Acquisition international February 2013 by AI Global Media

February 2013 /

IN THIS ISSUE/

DEAL GURU:

MANAGING HIGH-RISK LITIGATION:

Finding a way to exit the boom year deals. Acquisition International discusses the key issues with leading litigation experts from around the world.

INTELLECTUAL PROPERTY:

The importance of protecting intangible assets.

DEAL OF THE YEAR — Gulf Capital Acquires Majority Stake in SAKR Energy Solutions. / 14 www. ACQUISITION-INTL .com

AKUĞUR ASSISTS IN GO MONGO ACQUISITION — Mehmet Akuğur describes Akuğur Law Firm’s role in Dogus Group’s acquisition of 60% of the stakes of Go Mongo. / 14 GOD AND MAN IN COURT — James Rosenblum discusses the commonalities between trials, theatre, literature and religion. / 15

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CONTENTS:

February 2013

Editors Comment

This month saw the publication of the first winter economic forecast for the euro area and the European Union as a whole from the European Commission. The forecast covers a wide range of indicators including gross domestic product (GDP), inflation, employment and public finances for 2012‑14.

CONTENTS — February 2013

The forecast states that financial market conditions in the EU have improved substantially since last summer but economic activity has been disappointing in the second half of last year. However, leading indicators suggest that GDP in the EU is now bottoming out and the EC expects economic activity to gradually accelerate. The pick-up in growth will initially be driven by increasing external demand. Domestic investment and consumption are projected to recover later in the year, and by 2014 domestic demand is expected to take over as the main driver of strengthening GDP growth. The weakness of economic activity towards the end of 2012 implies a low starting point for the current year. Combined with a more gradual return of growth than earlier expected, this leads to a projection of low annual GDP growth in 2013 of 0.1% in the EU and a contraction of -0.3% in the euro area. Quarterly GDP developments are somewhat more dynamic than the annual figures suggest, and GDP in the fourth quarter of 2013 is forecast to be 1.0% above the level reached in the last quarter of 2012 in the EU, and 0.7% in the euro area. The contrast between the improved financial market situation and the muted macroeconomic prospects for 2013 is to a large extent due to the balance-sheet adjustment process, which continues to weigh on short-term growth. As this process advances, it will also strengthen the basis for growth in 2014, which is projected at 1.6% in the EU and 1.4% in the euro area. Olli Rehn, Commission Vice-President for Economic and Monetary Affairs and the Euro said: “The ongoing rebalancing of the European economy is continuing to weigh on growth in the short term. The current situation can be summarised like this: we have disappointing hard data from the end of last year, some more encouraging soft data in the recent past, and growing investor confidence in the future. The decisive policy action undertaken recently is paving the way for a return to recovery. We must stay the course of reform and avoid any loss of momentum, which could undermine the turnaround in confidence that is underway, delaying the needed upswing in growth and job creation.”

ON THE COVER - DEAL OF THE YEAR – GULF CAPITAL ACQUIRES MAJORITY STAKE IN SAKR ENERGY SOLUTIONS: /12 Dr Karim El Solh and Mr Richard Dallas speak to Acquisition International about a recent landmark acquisition. NEWS: /04

The Latest News Stories From Around The World.

DEAL GURU: /10 From Deal to Day One.

Enjoy the issue, Phil Grainger, Editor phil.grainger@acquisition-intl.com

How to get in touch AI welcomes news and views from it’s readers. Correspondence should be sent to; Address/ Acquisition International, Blakenhall Park, Barton under Needwood, Burton on Trent, DE13 8AJ. Tel/ 0844 809 4788 Email/ reception@acquisition-intl.com Website/ www.acquisition-intl.com Find us on/

ACQUISITION INTERNATIONAL

21/ 23/

Q4 REPORT: /25 Acquisition International’s Final Quarterly Review of 2012

DOING BUSINESS IN...: /26

A.I’s comprehensive guide to doing business around the world.

DEAL DIARY: /66 @acquisition-int

6/ 8/ 14/ 15/ 16/ 17/ 19/ 20/

The Latest M&A From Around The World.

24/ 30/ 32/ 34/ 35/ 37/ 38/ 42/ 45/ 49/ 52/ 54/ 58/ 65/

Hedge Funds News Appointments Akugur Assists in Go Mongo Acquisition God & Man in Court - By James Rosenblum 2013 Shipping & Maritime Predictions Aerospace: Airplane Carbon Trading Corporate Fraud & the Forensic Accountant Private Investigators: Fighting Financial Crime The Evolving Role of the Actuary: ensuring effective risk adjustment Managing Environmental Risks in M&A Transactions The harmonisation in EU Contract Law: The Common European Sales Law Ireland: Bouncing Back Switzerland: The New Model of Offshore Business Cross Border M&A in Southeast Asia Insolvency: Don’t Just Wait for Recovery London: a Financial Hub Bringing Foreign Direct Investment into… Antitrust Litigation – Resolving Competition Disputes Managing High-Risk Litigation The Growth of Islamic Banking Fund Formation Intellectual Property: the importance of protecting intangible assets Doing Business in 2012 - Forming Companies in… Meet the Experts - Resolving Commercial Disputes through Mediation

February 2013 /

NEWS:

from around the world

Treasury and IRS Issue Final Regulations to Combat Offshore Tax Evasion The U.S. Department of the Treasury and the Internal Revenue Service (IRS) has issued comprehensive final regulations implementing the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA). Enacted by Congress in 2010, these provisions target non-compliance by U.S. taxpayers using foreign accounts. The issuance of the final regulations marks a key step in establishing a common intergovernmental approach to combating tax evasion. These regulations provide additional certainty for financial institutions and government counterparts by finalizing the step-by-step process for U.S. account identification, information reporting, and withholding requirements for foreign financial institutions (FFIs), other foreign entities, and U.S. withholding agents. “These regulations give the Administration a powerful set of tools to combat offshore tax evasion effectively and efficiently,” said Deputy Secretary Neal Wolin. “The final rules mark a critical milestone in international cooperation on these issues, and they provide important clarity for foreign and U.S. financial institutions.”

The final regulations issued: Build on intergovernmental agreements that foster international cooperation. The Treasury Department has collaborated with foreign governments to develop and sign intergovernmental agreements that facilitate the effective and efficient implementation of FATCA by eliminating legal barriers to participation, reducing administrative burdens, and ensuring the participation of all non-exempt financial institutions in a partner jurisdiction. In order to reduce administrative burdens for financial institutions with operations in multiple jurisdictions, the final regulations coordinate the obligations for financial institutions under the regulations and the intergovernmental agreements. Phase in the timelines for due diligence, reporting and withholding and align them with the intergovernmental agreements. The final regulations phase in over an extended transition period to provide sufficient time for financial institutions to develop necessary systems. In addition, to avoid confusion and unnecessary duplicative procedures, the final regulations align the regulatory timelines with the timelines prescribed in the intergovernmental agreements.

Expand and clarify the scope of payments not subject to withholding. To limit market disruption, reduce administrative burdens, and establish certainty, the final regulations provide relief from withholding with respect to certain grandfathered obligations and certain payments made by non-financial entities. Refine and clarify the treatment of investment entities. To better align the obligations under FATCA with the risks posed by certain entities, the final regulations: (1) expand and clarify the treatment of certain categories of low-risk institutions, such as governmental entities and retirement funds; (2) provide that certain investment entities may be subject to being reported on by the FFIs with which they hold accounts rather than being required to register as FFIs and report to the IRS; and (3) clarify the types of passive investment entities that must be identified and reported by financial institutions. Clarify the compliance and verification obligations of FFIs. The final regulations provide more streamlined registration and compliance procedures for groups of financial institutions, including commonly managed investment funds, and provide additional detail regarding FFIs’ obligations to verify their compliance under FATCA.

Bacchus Capital Management Provides Follow-on Growth Capital to Wine by Joe Bacchus Capital Management, LLC, a San Franciscobased private equity firm providing strategic capital in the wine industry, has made a follow-on investment in Wine by Joe, one of Oregon’s largest and most prominent wine producers. This capital infusion enables Wine by Joe to further expand its national and international distribution, as well as build inventory and infrastructure. Concurrently, Wine by Joe has added Anthony Van Nice, an industry veteran with a track record of success, to the position of Chief Operating Officer. Van Nice will be

responsible for all business operations of the winery including the development and implementation of the company’s sales, marketing and strategic plans. He will work closely with Joe Dobbes, Founder, President and Winemaker. “Bacchus continues to back a winner; we’re proud of their continued support and partnership,” stated Joe Dobbes. “I started this company 10 years ago with $50,000 and a deep passion for winemaking. Today, we’re one of the largest wine producers in the

state. A deeper relationship with Bacchus enhances our resources and the industry expertise we need to support our own three brands, Dobbes Family Estate, Wine by Joe and Jovino, as well as our custom winemaking, bulk wine and control label business. Adding Anthony to our team clearly illustrates where this company is headed and shows that we’ve got what it takes long term. He joins Gretchen Boock, my first employee and now our GM, at the helm, which enables me to truly focus on my passion – winemaking, vineyard operations, and promotion of the company.”

Corporate Board Member and NYSE Euronext to Host Annual Risk Oversight Conference Corporate Board Member, an NYSE Euronext Company, will host an intensive, one-day Risk Oversight in the Boardroom event on April 9 at the New York Stock Exchange. Developed specifically for executives and board members of publicly traded companies, the event will challenge attendees to think more strategically about the opportunities and risks in today’s complex, global environment. “In our annual Law and the Boardroom Study with FTI Consulting last year, concerns over operational

/ February 2013

risk garnered the second highest percentage of responses from both directors and general counsel,” said TK Kerstetter, chairman of Corporate Board Member. “This event will empower boards and their management teams to better evaluate emerging risk exposures to make the right strategic choices.” Through a mix of expert panel presentations, audience Q&As, in-depth breakouts, and off-therecord peer group discussions, the event will take a deep-dive into critical issues such as characteristics

of an effective risk oversight process, data security implications in today’s digital environment, aligning your compliance programs to mitigate risks, the board’s and CFO’s respective roles in risk, and the post-election political and regulatory landscape. Taking place at the historic and iconic NYSE building, attendees will have the opportunity to take a tour of the NYSE Trading Floor at the conclusion of the event.

ACQUISITION INTERNATIONAL

NEWS:

from around the world

Interactive Data Provides Managed Services to Industry’s First Regulated Interest Rate Swaps Exchange Interactive Data Corporation, a leading global provider of managed ultra-low latency IT and market data feed services to facilitate electronic trading, has agreed to provide a full suite of services to trueEX, LLC, the first interest rate swaps exchange approved by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM). Interactive Data is providing trueEX with low-latency hosted services through its 7ticks platform. These services will include monitoring and support for the trueEX matching engine and network architecture, along with connectivity to leading global exchanges

such as the CME and the ICE via the 7ticks network for post trade execution clearing solutions. trueEX market participants will be enabled to access financial exchange matching engines from anywhere on the 7ticks global network. “We provide trueEX and its market participants with managed services designed to help address key issues related to the new swaps trading environment, helping to facilitate market participants with liquidity, fast execution and clearing,” said Emmanuel Doe, president, Trading Solutions Group for Interactive Data.

Interest rate swaps were previously traded mainly by phone and lacked regulatory oversight. As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, OTC derivatives trading is now mandated to be electronically executed and cleared in order to provide greater market transparency and efficiency while also reducing systematic risk. In response to this mandate, trueEX founded the first DCM that will serve the $300 trillion global interest rate swaps market when it begins operations in early 2013. This electronic exchange has been designed to meet the needs of market makers, asset managers, hedge funds and other buy-side firms.

TAIFEX and Eurex agree on strategic alliance to cooperate in derivatives trading TAIFEX, the Taiwan Futures Exchange, and Eurex Exchange, the international derivatives marketplace, has announced an extensive product cooperation to trade and clear derivatives based on the TAIEX index, one of the most heavily traded Asian equity indexes. A Letter of Intent (LoI) was signed today by Dr. Tony Fan, Chairman TAIFEX, and Andreas Preuss, CEO Eurex, in Taipei, Taiwan. The LoI foresees to establish a link between both marketplaces. As a first step, the partners plan to list TAIEX options and TAIEX futures as daily expiring futures on Eurex Exchange in Q4 2013. The TAIFEX/EUREX project is the first substantial case of cooperation with an international market operator in Taiwan’s capital market according to Taiwan’s regulator FSB (Securities and Futures Bureau), part of the FSC (Financial Supervisory

Commission). They say that they encourage the development of mutually beneficial endeavors of this kind. Dr. Tony Fan said:

“The partnership with Eurex is part of our strategy to sustain the competitiveness in the fast-changing global derivatives market. Licensing our flagship products TAIEX futures and TAIEX options to Eurex as the underlyings of daily expiring futures is a major milestone in the Taiwan capital market. This cooperation will enable investors to trade TAIEX futures and TAIEX options while TAIFEX market is closed. Our members can also thereby expand their business by providing customers with diversified products and services.”

Andreas Preuss said:

“This cooperation is a major milestone of our Asia strategy to broaden our global product suite. Our members will benefit from direct access to one of the most successful derivatives contracts in Asia, while Taiwanese market participants will have the opportunity to trade Taiwan’s most liquid index derivatives contracts during Taiwanese after hours. The cooperation also aims to attract new Eurex customers for TAIEX products outside of Taiwan and increase the interest for Eurex products from Asia-Pacific.”

Dell Enters Into Agreement to Be Acquired By Michael Dell and Silver Lake Dell Inc. has signed a definitive merger agreement under which Michael Dell, Dell’s Founder, Chairman and Chief Executive Officer, in partnership with global technology investment firm Silver Lake, will acquire Dell.

average closing share price during the previous 90 calendar days ending Jan. 11, 2013. The buyers will acquire for cash all of the outstanding shares of Dell not held by Mr Dell and certain other members of management.

Under the terms of the agreement, Dell stockholders will receive $13.65 in cash for each share of Dell common stock they hold, in a transaction valued at approximately $24.4 billion. The price represents a premium of 25% over Dell’s closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumours of a possible going-private transaction were first published; a premium of approximately 35% over Dell’s enterprise value as of Jan. 11, 2013; and a premium of approximately 37% over the

The Dell Board of Directors acting on the recommendation of a special committee of independent directors unanimously approved a merger agreement under which Michael Dell and Silver Lake Partners will acquire Dell and take the company private subject to a number of conditions, including a vote of the unaffiliated stockholders. Mr Dell recused himself from all Board discussions and from the Board vote regarding the transaction.

ACQUISITION INTERNATIONAL

A Special Committee was formed after Mr Dell first approached Dell’s Board of Directors in August 2012 with an interest in taking the company private. Led by Lead Director Alex Mandl, the Special Committee retained independent financial and legal advisors J.P. Morgan and Debevoise & Plimpton LLP to advise the Special Committee with respect to its consideration of strategic alternatives, the acquisition proposal and the subsequent negotiation of the merger agreement.

February 2013 /

FUND NEWS:

from around the world

Hedge Funds Post Strong January Gains As Macro Risks Shift Hedge funds posted strong gains in January as the resolution of the US fiscal cliff and investor optimism regarding the European banking and sovereign debt crisis drove gains across all hedge fund strategies to begin 2013, according to data released by HFR. The HFRI Fund Weighted Composite Index rose by +2.8 percent, the seventh gain in the last eight months and the strongest monthly gain since January 2012. Fund of Hedge Funds gained +2.5 percent, their third consecutive gain and sixth in last seven months. Equity Hedge led all strategies as global equity markets rallied across nearly all regions, with the HFRI Equity Hedge Index gaining +3.7 percent for January. Gains were also distributed broadly across Fundamental Value, Growth and Quantitative Directional strategies, with these returning +4.5, +3.8 and +3.8 percent, respectively.

Short-selling strategies were the lone sub-strategy to decline in January, losing -3.7 percent. Fixed incomebased Relative Value Arbitrage (RVA), the leading area of strategy performance in 2012, extended recent gains as the HFRI Relative Value Index gained +2.5 percent in January, the strongest monthly gain since September 2010. Significantly, RVA gains also occurred through an environment of increasing yields in most developed markets globally. Event Driven (ED) strategies also posted strong gains as activist positioning in Herbalife and other dynamic M&A situations contributed to performance, with the HFRI Event Driven Index advancing +2.2 percent, the eighth consecutive monthly gain for the Index and the strongest month since January 2012.

Currency volume soared in January in response to catalysts of inflation targeting by the Bank of Japan and falling sovereign yields across Italy, Spain and Greece driving the Euro to a 14-month high against the US dollar. The HFRI Macro Index gained +1.6 percent, only the second monthly gain in last six months and the strongest gain since April 2011, with positive contributions across Quantitative, Discretionary, Commodity, Currency and Emerging Markets exposures. The HFRI Macro Systematic Diversified/CTA Index gained +1.9 percent, improving on a disappointing decline of -2.5 percent for 2012, while the HFRI Emerging Markets Index gained +3.4 percent, improving on last year’s gain of +10.3 percent.

FRM Capital Advisors seeds Japan focused hedge fund FRM Capital Advisors (“FCA”), the seeding division of FRM, Man Group plc‘s (“Man”) fund of hedge fund division, has entered into a strategic relationship with a Japan focused hedge fund. FCA will make a significant investment in a fund launched by Arena Capital Management Limited (“Arena”), a Hong Kong based investment advisor. Arena, established in May 2012 by Toby Bartlett (CIO), manages a Japanese Long-Short Equity strategy focusing on domestic demand sectors, constructed with a factor neutral pair trading book. Joining Mr Bartlett at Arena are Greg McLaughlin (COO), Ayumu

Kuroda (Head of Trading and Risk Systems) and Yukimi Oda (Research Analyst). Patric de Gentile Williams, Head of Seeding at FRM said: “This deal reinforces the global nature of FCA as a seeding business and is the first investment we have made since FRM was acquired by Man last year. We view Asia, and specifically Japan, as an important focus in our manager research, where we have a local office and a significant investor base. “Arena’s focus is on the Japanese domestic demand sector and Toby has demonstrated experience in researching and investing in this space from his

time at Highbridge, Citadel and Fidelity Investments Japan. We see this both as an opportunity to potentially generate alpha in what is traditionally a less researched market by hedge funds where we have seen greater inefficiencies that allow managers that do in depth analysis to seek an edge, and as an opportunity to attract assets from investors looking to allocate to pure Japanese Long-Short Equity funds. “In addition, the recent drop in the Yen and newly elected Prime Minister Abe’s growth focused economic strategy has caused a noticeable rally in the domestic market that may spur meaningful investor interest.”

Apollo Aviation Group Completes $595 Million Fund Raise Apollo Aviation Group (Apollo Aviation) and Sciens Capital Management LLC have jointly announced that Apollo Aviation raised approximately $595 million from a broad array of investors for its second aviation fund, Sciens Aviation Special Opportunities Investment Fund II (SASOF II). SASOF II is managed by Apollo Aviation, a full service commercial aircraft asset manager jointly owned by its founders and principals, William Hoffman and Robert Korn, and by an affiliate of Sciens Capital Management LLC. SASOF II is a follow-on fund to the $213 million Sciens Aviation Special Opportunities Investment Fund (SASOF), which was raised in 2010. “SASOF II will seek to acquire mid-life commercial aircraft for lease and/or immediate disassembly and resale of the systems, components and parts,” said Mr Hoffman, Apollo Aviation’s Chairman.

/ February 2013

As of today, SASOF II has acquired 12 commercial aircraft and three engines including Boeing 737 NG, Airbus A320 CEO and A340 aircraft models. Nine of these aircraft are on lease and Apollo Aviation currently plans for the remainder to be either sold or disassembled with the parts then being sold. Sciens Chief Executive Officer John Rigas said:

“We are delighted with the accomplishments and growth of Apollo Aviation. They have now become the global leader in managing mid-life and end of life commercial aircraft and we look forward to our continuing cooperation in the future.”

Apollo Aviation is an aviation asset manager with offices in the U.S., Ireland and Singapore. Apollo Aviation’s activities include acquiring, refurbishing, marketing and leasing commercial jet aircraft, engines and related assets as well as “parting out” commercial aircraft. Founded in 2002, Apollo Aviation has grown from a small advisory boutique to a leading fullservice aviation asset manager. Apollo Aviation has over $1.4 billion of aviation assets under management (including commitments to SASOF II) representing over 110 aircraft and 70 aircraft engines.

ACQUISITION INTERNATIONAL

FUND NEWS:

from around the world

Fixed income most popular strategy in 2012 reveals Alix Capital The latest quarterly European research on the UCITS hedge funds industry published by Alix Capital, the Genevabased provider of the UCITS Alternatives Index (UAI) family of indices, reveals that more than half the inflows into UCITS hedge funds (56%, EUR 13.2 billion) were allocated to fixed income strategies during 2012, followed by macro strategies (24.7%, EUR 5.8 billion). Other key findings include: • UCITS hedge funds assets under management (AUM) increased by 20% in 2012 reaching a new high of EUR 140 billion • The three largest single strategy managers all witnessed significant increases in UCITS hedge fund AUM in 2012: Standard Life Investments’ AUM increased 59.8% to EUR 17.437 billion; GAM was up 41.2% to EUR 12.535 billion and M&G’s AUM doubled to EUR 10.801 billion

• EUR 4.7 billion was invested in fixed income strategies in Q4, representing 72% of the total inflows to UCITS hedge funds for the quarter • Three funds achieved performance gains in excess of 30%, 22 returned a performance greater than 20% and 84 achieved a performance above 10% in 2012 Louis Zanolin, CEO of Alix Capital, says: “Despite the current economic environment, the total assets managed in UCITS hedge funds continued to grow at a stronger rate than the rest of the hedge funds universe. “Fixed income was the most popular strategy and I believe this was not only money shifting from other strategies in the hedge fund space, but from long only products as well. Investors wanting exposure to fixed income are looking to absolute return funds in order to limit their risk exposure. Traditional offshore investors are also looking to UCITS vehicles for increased liquidity and

to meet new regulatory constraints. “In 2012 the five largest fixed income funds attracted 55% of total inflows into the UCITS hedge funds sector across all strategies, and 90% of the inflows into fixed income strategies. This can be attributed to performance – some of these large funds achieved the best results in 2012, for example M&G Optimal Income – but also to investors’ preference for blue chip names, especially true for new investors coming from the long only space.” The report provides in-depth information on 802 single manager alternative UCITS funds and 80 alternative UCITS fund of funds, as well as UCITS hedge fund platforms analysis. It covers strategy breakdown, fund and advisor location, liquidity, asset flows, assets under management (AUM) and performance for UCITS single strategy and fund of hedge funds.

