Continuing Influence Of U.S. Private M&A Practice

The United States private M&A market features a very well-developed level of market-practice for private M&A transactions, with a relatively large sample size of publicly available transactions and a universe of sophisticated buyers and sellers. In particular, private equity sponsors are active as both buyers and sellers, and therefore inform overall market development on key issues relating to deal/price certainty and the post-closing obligations/liabilities of the seller. Developments in the U.S. M&A market continue to influence Canadian M&A, particularly in cross-border transactions. We expect this trend will continue in 2013 and will include:

• The increased presence of "materiality scrapes" in which all "materiality" qualifications (including MAE) to a seller's representations are removed for purposes of whether a breach has occurred and for determining damages – thereby making the deductible the materiality threshold. We have also seen "knowledge scrapes" on