May 27, 2020
A recent article in Canadian Lawyer looks at Insightful Science’s acquisition of B.C.’s Cytapex Bioinformatics, which specializes in algorithms that analyse cytometry data. Author Aidan Macnab reports that the transaction between the San Diego-based technology company and Cytapex, which was completed on May 20, was executed virtually, from start to finish, without the parties and lawyers meeting face-to-face once during the deal.
While the nature of the transaction was new, it has become the norm, says Mark Longo, Co-Chair of the Emerging and High Growth Companies Group at Osler and Managing Partner of the firm’s Vancouver office.
“What we are seeing, during the last eight to 12 weeks, is deals are still happening,” Mark says. “We're doing a lot of venture financings. We're doing a lot of acquisition transactions, and I think this will be a trend towards more of a virtual means of conducting the deal. And that includes even up until closing.”
Virtual deal-making will be good news for Canadian technology companies, Mark tells Canadian Lawyer. With the remote process eliminating the geographical factor, Canadian businesses will be even more attractive for investment and acquisition, Mark says.
“You don't need to be in Silicon Valley,” says Mark. “With companies like Clio… and Shopify and others. The fact that there are great technology universities that are spinning out talent in places like Vancouver and Toronto and elsewhere. In my mind, [that] means that the acquirers and the venture capitalists are going to increasingly look to Canada as a place where you can acquire talented companies and talent.”
Mark also tells Canadian Lawyer that in executing the deal remotely, there had to be a “heightened level of organization,” from closing checklists, planning calls with Insightful’s counsel and combing through documents in a virtual data room. “There was no opportunity for in-person diligence. So, everything had to happen via virtual data room or Zoom, often combining the two,” he says.
Upon closing, the parties used DocuSign and another software that compiles all closing documents, he says, adding “it really does prove that you can do everything in a fully virtual mode.”
For more information on the transaction, read Aidan Macnab’s full article “Acquisition of B.C.’s Cytapex Bioinformatics was a deal executed entirely virtually” in Canadian Lawyer.