Australian private equity continues to post steady returns in Q3 2012 The Cambridge Associates LLC Australia Private Equity and Venture Capital Index (C|A Australia Index) rose by 2.90% in the third quarter of 2012, according to the latest quarterly report released by The Australian Private Equity and Venture Capital Association Ltd (AVCAL).

respectively on an annualised, net of fees basis compared to the S&P/ASX 300 Index’s 1.69% and 3.61% annualised returns over the same horizons. In the twelve months leading to 30 September 2012, a total of AU$2.2B was distributed back to LPs while $2.3B was drawn down.

For the 12 months ending 30 September 2012, the C|A Australia Index rose by 6.44%. Over the same period, the S&P/ASX 300 Index surged to record a return of 14.46%. However, over the longer 3 and 5 year horizons the C|A Australia Index outperformed the public equities index, rising by 8.33% and 2.97%

Australian Private Equity & Venture Capital Association (AVCAL) CEO Dr Katherine Woodthorpe said,

“The Index continues to demonstrate how private equity as a whole has consistently generated stable returns over the long term

compared to the more volatile listed markets, on an after fee basis.” Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia, said: “While the strong performance of both public and private indices in the third quarter is good news to investors overall, we continue to see Australian private equity and venture capital offering greater stability long term.”

Emerging Markets Hedge Funds Position for Currency Volatility Emerging markets hedge funds posted strong gains to conclude 2012 which continued through early 2013, as stimulus measures in developed markets contributed to EM currency and equity market gains. The HFRX Multi-Emerging Markets Index gained +13.1% for 2012, including a gain of +4.8% in 4Q, with contributions across each of the BRIC (Brazil, Russia, India, and China) economies. Hedge fund capital invested in Emerging Markets increased by $11.2 billion during the fourth quarter of 2012 to a record of $139 billion (272 billion Real, 867 billion RMB, 7.5 trillion Rupee, 4.2 trillion Rubble, 521 billion Saudi Riyal) according to the latest HFR Emerging Markets Hedge Fund Industry Report, published by HFR, the established global leader in the indexation, analysis and research of the global

ACQUISITION INTERNATIONAL

hedge fund industry. Net capital inflows to Emerging Markets hedge funds exceeded $3.0 billion in 4Q12, the highest quarterly inflow since 1Q08.

“Currency volume and volatility increased sharply in 4Q12 in anticipation of, and in response to, Bank of Japan inflation targeting and stimulus measures, and these have continued as Emerging Market economies prepare for the impact that additional stimulus measures and competitive currency devaluation are likely to have in 2013,” stated Kenneth J. Heinz, President of HFR.

“Although Macro hedge funds produced only limited gains in 2012, the environment has improved in recent months. Emerging Markets and Macro hedge funds are likely to experience significant opportunities in early 2013 as EM monetary authorities adjust to developed market stimulus efforts by utilising inflation targeting and various economic stabilisation measures.”

February 2013 /

APPOINTMENTS:

from around the world

RWC Announces New CEO RWC has announced that Dan Mannix will assume the role of Chief Executive Officer from the end of February. Mannix replaces Peter Harrison who will remain as non-executive Chairman of RWC and a significant shareholder in the business. Harrison is taking up a senior position at Schroders. Mannix joined RWC in 2006, as a senior member of the management team and has been a key player in the growth of the number of RWC’s investment teams, as well as leading its highly successful business development team. During this period, some of the industry’s most respected fund managers have joined RWC and the firm’s assets have grown to over $5bn.

As part of the transition from Harrison to Mannix, Paul Larche has been appointed to the newly created position of Chief Operating Officer and James Tollemache has been appointed Head of Sales for RWC. Sean Capstick joins RWC as Head of New Markets reporting into Mannix. Capstick has over 20 years’ experience in financial services and has known RWC for many years during his time as EMEA Head of Prime Brokerage for Bank of America Merrill Lynch and Global Head of Capital Introduction for Deutsche Bank. Schroders have had a shareholding in RWC since June 2010 and will remain a noncontrolling shareholder.

Peter Harrison, outgoing Chief Executive Officer for RWC, commented:

“Dan has been an excellent partner throughout the development of RWC. I believe strongly that he will continue to build the firm successfully. He has a very strong sense of the cultural imperatives necessary for success, as best demonstrated by his excellent record in building the sales and marketing efforts for the firm. RWC has developed significantly as a business in the past few years, and I look forward to being a continuing part of the next stage of its growth.”

Akin Gump Adds Senior Tax Professional in London Jon Hanifan has joined Akin Gump Strauss Hauer & Feld to lead its European hedge fund tax advisory team. He joined the firm from Ernst & Young, where he was a director in the hedge fund tax practice. Mr Hanifan will work closely with the investment management practice, which was recently joined by partners Tim Pearce and Ian Meade in London, and with Jonathan Ivinson, tax partner in Akin Gump’s London and Geneva offices. Mr Hanifan specializes in the provision of tax advisory services to hedge fund clients, including the tax implications of structuring new businesses, restructurings, international expansion or relocation, and mergers and acquisitions.

Stuart Leblang, co-head of Akin Gump’s tax practice, commented: “Jon has extensive experience advising hedge funds and their investment managers on the full range of tax issues affecting their businesses. With our expanding presence in London, Jon will provide critical tax support to our hedge fund clients in the U.K. and elsewhere in Europe.” David Billings, who heads the investment management practice in London, added: “Having a very strong tax advisory practice to add to our strong funds capability in London will benefit our clients both in London and elsewhere. We are pleased to continue to enhance our offering to clients and are delighted that Jon has joined us.”

Jon Hanifan also commented:

“Akin Gump’s funds team is highly respected around the world. The opportunity to join the team and to help further expand the growing practice’s capability across the funds sector is a challenge I am hugely looking forward to.” Founded in 1945, Akin Gump Strauss Hauer & Feld LLP is a leading international law firm with more than 850 attorneys in offices throughout the United States, Europe, Asia and the Middle East.

SRZ Announces the Addition of Leading Litigators Barry Bohrer and Lisa Prager SRZ has announced that Barry A. Bohrer and Lisa A. Prager will join the firm as partners and Lara Covington as special counsel in the litigation practice. The group’s arrival from Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. brings further depth to SRZ’s 100-person litigation and enforcement practice.

“We are very excited to welcome this outstanding group of lawyers to the firm,” said Alan S. Waldenberg, chair of the firm’s executive committee and chair of the tax group. “Expansion of the firm’s litigation and enforcement practice continues to be a key strategy for the firm in response to the increased needs of our clients and today’s regulatory climate.”

/ February 2013

Mr Bohrer, well known for his experience in handling white collar, complex civil and securities enforcement matters, will reside in the New York office. Ms Prager, who has extensive expertise in government investigations and enforcement actions relating to the Foreign Corrupt Practices Act (“FCPA”), antimoney laundering laws and export controls, served as head of the Morvillo Abramowitz D.C. office. At SRZ, she will split her time between D.C. and New York. Ms Covington, who practices in the areas of FCPA, export controls and government contract issues will be based in the D.C. office.

“The opportunity to bring on board partners with the established reputations of Barry and Lisa is thrilling for our firm,” said Robert M.

Abrahams, co-chair of the litigation practice. “With their extensive years of experience and litigation successes, they will be a great resource for our clients and mentors to our younger attorneys.” Commenting on their move, Mr Bohrer said, “We are delighted at the prospect of joining a firm of such depth, breadth and resources. We look forward to joining old friends, with new platforms for our practices and new challenges to meet on behalf of clients.”

ACQUISITION INTERNATIONAL

APPOINTMENTS:

from around the world

Brinker Capital Taps Mitch Mellen as Regional Director Brinker Capital, a leading investment management firm, has hired Mitchell J. Mellen as Regional Director - Full Service Sales. Mr Mellen, who covers Indiana, Kentucky, Michigan, and Ohio, reports to Lee Dolan, Principal and National Sales Director for Brinker Capital.

“Brinker Capital remains committed to excellence in investment management and advisor support. In our most recent Advisor Satisfaction Survey, 93% of advisors said they’d refer Brinker Capital to another

advisor,” noted Mr Dolan. “We are humbled by this support and are confident that Mitch, with his more than 25 years of investment experience, will help entrench the Brinker Capital ‘legacy of excellence’ in his territories.”

“I’m delighted to be part of the Brinker Capital team and look forward to helping my colleagues continue to build on their impressive accomplishments in the full-service sales arena,” said Mr Mellen.

Prior to joining Brinker Capital, Mr Mellen served as President of Distribution at ING Funds, Director of Sales at Strong Capital Management and National Sales Manager at Mainstay Funds.

Mr Mellen earned his BS degree in psychology and economics from the University of Wisconsin at Madison. He holds FINRA series 7, 24, 63, 65, 66 and 201 licenses.

Piper Jaffray Elects Philip Soran to Board of Directors Piper Jaffray, a leading investment bank and asset management firm, has announced that Philip Soran joined its board of directors and has been appointed to the audit committee, effective February 5, 2013. Philip Soran most recently served as president of Dell Compellent until his retirement in March 2012. He co-founded Compellent Technologies, Inc. in 2002 where he was president, chief executive officer and director until the company was acquired by Dell in February 2011. Prior to that, he was the co-founder,

president, chief executive officer and a director for data-storage products maker, Xiotech Corp. which was later acquired by Seagate.

Commenting on Soran’s appointment, Piper Jaffray Companies chairman and CEO, Andrew Duff stated, “We welcome Philip’s wealth of experience and proven leadership. His expertise in building and

growing successful companies will serve the board well.” Soran is a current board member of SPS Commerce, Inc., Hutchinson Technology, Inc. and Help/Systems LLC. He holds a bachelor’s degree in education from the University of Northern Colorado.

Dynasty Financial Partners Welcomes Michael Moriarty as Director of Investment Platforms Dynasty Financial Partners has hired Michael Moriarty as Director of Investment Platforms. Mr Moriarty will be based in New York City and has been appointed to the Dynasty Financial Partners Investment Committee. He will report to Todd Thomson, Chairman of Dynasty, in Mr Thomson’s role as interim Chief Investment Officer. As Head of Investment Platforms, Mr Moriarty’s responsibilities include developing and expanding the firm’s investment management solutions, including the Dynasty Separately Managed Account (SMA) and unified Managed Account (UMA) capabilities delivered in partnership with Callan Associates, one of the largest institutional investment consulting firms in the US, and Envestnet, a leading provider of technology-enabled wealth management solutions. According to Mr Thomson, “We are delighted to welcome Michael to the Dynasty team. He brings a depth of experience in investments and hedge funds to our investment platform and our Network Advisors. As we continue to expand our sophisticated, institutionally-researched investment

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solutions for the elite advisory firms in the Dynasty Network, Michael will be invaluable in structuring solutions, educating Network Advisors, and ensuring the platform operates seamlessly.”

and managing businesses investing in and allocating to hedge funds. Most recently, he served as Chief Operating Officer of PioneerPath and Surveyor Capital, Citadel Asset Management hedge funds.

Ed Swenson, COO of Dynasty Financial Partners, added, “Over the course of his career, Michael has demonstrated success building and running investment solutions. The advisors in the Dynasty Network are increasingly seeking the improved risk management and lower cost of SMAs and the efficiency and scalability that comes from UMAs. We are also seeing increased demand for alternative investments. Dynasty is committed to building out our investment capabilities in partnership with the leading independent Institutional Investment research firms, and Michael has the experience and talent to help execute this strategy.” Mr Moriarty joins Dynasty Financial Partners after 20 years of experience in financial services, primarily in building

Prior to Citadel, he was Managing Director and Head of Hedge Fund Linked Derivatives in the Americas for J.P. Morgan, responsible for merging the Bear Stearns and J.P. Morgan businesses as well as managing the combined hedge fund portfolio. Previously, he was Senior Managing Director and Global Head of the Hedge Fund Linked Derivatives business at Bear Stearns. Mr Moriarty holds a Masters in Law and Diplomacy from Tufts University, with a concentration in International Finance, and a B.A. from Davidson College, where he graduated Phi Beta Kappa.

February 2013 /

DEAL GURU:

EU buyouts: Finding a way to exit the boom year deals

EU BUYOUTS

— Finding a way to exit the boom year deals

-----------------------------------------------------------------------Charles Magnay is a Partner at Altius Associates. ------------------------------------------------------------------------

Many of the headline-hitting buyouts of the boom era are still sitting in private equity portfolios. Charles Magnay, Partner at Altius Associates, looks at how GPs have adapted to exit large companies in the postLehman world. Large European buyout groups are facing a difficult environment in which to sell some of the very large businesses that were bought at the peak of the market. With the IPO markets closed and a number of very large companies under private equity ownership, just how are the sponsors who own these businesses going to realise them and return cash to investors? In many cases the clock has reached the five year mark and is very definitely ticking. Of the three established exit routes (public markets, trade sales and secondary sales), the IPO market remains largely closed, and financing is almost certainly unavailable for financial sponsors to be realistic buyers in a secondary transaction. While a full trade sale of one of these large businesses is theoretically possible, it’s likely to be highly problematic given the uncertain economic environment in Europe and with vendors looking to receive cash rather than paper. GPs have therefore been forced to become increasingly innovative in seeking liquidity and,

10 / February 2013

thankfully for the asset class, have been successful in this regard in a number of cases. They have looked for ready sources of capital and found them amongst sovereign wealth funds, public market fund managers willing to bridge the pre-IPO gap, and corporates, often of Asian origin, though by no means exclusively. For example, KKR has been notably successful in persuading corporates to take stakes in two of its businesses: China’s Shandong Heavy Industry Group acquired a 25% stake in German forklift manufacturer Kion and Walgreens has agreed to buy Alliance Boots - a 2007 FTSE 100 transaction that really called the peak of the market - in a two stage transaction. Other potential buyers include sovereign wealth funds and those firms, in particular a number of the Canadian institutions, with the appetite and capability to make direct investments. For example, KIRKBI and Ontario Teachers’ made a €500m investment in Denmark’s ISS (owned by EQT) following its pulled IPO. CVC’s sale of a 21% stake in Formula One to three asset management firms for $1.6bn shows an encouraging interest from what are effectively public market investors in private equity owned assets. A Singapore IPO is expected this year and should herald the final liquidity event for one of Europe’s most successful private equity investments. There remain assets that, for a variety of reasons, have either not found the right buyer or are not yet

ready to be moved on, perhaps needing more time for further deleveraging. There are also rumours that some assets need to be reduced in size to be made more palatable and speculation continues that Acromas – the insurance group backed by CVC, Charterhouse and Permira - may be divided up once again into its two constituent parts: Saga and The AA. Overall however, it appears that high quality and strategic businesses are saleable, even in an environment where the public markets are effectively closed. We applaud GPs for their ingenuity in tapping these alternative buyers and believe that, just as the secondary market has improved the exit options for the lower mid-market, so this development will open up a broader range of strategic options at the larger end of the buyout market for many years to come.

Company: Altius Associates Name: Charles Magnay Email: charles.magnay@altius-associates.com Web: www.altius-associates.com

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Barristers, Solicitors, Consultants & Licensed Intellectual Property Attorneys Muluh & Partners is distinguished by a highly collaborative culture which values the contribution of our diverse team both within Muluh & Partners and in the wider community. Our style is open, service focused, and friendly. We believe that our commitment to client service, commerciality, and teamwork provides benefits to our clients and enhances effective business relationships. The hallmark of Muluh & Partners is the quality of its experts. As a matter of fact, our experts adhere to a general philosophy of providing excellent service, in a bid to maintain our Standards. We of Muluh & Partners recognize that rapid response times are essential to client service. In recognition of this: Muluh& Partners contact persons shall be available by telephone or email seven days a week or their telephone system or email replies shall offer alternative contacts that are available during periods when the contact persons cannot be available.

Muluh & Partners Immeuble IBCG Sise Face College de la Salle - Akwa BP. 1632 Douala - Cameroon Tel/Fax: +237 33 42 95 75 Hotline: +237 96 39 46 03 Email: info@muluhpartners.com Website: www.muluhpartners.com

ON THE COVER:

Deal of the Year – Gulf Capital Acquires Majority Stake in Sakr Energy Solutions

DEAL OF THE YEAR

— Gulf Capital Acquires Majority Stake in Sakr Energy Solutions -----------------------------------------------------------------------Dr. Karim El Solh is Co-Founder and Chief Executive Officer of Gulf Capital, one of the largest and most active private equity firms in the Middle East and Richard Dallas is Head of Private Equity at the Firm . Dr El Solh and Mr Dallas speak to Acquisition International about a recent landmark acquisition. ------------------------------------------------------------------------

Gulf Capital, an Abu Dhabi-based Private Equity Firm having 300 of the most prestigious institutional and individual investors in the Gulf as its shareholders, has proved to be one of the most active private equity and alternative investment companies in the region in 2012. The Firm is currently investing its USD $533 million GC Equity Fund II, raised from regional and global investors. One of the landmark deals the company has completed in 2012 is the acquisition of 82.7% stake in Sakr Energy Solutions FZCO (SES), a leading provider of temporary power generation services, now rebranded as Smart Energy Solutions, to reflect current ownership. SES, which is a UAE-based temporary power generation company, has already secured with the help of Gulf Capital two growth funding deals worth a total of US$ 42 million, including one from Gulf Credit Partners and one from the International Finance Corporation (IFC), a member of the World Bank Group. The US$ 25 million investment by Gulf Credit Partners into SES represented a milestone for and the industry at a time when credit for SMEs from traditional financing institutions and banks was

tough, tight, and sometimes even non-existent. The US$ 17 million IFC funding will help SES address temporary electricity shortages in developing countries in the Middle East, Sub-Saharan Africa, and South Asia, where power outages often cut into productivity and hamper economic growth.

Sub-Saharan Africa.” He also described how Gulf Capital’s private equity division is focused on acquiring sizeable and controlling stakes in highly profitable and rapidly growing companies within a select number of fast-growing industries in the GCC region.

SES operates in a growing region with a booming population, yet one with inadequate power generation infrastructure and deep structural power supply/demand imbalances.

Gulf Capital was awarded the “Best Private Equity Firm in the Middle East” Award by Banker Middle East Magazine in 2011 and 2012. The Firm was also voted the winner of the Private Equity “Deal of the Year” Award for MIS exit at the 7th Private Equity World MENA Conference in 2011. Very recently, the Firm also received the “Best Investment Company of the Year” Award at Arabian Business Achievement Awards 2012, and its SES Acquisition Deal is now named “Deal of the Year” by Acquisition International Magazine.

The company builds and rents a wide range of power generation systems, which provide governments and businesses with short-term solutions to energy shortfalls, giving states time to implement efficient, long-term solutions. The power rental industry has seen dramatic growth over the last five years, with governments remaining under increasing pressure to provide greater access to electricity. The company operates from Jebel Ali Free Zone in Dubai, UAE, and was launched in July 2007 as a result of a carve-out of the Middle Eastern assets of GE Energy Rentals (following its acquisition by Aggreko). Dr Karim El Solh, Chief Executive Officer of Gulf Capital said: “The acquisition of SES is in line with our focused strategy to invest in defensive yet fastgrowing sectors that benefit from the regional population growth, governmental infrastructure spending and rising GDP per capita, including energy and power. The power sector represents a resilient and rapidly growing sector, not only in the MENA region, but also in South Asia and

SES’s founders are the current senior management led by Mr Waleed Isaac and Mr Ghassan Ayoub and Sakr Holding, a group of companies specialising in manufacturing power generation sets, as well as implementation of turnkey power projects. Since its foundation, Mr Waleed Isaac and Mr Ghassan Ayoub have successfully led the company and expanded its footprint to cover the UAE, Saudi Arabia, Qatar, Yemen, Oman, and Tanzania. Dr El Solh continued that “the strategic reasoning behind the SES acquisition included: •

Attractive Global Market with Structural Supply/ Demand Imbalances: The global deficit in power

SES powering a regional project in Oman

/ February 2013

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ON THE COVER:

Deal of the Year – Gulf Capital Acquires Majority Stake in Sakr Energy Solutions generation increased from 50 GW in 2004 to 150 GW in 2010, most of which remains unmet. According to the International Energy Agency, the deficit is expected to grow to 600 GW by 2015. •

The Temporary power market size in the Middle East and Africa is estimated to be 8.4 GW Iraq, Angola and Nigeria are expected to grow by 73%, 8% and 6% per year in the next 5 years, respectively. This presents SES with an excellent opportunity to grow its regional footprint, improve utilization and pricing. Despite the regional governments’ plans and efforts, the pressure on the national grids is expected to continue to increase over the long term driving the demand for temporary power. The regional market is expected to grow by ~6% per year in the medium term

•

Strong and Experienced Management Team: CoCEO’s are ex-GE and have solid combination of technical and sales skills. Both have more than 10 years of experience in the temporary power industry

•

Scalable Business: increases in power generation capacity enable temporary power companies to improve their margins and Return on investment capital (ROIC) significantly.

•

Strong Track Record Driven by Engineering and Project Management Capabilities: driven by SES’ strong technical and operational capabilities and ability to operate in difficult environments

•

Ability to Penetrate New High Growth Markets: The Company has consistently expanded its footprint in the GCC and Yemen and has recently been able to gain a foothold in the African market.”

•

The demand for temporary power significantly outstrips supply and this shortfall is expected to increase over the medium to long term on the back of a booming population, especially in the Middle East North Africa South East Asia (MENASA) and Africa regions. The global deficit in power generation increased from 50,000 MW in 2004 to 150,000 MW in 2010, most of which remains unmet and the deficit is expected to grow to 600,000 MW by 2015. This presents SES with a significant opportunity to grow in the medium and long-term.

