23 Sep 2019

The enthusiasm for Bitcoin and dramatic increase in its value in 2017 has proven to be very attractive to cybercriminals, who took advantage of investors’ lack of knowledge to hack them.

Cryptocurrencies have in fact shown to have serious security and governance flaws. Other cybercurrency risks have also been exposed: “Managing and handling cryptocurrencies is risky for people,” says Louis Roy, Assurance Partner and President of Catallaxy, subsidiary of Raymond Chabot Grant Thornton.

“For example, if you lost your private key, you would no longer have access to your assets. This isn’t like misplacing your debit card, which can easily be replaced.”

Many investors keep their assets as cryptocurrencies on their cellphone. In addition to the risk of losing their assets, they could be the target of cyberattacks. Investors must therefore be even more vigilant, especially when it comes to phishing scams.

Some investors rely on an intermediary to manage their cryptocurrencies.

“In some cases, the loss of assets is not due to an attack, but rather to a management or fraud issue,” Roy adds.

Recently, the suspicious death of the company founder resulted in more than $250M in losses for the cheated investors.

Roy questions: “How can you explain that a company leader had millions of his clients’ dollars all to himself on his personal computer? To improve cybersecurity in the cryptocurrency field, we’ll have to stimulate technological innovations and better inform users, but there are regulatory framework issues as well.”

You can read the entire article online (for subscribers only).

Are you interested in understanding blockchain technology and applying it in your organization? Our team of experts can help.

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20 Sep 2019

As entrepreneurs get closer to retirement, many of them would like to hand over the reins of their family business to their children. However, transferring the company to your children could be more complicated than selling it to strangers.

In an interview in L’Étoile du Lac, Éric Dufour, Partner and Vice-President, Management Consulting, tells us why:
“At the provincial level, the situation has been rectified, but this is not the case at the federal level. There is no tax exemption of up to $900,000 that applies when selling to family members. This complicates the transaction. You have to be prepared to make monetary sacrifices, because a company’s value, that’s the owner’s pension fund. It’s an obstacle and it’s time for the government to change this outdated 1980s tax system.”

Dufour also pointed out that the key to a business transfer lies in planning: “You have to undertake a plan that spans four years. An inter-generational overlap occurs, which means there is an adaptation period. This makes it all the more important to be supported in the process.”

The issue of intergenerational business transfers is still a concern for our Firm. In Quebec, a number of constraints still exist while at the federal level, the entire issue persists. We invite you to view the Firm’s recommendations, including recommendation 7 in the prebudget recommendations presented to the Quebec government at the time of the last Quebec budget.

Contact one of our entrepreneurial succession experts for support during the important process.

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18 Sep 2019

Raymond Chabot Grant Thornton’s Corporate Finance team is pleased to announce the successful refinancing transaction of Pasta Romana Foods and Pizza Romana (hereinafter individually ‘‘Pasta Romana’’ or ‘‘Pizza Romana’’, and together the ‘‘Company’’).

Pasta Romana is a family-owned and operated business founded in 1996 by Mr. Bernard Filippone and his sons, and headquartered in Montréal, Quebec, Canada.

For over 23 years, Pasta Romana has been offering a wide variety of high-quality fresh and frozen pastas, catering to big box retailers through both the Pasta Romana brand and its private label segment.

More recently, the Company, through its new entity Pizza Romana, has leveraged its proven expertise in operations and product development by acquiring a state-of-the-art manufacturing facility to add high-quality frozen pizzas to its portfolio, which has seen tremendous momentum and success since inception.

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Pasta Romana concludes a refinancing transaction to support growth

The Company strives to never waiver from what has made it successful: products prepared as they would be at home and made fresh without any compromise to quality. Today, Pasta Romana and Pizza Romana have grown to become significant players in the Canadian food manufacturing industry, operating two state-of-the-art plants in Montréal North and in Lachine, where the Company has the capacity to produce 2,300 kg of pasta, 1,000 litres of sauce and 3,000 kg of pizza on an hourly basis.

The Company called on Raymond Chabot Grant Thornton to review and optimize its financial structure. Raymond Chabot Grant Thornton’s Corporate Finance team acted as exclusive financial advisor to the Company which now has a streamlined, adaptable and flexible structure that will allow it to seize new business opportunities in a very active industry.

