Title insurance enables “major” HBC acquisition

First Canadian Title, a provider of title insurance, recently enabled the multi-jurisdictional acquisition of HBC, which involved the purchase of all HBC shares in January by South Carolina businessman Jerry Zucker in a deal worth more than $1 billion.”The historical nature of some of the properties, along with the complexity of the land title records involved, could have threatened to delay the closing of the financing of this transaction,” John Rider, vice president, commercial division, First Canadian Title, says . “Without title insurance, the deal would have required up-to-date surveys, full title and off-title searches and title opinions for each individual site.” Some provinces involved in the transaction (Ontario, Quebec, Nova Scotia, B.C., Saskatchewan, Manitoba and Alberta) have an eight to nine day delay in registration, according to the Company. First Canadian Title’s gap coverage – covering the time between closing the deal and the registration of documents – enabled the deal to close “at the boardroom table” in Toronto. “The traditional means of closing a deal like this would have been very costly and time consuming,” Rider says. First Canadian Title has developed a process enabling multi-site transactions to close simultaneously, which the Company says allowed lawyers involved in the HBC transaction to “focus on the structure of the deal rather than details that could hinder the closing.” The total value of investment transactions in Canada soared from CD$16.5 billion in 2004 to CD$18.6 billion in 2005. As commercial real estate transactions become more complex, title insurance has become increasingly popular.