As SES embarks on an aggressive regional expansion, Richard Dallas, Head of Private Equity of Gulf Capital, said the funding and support of Gulf Capital has been instrumental in helping the company achieve its ambitious expansion goals. SES’s yearto-date 2012 results have benefited from significant investment in fleet, and higher utilization rates than those achieved during 2011. He said: “We would like to see SES emerge as one of the best funded and most successful operators in the region and able to supply more power to existing and future customers across the region. Therefore, we continue to closely work with the management of SES on expanding this platform across the region via organic growth and acquisitions.” The future for SES looks bright, as Richard Dallas concluded: “SES will continue to tap into existing power shortages in emerging economies with a focus on Sub-Saharan Africa and frontier markets in the Middle East (Yemen and Iraq).

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“Our long-term goal for SES is to finance its expansion across the region and to position it as the premier provider of temporary power rental solutions in the Middle East and Africa.” Keeping this in view, Gulf Capital closely worked with IFC, a member of the World Bank Group, to secure the financial package of USD $17 million for SES, to help address temporary electricity shortages in many conflict-affected countries.

Leverage Team’s capital markets expertise to position companies for maximum momentum at exits

Gulf Capital distinguishes itself from the competition as it is the most active and diversified alternative investment company in the region, and the only one with three alternative business platforms of Private Equity, Real Estate, and Credit & Mezzanine. Gulf Capital’s private equity division has a focused investment strategy which is based on the following principles: -

Acquire significant strategic or controlling stakes in established market leaders within the MENA region

Target companies with USD $30 - $250 million of enterprise value in pre-identified, rapidly growing industries (oil & gas, healthcare, utilities, food and beverage, consumer goods, logistics, education, infrastructure and financial services)

Accelerate growth and enhance profitability through active ownership – Gulf Capital is a catalyst for change and growth

Company: Gulf Capital Name: Dr. Karim El Solh Name: Richard Dallas Web: www.gulfcapital.com

Company: Smart Energy Solutions Name: Ghassan Ayoub Name: Waleed Isaac Web: www.sesrent.com Address: PO Box 18051 Jebel Ali, UAE Telephone: +971 4 886 2067

February 2013 /

SECTOR SPOTLIGHT:

Akuğur Assists in Go Mongo Acquisition

AKUĞUR ASSISTS IN GO MONGO ACQUISITION

-----------------------------------------------------------------------Mehmet Akuğur is the founder of Akuğur Law Firm. ------------------------------------------------------------------------

Akuğur Law Firm established in 2006 by Mehmet Akuğur and located in Istanbul, Turkey, assisted in the acquisition of 60% of the stakes of Go Mongo, which is a well-known Turkish restaurant chain specialised in Mongolian Barbeque concept, by Dogus Group, which is one of the biggest conglomerates in Turkey that is currently engaged in making acquisitions in the Turkish dining and entertainment sector. Akuğur Law Firm is a well reputed and a boutique law firm consisting of experienced, professional and capable lawyers representing their clients in domestic and crossborder levels with the highest quality legal services and by acting responsibly through personal approach. The firm deals with wide range of areas of legal practice by considering specific needs of each client through the particular features of their businesses in an effective way and a creative touch starting from the first contact with the client and throughout the consulting and retainer term. The firm serves consultancy services majorly and mostly on mergers and acquisitions, corporate works including but not limited to establishment of companies and their growth, convention of general assembly and board meetings, drafting, negotiation and finalisation of agreements and provision of legal advice and assistance to its clients in every aspect of Turkish law including, but not limited to, real estate, banking and finance, insurance, labor law issues and dispute resolution.

/ February 2013

Since the Firm has been involved in many national and international mergers and acquisitions, it became one of the leading legal consulting firms in the Turkish M&A market. Mr. Mehmet Akuğur has a talk with International Acquisition regarding the said transaction and provided information on the procedures handled throughout the realisation of the stake transfer in question: “Go Mongo established in 2007 is the first and sole agent of Mongolian Barbeque concept in Turkey and has opened several restaurants in short period of time. In addition, worldwide known Gourmet Burger having 43 restaurants in the United Kingdom is established in Turkey in 2008. Since Dogus Restaurant Entertainment and Management, shortly known as D.ream, established in March 2012 as an affiliate of Dogus Group, which is one of the most known and the biggest establishment in Turkey, to render a service in entertainment, food and beverage sector, was seeking for the acquirement of stakes of Go Mongo to expand the brand domestically and internationally. We represented the sellers as the shareholders of Go Mongo, by considering and evaluating all risks and negotiating and revising share purchase and shareholders agreements. All along the process of starting from signing of such agreements until closing, we have evaluated and considered the major provisions covering conditions precedent, share purchase price, representations and warranties, provisions regarding shareholding structure and company management after closing from a just point

of view considering also the priorities and sensitivities of our client.” Thanks to its experience in M&A transactions reaching over an amount of $7billion, Akuğur Law Firm has been able to establish a user-friendly mechanism protecting the benefits of both parties in respect of future acquisitions in question. The Firm accomplishes to reach a prestigious position in the legal arena in a short time with its coordinated and professional approach. Creativity, experience, quality in services and adoption of the foregoing principles resulted in Akugur Law Firm being granted with two of the 2012 Acquisition International Legal Awards, namely, the Turkish Legal Due Diligence Firm of the Year and Boutique Law Firm of the Year.

Company: AKUGUR LAW OFFICE Name: Mehmet Akugur, LL.M. Email: mehmeta@akugurlaw.com Web: www.akugurlaw.com Address: Levent Mahallesi, Cilekli Caddesi, No:10 Levent, Besiktas-Istanbul/TURKEY Telephone: +90 212 286 48 28

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SECTOR SPOTLIGHT: God and Man in Court1

GOD AND MAN IN COURT 1

By James Rosenblum

What do trials, theater, literature and religion have in common? The connection with the theater and literature may be clear but religion? However, what do clients do when juries are deliberating? And when they get legal papers? They prey, of course!

Similarly, witnesses who view themselves as being judged by a higher power are likely to be judged better by jurors than witnesses who try – as many do – to play to the crowd, or manipulate facts in hopes of appealing to the witness’ perception of what is convenient to the trial.

Many laymen (relative to lawyers) don’t appreciate the connection with theater and literature, much less religion. When laymen hear about “cases,” they ask what the evidence is, as though it is some cold, immutable object. Many clients say, “I did nothing wrong,” as though that is the end of the case.

Meanwhile, apart from establishing paradigms of justice and how people should treat each other and how they should be judged, religion has a flip side which shows how fragile human judgment can be, despite the most compelling evidence. Let’s start where we began, with prayer. Many people pray but many prayers are not answered. Many people have faith in a higher power but many do not and will not in the absence of definitive proof. Conversely, many people accept the mystical elements of religion regardless of science. In the courtroom setting, where human conduct is judged retrospectively, magical thinking may prevail so that jurors really believe that an alternative course of action would have produced a better outcome, no matter how speculative that view may be.

People do not ask not how the evidence will be presented or how it can be molded or framed, or the credibility of witnesses or the ability of witnesses to effectively communicate complex principles. They also do not ask who will be hearing the trial or making decisions. In fact, there is a significant connection between trials, theater, literature and religion. Managing trials, like foreign policy or large domestic programs or major corporate undertakings, require 5 grand strategies. Great stories, great themes and deep cultural traditions, are integral to effectively presenting evidence and motivating jurors. Understanding this is important for those involved in high stakes litigation whether the case involves complex areas of medicine and science, patent infringement or securities. Let’s start with religion– beyond prayer. First, there are biblical themes which provide support to life in general and stressful moments in particular. There are stories of mortals facing over-whelming odds. True, such miracles which are unlikely in court. Even federal judges have their limits. But types of miracles seem to occur. Documents surface which may not have appeared during discovery. Witnesses blurt out statements which transform cases. I had a case where there was a bomb scare at a strategic time, giving us an adjournment to prepare for new evidence. A miracle? Perhaps not, but it seemed that way. Religion is also important for counsel and witnesses in assessing how they – and others – will be judged. A person who is religious – in the spiritual, not the ceremonial sense – is someone with intrinsic values including respect for others, empathy, compassion, and humility. Think of how you react to people you see during religious ceremonies – holy, serene, they can do no wrong – compared to how you react to many people at work – greedy, conniving, and overly competive. Religion –and its cultural roots and its deep appreciation for justice and for compelling stories – can have a profound effect. Great sermons describing basic elements of relationships, can inspire powerful emotions. Great sermons inspire respect and even awe even when they describe the mysticism of religion. True, congregants are predisposed to believing their pastors, but the power of the stories – the principles involved, the importance of human dignity, the importance of respect for others, and the limitations of human capacity are transcendent.

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So, applying religion to the courtroom is not as simple as loving mercy and walking humbly with God. The point is that having religious values, and appearing to treat people in court the same way you would treat them in a religious context, and having an appreciation for the limits of human action no matter how sincere the intent is to help others, are positive factors that are likely to elicit favorable judgments or, at least, help you cope with adversity. What is the power of the theater? It is not the ability to read lines. It is the ability to make statements with conviction and to portray powerful images even if fictitious. Conviction produces believability. Like great actors who reach deep into themselves to transform themselves, witnesses need conviction, they need to persuade others. What about novels? Great stories provide another dimension relevant to trials. Novels have enormous character development. Readers get to know characters in great detail. They know if they are good or evil, caring and compassionate or callous and indifferent, reliable or unreliable. The knowledge that the reader gets of welldeveloped characters creates a type of bond so that the reader knows whether to trust, or mis-trust, like, or dislike, the character as the novel evolves. The development of perspectives in novels are also relevant to trials insofar as it alters the focus of attention or the detail of the landscape observed. Determining the theme, the focus and the perspective are important tasks. Another lesson which novels teach us is that while powerful stories may reach and persuade many people, no story reaches everyone. People are so diverse that they invariably filter characters and circumstances through their own lenses so that final judgments will not necessarily be the same. However, compelling stories, character development, relationships, and context are important components of success in many cases.

Lest these lofty attempts at being thought-provoking become too etherial, let me try to provide concrete illustrations. Why do large corporations lose in court, simply because they are “deep pockets,” as many people think? There is clearly much more. The CEO does not want to get involved at all, much less go to court. Too important. Too busy. Understandable, but CEO’s, like national leaders, are the voice of the company. And, if they do deign to go to court, they are unlikely to shake their focus on profits and quarterly reports. The same is true for many individuals – doctors, lawyers, architects, engineers – they have their scientific or engineering or legal principles which they believe should rule the day without regard to the personalities and relationships. But consider the following examples of testimony in a hypothetical case against a car manufacturer: Example 1: Yes, the car exploded on impact, and yes, other cars we made exploded. Yes, there were tragedies. But we consulted expert, reports were equivocal, we balanced the need for safety with the need for marketable pricepoints. And we did no wrong. Example 2: Yes, some cars exploded and we were devastated. I know the engineers who designed them. They have families who drive these cars. They have friends who drive these cars. And we all drive these cars. We are a large company with many thousands of employees, but we have a common goal, to provide a product which helps people and which is safe. We have made millions of cars which have enhanced the lives of millions of people. I have worked for years with the people who built these cars. I know these people. I see them during the week and on weekends. We did safety testing – because safety is our main concern and analyzed these tests as carefully as any human beings could. The tragedies occurred despite all of efforts. So, yes, knowing the issues and responses are all critical. Loving mercy and walking humbly with God is not a substitute for preparation. But preparation alone is not often not enough. 1 ( c ) James Rosenblum

Rosenblum Newfield, LLC

Company: Rosenblum Newfield, LLC Name: James Rosenblum Email: JBR@JBResq.com Web: www.rosenblumnewfield.com Address: One Landmark Sq, Stamford, Ct Telephone: +1 203.358.9200

February 2013 /

SECTOR SPOTLIGHT:

2013 Shipping & Maritime Predictions

2013 SHIPPING AND MARITIME PREDICTIONS The world’s oceans are the backbone to global trade, but suffering from high oil prices and over capacity, many operating in the industry have to enter 2013 with a fresh approach in order to stay afloat. Tough times have encouraged radical thinking the world’s sharpest shipping minds are now focussing and advising on how to cut costs and lessen the negative environmental impact of shipping.

Acquisition International speaks to Lubis Ganie Surowidjojo to discuss environmental regulation and change in the industry.

-----------------------------------------------------------------------Dr Mohamed Idwan (‘Kiki’) Ganie is the Managing Partner of Lubis Ganie Surowidjojo (LGS). -----------------------------------------------------------------------LGS was founded in 1985 by Timbul Thomas Lubis, Dr Ganie and Arief Tarunakarya Surowidjojo. Since then, LGS has grown into the largest corporate transactions and corporate litigation firm in Indonesia that is also widely recognised for its shipping practice. Dr Ganie has more than 30 years of legal experience, and specialises in commercial transactions and commercial litigation, including alternative dispute resolution. His expertise covers general corporate/company law, banking law, finance, bankruptcy and restructuring, mining, investment, acquisitions, infrastructure projects/project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance. Dr Ganie explained that the shipping industry has seen a slowdown during the financial crisis, noting that this can be seen in the significant decline of shipping rates, which have in turn had an effect on commodity markets due to changes in logistic costs. “Specifically in the shipping industry, we have seen the excess capacity causing financial troubles for some well established companies and even sales of newly delivered vessels due to a lack of potential for utilisation,” he added.

/ February 2013

Discussing the best way to encourage the industry to pursue green initiatives, Dr Ganie stated that considering the current downturn, any changes will be coloured by business considerations of the players rather than non-mandatory programs or even regulation, which would be difficult to introduce given the current strained financial conditions. “Having said this, however, certain green initiatives are able to provide cost savings, and these are the types of initiatives that one would expect to be successful in the near future, not just due to the environmental considerations but due to the much more pragmatic focus of the industry players on their costs,” he observed. On way in which the industry is trying to reduce its environmental impact, and cut costs, is reducing the speed of ships, thus lowering fuel consumption and costs. Dr Ganie stated that the slowdown in the industry has resulted in significantly decreased prices for customers, which have in turn opened up new, longer routes that have previously been cost prohibitive. “As such, the effect of the slowdown may not have necessarily been a positive development for the environment, since the vessels are still largely in operation, but are transporting cargo that would not have previously been shipped over such distances.”

Looking to the future, Dr Ganie believes that the excess capacity is likely to balance out due to the early retirement of certain vessels and the eventual slowdown in deliveries of new vessels that have been adding to the available tonnages at a time of reduced shipping volumes. “These two effects, combined with the signs of economic recovery in some regions can be expected to put the industry on a path to recovery in 2013, even if a full recovery is unlikely in such a short term,” he concluded.

Company: Lubis Ganie Surowidjojo Name: Dr. Mohamed Idwan (‘Kiki’) Ganie Email: ganie@lgslaw.co.id Web: www.lgsonline.com Address: Menara Imperium 30th Floor, Jl. H. R. Rasuna Said Kav. 1 Kuningan, Jakarta 12980, Indonesia Telephone: +62 21 831-5005, 831-5025

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SECTOR SPOTLIGHT:

Aerospace: Airplane Carbon Trading

AEROSPACE

Airplane Carbon Trading l The European Union (EU) recently backed down from enforcing its airplane-emissions carbon-trading program. The fight over this attempted solution has been incredibly contentious, and governments around the world have condemned the EU for the idea. The EU’s proposed action was the world’s first attempt to affect other countries’ climate policy, requiring airlines to buy permits accounting for their full flight emissions unless the country of origin had similar carbon controls as the European emissions trading scheme. President Barack Obama signed a law last week to prevent U.S. airlines from contributing to a European carbon-trading scheme, but negotiations for a global compromise will continue at a branch of the United Nations. The aviation emissions problem is a significant one. Aviation is a growing source of emissions, and those emissions are largely unregulated. Emissions from aviation are increasing against a background of decreasing emissions from many other industry sectors. Acquisition International speaks to Santamarina y Steta to examine aviation emissions. their emissions between the years of 2013 and 2020. Consequently, only a third of their allowances would need to be purchased from the market. On the other hand, regarding passengers, e Commissioner for Climate Action of the European Commission, Mrs. Connie Hedegaard, has stated that the additional cost of an airline ticket from London to New York would be less than $1.5USD per passenger, which would be barely noticeable. In our view, the inclusion of aviation in the EU ETS will not pose a risk to the aviation industry; it would boost the carbon – trading international market, and may cause airline producers to develop new technologies towards green ways to transport. In a nutshell, cap a trade schemes are a very effective tool to make companies rethink their processes and make them more efficient through the development of new technologies.

-----------------------------------------------------------------------Juan Carlos Machorro is the Chair of Aeronautics and Airports practice at Santamarina y Steta, S.C. Héctor A. Garza C is a Senior Associate of the Climate Change practice. -----------------------------------------------------------------------A trending toping regarding emissions-trading in the world is the inclusion of aviation in the EU Emissions Trading System (EU ETS). Such system sets forth that all cross board passenger flights with destination or departure from the EU shall perform their flights in compliance with the standards approved by the EU regulations that will now restrict the greenhouse emissions produced by aircraft; otherwise they will need to buy extra credits for the extra amount of gases produced (cap & trade). The European Court of Justice resolved on October 6, 2011 on the legality of such inclusion. USA, China, and India have leaded a group of 17 countries confronting this decision, mainly based on international law jurisdiction arguments. US has been particularly adamant about the implementation of EU ETS, to the point where President Obama signed the “European Union Emissions Trading Scheme Prohibition Act” last November, 2012, while China threatened to cancel an important airplane purchase agreement entered into with Airbus. On recent developments, EU has decided to freeze the coming to force of the above

ACQUISITION INTERNATIONAL

system for one year in hope that this “token” serves as a catalyst to reach an international agreement when the United Nations International Civil Aviation Organisation (ICAO) meets in October 2013. In our view, the EU airplane-emissions carbon trading program is consistent with the “polluter pays” principle contained in the Rio Declaration on Environment and Development. Likewise, a natural effect of these type of schemes is an natural introspection of companies about their process, machinery, and in general, way to produce profit. The foregoing normally results in the development of new technologies in order to enhance productivity. In essence, we think that a cap & trade scheme is always beneficial as a “harnessing” regulation of activities in which the intervention of the authority is limited to directing the market towards a more environmentally – friendly approach rather than intervening or regulating. The big question here is: will airlines or passengers be affected by the implementation of the EU ETS airline measure? In our view, the answer is no. Regarding airlines, the proposed scheme foresees that airlines will be granted free allowances in amounts equivalent to two-thirds of

In our view, the fear of accepting the above inclusion from a US - China perspective may be moved by the implied acceptance of the existence of climate change and the natural effect such acceptance may have for future developments regarding an international carbon trading scheme. We think that, from a US perspective, this concept has already been given and should not be matter of concern, particularly considering that the California cap and trade compliance obligations have already became binding on January 1, 2013. The EU ETS airline may as well end up serving as a catalyst to establish a formal international carbon trading scheme.

Company: Santamarina &Steta, S.C. Name: Juan Carlos Machorro Email: jmachorro@s-s.mx Web: www.s-s.com.mx Address: Campos Elíseos 345, Fl. 2, 3 and 11, Col. Chapultepec Polanco, C.P. 11560 México, D.F. Telephone: +5279-5400

February 2013 /

SECTOR SPOTLIGHT:

Corporate Fraud & the Forensic Accountant

CORPORATE FRAUD & THE FORENSIC ACCOUNTANT

According to the 2012 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners (ACFE), it is estimated that organisations lose 5% of their total revenue to fraud; this translates into a staggering global annual loss of $3.5 trillion. Corporations exist in a world where cases of fraud are piling up and businesses are becoming more vigilant, as a result Forensic Accountants and Fraud Examiners have never been in such demand.

Largely down to rapid recent advances in technology, corporate fraud and the art of preventing it are evolving. Technology has in one respect it has made it quicker and easier to find and analyse data i.e. speeding up the process of criminal investigation, however it has also made the world a much smaller place, which in many cases gives an advantage to the fraudster. When called upon, a forensic accountant can help to uncover acts of dishonesty and calculate the exact value of the consequences to the board and investors. In a separate ACFE report, findings suggest that it takes an average of 18 months before a fraud is detected, 72% of cases are uncovered by whistle-blowers, management reviews and internal audits, therefore internal vigilance is absolutely essential in the fight against fraud. Prevention and deterrence is the best way to combat the natural tendencies of people facing financial pressures, however after the event, the right forensic accountant can help a company identify who is involved, how and why it happened and will work with you to ensure every possible system is in place to prevent it from happening again. Acquisition International spoke to Niederer Kraft & Frey to get the firm’s opinion on corporate fraud and the role of the forensic accountant.

In addition to the challenges faced by any such investigations, Dr Frick stated that Swiss law severely limits not only the ways an investigation is allowed to be undertaken and data retrieved, but also the way such data may thereafter by used, in particular if cross-border data transmissions become necessary.

Dr Kammerer noted that the most popular methods to deter corporate fraud include: a strict email and web-policy; the four eye principle; reasonable financial incentives to the employees; and, most importantly, a participative corporate culture stressing compliance values.

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fashion, at times under considerable time pressure. In the field of forensic services in which many of our lawyers have practical business experience we add independence and credibility to any such exercise. As a tier 1 firm we strive to service our clients with effective, top quality work, yet aiming at keeping things as simple as possible.”

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We believe that this field of business will even further expand in 2013 and the forthcoming years, he concluded.

“Such limitations can only be overcome by applying and enforcing strict standards to any investigation process,” he added. -----------------------------------------------------------------------Dr Adrian W. Kammerer and Dr Thomas A. Frick work as partners at the law firm of Niederer Kraft & Frey Ltd (“NKF”), one of Switzerland’s largest tier 1 law firms. -----------------------------------------------------------------------A substantial number of NKF’s associates and partners have been and continue to be involved in major Swiss internal investigation cases. Not only does NKF have the expertise and the ability to support with considerable man power but the firm also has sufficient, well trained and experienced human resources to assist in such matters - on a 7/24 basis if need be. In cooperation with specialised IT providers, the firm offers a one-stop shop for any investigation, with a tailor-made team to suit a client’s needs. “Forensic experts require many skills to perform their specialised jobs,” explained Dr Kammerer. “As attorneys, we are well trained and used to work team wide in an analytical, detail-orientated, flexible and people-oriented

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Dr Kammerer noted that corporate fraud is at a low level in Switzerland, but certain industries (in particular the building industry) may be more prone to corporate fraud. “We cannot confirm whether the actual number of fraud cases has increased, but Swiss companies are increasingly seeking our assistance in reviews of vast documentations (supported by sophisticated IT solutions) as well as in litigation cases resulting from corporate crime,” he observed. Discussing fraud in the digital age, Dr Frick stated that business in increasingly exposed to fraud and cybercrime given the sometimes sophisticated instruments used by fraudsters, such as: phishing; hacking; identity theft; etc. “In their majority, clients seeking our assistance in forensic matters use our experience and knowledge as a precautionary measure to implement and maintain enhanced internal precautionary instruments,” he commented.