“The Raymond Chabot Grant Thornton Corporate Finance team significantly simplified our refinancing process.” states Mr. Michael Filippone, Vice President of Operations at Pasta Romana. “With their knowledge, expertise, and large network in the debt market, Mark and his team allowed our Company to obtain the most favourable terms and conditions, as well as the financial flexibility to sustain our growth. In addition to their deep understanding of our industry, they managed the entire process in a very professional manner and allowed for a seamless process from start to finish. We will certainly reach out to them on our next transaction.”

To learn more about how Raymond Chabot Grant Thornton can help meet the needs of your business, please contact our deal team.

About Raymond Chabot Grant Thornton

Our leading mid-market focused corporate finance advisory team provides sector-specific advice on mergers, acquisitions and divestitures, debt and equity capital markets. We bring deep industry knowledge to each transaction to support our clients’ corporate finance strategies and priorities.

A Quebec and Canadian leader in the areas of assurance, tax, advisory services and business recovery and reorganization, Raymond Chabot Grant Thornton boasts more than 2,600 professionals. Raymond Chabot Grant Thornton is a member company of Grant Thornton International and the Canadian counterpart of Grant Thornton LLP. Our global footprint spans across more than 135 countries with over 53,000 people who provide real insight, a fresh perspective and agility to keep clients moving ahead.

Deal team:

Mark Rossi
Simon Marcotte-Légaré
Justine Bergeron

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16 Sep 2019

Catallaxy, Raymond Chabot Grant Thornton’s subsidiary takes its blockchain and cryptocurrency expertise worldwide with the signing of a partnership agreement with Grant Thornton Switzerland/Liechtenstein.

Under the agreement, Catallaxy will handle all of their projects involving cryptocurrency auditing over the next two years. Additionally, the Swiss/Liechtenstein firm wants to use Abacus, the cryptocurrency audit software solution developed by Catallaxy. This unique association provides Grant Thornton international visibility and widespread potential.

Emilio B. Imbriglio, President and CEO of Raymond Chabot Grant Thornton said: “When we created Catallaxy in 2017, we wanted to make Montréal a global blockchain technology expertise centre in the Grant Thornton organization. The agreement signed with GT Switzerland/Liechtenstein marks the achievement of this objective.”

GT Switzerland/Liechtenstein’s clientele includes numerous cryptocurrency entities, representing some 30 projects for Catallaxy in the coming years. This first agreement should pave the way for more partnerships with other member firms of Grant Thornton around the world.

Michel Besner, Managing Director of Catallaxy stated: “Switzerland/Liechtenstein’s regulatory framework has prompted many cryptocurrency foundations to set up in that country, creating a strategic centre in the world of cryptocurrencies. We are pleased to provide our expertise, support and technological tools to help GT Switzerland/Liechtenstein become a leader in their country.”

Marco Valenti, from GT Switzerland/Liechtenstein added: “As the cryptocurrency sector is expanding in Switzerland/Liechtenstein, it’s a plus to be able to count on the benefits of the Grant Thornton organization and call on our best specialists, such as Catallaxy. Thanks to our collaboration, we will be in a position to better serve our clients’ interests and position ourselves as market leaders. The agreement was prompted by our desire to become more competitive in this growing area.”

Cryptocurrency audits
The surge in cryptocurrencies has led an increasing number of organizations to own these types of currencies. Because of recent government positions on cryptocurrency legislation, it is imperative for auditors to obtain an understanding of this new asset class in order to implement sufficient and appropriate audit procedures. This translates into a range of issues in practice. The lack of regulations, immature technologies, security considerations and the quantity of data are major challenges for auditors and businesses alike.

The combination of an exclusive technology and a real-time audit software solution developed by Catallaxy gives Grant Thornton a competitive edge with a unique service offering specifically designed for digital asset audits that meet the auditor’s needs.

About Catallaxy
A Raymond Chabot Grant Thornton subsidiary, Catallaxy develops products in the fields of finance, accounting, digital economy and digitization of physical assets (consumer goods, food assets, real estate, manufacturing and legal documents).

Catallaxy has a group of experts in innovative technologies, such as cryptographic data analysis, blockchain, tokenization and artificial intelligence.