Vendors Can Help
As corporations rally to collect every single piece of data that could be potentially responsive, SIRs can quickly become massive files. We’re talking millions of documents, with an overall responsiveness rate from your team being somewhere between two and five per cent.
You will require a large and scalable team that is well versed in not only M&As, but also large-scale document reviews. Despite your legal team’s experience and best efforts, it’s not always feasible to execute a SIR without the support of a third-party eDiscovery vendor.
The support of an outside vendor significantly reduces the amount of time it takes to complete the request and provides additional resources including multiple processing tools, proprietary workflows to identify, cull and organize large data sets, and advanced analytics to expediate the process.
At Ricoh eDiscovery, our highly experienced and skilled eDiscovery lawyers and Review Management team have collectively led and completed more than 25 Supplementary Information Request document reviews. Our team of Relativity Masters and Experts have significant experience managing large-scale document reviews, utilizing proprietary Ricoh analytics and machine learning workflows to maximize accuracy and minimize cost and time.
If you have questions be sure to reach out to our team today. We're happy to consult with you now, before your merger even begins, to assist in data management and organization to make your SIR process and straightforward as possible.
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