Company: Niederer Kraft & Frey Ltd. Web: www.nkf.ch Address: Bahnhofstrasse 13, CH-8001 Zurich Telephone: +41 (0)58 800 8000 Name: Adrian W. Kammerer Email: adrian.kammerer@nkf.ch Name: Thomas A. Frick Email: thomas.frick@nkf.ch

February 2013 /

SECTOR SPOTLIGHT:

Private Investigators: Fighting Financial Crime

PRIVATE INVESTIGATORS

Fighting Financial Crime

l Financial crime continues to undermine the security of businesses around the world; with it affecting everything from assets to employees, more and more firms are choosing to take precautions where the security environment presents a high risk. As such it comes as no great surprise that the private detective industry in the UK has seen a 21% growth in the past year. What is perhaps surprising though is the type of firm/individual beginning to employ private investigators, for instance the notable increase in their use by solicitors. This leap has been put down to the fact that increasingly, solicitors are hiring specialists to help in key areas such as: to locate former employees and assets, to help build evidence for litigation and M&A transactions, to enforce judgements, to predict patterns of behaviour and to collect electronic data. A private investigator is the perfect solution when it comes to removing doubt and it is increasingly the route that professionals in difficult situations are opting for. Choosing the right private investigator for a specific business or financial problem is essential to give the best chance of success. Acquisition International speaks to Kessler International for a detailed look at private investigation and financial crime. “As with any forensic audit, pieces of key information often become elusive,” he continued. “But where other accounting firms give in, Kessler International excels. Our decades of experience in forensic auditing give us the edge when the facts have been hidden, and our worldwide proprietary information databases provide a valuable resource that the competition simply can’t match.” Mr Kessler explained that, due to the current economic climate, there has been a severe uptick in investigations relating to Ponzi and other fraudulent financial schemes. Kessler has also seen tremendous growth in the areas of investigation and financial forensics as applied to high profile divorce matters. The firm has also recently obtained federal government service contracts in the fields of finance and technology. He stated that the fields of forensic accounting and private investigation have grown exponentially over the past two decades, adding that it has become more important than ever for those who wish to commission such professionals to question and investigate for themselves the experience and qualifications of the firm or individual they wish to use. “So many firms are hiring one accountant with little or no forensic accounting experience or credentials OR little or no investigation experience and credentials who claim that they now offer a combination of the two.

Many accounting firms approach even the most complex assignments as routine, and don’t investigate or even recognise every possibility when conducting forensic and investigative audits. Kessler is different. We explore every prospect and consider every factor in order to guarantee a comprehensive audit. Our auditing expertise makes us the ideal candidate when you need to know more than the spreadsheets are showing.

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20 / February 2013

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-----------------------------------------------------------------------Michael G. Kessler is the President & CEO of Kessler International. Mr Kessler is a professional licensed private investigator, computer forensics engineer and certified forensic accountant. Mr Kessler founded Kessler International nearly three decades ago for the purposes of providing a global clientele with fraud detection, prevention and legal support services. -----------------------------------------------------------------------“Accountants look at the numbers. Forensic accountants look behind the numbers®,” said Mr Kessler. “At Kessler, we believe in going above and beyond the expectations of our clients, and we strive to provide financial investigative services that are second to none. We dig deep, going through documents with a fine-toothed comb to get to the root of the problem and giving clients maximum results for their investment.

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Kessler International predicts that the growth of the demand for forensic accounting and auditing services will also grow exponentially, as sophisticated frauds and swindles are increasingly perpetrated worldwide by a progressively more savvy community.

Mr Kessler noted that auditors sometimes face serious challenges that may hinder and even prevent a successful review, adding that the staff at Kessler is distinguished by its ability to face, evaluate and overcome the difficulties that would normally discourage other firms.

Company: Kessler International Name: Michael G. Kessler Email: mkessler@investigation.com Web: www.investigation.com Address: 45 Rockefeller Plaza, 20th Floor, New York, NY 10111 Telephone: +1 212-286-9100

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SECTOR SPOTLIGHT:

The Evolving Role of the Actuary in M&A: Looking Beyond Numbers

THE EVOLVING ROLE OF THE ACTUARY IN M&A

Looking Beyond Numbers -----------------------------------------------------------------------Steve Allan is the M&A Practice Leader for EMEA with Towers Watson. -----------------------------------------------------------------------Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. With 14,000 associates around the world, we offer solutions in the areas of employee benefits, talent management, rewards, and risk and capital management. My role is focused on leading our work supporting clients across the range of people related issues within an M&A transaction. I work with colleagues throughout the world and across the range of consulting disciplines helping to bring the right team together to support our clients and providing leadership to consulting teams. I also draw on my actuarial skills with 20 years of international consulting experience, to provide specific advice around pensions and benefit issues on multi-country deals. We also have a dedicated team of colleagues focused on the technical issues specific to M&A transactions within the financial services sector. Where deals arise in that area, we work closely together as they address the specific issues in that industry and I bring the broader human resources (HR) focus to the combined team. Collectively we support many hundreds of M&A projects in any given year, over 800 in 2012 for example. As well as the many deals where I am personally involved, I also have a role in ensuring that as a firm we can leverage our global reach and 14,000 colleagues to support this volume of client activity and continuously improve our expertise and experience. By background I am a qualified actuary with both UK Fellow of the Institute of Actuaries and US Fellow of the Society of Actuaries designations, and also an Honorary Visiting Fellow at Cass Business School in London. When does Towers Watson get involved in deals in the HR space? We are deeply involved across all the stages of a transaction from deal preparation and M&A readiness, due diligence, implementation planning and costing through to deal implementation and the practical process of bringing employee groups together as a combined workforce. During the early stages of deal preparation and M&A readiness, working with clients there is often a focus on capability building within the HR team, recognizing that many individuals within HR may have limited to no practical experience of M&A deals. There is also a significant focus on anticipating where difficulties may arise in the deal and working to address those ahead of time, for example building links to the corporate strategy teams, education on the M&A process and the practical importance of issues such as corporate culture and their impact on post deal integration. Within the due diligence stage much of the work is focused on the key financial risks associated with HR programs, in practice these tend to be heavily focused on issues such as employee benefits (such as pension arrangements) as well

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as compensation related issues such as changes in control triggers. The benefits related due diligence draws on core actuarial skills such as the identification of unfunded, underfunded or under reserved liabilities associated with pension and benefit plans in every country covered by the deal and the ongoing financial impact of these plans. Within the financial due diligence process these risks have to be identified and quantified, at pace and often with limited information, and within the specific context of the deal and the client’s objective for the transaction.

workstreams (whether led by ourselves, the client or other third parties), to ensure that the deal implementation process moves at the appropriate pace alongside the other deal timelines in the overall project management process. Our final layer of support comes through the change management approach that we bring to our consulting, ensuring that not only are the right activities under-taken, at the right time, but that key stakeholders buy into the overall process and the new post-deal organization retains and engages employees.

As the deal moves past the financial due diligence phase we work to support the implementation planning and then execution of the deal. This work builds upon the due diligence activity and will often take a deeper dive into specific areas of practical concern as further information becomes available.

What is the skill set required from the actuaries you work with and how do you see this changing?

Across the HR space where does Towers Watson support clients in M&A deals? There are seven broad areas of focus where we support our clients • Pensions and employee benefits – assisting clients in understanding the risks and exposures associated with the plans they are taking on and ensuring that they can implement an integrated overall rewards approach that balances attraction, retention and engagement needs against costs and risk factors. •

Leadership – working with clients as they structure, select, retain and equip an effective leadership group, and to put in place leaders who are capable of delivering on a new business agenda.

•

Culture – Recognising the importance of workplace culture in successful transactions, we work with clients to build an aligned vision and integrated culture that drives performance.

•

Communication – ensuring that employees know, feel and do the right things at each stage of the deal. Providing employees with the right information, at the right time, in an effective and engaging way.

•

Talent and organisation alignment – aligning and integrating functions to ensure the new organisation design is fit to support the future business strategy, with a smooth transition across to new organisation structure which has the right people, with the right skills in the right roles.

•

HR service delivery -- align the HR function with the needs of the merged company while balancing day-today operational needs.

•

Compensation policies and practices – helping clients migrate to appropriate compensation strategy and programs to drive employee attraction, retention and engagement at the right cost.

In addition to these seven focus areas we also provide broad support to coordinate and project manage all HR

The actuarial consultants supporting clients through M&A activity all have strong technical expertise. The nature of M&A is that we provide support in identifying significant financial risks (for example underfunded pension plans), and help clients make key business decisions (such as whether to proceed with a transaction, and if so, at what price and on what terms). One challenge is that M&A work is often performed at pace and with limited information, we rely on our experience and knowledge to quickly identify key issues, and we then phrase our findings and advice in concise business terms that help the deal team (who may be not HR experts), make informed business decisions. A key skill set for actuaries working in this space is the ability to explain what the actuarial findings mean, and give clear opinions on how the client should react. Equally important as these technical and consulting skills however, is the ability to work within the broader deal team including other consultants, advisers and a range of professionals from within the client teams. For many individuals the pressures of the deal are coming on top of their day job. Empathy and understanding the personal, as well as business, pressures that everyone is working under are central to maintaining the constructive and open working relationships that are important to collaboration and ultimately a successful and enjoyable process. This combination of technical and interpersonal skills is essential to working within the M&A space and is something that is becoming increasingly important as actuaries expand into a range of topics, including M&A, beyond the traditional core “actuarial” areas.

Company: Towers Watson Name: Steve Allan Email: steve.allan@towerswatson.com Web: www.towerswatson.com Address: 71 High Holborn, London, WC1V 6TP Telephone: +44 20 7170 2113 Twitter: @Steveallantw

February 2013 /

SECTOR SPOTLIGHT:

Managing Environmental Risks in M&A Transactions

MANAGING ENVIRONMENTAL RISKS IN M&A TRANSACTIONS l As businesses develop plans for growth in these still somewhat turbulent times, environmental issues play a big part in determining strategic growth options and the decision to buy or sell. Regulatory and enforcement trends are everevolving and can impact on business strategy, operations and entity valuation. Over the years there have been some major environmental issues that have halted corporate transactions and inevitably the deal has failed to complete. After acquiring a company, by default, the acquirer assumes environmental legacy costs, and the vendor also still has liability. It is therefore of the upmost importance for both sides to understand the environmental issues and risks involved before entering into a deal. Allen & Overy gives Acquisition International a detailed look at environmental risks in M&A transactions. economic conditions may have forced certain companies to postpone investments in this respect,” he observed. Discussing legislation, Mr Spaans noted that not much progress has been made with the intended comprehensive Environmental Act. The original plan to present Parliament with a bill in 2013 will not be achieved, and completion and implementation may be postponed until as late as 2018. The proposed new Nature Act has also incurred a delay as a result of the change in government, which has announced that the proposal will be amended. Furthermore, the third phased under the EU emissions trading system (ETS) has entered into force on 1st January 2013. “This raises various new legal questions on the allocation of emission allowances, as well as on the expected surplus of EU allowances on the market at the start of the ETS’ third phased,” commented Mr van Geen.

Allen & Overy assists businesses in assessing environmental risk related to deals by providing advice about the applicable regulatory framework for the relevant industry. The firm helps clients to understand the environmental law challenges of the transaction under consideration, as well as due diligence services ranging from highlighting ‘red flag’ issues to detailed full reports.

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The findings of the due diligence will be included in the transaction documentation through appropriate drafting. In addition, we provide both practical solutions and contractual structuring to address the specific environmental problems encountered, explained Mr van Geen.

noting that non-compliance may result in very high fines and even plant closures. He added that the authorities have become even stricter in their approach to enforcement after the Chemie-Pack disaster in 2011 and further significant compliance problems in 2012 with a tank storage terminal in Rotterdam and a phosphorus derivatives plant in the Flushing area, which has since gone bankrupt.

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Thus, a potential buyer should carry out an in-depth investigation regarding the target’s environmental compliance to avoid financial and publicity damage,” he advised. “In addition, the reorganisation that often takes place after an acquisition enable the buyer to implement solutions to rectify any non-compliance situations and improper housekeeping issues identified in the due diligence.

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-----------------------------------------------------------------------Partner Henry van Geen heads Allen & Overy’s Amsterdam environmental team, which includes counsel Jochem Spaans. ------------------------------------------------------------------------

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“We also work alongside environmental consultants to complement and translate their technical audit reports into compliance-focused action.”

Whereas soil contamination remains one of the hot topics in environmental due diligence, Mr van Geen stated that overall environmental compliance, including compliance with permit conditions, seems to be the most important topic in due diligence at the moment.

Mr Spaans stated that the enforcement of environmental law has always been fairly strict in the Netherlands,

“This is not only because the authorities have become even stricter in their approach to enforcement, but also as

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“Finally, the intentions of the new Dutch Government include to achieve a 16% share of sustainable energy in the total energy consumption by 2020, which would probably require, inter alia, accelerated construction of offshore wind farms and increasing the co-generation of biomass in coal-fired power plants,” he concluded.

Company: Allen & Overy Web: www.allenovery.com Address: Apollolaan 15, 1077 AB Amsterdam, PO Box 75440, Amsterdam, 1070 AK, Netherlands Telephone: +31206741000 Name: Henry van Geen Email: henry.vangeen@allenovery.com Name: Jochem Spaans Email: jochem.spaans@allenovery.com

February 2013 /

SECTOR SPOTLIGHT:

The Harmonisation in EU Contract Law: The Common European Sales Law

THE HARMONISATION IN EU CONTRACT LAW

The Common European Sales Law

l The EU has been looking to harmonise contract law for more than a decade. Now branded as the ‘Common European Sales Law’ (CESL), the European Commission assert that this new law would benefit consumers, and small and medium-sized enterprises (SMEs). The regulation aims to remedy a series of legal impediments that sellers and buyers face in their cross-border trade. This Common European Sales Law will not replace the existing national sales laws, but will exist autonomously, together with and next to the 27 national contract law systems already in place. Some have suggested that there are fundamental flaws in both the principle and the practical operation of the CESL. The key aim of the proposal for a new set of contract law rules for cross-border contracts was to remove barriers to cross-border trade. The evidence, however, suggests that the CESL will not promote trade and will be time-consuming and cumbersome to negotiate. Acquisition International speaks to Russell-Cooke LLP to get their take on the controversial law.

-----------------------------------------------------------------------Guy Wilmot is a partner at Russell-Cooke LLP working in the Corporate and Commercial department. -----------------------------------------------------------------------According to Mr Wilmot, the main issues in harmonising contract law in the EU have been dealing with the problems which arise due the fact that the EU Member States use very different systems of law. Some countries have common law systems while many more have Civil Code based systems. “The Commission has also faced considerable opposition and concerns from various corners, including national governments (particularly, but not exclusively, the UK) and consumer groups concerned about the possible effect on EU wide consumer protection legislation,” he explained. “The EU faces a real challenge to ensure that if the CESL is introduced in some form, it has the potential to bring benefits which will outweigh the challenges of implementation.” Mr Wilmot stated that introducing the CESL will be a huge political challenge. However, assuming these issues can be overcome, he believes that CESL may have some real benefits. For certain businesses the CESL may be an attractive proposal offering strategic benefits. “In particular, e-commerce businesses may find it is a useful tool to drive sales and to expand their business into markets

24 / February 2013

they had previously ignored,” he observed. “Using the CESL could be a useful branding pitch for some businesses – showing a business is open for cross-border trade.” While there are “undoubtedly positive aspects” to the introduction of the CESL, Mr Wilmot does not believe that it is a panacea for tackling all the problems and blockages which businesses and consumers face when undertaking cross-border trade. “Overall I do think that it is a positive step, but there is a real risk that when implemented the CESL is so limited in its scope as to be virtually useless,” he continued. “Currently, the CESL may only be used for consumer contracts or contracts with SMEs – as the CESL is optional why not allow anyone to use it? Why not apply the CESL to services, as it contains provisions dealing with services which are supplied with goods? “My preference would be for a broader, shallower law with complete freedom for parties to use it as they see fit.” Discussing the impact of the law on the UK, Mr Wilmot noted that there is some concern that the use of English law for commercial contracts may decline, however he thinks that this is unlikely. The principal purpose of the CESL is for consumer contracts.

“I do not think the impact will be significant, however for many UK commercial lawyers (who will need an understanding of the new law) CESL will be an introduction to certain Civil Code concepts,” he added. “The Commission seems fairly determined to press on with CESL despite the considerable push back they have received from both national governments and the European Parliament. The ambition of the CESL may be scaled back in order to move forward with something. I suspect that it will be several years at least before the law is actually in force,” he concluded.

Company: Russell-Cooke LLP Name: Guy Wilmot Email: guy.wilmot@russell-cooke.co.uk Web: www.russell-cooke.co.uk Address: 2 Putney Hill, London, SW15 6AB Telephone: +44 208 394 6531

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SECTOR SPOTLIGHT: Q4 Report

Q4 — Report

l Acquisition International’s final quarterly review of 2012 examines the factors driving the global economy, discusses some of the major findings of the last quarter and profiles the leading experts.

According to Mr Gonneau, Camden Associates distinguishes itself through its long experience of financing throughout the various cycles encountered in more than 20 years or practice. In Q4 2012, the firm was involved in a number of notable deals, including financing for an Australian private green energy company called Ignite and for a private French internet wine sale company 1855. Camden also acted as a placement agent for the IPO on Alternext of a medtech company called Vexim, the specialist in mini-invasive solutions for treating traumatic spinal technologies. Mr Gonneau stated that the situation in the UK in Q4 2012 was worse than the growth forecast as “the overall sentiment has turned quite negative”. Discussing the timing and funding of deals, he explained that depending upon the market conditions and deals complexity the funding can take from a month or two to over six months. “The funding can come from usual players or totally atypical players, private investors, family offices and business angels located in little known parts of Europe or North America,”

he commented. “This access to remotely located sources of capital is certainly one of Camden’s strong points and most certainly the key to its success in 2012”. Commenting on the most promising sectors, Mr Gonneau noted that there seems to be a revival of biotech deals. However, this is less in terms of volumes than in terms of renewed appetite of investors for the sector. He believes that the current attitude regarding growth and deal opportunities remains quite guarded and is deteriorating.

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-----------------------------------------------------------------------Jean-Claude Gonneau is the Managing Director at Camden Associates. ------------------------------------------------------------------------

“The appetite for risk taking is globally on the wane in the Eurozone,” he explained. “But as a specialised firm we have managed to find clients and investors across three continents. This required a fairly robust appetite for risk and a well-organised execution capability. “Agility and creativity are the only ways forward in the financing game at the moment,” he concluded.

It has certainly not improved since the end of Q4 2011,” he observed. “This tends to be what contrarians are looking for… He added that the ease of doing business in the UK has not improved in the last quarter as there are too many uncertainties affecting investment decisions, and there are “clear signs of investors’ fatigue”. While some recent fiscal decisions in France could negatively impact the sector, Mr Gonneau stated that “it is often when the outlook is the bleakest that the best opportunities arise”.

Company: Camden Associates Ltd Name: Jean-Claude Gonneau Email: jcg@camdenassociates.co.uk Web: www.camdenassociates.co.uk Address: 27 Hill street London W1J 5LP Telephone: +44 207 2909812 & cell +336 7498 4104

The award-winning URS Transaction and Compliance team has over twenty years’ experience of providing environmental, health and safety, technical and perational due diligence support services for a wide range of transaction sizes. URS works for industrial and financial clients across the full range of industrial sectors. We are recognised for our technical breadth and depth of knowledge, our pragmatism and business-minded approach and also for our rapid turnaround of both single assets and global portfolios. We have a substantial team of transactions and compliance professionals worldwide, supported by URS’ global network of scientists, engineers and experts across all major disciplines. We support and resolve transactions and compliance issues and advise on liabilities, associated costs, approaches and technologies during the transaction and post deal completion. Following the transaction, we help clients to integrate acquired businesses into their existing operations and to manage residual liabilities associated with divested or acquired businesses and assets.

www.urscorp.com

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Nick Howard - Email: nick.howard@urs.com - Telephone: +44 (0) 161 237 6050 Beth Myers-Graham - Email: beth.myers-graham@urs.com - Telephone: +1 513 419 3441

February 2013 /

SECTOR SPOTLIGHT: Doing Business

DOING BUSINESS l Acquisition International’s comprehensive guide to doing business around the world. ALGERIA

Company: KPMG Algérie Name: Mathieu Beaucourt - Partner and CEO Email: mbeaucourt@kpmg.dz Web: www.kpmg.dz Address: 44, Rue Abou Nouas, 16035 Alger, Algérie Telephone: +213 (0)21 600238 Ext : 205

EGYPT

Giza Spinning and Weaving Co Company: Giza Spinning and Weaving Co Name: Mohamed Marzouk Email: mg.marzouk@gizaspin.com Web: www.gizaspin.com Telephone: +202 38900210 -11 -12 -13 -14 - 15

in Cameroon

-----------------------------------------------------------------------Atanga Charles Mbah-Mbole, Esq, is the managing partner of ATANGA LAW OFFICE. -----------------------------------------------------------------------According to Mr Atanga, the current business environment in Cameroon can be described as yearning for foreign investors to boost its renewed economic growth after a good number of years of stagnation. “The main attraction of investors to Cameroon is its people who are very hard-working and ingenious,” he observed. “There is a very high rate of skilled and unskilled labour suitable for any sort of industry. The geographical location of Cameroon is another good attraction. Often referred to as Africa in miniature, Cameroon is the most influential country in the Central Africa sub region and a gateway to the economies of all these nations. Douala is not only the economic capital of Cameroon, but that of the entire sub region.” Mr Atanga stated that the key strengths of the Cameroonian economy are the agricultural sectors and the extraction industry. Cameroon is an exporter of cash crops such as coffee, cocoa, banana, rubber, and timber, amongst others. Its soil is rich in minerals such as iron ore, bauxite, gold, copper, coal, nickel, etc. Cameroon is also a petroleum exporting country.

