Acquisition Rules for Change of Control Non capital lossesIn Canada, Non-capital losses from a business before the change of control may be carried forward to years after the change of control, but only if the same business is carried on after the change of control with a reasonable expectation of profit, and only to offset income from that business or a similar business.
Similarly, non-capital losses after the change of control from a business can be carried back to years before the change of control only if the same business is carried on with a reasonable expectation of profit, and only to offset income from that business or a similar business.
At a tax rate of 27%, the $211 million in non capital losses held by Cipher will protect previous and forward profits of about $60 million.
Knight have no capital losses for its Canadian Pharma operations.
These would also benefit Bausch for its Canadian operations.
In summary, Ciphers non capital losses are an attractive asset for potential suitors