26 / February 2013

“The vulnerability of the Cameroon economy can be said to be a less developed service industry and wanton corruption,” he added. Mr Atanga believes that the prospects for Cameroon in 2013 are good. He noted that there has been a steady but low growth rate for the past years, and that government efforts to revamp the economy seem serious in 2013.

in wages and payments with a strict control of public servants can also reduce this ill at the lower levels of public life. “Regarding predictions for the Cameroonian economy in 2013, I would say, a timid growth rate shall be maintained. More investors shall definitely come due to our relative peace in the region,” he concluded.

Discussing increased foreign investment, Mr Atanga stated that it will not only benefit Cameroon but all its neighbouring countries, especially as regional integration is being canvassed by the governments of these states. “However, the free movement of goods and persons from one country to another in the Central Africa sub region still leaves much to be desired,” he observed. Corruption remains a very significant setback to the progress of Cameroon and its economy. Mr Atanga noted that it is felt at all levels and this dilutes any serious efforts made by the government to fight it. “The recent efforts to fight corruption have yielded little or no fruits,” he explained. “A call to the respect of laws especially the constitutional provision for the declaration of assets and laws to fight illicit acquisition of wealth can help fight corruption in governing circles, otherwise called big corruption. An increase

Company: Atanga Law Office Name: Atanga Charles Mbah-Mbole, Esq Email: info@atangalawoffice.com or atanga@atangalawoffice.com Web: www.atangalawoffice.com Address: 2nd Floor Tayou Building, Fokou Douche Akwa, P.O. Box 4663 Douala Cameroon Telephone: 00 237 33 42 00 89 or 00 237 77 63 22 97 (Mobile) Fax: 00 237 33 42 00 69

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Doing Business

in Italy -----------------------------------------------------------------------Andrea Campioni is the Principal at ENVIRON. -----------------------------------------------------------------------Since 1982, ENVIRON helps businesses worldwide manage the most demanding health and environmental challenges. The firm’s clients include top 100 Largest Private Companies and major lending, private equity and investment institutions. ENVIRON operates in Italy through two offices in Rome and Milan. Mr Campioni has more than 24 years of experience in risk analysis and remediation (contaminated land assessment, international due diligence liability, strategic environmental management), conducting environmental audits of more than 200 industrial facilities located throughout Italy. Facilities assessed include petrochemical plants, power plants, pharmaceutical plants, mines, steel mills, hazardous waste storage and various manufacturing industries. “ENVIRON’s consultants apply not only their interdisciplinary technical and scientific expertise, but their business and transactional awareness as well,” commented Mr Campioni.

in Russia -----------------------------------------------------------------------Alexey Peshkov is a partner with Lex Borealis, a Russian local law firm based in Moscow. His practice areas are corporate and M&A, banking and litigation. -----------------------------------------------------------------------Discussing Russia’s prospects for 2013, Mr Peshkov stated that the environment has not changed significantly since 2012. He noted that administrative and legal reforms still stagnate, and this, taken together with notable political pressure brought by current political leaders most likely will not result in investment climate improvement (which is treated as the most crucial factor for development of the Russian economy). “As to legal entourage, the most expected and considerable event is adopting of amendments to Russian Civil Code which as anticipated will make domestic legal system and practices more adequate to contemporary international economic and financial system development,” he concluded. “However, even if adopted in 2013 in its most sophisticated version, it is most likely that first positive practical results may be seen not earlier than in 2014 – 2015.”

“Our successful completion of many thousands of assessments (Mergers, Acquisitions, Divestitures, Refinancing, Restructuring, Debtor-in-Possession (DIP) Financings) has provided valuable insights into the relationship between material risk- liabilities and deal structure -value.” Mr Campioni stated that the current global financial crisis, economic slowdown and the political instability have clearly affected Italy and have contributed to the significant decline in Italian M&A activity for the last two years.

environmental claims, environmental issues have to be addressed promptly, current and future risks and liabilities assessed and corrective action plans (e.g. Site remediation, regulatory compliance, litigation assistance) efficiently managed. “ENVIRON Italy assisted its clients successfully throughout the end-to-end process and furthermore assures the posttransaction support,” he concluded.

“Although uncertainty remains omnipresent, we believe it is an era with great challenges but of great opportunities for M&A and for ENVIRON business activities.” Indeed, he noted that, despite the M&A transaction slowdown, ENVIRON Italy kept revenues stable in 2012 while profits rose by 15%. He added that the peculiar situation of this lasting crisis have forced many companies’ boards to face complex and important decisions they have so far delayed. Environmental concern is one of them and due to its (direct and indirect) impact on the asset exit value, has become a priority. “Either the company was the object of an acquisition, a force divestiture, a bankruptcy procedure, or has received According to Mr Peshkov, the greatest strength and vulnerability of Russia’s economy is sufficiency of hydrocarbon resources. He noted that this financially supports the Russian economy and hampers administrative, legal and technological developments. Commenting on how Russia is portrayed globally, Mr Peshkov stated that recent political changes have complicated this.

Company: Environ Italy Name: Andrea Campioni Email: acampioni@environcorp.com Web: www.environcorp.com Address: Via Mentore Maggini, 50 - 00143 Rome, Italy Telephone: +39 06452 1440 on privatisation of state owned companies, thousands of production sites that badly require an upgrade (both technical and administrative) and many others. “All over again, the main factor that may sensibly deteriorate market conditions is changing political atmosphere and on-going rearrangements in governmental and legislative agencies. The outcome of these changes is hardly predictable, but in worst case scenario this may greatly discourage investors,” he concluded.

“Potential opportunities for economy developments are still breath-taking, but given the huge influence of the political over world on leaders of local business it has become much harder to describe even mid-term outlook for the business environment.” Mr Peshkov sees no factors that may trigger significant growth in the domestic market in general and in M&A and commercial real estate markets in particular. “Overall slowdown in lending and liquidity squeeze should not adversely affect investors’ (both foreign and domestic) attitude towards potential transactions as various internal factors may mitigate macroeconomic influence – plenty of attractive assets in the market ready for sale or restructuring, a number of state investment programs that may stimulate investors, officially announced focus

Company: Lex Borealis Name: Alexey Peshkov Email: peshkov@lexborealis.com Web: www.lexborealis.com Address: 21 Stanislavskogo building 2, 109004 Moscow Russia Telephone: +7 (495) 287 42 00

OTHER EXPERTS IN THIS AREA

Company: Akis Tech Ltd Name: Alok Kumar Email: alok@akistech.com Web: www.akistech.com Address: St. Burakova-27, Moscow 105118 Russia Telephone: +7-495-2762739

ACQUISITION INTERNATIONAL

February 2013 /

SECTOR SPOTLIGHT: Doing Business

-----------------------------------------------------------------------Saleem Sheikh is the Head of Legal and General Counsel at KPMG Al Fozan & Al Sadhan, Kingdom of Saudi Arabia. -----------------------------------------------------------------------The first “one-stop shop” multidisciplinary practice in the Kingdom of Saudi Arabia, KPMG Al Fozan & Al Sadhan provides a range of tax, audit, advisory and legal services, which is particularly advantageous to the client with regard to legal, tax and financial due diligence, or work that combines some or all these business services including legal services. For local companies (100% Saudi owned companies): The current restrictions which recently affected the Foreign Investment Act and the Guide of Procedures in SAGIA, have to some extent limited the market access for foreign SMEs to the Saudi Arabian market, and consequently increased the competitivity and eligibility to public procurement bids. “The business market in Saudi Arabia is buoyant and offers diverse opportunities for various business sectors,” Saleem elaborates. “Increasingly, there has been much emphasis on infrastructure projects; healthcare; education and training; and energy and utility areas. A number of projects

in Saudi Arabia -----------------------------------------------------------------------Khalil Khazindar is the founder and managing director of Khalil Khazindar Law Firm. -----------------------------------------------------------------------Mr Khazindar stated that Saudi Arabia is ranked the easiest place to do business in the MENA region, noting that the country is undertaking aggressive reforms and investments to become one of the world’s top 10 most competitive economies.

“Saudi Arabia offers the world’s most competitive energy prices to investment projects,” he observed. “As such, Saudi Arabia continues to be a natural choice for investors in all energy-intensive industries. Saudi Arabia is creating a world-class business environment that combines an ease of conducting business with low costs. It’s about unfettered access to regional markets and financial services.” Mr Khazindar describes Saudi Arabia’s Foreign Investment Authority (SAGIA) as “the government’s investor-friendly face”, adding that as well as a progressive regulatory environment, generous financial incentives and one of the world’s most stable currencies, the Kingdom offers and excellent standard of living.

are currently under way highlighting the important of these areas to the region. “The Kingdom has also witnessed a growing number of conversions from limited liability companies to joint stock companies as a means of raising capital and ultimate entry into an IPO for larger projects.” SAGIA recently reconsidered its Guide of Formalities related to granting permits to foreign companies. The main change concerns the setting-up an Evaluation Committee which assesses the eligibility of each foreign applicant to have an investment license. “The risk resides in the fact that this Committee has not elaborated on the criteria for evaluation of companies in granting the investment license,” continues Saleem. “Saudi Arabia will need to strengthen its legal system to enforce the IPRs, basically with respect to patented rights. This involves a number of cases in industrial and pharmaceutical businesses.” There is an expected impact from the North American oil reserves on Saudi Arabia’s anticipated emergence as a net oil exporter but, as Saleem states, the main impact will be largely political.

‘‘

Saudi Arabia’s four new Economic Cities – fully planned and under construction – are exactly that: new cities, where up to five million residents will live, work and play,” he explained. “Each will be an exciting metropolis, design to maximise investment potential and deliver huge advantages to business located there.

‘‘

in Saudi Arabia

Asia will be the most important emerging-market region for Saudi Arabia and the GCC in the coming years, according to a study by the Economist Intelligence Unit on GCC trade and investment flows. Asia will be the GCC’s biggest trading partner by 2017, accounting for a greater volume of trade than the OECD. India, China and Indonesia account for more than half of the GCC’s trade with Asia. “Rising oil demand will play a major role, it is estimated that oil consumption in Asia will grow by 4.4% per year on average until 2016, while the OECD’s demand is expected to plateau,” commented Mr Khazindar. “Rising consumer good consumption in Asia, fuelled partly by an expanding middle class, will produce a host of new opportunities for trade. Tourism, one of Saudi Arabia’s competitive strengths. Over the next decade, Asian growth will enter a new phase with domestic demand, particularly the local

“The US will enjoy a sustained energy independence toward the Middle East oil supplies. The Saudi exports have already been affected by the economic de-growth in the Euro Zone. “These two factors could have a limited effect over the significant public budget in Saudi Arabia, which was based, during the last five years, on a barrel price ranging between 100 – 140 $. “However, the economic emergence of China and India, along with the recent embargo over Iranian oil exports, will keep Saudi Arabia as a major exporter of oil.”

Company: KPMG Al Fozan & Al Sadhan Name: Saleem Sheikh Email: saleemsheikh@kpmg.com Web: www.kpmg.com

consumer market, which has substantial savings to draw on, becoming increasingly important. “This translates into new opportunities to export goods and services to Asia. For Saudi Arabian and GCC investors, expected returns on investment in Asia compare very well with those in other regions,” he concluded.

Company: Khalil Khazindar Law Firm Name: Khalil Khazindar Email: khalil@khazindarlaw.com Web: www.khazindarlaw.com Address: Andalus Street, P.O. Box: 157, Jeddah: 21411, Saudi Arabia Telephone: +9662 6647032 Fax: +9662 2842829

OTHER EXPERTS IN THIS AREA

Company: Al Kheraiji Law Office Name: Abdulaziz Al Kheraiji Email: abdulaziz@alkheraiji.com Web: www.alkheraiji.com Address: Al Malaz – Ali ben Abi Taleb St., P.O. Box 25900, Riyadh 11476, Kingdom of Saudi Arabia Telephone: +966 1476 6939 Fax: +966 1 478 0544

28 / February 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing Business in the Nordic Region

DOING BUSINESS

in the Nordic Region

“We have a market leading role in the Danish market and one of the primary forces we have over our competitors is

ACQUISITION INTERNATIONAL

our possibility to tailor most effectively our service offerings to the benefit of our clients,” said Mr Krejler. “An example I can give is that apart from delivering second to none ‘standard’ M&A services, we have recently broadened our product portfolio to also include strategic business advisory solutions. This means that our clients are able to choose us as a single supplier of advisory services rather than being forced to engage with several advisers.”

Mr Krejler expects the top-four sectors for activity in the Nordic region to be within technology or industrials & chemicals at number one or two, and consumer products or pharmaceuticals to take third and fourth place. “We expect a slightly increasing transaction market in 2013 to a large extent driven by private equity but supported by strong corporates looking for new opportunities.”

Mr Krejler stated that in the last few years, the firm has experienced a declining Nordic market, as has been seen in all other regions in the world when looking at acquisition activity. Looking ahead, he expects the trend to turn to a more positive market during the course of 2013.

‘‘

We expect trade with strategic corporates to stay more or less in the same level as in 2012 and expect the growth to stem from sale of private equity portfolio companies,” he explained. “What we experience currently is that the private equity companies with ownerships across the Nordics have been through restructuring phases or sales maturing periods and have a large amount of companies in their portfolios ready to go to market in 2013.

‘‘

-----------------------------------------------------------------------Søren Krejler is a partner with KPMG in Denmark - he serves as Head of the Transaction Services Department, and is also Head of the Danish Private Equity Group based in Copenhagen. -----------------------------------------------------------------------The Transaction Services department forms part of the Advisory leg of KPMG - the other two legs are constituted by Audit and Tax, respectively. The primary service offering of the Transaction Services department is to provide financial due diligence – both buy and sell side - to clients looking to acquire Danish target entities. The Danish Private Equity Group provides services to the broader private equity community operating within Danish borders, but also in cooperation with other Nordic KPMG colleagues to funds operating on a pan-Nordic level. Mr Krejler has a degree as a state-authorized public accountant and started out in KPMG as an auditor. He began working with financial due diligence projects and was part of the team that established the Transaction Services department in Denmark back in 1998. Today, he has more than 15 years’ M&A experience and the firm has a team of more than 50 specialists working with M&A.

Company: KPMG Name: Søren P. Krejler Email: skrejler@kpmg.dk Web: www.kpmg.dk Address: Osvald Helmuths Vej 4, 2000 Frederiksberg, DENMARK Telephone: +45 7323 3726

February 2013 /

SECTOR SPOTLIGHT:

IRELAND

Ireland: Bouncing Back

Bouncing Back l Thanks to its attractive tax, regulatory and legal regime combined with its open accommodating business environment and availability of skilled labour, Ireland’s status as a world-class location for international business is well established. In recent years Ireland has increasingly emerged as a favoured location for multinational corporations establishing regional or global headquarters in order to effectively manage profits, functions and shareholdings associated with their businesses. With the lasting changes to the global economic, regulatory and business environment, the challenge for everyone now is to reposition themselves so they are ready to take advantage of the recovery when it comes. In the wake of the 2013 budget it seems that retaining Ireland’s competitiveness for mobile foreign investment remains the core of the Government’s export led recovery strategy for Ireland maintaining the competitive 12.5% Corporation Tax Rate to attract job rich foreign direct investment. The appetite for M&A seems to be returning to the region with a 17.6% increase in activity reported in Ireland in Q2. Acquisition International speaks to Healy O’Connor Solicitors to get the firm’s opinion on Ireland’s economy. “Cross border activity is certainly important but foreign investment keep the lights on,” added Mr Healy. “However, that is not to forget the numerous start-ups and SME’s that are creating employment in the local economy.”

Custom House / Dublin

Mr Healy predicts that the property market will begin to stabilise in 2013, noting that first time buyers are getting great deals in the residential market. He expects that this will soon follow for other investors in the property market when the banks begin to lend for people who want to trade up and for commercial property investors who want to invest in good commercial stock at strong yields. “The Irish economy is the most open in the world and Ireland has a resilient people,” observed Mr Healy. “What people seem to forget between this recession and the recession of the eighties is that Ireland’s infrastructure, housing stock and commercial property is now on a par with its European neighbours. Indeed, the population is now at its highest since the great famine of the 1840’s.

‘‘ Mr Healy explained that the property market in Ireland softened further in 2012; however he noted that it “does not have a whole lot more to go and is certainly beginning to bottom out”. “FDI continues apace with good graduate and other positions being created,” he commented. “Emigration continues to act

30 / February 2013

as a safety valve for pressure on the public purse with the future benefit that these graduates will return with foreign experience when the economy begins to pick up.” “Ireland is certainly not out of recession and no way can it be said that the economy is bouncing back. There is still a tightening of credit from the banks, and until this credit starts circulating, the economy will not come back in a meaningful way. Once the banks are fully sorted out, then I expect the economy to come bouncing back.” Mr Healy has witnessed an increase in M&A from the firm’s international clients, who are booming on the back of lower wages and keener rents for office space. He stated that the greatest opportunities for investors currently lie in property and commercial property, which are at their lowest levels for decades.

‘‘

-----------------------------------------------------------------------Shane Healy is the Managing Partner of Healy O’Connor Solicitors with offices in Dublin and Cork. -----------------------------------------------------------------------Mr Healy has worked in leading law firms in Ireland and Australia before setting up Healy O’Connor Solicitors with Maurice O’Connor in 2009. Keane & Co merged with the firm in 2011. Healy O’Connor Solicitors now acts for a wide range of financial institutions, companies and private clients.

Fortunately, Ireland has sought to address the problems and mistakes of its own making early on, and the country has largely pulled together as a whole. We will begin to see the benefits of that over the coming years. In my opinion the Celtic Tiger will come roaring back but it will be a must wiser, chaste society. One must remember that there were sound economic fundamentals before over spending on property overcame that, he concluded.

Company: Healy O’Connor Solicitors Name: Shane Healy Email: shane@hoc.ie Web: www.hoc.ie Address: 77 Sir John Rogerson’s Quay, Dublin 2 Telephone: + 353 1 6401849

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Switzerland: The New Model of Offshore Business

SWITZERLAND The New Model of Offshore Business

l In recent years wealth managers in Switzerland have faced challenges so great that some thought the country might be knocked off its spot as the world’s biggest offshore centre. New regulatory and tax developments have certainly had an impact; however Switzerland is adjusting well and has managed to remove itself from the stereotypical offshore image, i.e. a haven for undeclared assets. Acquisition International speaks to leading experts to examine the new offshore industry that now exists in Switzerland. -----------------------------------------------------------------------Prof. Dr. Joachim Frick, LL.M./J.S.D. (Yale) is a partner of Baker & McKenzie in Zurich and frequently advises banks, insurers and other financial intermediaries on all aspects of financial, corporate and contract laws. He heads the Swiss insurance practice of the Zurich office of Baker & McKenzie and is a member of the Steering Committee of Baker & McKenzie’s European Financial Services and Insurance Practice. -----------------------------------------------------------------------The current wealth management landscape in Switzerland is characterized by substantially increased regulatory and compliance requirements. They are the result of additional requirements set by the Swiss regulator in particular to further regulate cross-border financial services, to improve consumer protection, and to implement the strategy of the Swiss financial market to avoid tax crimes and money laundering (“Weissgeldstrategie”). Affected are all players of the financial services industry but also high net worth families and individuals. The new rules aim to ensure that only those companies who comply with the new legal framework will in the long run be successful. Most affected is the private banking industry and other players who serve this industry, including independent asset managers and insurance intermediaries. The new regulatory framework will make it necessary to adjust the business model, the distribution channels and some of the products. One has to hope that the focus will be on material improvements and not on imposing bureaucratic formalities -----------------------------------------------------------------------Philipp Ochsner is the founder and CFO of IndexInvestor Ltd. He is responsible for the ETF (Exchange Traded Fund) selection and the asset allocation using ETF and Index Funds. -----------------------------------------------------------------------Mr Ochsner noted that wealth management in Switzerland is very heterogeneous and it has not changed much in recent years. However, he believes that the wealth management landscape in Switzerland remains stronger and deals with the current trends better than many of its competitors. “There are various challenges like lower margins, pressure from foreign countries and increasing regulation to master,” he observed. “Another big challenge to all wealth managers globally is the fact that asset managers in aggregate underperform index performance. The question remains whether clients are willing to pay high margins for traditional wealth management services when they nowadays can invest with index solutions at a fraction of the cost.”

which only increase costs but do not significantly improve quality. The aim to impose a level playing field for all players in the market should not neglect the differences which exist looking at products and clients. It hardly makes sense to impose formalistic consumer protection rules regardless of the complexity of the products concerned and sophistication of the targeted clients. Only an attractive legal and regulatory framework will ensure that Switzerland can keep its place in an ever more competitive environment. It would be unfortunate if key players of the industry and experts having the respective knowhow would leave Switzerland to find a future in foreign financial markets which rightly or wrongly are seem to be more attractive. In view of the additional rules and regulations it is sometimes overlooked that the legal, regulatory and financial stability of Switzerland will remain the key factor to keep Switzerland attractive for the banking and insurance industry. One has to hope that the Swiss regulator is aware of the fact that small changes in the regulatory framework can have a very substantial impact on the industry and need to be carefully considered. Switzerland’s approach of negotiating bilateral agreements has the advantage that the agreements can be customized to bilateral relations, their history and the specific needs of the persons concerned. The disadvantage is that it will become increasingly difficult for Switzerland to negotiate treaties which go less far than other treaties already concluded, as negotiating parties will want a most favorite treatment.

can additionally ensure that investors take the least amount of banking risks. Therefore Switzerland is a safe haven for many investors.” Discussing how wealth managers are improving the quality of the services they offer, Mr Ochsner highlighted the exceptional analysis possibilities currently available, “having at hand so much data even on the level of indexes”. He stated that this allows for well founded and scientifically proven strategic asset allocation.

Company: Baker & McKenzie Zurich Name: Joachim Frick Email: joachim.frick@bakermckenzie.com Web: www.bakermckenzie.com Address: Holbeinstrasse 30, P.O. Box, 8034 Zürich, Switzerland Telephone: +41 44 384 14 14

stable framework that Switzerland provides I can imagine that Switzerland benefits from the uncertainty in the global banking system and therefore many investors invest more money with Switzerland’s independent Asset Managers,” he concluded. IndexInvestor Ltd ensures that investors have some of the safest and best quality Index ETF in scientifically proven index portfolios. IndexInvestor is the Swiss specialist for index investments, providing independent Asset Management and is based in Zurich, Switzerland.

“With ETF we can own thousands of stocks and still maintain a relatively simple portfolio,” he explained. “We can cover whole markets instead of single stocks, allowing us to ensure very broad diversification. At the same time transparency is improved since it is clear in which stocks and bonds their money is invested in and clients can view their Index ETF portfolio online.”

According to Mr Ochsner, Switzerland provides an outstandingly stable economic, political and legal environment. He noted that the Swiss Franc is known internationally for its stability.

Mr Ochsner noted that Switzerland continues to focus on its main strengths. These consist of: providing political and economic stability; legal security; privacy and the stability of the Swiss Franc.

“Another fundamental advantage of Switzerland is its neutrality,” he commented. “Independent asset managers

“On top of that Switzerland offers index solutions that allow investing perfectly in the investors’ interest. Because of the

32 / February 2013

Despite of an increased cost burden, resulting from the additional compliance requirements, there is no doubt that the Swiss wealth management industry will remain successful also in 2013, given Switzerland’s unique position as a safe harbor under financial, political, social, and regulatory aspects and with a strong Swiss currency. Issues such as the need to transfer wealth from one generation to the next or from an unstable political or financial environment to a safe and stable environment will ensure that Switzerland remains attractive notwithstanding changes to the tax or compliance framework.

Company: IndexInvestor Ltd Name: Philipp Ochsner Email: philipp.ochsner@indexinvestor.ch Web: www.indexinvestor.ch/en Address: Gartenstrasse 36, CH-8002 Zurich Telephone: +41(0)44 536 40 01

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Cross Border M&A in Southeast Asia

CROSS BORDER M&A IN SOUTHEAST ASIA l Southeast Asia has seen a cross border M&A boom and outbound M&A from the region has been surging. With the maturity of many of the region’s economies leading companies are running out of growth prospects in their home countries and in the region. Takeover deals have more than doubled since last year with many companies looking for growth prospects in new regions in an attempt to broadening their customer base and increase market share. Asian companies are looking to compete globally and M&A offers a shortcut to new markets. In 2012 there was an increasing trend of companies looking to acquire assets in North America, North Asia and Western Europe, marking a change in cross-border deal flows. The European debt crisis has been an opportunity for Asian companies to get a foothold in Europe whilst the region suffers from a lack of investment. Acquisition International speaks to leading experts in the region to get their impressions on cross-border M&A activity.

With a staff strength of about 80, Luther is by far the largest German (and continental European) law firm in Singapore. 14 German lawyers together with French, Luxembourg and local colleagues cover the whole range of corporate and commercial legal work as well as the structuring of investments within South and South East Asia. The firm has been working in this region for many years, representing clients from a wide range of industries in their activities. This includes M&A activities in most of the neighbouring countries. Luther LLP is complimented by the advisory services of its wholly owned subsidiary Luther Corporate Services Pte Ltd. “Our team of accountants and tax consultants offers all services which our clients expect of a ‘one stop concept’ from fiscal advice to outsourced accounting and administration,” commented Dr Unger. “Additionally we provide to our clients a team led by an experienced Singaporean attorney providing corporate secretarial services.” Luther LLP is part of Luther Rechtsanwaltsgesellschaft, which is one of the major commercial law firms in Germany -----------------------------------------------------------------------Chris Naziris is a Foreign Legal Advisor at Mochtar Karuwin Komar (“MKK”) Indonesia. -----------------------------------------------------------------------MKK is one of Indonesia’s oldest and most renowned full service commercial firms. Established in 1971, it has been closely involved with many of the pivotal legal moments and transactions in Indonesia’s independent history. As the oldest firm in Indonesia, MKK calls on decades of experience dealing with regulators and the key family controlled business conglomerates in Jakarta. We work with many of the major US, UK, Asian and Australian firms on an ongoing basis and have built relationships that have lasted many decades.” “Having worked both in-house and in Private Practice, I have a first-hand understanding and appreciation for the commercial pressures and imperatives that clients are under during an M&A,” said Mr Naziris. “We work to successfully anticipate the questions that clients need the answers to in order to remove as many “surprises” as possible.

with 320 attorneys and tax advisers. Luther provides legal and tax advice in all areas of commercial law. The 11 German offices are located in Germany’s major business centres. Additionally, Luther has offices in key European and Asian markets: Brussels, Budapest, London, Luxembourg, Shanghai and Singapore. “With our legal and corporate services offices in Singapore, New Delhi, Kuala Lumpur, Yangon and Shanghai we have a direct presence in some of Asia’s most important markets,” explained Dr Unger. “As we have been in Asia for a while, we have established relationships to law firms in all Asian countries, with whom we have worked together on numerous occasions.”

‘‘

While Thailand and Malaysia have been targets for European M&A activities for years now, especially Indonesia is becoming more attractive, although investment restrictions are still an issue. In general, the attractiveness of the less developed ASEAN countries compared to China or Japan is clearly increasing, he concluded.

Luther is a member of “Taxand”, a global network of leading tax advisors in more than 40 countries. Discussing the main challenges faced in cross-border deals, Dr Knut stated that, apart from legal differences between civil- and common law countries that always result in some confusion, the lacking corporate governance/compliance in the less developed ASEAN countries may be particularly problematic in inbound M&A from Europe to ASEAN. “After the legal transaction, the actual setup of the business operations can be hindered by cultural differences – more so for M&A activities by European SMEs with less international exposure,” he added.

in the US and EU and a need for the injection of capital that could be released from the sale of Indonesian ventures,” explained Mr Naziris. “Although Indonesia is an exciting growing market, the regulatory challenges to doing business here still exist. As with China and India, a long term view and an expectation of significant investment before profits can be realised is the reality.” MKK’s focus in 2012 has been on inward investment into Indonesia, “The economy expanded in excess of 6% last year on the back of on-going minerals boom, infrastructure development and growing middle class consumer demand.” “Coupled with an expanding and young population and the greater integration of the ASEAN Economic Community by 2015, we consider that the majority of M&A activity in Indonesia will continue to be inward rather than outward focused,” added Mr Naziris.

In 2012, the firm saw an increase in European and American vendors and Asian purchasers in 2012.

MKK predict that uncertainty over the application and effect of laws, regulation and court decisions relating to mining may continue to curtail investment in the mining and mineral refining sector in 2013.

“Our opinion was that this development was based on a number of factors including a desire by vendors to reprioritise their offshore projects, a continued weak or negative growth

“Investment in infrastructure will increase once the new land acquisition laws become entrenched and tested,” added Mr Naziris. “This will encourage an improved view of the

34 / February 2013

Looking ahead, Dr Knut sees a clear improvement of the lessdeveloped ASEAN countries.

‘‘

-----------------------------------------------------------------------Dr Knut Unger is a Partner at Luther LLP -----------------------------------------------------------------------Luther LLP is the Singapore office of Luther Rechtsanwaltsgesellschaft mbH. Luther used to be Andersen Luther Rechtsanwaltsgesellschaft (part of Andersen Legal) and was later associated with Ernst&Young. Since 2006, Luther ended the association with Ernst&Young.

Company: Luther LLP Name: Dr Knut Unger Email: knut.unger@luther-lawfirm.com Web: www.luther-lawfirm.com Address: 4 Battery Road, #25-01 Bank of China Building, Singapore 049908 Telephone: +65 6408 8000

‘bankability’ of such investments in Indonesia and will have a flow on effect in M&A activity in related goods and services. “We consider that M&A activity in manufacturing, consumer products, utility services and the supply chain sectors will continue to grow. There is are increasing consumer demands from a rapidly expanding middle class. All this is predicated on continuing demand by China and India for Indonesian minerals especially coal, nickel and iron” he concluded.

Company: Mochtar Karuwin Komar (“MKK”) Name: Chris Naziris Email: chrisnaziris@mkklaw.net Web: www.mkklaw.net Address: Mochtar Karuwin Komar, 14th Floor Wisma Metropolitan II,Jl. Jend. Sudirman Kav. 31, Jakarta 12820 Indonesia Telephone: +62 21 571 1130

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Insolvency: Don’t Just Wait for Recovery

INSOLVENCY

Don’t Just Wait for Recovery

l Over the course of 2012 and even in these early days of 2013, the number of big-name brands that are forced into bankruptcy continues to shock us. Many in the international business community have been ‘hanging on’ to survive but it is becoming clearer, year on year, that in this environment the ‘hold tight and wait for recovery’ approach simply isn’t working. Many insolvency specialists predict that the only companies who will thrive this year will be those who create a firm business plan based on succeeding in current market conditions and not those who sit tight, waiting for the return of cheap credit. Acquisition International speaks to leading insolvency specialists from the international advisory community to get their opinion on how to thrive in the current environment. -----------------------------------------------------------------------Declan Taite is a Partner and Head of Restructuring & Insolvency and Anne O’Dwyer is a Partner at RSM Farrell Grant Sparks. -----------------------------------------------------------------------Discussing 2012 for Ireland in terms of Insolvency, Mr Taite noted that the incidence of formal corporate insolvencies was static with the 2011 statistics (2011 saw 1997 corporate insolvencies as opposed to the 2005 failures in 2012). A significant increase (38%) in the number of corporate receiverships was recorded (2011 (425), 2012 (634)). “In addition there was a notable increase in the number of fixed asset receiverships however as there is no statutory advertising requirement for such appointments actual figures are not available,” he explained. “The number of examinership cases declined marginally however there were a number of high profile cases availing of the process (Eircom, Ritz Carlton Powerscourt and Atlantic Homecare). The passing into legislation in December 2012 of the Personal Insolvency Act was another notable milestone in the evolution of insolvency in Ireland.” Ms O’Dwyer stated that, in the short to medium term, businesses do not fail to lack of profitability but due to lack of cash, adding that any successful business plan must be predicated on a sustainable working capital model. “Controlling cashflow in an efficient and effective manner is the lifeblood of any business irrespective of scale”, she -----------------------------------------------------------------------Simon Harris is a Partner and Licenced Insolvency Practitioner with ReSolve Partners LLP. -----------------------------------------------------------------------According to Mr Harris, contrary to popular opinion, the UK insolvency market has witnessed fewer appointments with the number of Administration appointments in particular well down on pre-recession numbers. “Historically the number of insolvencies goes up as an economy recovers and as the need for cash resources increase. The question is whether we will start to see a recovery or whether the economy will continue to flat-line.” Accordingly ReSolve believes the key challenge to succeeding in the current market is cash flow. “Working capital cash flow management and forecasting of cash flow on a short, medium and long term basis is critical,” explained Mr Harris. “Not knowing what cash you will need and when is akin to driving in the dark without headlights.” He stated that understanding what drives the cash flow of a business and understanding the cash cycle will determine what type of funding is most appropriate.

ACQUISITION INTERNATIONAL

explained. “On-going vigilant monitoring of the working capital cycle is an absolute prerequisite for any successful business plan.” RSM Farrell Grant Sparks has extensive experience in assisting management and owners of businesses over the past 30 years. The firm’s wide ranging sectoral knowledge across property & development, hospitality and retail enable it to react and deal with issues in a timely manner. “The experience gleaned from our restructuring & insolvency team in terms of lessons learned from failed entities can be applied in helping businesses overcome the demands and challenges in today’s marketplace,” added Ms O’Dwyer. Looking ahead over the next 12 months, the firm expects to see a continuing increase in the number of fixed asset receiverships, in particular in the buy to let sector. “The changes introduced to the Examinership process whereby companies can now petition for the appointment of an examiner through the circuit court as opposed to the high court is likely to see an increase in the incidence of examinership cases. Obviously the introduction of the Personal Insolvency Act will be interesting to observe in particular the number of debtors seeking to avail of the process,” concluded Mr Taite.

“Communication with stakeholders is also key,” he continued. “No one likes surprises so it is important to identify problems early, acknowledge they exist and then speak to stakeholders and advisors to find an appropriate solution to resolve the problem.” ReSolve see many businesses that do not have even the most basic short term cash flow forecast, which therefore remain in denial there is a problem until a winding up petition is received.

Company: RSM Farrell Grant Sparks Web: www.rsmfarrellgrantsparks.ie Address: Molyneux House, Bride Street, Dublin 8, Ireland Name: Declan Taite Email: declan.taite@rsmfgs.ie Telephone: +353 (0) 1 418 2086 Name: Anne O’Dwyer Email: anne.odwyer@rsmfgs.ie Telephone: +353 (0)1 418 2087

weather the losses they may have previously been reluctant to crystallise. “It would be a bold move by the Bank of England to increase interest rates, however a small increase may well be the catalyst for change the economy needs,” concluded Mr Harris. ReSolve is a restructuring and recovery practice and a distressed finance provider.

“Unfortunately by the time we are introduced to a situation the position is normally terminal for the company involved,” observed Mr Harris, “which we see as a challenge.” Our job is to keep the business operating as a going concern (something we have been very successful at).” “Speaking to ReSolve early enough may be the difference between keeping a business trading and seeing it closed down by a stakeholder which has lost patience.” ReSolve believes the number of administrations will increase in 2013. Mr Harris attributed this to a combination of investor or lender fatigue; management trying to deal with increasingly distressed situations outside their control; and possibly lender balance sheets being healthy enough to

Company: ReSolve Partners LLP Name: Simon Harris Email: simon.harris@resolvegroupuk.com Web: www.resolvegroupuk.com Address: One America Square, Crosswall, London, EC3N 2LB Telephone: +44 (0) 20 7702 9775

February 2013 /

Mkono & Co

Advocates in Association with

Mkono & Co. Africa is a leading East-African law firm headquartered in Dar es Salaam, Tanzania. Founded in 1977 by the firm’s managing partner, Honourable Nimrod E. Mkono, the firm has gradually developed to become Tanzania’s leading law firm and a prominent corporate, commercial and financial practice in the East-African region. Mkono & Co.’s growth is reflected by the unique and dynamic team of lawyers coming from the US, Europe, India and from all over Africa. The firm has a unique mix of common law and civil law practitioners which is key to its move to the East African and Great Lakes Region. The firm is recognised by international professional directories and has received multiple awards for its legal leadership and quality of services. The firm has been ranked in Tier one by Chambers Global since 2000 and counts several lawyers ranked as leaders in their field.

Head Office: 8th Floor, EXIM Tower, Ghana Avenue. PO Box 4369, Dar Es Salaam, Tanzania

Tel: +255 22 2118789-91, 2194200 & 2114664 Fax: +255 22 2113247 & 2116635

info@mkono.com

www.mkono.com

SECTOR SPOTLIGHT:

LONDON

London: a Financial Hub

a Financial Hub l The City of London is known as the heart of the global financial services sector, an image that it has struggled to maintain throughout much of the financial crisis. The UK has reclaimed its title as the biggest market in Europe for private equity and M&A. The fourth quarter of 2012 was best quarterly performance since the second quarter of 2008 for M&A activity and overall activity was up 5.1% on the year before. The rest of Europe saw a 10.5% drop in the value of transactions, with Asia-Pacific down 13.5% and the US down 6.4%. Confidence is being restored in the UK and stability is resuming now that the outlook for the global outlook is improving. There was a British element in 47.3% of all European transactions, up from 43.7% in 2011, and in terms of value the UK contributed almost 42% of the European total for 2012. Acquisition International spoke to leading experts in London to examine the city’s strengths as a financial centre. -----------------------------------------------------------------------Simon Blake is a Partner and Head of Corporate Finance at Price Bailey LLP. -----------------------------------------------------------------------With Price Bailey’s spread of offices and partners working across East Anglia, London and Guernsey, the firm has a unique blend of experience for its clients. This is supported by international connections through the firm’s international association, IAPA, giving SME clients access to the global market place that might otherwise only be available by going to a top 10 practice. According to Mr Blake, London’s key financial strengths combine its history, language, timezone, sensibility and centrality in global trade and politics, combined with the best education coming from UK universities and access to Europe whilst remaining independent. “London’s greatest opportunities (and challenges) lies in balancing the roles of commercial freedom with regulatory excellence, and recognising the different facets for the range of businesses operating in today’s world,” he explained. “This will include not only financial impact but the impact of business decisions on humanity best expressed through the impact on all stakeholder relationships – with customers, suppliers, employees, local communities, funders, regulators and government.” -----------------------------------------------------------------------Merlin Piscitelli is the Director of International Sales for Merrill DataSite. -----------------------------------------------------------------------Merrill DataSite is a complete, secure VDR solution that optimises the due diligence process by overcoming the many limitations of a traditional paper data room. The company is established as the market-leader for virtual data rooms (VDRs) in Europe and across the world. According to Mr Piscitelli, the key to London’s financial strength is “the diversity and sheer wealth of talent assembled in this great city”. He highlighted that the city has the local talent, geography and time zone crossover to fully manage any global process, “whether it’s in Hong Kong, Europe, Africa, the Middle East, South America or the U.S.”.

The true international foundation of the City allows you to draw on the vast local talent pool living in London; a talent pool that speaks the languages and understands the dynamics of the deal regardless of whatever borders the deal is crossing, he observed.

ACQUISITION INTERNATIONAL

Mr Blake attributes the pick-up in M&A activity in Q4 2012 as a “recognition that we are in the ‘new normal’.

Commission continue to hang over Brussels, Strasbourg and to a large extent Berlin.

“Nothing dramatic is likely to change in the near future, and many leaders are now recognising that we are at the beginning of a long and slow recovery, therefore there is a lot of upside ahead for acquirers and no particular reason for vendors to wait for something to suddenly make a big difference to the value of their business.”

“The continuing opportunity to meet the needs of the technology sector through innovation remains vital. TechCity is important but should be a national rather than ultra-local emphasis. Innovative financing, such as crowd finance need to be recognised as a real alternative for SME finance and personal finance alternatives to ‘structured’ products,” he concluded.

Discussing trends in 2012, Mr Blake noted that entrepreneurial clients have moved into an activity mode. He explained that there is little organic growth available, and hence controlled growth through sensible M&A deals with plenty of vendor support and realistic valuations is a direction for many. “Meanwhile, banks are beginning to show a keener attitude to corporate finance lending in the SME market and private investors are supporting activity as well,” he added. Looking ahead, Mr Blake anticipates that London can continue to provide the long term stability it has been known for whilst continuing questions over the Euro, the stability of certain EU members and the politics of the European

Commenting on the pick-up in M&A activity in Q4 2012, Mr Piscitelli noted that years of negative M&A sentiment has led to companies and private equity sitting on massive cash piles that they would now like to put to work. “I think Q4 was when these organisations said that it was time to look further ahead and be the first mover in an M&A market that is looking much more positive in 2013,” he continued. “Confidence will grow with every successful transaction.”

Company: Price Bailey LLP Name: Simon Blake Email: simon.blake@pricebailey.co.uk Web: www.pricebailey.co.uk Address: Dashwood House, 69 Old Broad Street, London EC2M 1QS Telephone: +44 (0) 207 065 2660

return to a more favourable environmental,” said Mr Piscitelli. “This in turn will attract talent to the centre of deal making in London. “My prediction for London in 2013 is that it will start off with a few good deals that grow confidence and this will lead to a strong second half of the year and renewed optimism in the financial markets,” he concluded.

Mr Piscitelli stated that due diligence has only grown in importance as companies are keen to do a deal, however he noted that they want to make sure they have thoroughly investigated all angles of the potential deal before moving forward. “There is now real pressure to satisfy all the shareholders, realise synergies and do the ‘right deal’ not just any deal,” he added. Looking ahead in 2013, Merrill DataSite believes that Energy, Oil and Gas and TMT are the sectors in which the greatest opportunities lie. “I think London will only grow as a financial hub in 2013 as the tax burden for high earners is lessened and the markets

Company: Merrill DataSite Name: Merlin Piscitelli Email: merlin.piscitelli@merrillcorp.com Web: www.merrillcorp.com Address: 101 Finsbury Pavement, London EC2A 1ER, United Kingdom Telephone: +44 (0) 207 422 6266

February 2013 /

SECTOR SPOTLIGHT:

Bringing Foreign Direct Investment Into...

BRINGING FOREIGN DIRECT INVESTMENT INTO l In 2007 cross-border investment flows reached an unparalleled high of $2 trillion as global corporations made the most

of strongly performing international markets. In the 5 years to follow the housing market collapsed, we’ve had an international banking crisis and we have experienced record levels of unemployment. This combination created severe economic contraction affecting all corners of the globe and had a massive impact on the global flow of Foreign Direct Investment.

In the years since, patterns of FDI have been patchy to say the least and unsurprisingly investors remain wary, however according to both the 2012 A.T. Kearney FDI Confidence Index and the World Investment Report 2012 by the United Nations Conference on Trade and Development, flows of investment have shown signs of recovery. Government leaders across the board are keen to attract FDI, it can help to reign in fiscal deficit, provide employment and support economic growth. Acquisition International speaks to experts from around the world to discuss current levels of FDI and the opportunities within their jurisdictions.

Mr Topic highlighted the firm’s in-depth knowledge of certain industry sectors and commercial focus on solutions rather on mere identification of legal issues and risks as the main advantages DTB has over its competitors. “The general sentiment is that FDI are “conditio sine qua non” for the Croatian economy and the country has a lot to offer to investors in various sectors. The support for investments is the highest on the top-level of administration and it decreases as it goes to ground level,” he said discussing

Cyprus -----------------------------------------------------------------------Anthony Indianos is the Managing Director and lawyer at Costas Indianos & Co Advocates & Legal Consultants. -----------------------------------------------------------------------The firm was established in 1924 and has acquired over the years both a local and international client base comprising of corporations, commercial banks, municipalities, real estate investors, consulting firms and others.

‘‘

We maintain a wide network of long term business cooperation with firms across the EU, Russia, and Ukraine and further, said Mr Indianos. The firm’s areas of practice include: corporate & business law, company registration, shipping law, tax planning – tax law, litigation, immigration, real estate, debt collection, inheritance law, intellectual property, the Cyprus international trust, Cyprus investment funds and Cyprus FX investment firm.

38 / February 2013

Further Mr Topic discussed the support DTB offers to potential investors in the country. He said:

‘‘

When it comes to day-to-day business or sophisticated transactions, DTB is a stepping-stone for its international clients and their business in the Republic of Croatia. He also outlined the ability of central government to intervene into situations where local authorities are delaying investment realisation as vital for Croatian government in order to attract greater levels of investment.

Commenting on the FDI levels for Cyprus in 2012, Mr Indianos said: “Cyprus is one of the most attractive locations for foreign investments, indicating both high FDI performance as well as high FDI potential, based on the latest data of the Central Bank of Cyprus in 2011. The longterm FDI trend is positive and Cyprus has the potential to attract even higher FDI.” Mr Indianos highlighted Tourism, Real Estate, Shipping, Professional Services, Banking and Financial Services and Energy as the most attractive sectors for investors in Cyprus.

‘‘

The biggest potential for investment in the coming years will be in the hydrocarbons extraction and processing sector. According to preliminary findings, Block 12 in Cyprus’ Exclusive Economic Zone could have between five and eight trillion cubic feet of natural gas, which could turn Cyprus into a natural gas exporter at a time when international demand for liquefied natural gas (LNG) is expected to rise, he said.

‘‘

The firm is well-established and widely regarded as one of the leading corporate and commercial firms in Croatia. DTB is currently the largest Croatian top-tier law firm with 29 attorneys working in specialized practice groups. The firm’s list of clients comprises international and domestic companies, business owners, investors and financial institutions.

Mr Topic also commented that foreign investments from Austria (EUR 193.0 million), the Netherlands (EUR 87.8 million), Italy (81.3 million) and Turkey (81.3 million) were mainly responsible for the current FDI in Croatia.

Finally, Mr Topic shared his predictions for FDI into Croatia in 2013: “Due to the accession to the EU-membership (1 July 2013) Croatia started to be on investors’ radar more and more. Hence, the increase in FDI is expected but mostly due to this monumental event for the Croatian economy, rather as result of Government’s action plan and offered incentives,” he concluded.

Company: Divjak, Topic & Bahtijarevic Name: Damir Topic Email: damir.topic@dtb.hr Web: www.dtb.hr Address: 10000 Zagreb, Croatia, Ivana Lucica 2a Telephone: +38515391600

‘‘

-----------------------------------------------------------------------Damir Topic is a Senior Partner in Divjak, Topic & Bahtijarevic Law Firm (DTB). ------------------------------------------------------------------------

the country’s approach to foreign direct investments. Mr Topic also noted that the improving trend in the last 12 months is now evident and increased interest and initial investment activities are now more often witnessed.

‘‘

Croatia

Mr Indianos stated that there is a big interest in investing into areas such as medical tourism, sports, nautical and agro tourism, conferences, theme parks and managed attractions.

‘‘

A recent amendment to the Trust law will open up new opportunities for investors, he concluded.

Company: Costas Indianos & Co, Advocates & Legal Consultants Name: Anthony Indianos Email: anthony.indianos@indianos.com.cy Web: www.indianos.com.cy Address: 4, Diagorou street, Kermia Building, office 601, 6th floor, 1097 Nicosia, Cyprus Telephone: +357 22675231

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Bringing Foreign Direct Investment Into...

Ahmad Faizal Yahya / Shutterstock.com

Invest in the Vibrant Heart of Malaysia – Invest in Selangor

Malaysia

-----------------------------------------------------------------------Hasan Azhari Idris is the CEO of SSIC Berhad. -----------------------------------------------------------------------Selangor is truly the heart of Malaysia’s economy. Contributing more than 22% of the Malaysian gross domestic product, the state offers the largest population, the most institutions of higher learning and a reliable partner for investments. Your investment project is made easy by the Selangor State Investment Centre Berhad (SSIC Berhad), which is your partner during the whole process. SSIC Berhad is a one-stop investment promotion agency with information and advisory services for potential and existing investors. Based on the experience of more than 12 years, SSIC is considered the role model for other states in Malaysia, who have formed a similar mechanism. Staying ahead of this competition, Selangor creates new networks, services

ACQUISITION INTERNATIONAL

and competitive investment incentives provided by the Malaysian Investment Development Authority (MIDA). What can you expect? Selangor continues to be an economic stronghold in a sluggish global economy and crucial to Malaysia’s impressing development. Whenever Malaysia’s international rankings improved, Selangor was at the core of it. In 2012 Malaysia ranked 10 in the FDI Confidence Index, 18 in the World Bank’s Ease of Doing Business Index and 14 in the World Competitive Yearbook. Furthermore, A.T. Kearney’s Global Services Location Index saw Malaysia finishing 3rd, which consolidated Selangor as the leading service hub with often more than 60% of all related companies located here. In other words, you can expect the best of Malaysia in Selangor including an advanced network of highways, the biggest sea- and airport as well as reliable internet, energy and water supply. Our B2B services are globally competitive and regionally leading, making Selangor the perfect bridgehead for Malaysia and ASEAN. Benefit from our stable, exportoriented and investment-friendly environment.

For more information please visit our website www.ssic.com. my or e-mail your enquiry to enquiry@ssic.com.my

Selangor State Investment Centre

Company: SSIC Berhad Name: Hasan Azhari Idris Email: enquiry@ssic.com.my Web: www.ssic.com.my Address: No. F1-2-G, Jalan Multimedia 7/AG, CityPark, i-City, 40000 Shah Alam, Selangor Darul Ehsan, Malaysia Telephone: +603-5510 2005

February 2013 /

SECTOR SPOTLIGHT:

Bringing Foreign Direct Investment Into...

Philippines

-----------------------------------------------------------------------Roberto G. Manabat is the Chairman & Chief Executive Officer of Manabat Sanagustin & Co. (KPMG Philippines). ------------------------------------------------------------------------

MS&Co. provides integrated services in audit, advisory and tax. In addition, MS&Co.’s top management has experience in both the public and private sector, giving the firm a diversified and well-rounded background. MS&Co. utilises local and global expertise as it is part of the KPMG network. Mr Manabat explained that the Philippines has been on an upward momentum for the last few years, noting that strong macroeconomic figures – coupled with credit rating upgrades, a surging stock market index, improving fiscal conditions, among others – make the Philippines an attractive country in which to invest. “Moreover, qualitative factors such as stable political environment and the focus on good governance have been improving.” he commented. “At present, government has also made job creation a big priority.”

Romania

-----------------------------------------------------------------------Bruno Leroy is a Resident Partner at Gide Loyrette Nouel Leroy & Asociatii. -----------------------------------------------------------------------According to Mr Leroy, when compared with other new members of the European Union, Romania still registers a significant development deficit, particularly in areas such as public utilities, energy, infrastructure or agriculture. He stated that, against this background, the Romanian Government has manifested on many occasions its interest in attracting foreign direct investment and, over the years, has passed incentive schemes designed to stimulate investment and growth. “As a token of the Government’s positive attitude towards foreign investment, the Romanian foreign investment regime is permissive and relies on principles such as equality of treatment, transparency and confidentiality,” he commented. “Nevertheless, on a practical level, one needs to take into account that the public authorities in charge with attracting, maintaining and growing foreign direct investment in Romania are not sheltered from pervasive bureaucracy, which remains apparent throughout the spectrum of Romanian public institutions.”

Texas

-----------------------------------------------------------------------Tim Powers is a partner, member of the Board of Directors and oversees the international practice at Haynes and Boone, LLP. -----------------------------------------------------------------------Mr. Powers’ practice focuses on international business law with an emphasis in international banking and finance, international joint ventures, international investment in real estate and foreign investment in the United States. Haynes and Boone is the fourth largest law firm in Texas, with full-service offices in each of the major cities. The firm represents many of the leading foreign owned companies in Texas, and has helped those clients establish all aspects of their U.S. business operations.

In order for the Philippines to be a more attractive destination for foreign direct investment, Mr Manabat stated that an important area of focus should be improving the current infrastructure. “The Philippine Government is now taking steps to further improve infrastructure facilities,” he continued. “Parties from both the local and foreign private sectors have been showing firm commitment to invest in various infrastructure projects planned by the government.”

“Second, robust economic growth – coupled with sound economic policies – will pave the way for foreign investments. Note that prospects in the Philippines are very bright given the improvement in infrastructure being prioritized by the government.

In summary, Mr Manabat advised the local government to improve on the bureaucracies, policies, and regulations when it comes to foreign direct investment. “The government should also put in place ‘roadmaps’ as to address sustainability of investment,” he observed. “Again, we should always take into account the ‘goodwill’ the President brings to the table as he focuses on reducing corruption.” Looking ahead, Mr Manabat stated that FDI in the Philippines is expected to increase in 2013. He noted that credit agencies Fitch and S&P have been keenly watching the Philippines for a potential investment

Company: Manabat Sanagustin & Co. (KPMG Philippines) Name: Roberto G. Manabat Email: rgmanabat@kpmg.com Web: www.kpmg.com.ph Address: The KPMG Center, 9/F 6787 Ayala Avenue Makati City 1226, Philippines Telephone: +63(2)8857000

Discussing the sectors with the greatest opportunities for investors, Mr Leroy noted that Romania has a commitment that 30% of total gross energy consumption will be represented by green energy by 2020. As a result of this, investment opportunities offered by the renewable energy sector are not showing signs of drying out in the near future.

“Apart from a huge productivity potential waiting to be tapped, agricultural investment may also indirectly benefit from increases in capital value of the land brought about by consolidation (a large part of Romania’s farm land is divided into smallholdings), as well as anticipate farm land price convergence with Western Europe over time.

He added that road infrastructure projects also garner interest from investors, as a consequence of the Government’s efforts to accelerate the process of inter-connection with the main European transport corridors.

“On a separate note, it should be pointed out that the scarcity of conventional bank financing coupled with a return of local entrepreneurs to more realistic price expectations should translate in increased opportunities for private equity investments,” he concluded.

“Very interesting investment opportunities are offered by public utilities infrastructure projects (such as the construction and/or rehabilitation of waste management and disposal plants, water treatment and heating facilities etc.),” he continued. “Numerous utilities projects have been advertised lately by local public authorities on the relevant public procurement directories, their source of financing being represented mainly by European structural and cohesion funds.” Finally, Mr Leroy highlighted that a series of favourable factors ranging from low farm land prices, cheap labour, and a significant productivity gap converge to promote agriculture and the related food processing industry, which have been gaining momentum lately. educated work force provide a significant advantage to Texas-based businesses. The location of Texas in the middle of the United States, and its major transportation hubs, positions Texas as a major distribution state. It also allows the business executives based in Texas to travel to either U.S. coast, conduct business, and return home all in the same day. The proximity of Texas to Mexico also provides a significant advantage.” Texas is a leading global destination for foreign direct investment (FDI), and more than 1,300 major foreign companies continued their active operations in the state in 2012. Mr. Powers attributed this in part to the state’s strong economy, competitive business climate and central location within North America. Texas has the second most Fortune 500 companies headquartered in any of the United States.

Haynes and Boone provides all phases of legal support for foreign owned companies that want to establish in Texas, from company formation, to assistance with governmental incentives and permits, to office and manufacturing startup arrangements, to labour force start up (including immigration) work.

During the five-year period of 2008-2012, Texas attracted FDI projects from 42 independent countries, as varied as Qatar, Denmark and New Zealand. Between 2008-2012, more than 430 non-U.S. companies announced over 500 separate business expansions in Texas. These projects created an estimated 46,000 jobs and $38 billion in capital investment.

“Texas prides itself as a business friendly state,” said Mr. Powers. “Its laws and regulations, low tax rates and well

The top countries for FDI projects in Texas are: United Kingdom; Germany; Canada; Japan; China and Spain. The

40 / February 2013

grade upgrade, adding that such an upgrade will boost the marketability of the Philippines as a country worth investing in.

Company: Gide Loyrette Nouel Leroy si Asociatii Name: Bruno Leroy Email: leroy@gide.com Web: www.gide.com Address: Str. Maior Gh. Şonţu nr. 10-12, Bucureşti, Sector 1 Telephone: +40 (21) 223 03 10 / 744 37 45 46 sectors currently attracting the most capital are: Software & IT; Business Services; Industrial Machinery; Oil, Gas & Mining; and Communications. In order to attract greater levels of investment, Mr. Powers believes that Texas should continue to implement business friendly legislation and incentives, and keep taxes low. “If Texas continues its policies, then foreign countries will increase their investments,” he concluded.

Company: Haynes and Boone, LLP Name: Timothy E. Powers Email: timothy.powers@haynesboone.com Web: www.haynesboone.com Address: 2323 Victory Avenue, Suite 700, Dallas, Texas 75219 Telephone: +1 214 651 5610

ACQUISITION INTERNATIONAL

Legum Amicuss Corporate, Legal, HR & Compliance Consultans WELCOME TO LEGUM AMICUS Legum Amicuss is a full service HR, compliance and legal consultancy firm, operating in India and abroad. As part of the firmâ&#x20AC;&#x2122;s expansion plans, the firm has recently started its Dubai Office, offering a range of human resource, compliance and legal services. The strength of the firm lies in understanding the financial, commercial and legal architecture of the region and its application to clientâ&#x20AC;&#x2122;s business goals.

WHAT SERVICES WE OFFER Human Resource Consultancy Compliance, Policy & Regulatory & Company Secretarial Legal Advisory Corporate & Commercial Law Compliance Services Secretarial Services Intellectual Property Corporate Insolvency & Restructuring Foreign Direct Investment Mergers & Acquisitions Private Equity & Debt Solutions Banking & Finance Commercial Litigation & Arbitration Infrastructure Real Estate

www.legumamicuss.com

SECTOR SPOTLIGHT:

ANTITRUST LITIGATION

Antitrust Litigation – Resolving Competition Disputes

Resolving Competition Disputes

Litigation involving competition law issues has over recent years become more and more international. More decisions by competition and other economic regulatory bodies are being challenged in the courts because the stakes are so high. Actions against anti-competitive practices, whether public or private, often involve companies located in different countries, making this area of expertise all the more complex.

An increasingly globalised economy, the volume of world trade and the operations of multinational companies are only some of the aspects hinting at the transnational dimension of modern business transactions. Along with the internationalisation of commerce, anti-competitive business practices increasingly tend to produce cross-border effects. Recent legislative and judicial developments have led to an increased focus on competition litigation across many regions throughout the globe, as a result, expert, commercial competition litigation advice is increasingly important for companies, not only as defendants but also using private litigation as a means of redress. Because the risks of engaging in competition litigation can be high, companies should ensure that assessing those risks is a key part of any corporate risk management strategy. When competition issues end up in court, it is therefore essential that those involved ensure that they seek the best advice from experts within the field who are able to advise them on an international level. Acquisition International spoke to leading experts in the field to get their opinion of the key current issues. -----------------------------------------------------------------------Sarah Keene is a Partner and head of Russell McVeagh’s Competition Team. Dr James Every-Palmer is a Partner and Troy Pilkington is Senior Associate at the firm. -----------------------------------------------------------------------Russell McVeagh’s Competition Team is regarded as preeminent in the field of competition law in New Zealand. It offers a multi-disciplinary competition practice combining commercial and litigation expertise, and provides expert advice on the full range of competition law issues including commercial advice, advice on structuring joint venture and exclusive supply arrangements, obtaining clearances and authorisations for mergers, working with economic advisors and acting in cartel investigations, leniency applications, prosecutions and appeals. This multi-disciplinary practice enables Russell McVeagh to remain at the forefront of competition law in New Zealand and provide a seamless service to clients across all competition law matters. Russell McVeagh’s Competition Team is independently ranked as the best in New Zealand: • • • •

Ranked as ‘Elite’ (the top category) by the Global Competition Review’s GCR 100 Ranked as ‘Band 1’ (the highest category) by Chambers Asia Pacific 2012 Winners of the M&A International Global Awards 2013 New Zealand Competition Law Firm of the Year Award Winners of the ICFM 2012 End of Year Country Awards Best Competition Law Firm in New Zealand

42 / February 2013

•

Sarah Keene is individually ranked ‘Band 1’ by Chambers Asia Pacific 2012 and is regularly listed in The International Who’s Who of Competition Lawyers and Economists.

Cartel litigation in New Zealand is in the middle of a fascinating stage of its evolution - a stage that has seen the NZCC obtain significantly greater penalties for price fixing, including a record fine of NZ$6.5 million, and obtain far greater powers to share information with overseas regulators. The past two years have also seen the Courts clarify the extent to which the Commerce Act applies to overseas conduct and the extent to which third parties may obtain access to the NZCC’s cartel investigation documents. The next few years are expected to continue this theme. The Commerce (Cartels and Other Matters) Amendment Bill proposes the introduction of seven year jail sentences for intentional cartel conduct, an expanded definition of cartel conduct, and significant expansion of the extraterritorial jurisdiction of the Commerce Act. These developments will likely mark a sea-change in New Zealand cartel litigation. There are likely to be cases testing the scope of the expanded definition of cartel conduct and the degree of intent necessary for criminal sanctions to apply. The introduction of criminal sanctions will also raise the prospect of defendants being extradited for cartel offences, and will likely provide the NZCC with intrusive surveillance, interception and tracking device powers.

Company: Russell McVeagh Web: www.russellmcveagh.com Address: Vero Centre, 48 Shortland Street, Auckland Telephone: + 649 367 8000 Name: Sarah Keene Email: sarah.keene@russellmcveagh.com Name: James Every-Palmer Email: james.everypalmer@russellmcveagh.com Name: Troy Pilkington Email: troy.pilkington@russellmcveagh.com

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Antitrust Litigation – Resolving Competition Disputes Sao Paulo / Brazil

-----------------------------------------------------------------------Bruno Oliveira Maggi is a Partner at Senise, Moraes & Maggi Sociedade de Advogados. -----------------------------------------------------------------------A couple of themes come to mind when we talk about the Antitrust Litigation. In one hand, the decisions issued by the CADE (Brazilian Antitrust Agency) can be challenged in courts by anybody or any company which suffers the effects of such decisions. In the other hand, Antitrust Litigation also includes civil claims for damages arising from anticompetitive conducts. Thus, the discussion may take both the ways. In Brazil, the litigation against the Cade’s decisions is very usual and favorable judicial decisions are likely. There is not any relevant update on this regard. -----------------------------------------------------------------------Peter Armitage is a Partner at Ashurst Australia. -----------------------------------------------------------------------Mr Armitage has practised in the field of competition law for approximately 30 years and has also conducted a substantial number of court cases, many involving competition law and some in areas such as trade secrets, intellectual property and consumer protection. “I have a deep understanding of competition law and extensive experience in litigation,” he commented. “There are experienced competition law lawyers and experienced litigators in Australia but relatively few who combine both areas.” According to Mr Armitage, the key skills for anti-trust litigators include: a good appreciation of the economic principles which underpin anti-trust laws; an ability to separate out from a mass of data and facts the key facts which must be proved in a particular case; and a depth of experience in litigation procedures. Mr Armitage stated that cartel enforcement is increasingly multi-jurisdictional. As a consequence, he believes that it is increasingly important for antitrust lawyers to be familiar with the substantive and procedural laws and regulations in other key jurisdictions.

Regarding the indemnification Law suits, they are not so disseminated in Brazil as in Europe or the USA, since there are some complexities involved. In the USA, the treble damages statute ensures the petitioner shall be compensated by the violator of the Antitrust Legislation with the triple amount of the actual damage suffered. Combining this institute with the Common Law judicial system and its procedures, like as the class actions, it comes to a very significant demand for antitrust indemnification. Just across the Atlantic, in Europe, although this demand is not so high, the Antitrust Litigation for damages is increasing in the last years and the incorporation of investments funds specialized in buying rights from citizens harmed by anticompetitive conducts burst this activity. In Brazil, the trend for claiming the antitrust damages is just starting. There are few court decisions already issued and some other law suits on discovery phase. The new Brazilian competition law (entered in force on 29th May, 2012) did not change anything on this regard, but during the last 3 years the procedures got stronger. The cartel investigations became more technical and the evidence production much more effective, resulting in better decisions issued by the CADE (better arguments and material probations against the defendants). “For example, discovery obligations in the United States may have a critical impact on the management of cartel immunity applications in Australia and the conduct of subsequent class litigation,” he observed. Private actions for competition law contraventions have been possible in Australia since the competition statute was first introduced in 1974. Mr Armitage noted that there has been an increase in private actions, especially class actions against cartel participants, since the late 1990s. “This is partly because the regulator in Australia, the Australian Competition and Consumer Commission (ACCC) is detecting more cartels and taking enforcement action against them, which facilitates follow-on class litigation,” he elaborated. “The increase is also partly because the traditional causes of action favoured by class action law firms in Australia have become more difficult following tort law reform.” Mr Armitage explained that the enforcement of competition law in Australia is not an administrative decision of the regulator, the ACCC. “For penalties and other remedies to be imposed a court decision is required,” he stated. “Appeals from the decisions made by the European Commission (the Commission) or by a national competition authority, continues to increase. The often global character of the relevant conduct means that a single infringement decision may lead to civil claims in several jurisdictions. Allen & Overy advises on the full range of contentious competition issues, offering our clients an integrated competition and litigation service. We are frequently asked to advise on competition claims both on behalf of claimants and of defendants, with significant recent matters being advising on the defence of claims in the UK arising out of the Commission’s LCD investigation and on an application for a preliminary injunction in the context of Daimler’s refusal to deal with WAS in Germany.

-----------------------------------------------------------------------Jonathan Hitchin is a Partner at Allen & Overy LLP. -----------------------------------------------------------------------Private enforcement of competition law by means of civil actions for damages or an injunction is firmly on the radar of companies under investigation by antitrust authorities both in the EU and elsewhere. In the EU, the number of such claims, especially those following-on from infringement decisions

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The number of claims looks set to continue to increase in 2013 and beyond. The trend across Europe in 2012 has been progress towards resolving some of the legal and procedural uncertainties associated with these claims. These resolutions are likely to make it easier for claimants to proceed and include clarification of the circumstances in which civil claims that are related to, but go beyond the scope of, a Commission infringement decision may be brought. Importantly, there have been proposals for reform in a number of jurisdictions including the UK, Germany and the Netherlands aimed at

Consequently, many law suits arose from the last cartels condemned in Brazil. The Industrial Gases Cartel is the best example, since many costumers demanded for the damages and also the Public Prosecutor’s Office started a civil class action against the companies. This scenario confirms Brazilian tendency to reach European standards of antitrust litigation for damages and, maybe in the future, the USA level.

Company: Senise, Moraes & Maggi Sociedade de Advogados Name: Bruno Oliveira Maggi Email: bruno.maggi@smmadvogados.com.br Web: www.smmadvogados.com.br Address: Praça Dom José Gaspar, 76 – 5th floor, São Paulo – SP, ZIP: 01047-010 Telephone: +55 11 3237-1806

of trial judges in competition cases are relatively common and the principles are fairly well settled.” Finally, Mr Armitage noted that the ACCC has stated that it expects to commence more competition law enforcement proceedings in 2013. “If this is correct, we would expect to see an increase in followon damages actions late in 2013 or in 2014,” he concluded.

Company: Ashurst Australia Name: Peter Armitage Email: peter.armitage@ashurst.com Web: www.ashurst.com Address: Level 36, 225 George Street, Sydney, NSW, 2000 Telephone: +61 2 9258 6119

facilitating effective private enforcement. Of these, perhaps the most eye-catching is the UK Government’s decision to introduce reforms to allow ‘opt-out’ collective (or class) actions in the antitrust context. The Commission is also focussing on private enforcement, with a legislative proposal expected which should clarify the extent to which claimants can obtain leniency documents held on the Commission’s file for use in a civil action.

Company: Allen & Overy LLP Name: Jonathan Hitchin Email: jonathan.hitchin@allenovery.com Web: www.allenovery.com Address: Allen & Overy LLP, One Bishops Square, London, E1 6AD, United Kingdom Telephone: +44 20 3088 4818

February 2013 /

we understand that to be in business

IS TO BE EXCEPTIONAL In the everyday pursuit of your goals, there are always legal risks to manage or challenges to overcome. You require sound legal counsel that will understand your values and objectives and proffer appropriate solutions that recognize opportunities in the disruptions that may have stymied others. We are motivated by client satisfaction and are focused on the changing demands of todayâ&#x20AC;&#x2122;s businesses. We aim to give you the required edge for success today and tomorrow. As preferred Nigerian Counsel, we know the tangency of international business concepts and the shifts in the local milieu. Fundamental to our practice are the traditional precepts of law. As such, we do not merely pay lip service to professionalism, integrity, fidelity, dedication, confidentiality and the avoidance and disclosure of conflicts. We hold these values dear and they are the fulcrums of our practice.

l DISPUTE RESOLUTION GROUP l CORPORATE & COMMERCIAL GROUP l NATURAL RESOURCES, ENERGY & ENVIRONMENTAL GROUP l INFRASTRUCTURE & PRIVATISATION GROUP l LEGISLATIVE OVERSIGHT & RELATED GOVERNMENTAL ACTIVITY GROUP

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SECTOR SPOTLIGHT:

Managing High Risk Litigation

MANAGING HIGHRISK LITIGATION

l The increasing popularity of various alternative dispute resolution techniques has certainly affected the type of dispute that gets resolved in court, however the overall volume of litigation work remains strong thanks to a dramatic increase in the number of highrisk litigation cases. High-risk litigation generally includes cases where large amounts of money are at stake; however there are other identifying factors as to why a case might be defined as high-risk, such as multi issue, party and jurisdictional suits, a real probability of failure and a result that could affect the client’s ability to conduct business moving forward. Acquisition International discusses the key issues with leading litigation experts from around the world. -----------------------------------------------------------------------Mark S. Bernstein is a Partner at Barack Ferrazzano Kirschbaum & Nagelberg LLP. -----------------------------------------------------------------------For 25 years, Mark has been helping clients resolve complex commercial disputes. As a partner in the Litigation Group of Barack Ferrazzano Kirschbaum & Nagelberg LLP, he helps clients manage and resolve disputes in a wide variety of circumstances, ranging from pre-litigation counseling to taking cases to trial. Mark’s comprehensive experience is highly effective in all forms of alternative dispute resolution, including arbitration, mediation and other forms of summary proceedings aimed at resolving disputes without formal court litigation. His substantial background in accounting is invaluable to clients, and their bottom line, when determining the best course of action for each issue. Mark is regularly retained to represent clients in commercial disputes that clients consider high stakes because they involve high dollar exposure, important customer or reputational issues or threaten the client’s ongoing business operations. On each matter he works with the client to identify the business issues that are implicated by the dispute and he analyzes and describes both the potential and likely outcomes to assist each client in developing the business objectives necessary to resolve each dispute. He then implements a cost effective strategy to achieve -----------------------------------------------------------------------Thomas B. Snyder, Director, is a member of Crowe & Dunlevy’s White Collar, Compliance & Investigations practice group, and Joe E. Edwards, Director, is Chair of the practice group. ------------------------------------------------------------------------

Crowe & Dunlevy is a full service law firm based in Oklahoma City with deep expertise in banking, oil and gas, healthcare, complex litigation and white collar compliance and investigations. Crowe has the experience and capability of handling high-risk litigation throughout the United States and the World. With the ever increasing regulation of the business environment by the United States government, high-risk litigation has become increasingly common in almost every industry. At the federal level, the United States is devoting substantial resources to combating corruption throughout the world. Employing the broad reach of the U.S. Foreign Corrupt Practices Act and other laws, the U.S. Department of Justice has obtained multi-million dollar fines from dozens of companies, and jail sentences for some individuals involved. The United States Consumer Financial Protection Bureau has also been active in launching investigations and exacting multi-million dollar fines against credit card companies, lenders and other entities for engaging in deceptive practices in consumer transactions. The Department of Justice has similarly

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those objectives. Establishing the business objectives for each dispute is essential so that all involved can evaluate the chosen strategy and adjust as the case develops or if the business or litigation environment changes. Barack Ferrazzano has assembled a group of highly skilled trial lawyers who represent clients, both forcefully and efficiently, in a broad range of disputes. We are always ready to try cases when necessary, but resolve them early and economically when appropriate. Some of the world’s most prominent companies have selected Barack Ferrazzano for representation in their most significant legal disputes. Our clients include a diverse group of businesses, ranging from one of the world’s leading oil and gas suppliers to large financial institutions, major telecommunications services providers, REIT(s), motor vehicle manufacturers, hedge funds, law firms and consumer goods companies. Our litigators have extensive experience in state and federal courts throughout the United States, on both the trial and appellate levels. We understand when asked to help resolve business problems, a trial is only one potential solution. When the situation calls for it, significant part of our time is focused on strategic counseling and alternative dispute. Our clients rely on our ability to design thoughtful, cost-effective

devoted substantial resources to anti-money laundering efforts, exacting record fines from banks and other financial institutions for failure to properly implement anti-money laundering controls. It is only a matter of time before those efforts include seeking criminal penalties against individual officers or directors of the offending institutions. Finally, all of the foregoing often spawns parallel government and civil litigation that requires tremendous coordination. As with any high-risk activity, the key for any business is to understand the main sources of its risks, be well counseled on the governing law, and implement effective compliance programs tailored to mitigate those risks. Crowe has extensive experience in assisting clients with developing and implementing such risk based compliance programs. If and when alleged wrongdoing occurs, it is crucial for a company to quickly assimilate the relevant facts and understand how to respond to any pending governmental investigation. Crowe has assisted clients in conducting internal investigations and interacting with the Department of Justice, the Securities and Exchange Commission and other governmental agencies to place clients in the best position to seek and obtain successful resolutions, including deferred prosecution and nonprosecution agreements. Finally, if a resolution cannot be reached and the case proceeds to formal litigation, the company must be prepared to defend itself and its

solutions to complex scenarios, and to determine when it’s the right course of action. Barack Ferrazzano trial lawyers are experienced in a broad range of alternative dispute resolution techniques, including mediations, binding and non-binding arbitrations, mini-trials and settlement trials with floors and caps. Many of our lawyers continually hone their skills and widen their perspectives by serving as arbitrators and mediators. Clients count on Barack Ferrazzano for strategic counseling designed to minimize the likelihood of litigation or reduce the exposure to litigation when potential problems arise. Our litigators have the unequivocal experience for engagements requiring certain legal or industry proficiency to achieve the most effective results for clients’ needs. Company: Barack Ferrazzano Kirschbaum & Nagelberg LLP Name: Mark S. Bernstein Email: mark.bernstein@bfkn.com Web: www.bfkn.com Address: 200 West Madison Street, Suite 3900, Chicago, IL 60606, USA Telephone: +1 (312) 984-3214

officers and directors from potentially devastating civil or even criminal charges. Crowe’s trial attorneys, including former state and federal prosecutors, have handled hundreds of complex civil and criminal trials.

Company: Crowe & Dunlevy Web: www.crowedunlevy.com Name: Thomas B. Snyder Email: thomas.snyder@crowedunlevy.com Telephone: 405.234.3254 Name: Joe E. Edwards Email: joe.edwards@crowedunlevy.com Telephone: 405.239.5414

February 2013 /

SECTOR SPOTLIGHT:

Managing High Risk Litigation -----------------------------------------------------------------------Christopher F. Robertson is a Partner in the Litigation Department of Seyfarth Shaw LLP, based in Boston, Massachusetts. -----------------------------------------------------------------------Mr Robertson explained that the main factors that make a case high risk are the monetary exposure of a case or the potential of losing the ability to conduct a certain aspect of the company’s business. For individuals such as senior executives, accountants, brokers or attorneys, the risk of an officer or director bar, or the loss of a license is often far more high-risk than any monetary penalty. “On the corporate side, for example, in certain cases involving Medicare or Medicaid, an adverse ruling on billing practices could result in the loss of the ability to participate in the program, which could be fatal for the company,” he commented. “Similarly, a government contractor facing a potential ban from doing business with the government is a bet the company proposition. Likewise fatal for an individual broker or accountant would be the loss of a brokerage license or suspension of an accounting license. “While these factors have not changed in recent years, the government’s focus on seeking non-monetary relief has -----------------------------------------------------------------------David M. Davis is a Founding Shareholder of Davis & Wright, P.C. -----------------------------------------------------------------------Davis & Wright was founded in 1985. The attorneys in the firm represent clients throughout Texas from its base in Austin. The firm’ litigation services are focused on high risk and complex civil trial law, including professional, product and health care liability defence, commercial litigation, insurance litigation and construction litigation. Davis & Wright represents individuals and business organisations. Mr Davis noted that Texas has always been a jurisdiction that attracts high-risk litigation due to the relative size of the Texas economy, the large number of major manufacturers and businesses which do business in, from and to the state and the diversity of Texas businesses, including energy, financial and high-tech. “Over the past two decades the Texas economy has seen significant growth among existing and new businesses,” he explained. “Additionally, the recent recession added additional stresses to many individuals and businesses, likely resulting in more decisions to resolve disputes through the judicial system.” -----------------------------------------------------------------------Clare Strowbridge is the Managing Partner and Head of Commercial Litigation Department at Hutton’s Solicitors & Advocates. ------------------------------------------------------------------------

increased, and it is harder to settle cases without addressing these issues.” Mr Robertson stated that the main challenge in high stakes securities litigation is the ability of the plaintiff in many cases to reframe the allegations of the complaint after the allegations have been deemed insufficient by the court. In any motion to dismiss, the plaintiff is educated about the weakness of the complaint, and unless the claim is dismissed with prejudice, the amended complaint will be more focused and precise. “We seek to overcome this problem by highlighting those aspects of the complaint that cannot be ‘fixed’, such as a lack of causation or damages, a statutory bar on the claim, or an issue such as a lack of standing to bring the claim. We also seek to limit the number of amendments that will be allowed by the court,” he added. With the continued instability in the financial markets, leading to share price fluctuations and opportunities for shareholder gains and losses, Mr Robertson expects to see continued focus on shareholder litigation, insider trading and challenges to the actions of corporate officers and directors.

He stated that the key challenge faced in high-risk cases is maintaining a focus on a cost-effective and realistic outcome when the time demands of the litigation increase. “This challenge includes maintaining appropriate communications between the attorney and the client decision-makers and continued and timely evaluation of risks and benefits of the litigation,” he added.

Company: Seyfarth Shaw LLP Name: Christopher F. Robertson Email: crobertson@seyfarth.com Web: www.seyfarth.com Address: World Trade Center East, Two Seaport Lane, Suite 300, Boston, Massachusetts 02210 Telephone: +1 617 946 4989

monetary costs of discovery and trial although it may conversely result in an increase in the cost of preparation for trial. As these rules do not consider the impact of a judgment on the defendant beyond monetary damages it will likely result in greater pressure on a defendant to settle to avoid a perceived inability to properly defend the claim at trial when professional reputation and other noneconomic damages are involved,” he concluded.

Based on legislation passed in 2011, the Texas Supreme Court is implementing procedural rules to direct cases, regardless of complexity or non-economic damages, which are pleaded to involve economic damages of $100,000.00 or less to an expedited trial docket. Mr Davis explained that the current rules promulgated by the court for comment make the expedited docket mandatory for cases which fit within the amount in controversy without regard to the consent of the defendant or the nature of non-economic damages at risk or the nature of the pleaded cause of action. “Significant limits on discovery and the length of the jury trial per party will certainly result in a reduction of the

Hutton’s is a niche litigation practice, with expertise in complex civil and commercial litigation, complex crime and professional negligence including high value clinical negligence cases.

“Litigation rarely changes its nature; a successful case is developed from a number of key factors all of which flow from the primary starting point: ‘detail’. Proper pre-litigation due diligence and risk assessments will mitigate the risk of failure however there is no excuse for either party not undertaking a proper review of the fundamentals before embarking on litigation. In many cases, a claim may not start out as ‘high risk’, but before long it becomes a high risk case.”

Discussing the dramatic increase in the number of high-risk litigation cases, Ms Strowbridge stated that “desperate times call for desperate measures”.

According to Ms Strowbridge, the key to any success comes from an ability to identify the issues and build a comprehensive case that addresses these.

“Whilst nobody ‘enjoys’ litigation, the global meltdown has put significant financial pressures on businesses. In high pressure situations where commercial relations become strained, the immediate resolve is to ‘sue’ when proper risk analysis and ‘bigger picture thinking’ would indicate an alternative form of action may be the more appropriate way forward.”

“More often than not the other side will miss the obvious: the skilful litigator will use such tactical advantages where possible and make the procedural rules work for the client as far as permitted so as to put the other side under as much pressure as possible. We make sure that no opportunity is lost to advance the clients’ position.”

She explained that there are a number of factors which indicate a high risk case, such as: value; number of issues; the extent and specialism of expert evidence; witness evidence; and funding.

As the economy starts to show signs of improving, Ms Strowbridge believes that businesses that have held back may now elect to litigate matters they previously regarded as having borderline prospects.

46 / February 2013

“With recent changes in the law protecting whistleblowers, we expect to see some high profile cases initiated by employees cooperating with the government and the plaintiff’s bar. As the stakes for companies increase in these cases, the ability to work closely with counsel and have visibility on the costs of litigation and the risks of liability, is paramount. With Seyfarth’s depth of experience, combined with our SeyfarthLean principles, the firm is well positioned for the future,” he concluded.

Company: Davis & Wright, P.C. Name: David M. Davis Email: ddavis@dwlaw.com Web: www.dwlaw.com Address: 1801 South Mopac, Ste. 300, Austin, TX 78746 Telephone: +1 512 482 0614 “Defendants may well become worthwhile to sue, as prospects of recovery now exist and limitation dates may now force them into an all or nothing decision. “However the general trend is that as things get better, litigation rates drop. So the number of potential cases will be inversely linked to the performance of the economy in the longer term,” she concluded.

Company: Hutton’s Solicitors Name: Clare Strowbridge Email: clare.strowbridge@huttons-solicitors.co.uk Web: www.huttons-solicitors.co.uk Address: 16 St Andrews Crescent, Cardiff, CF10 3DD Telephone: 029 20 378 621

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Managing High Risk Litigation -----------------------------------------------------------------------Errol Knowles is a senior attorney of nearly 40 years post admission practice, of which by far the majority has been managing litigation. ------------------------------------------------------------------------

Knowles Husain Lindsay Inc. (“KHL”) specialises primarily in dispute resolution as its strategic and practical focus. The core of its senior practitioners have practised within the “mega” firm environment and benefit from our more independent and focussed environment. KHL has received awards for its Dispute Resolution practice. KHL represents a number of listed corporates in industrial, telecommunication, mining, property and other commercial fields and has international clients. We represent these clients in large and high-risk litigation. The past years have seen an increase in high risk litigation. In our experience that is attributable to a number of factors. Primarily, the nature of the global, commercial environment and the economic depression has resulted in international corporates seeking commercial opportunities in wider geographical areas and in particular emerging markets such as Africa. Business opportunities are speculative, with both high reward

but also high risk. A lack of knowledge and protocol within new environments results in a higher percentage of failure than would be expected within accustomed “home” environments and healthy economies. High risk litigation generally arises from large and risky ventures. It is signified by large amounts at stake, potentially difficult and complicated issues, unaccustomed and difficult jurisdictions, choice of law, competitors that are frequently less than “gentlemanly” and high cost. Our strategies and practice are designed to meet and overcome these obstacles. The management and success of high risk litigation is primarily a matter of strategy. Legal techniques do not differ in any material respect whether one litigates in the United Kingdom or in South Africa and one would expect proficiency, knowledge of the law and practice and an aggressive efficiency. A proper analysis of issues, public and jurisdictional vulnerability, strengths and weakness, results in carefully devised and implemented strategy designed to achieve resolution without necessarily relying on a final outcome from the applicable forum. Litigation and strategy are tools to be used to this objective. -----------------------------------------------------------------------Alexander Loos is a Partner at Hogan Lovells International LLP, Office Düsseldorf. ------------------------------------------------------------------------

In addition to legal services for all fields of entrepreneurial business Hogan Lovells International LLP offers corporate and commercial litigation in all of its 44 offices in the 27 most mature jurisdictions of the northern hemisphere.

The legislature in South Africa has not responded to the changes and advances in the litigation environment. As the result private initiatives have resulted in the development of managed litigation Forums such as the Arbitration Foundation of South Africa (“AFSA”). We see this trend increasing in coming years. South Africa is an attractive forum for international arbitration.

Company: Knowles Husain Lindsay Inc Name: Errol Knowles Email: ENK@khl.co.za Web: www.khl.co.za Address: 4th Floor The Forum, 2 Maude Street, Sandton, 2196 Telephone: +27 11 669 6000

Despite the limitation, Mr Loos has predictions for highrisk litigation over the next 12 months with regards to business in Germany. “For as long as the German jurisdiction applies capped fees, claimants will tend to raise claims amounting to more than the base value of the cap (€ 30 million),” he explains. “And with regards to ensuring a successful outcome every time, it is helpful if you can convince your client that miracles are possible!”

“Hogan Lovells International LLP provides seamless cross-border service, both in advisory legal services as well as dispute resolution,” said Mr Loos. There has been a dramatic increase in the number of high-risk litigation cases which Mr Loos attributes to the globalisation of capital markets. “Such globalisation gives rise to an unexpected number of controversies caused by widely differing national expectations,” he explains. “High-risk claims that may wipe out entire companies require counsel not only to be a good advocate, but also to show qualities in rendering strategic advice to the client.”

Company: Hogan Lovells International LLP Name: Dr. Alexander Loos Email: alexander.loos@hoganlovells.com Web: www.hoganlovells.com Address: Kennedydamm 24, 40476 Düsseldorf, Germany Telephone: +49 211 13 68 416

OTHER EXPERTS IN THIS AREA

Company: Connors Law, LLP Name: Kevin Connors Email: kconnors@connorslawllp.com Web: www.connorslawllp.com Address: 140 South Village Avenue, Suite 120, Exton, PA 19341 Telephone: +1 610 524 2100

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Company: Koskie Minsky, LLP Name: Kirk M. Baert Email: kbaert@kmlaw.ca Web: www.kmlaw.ca Address: 20 Queen Street West, Suite 900, Toronto, ON M5H 3R3, Canada Telephone: +1 (416) 595 2117

February 2013 /

[ We go beyond... ]

SECTOR SPOTLIGHT:

The Growth of Islamic Banking

THE GROWTH OF ISLAMIC BANKING

l In an increasingly globalised landscape, Islamic finance is beginning to play an increasingly important role in strengthening economic interlinkages between key nations in the Organisation of Islamic Co-operation and beyond. Islamic finance activities continue to venture beyond national boundaries and the industry’s international growth is now stronger than ever, according to banking experts. The dynamic pace of innovation in the global Islamic finance industry has widened the range of financial products and services available to the global audience, thereby significantly increasing its appeal. In the aftermath of the economic crisis, the global economy is on its quest for a financial system that promotes sustainable growth providing tremendous potential for Islamic finance. Acquisition International spoke to experts in Islamic banking to discuss this growing area of finance.

-----------------------------------------------------------------------Andrew Quinn is a partner and Head of Tax with international law firm Maples and Calder, based in the Dublin office. Tahir Jawed is Managing Partner of Maples and Calder’s Dubai office. -----------------------------------------------------------------------Andrew Quinn explains that 2012 was another strong year for Islamic Banking, with the value of Shariah compliant assets under management reaching approximately 1.3 trillion U.S. dollars globally. “The market for Islamic fixed income products, namely sukuk, made a return, particularly in the Middle East with issuances by several banks and, for the first time, an issuance by a bank to raise tier 1 capital,” he explains. “There was also positive news in Ireland, with a number of announcements providing a further boost to Ireland’s growing Islamic Finance sector. August 2012 heralded the news that Ireland had attracted its first fund promoter from Malaysia. This was soon followed by the announcement in November 2012 that Armanie Advisors, a global Islamic capital markets advisory firm, was to set up an Irish operation in Dublin’s Financial Services Centre.” Maples and Calder, with offices in the Cayman Islands, Ireland and the BVI, has continued to see a growth in Shariah compliant investment funds. Already the locations of choice for hedge funds and private equity funds, there has been a wave of investment funds looking to offer Shariah compliant investment opportunities to Islamic investors.

ACQUISITION INTERNATIONAL

There are a number of factors which have combined to make Islamic Finance one of the fastest growing sectors of finance in the world.

importance of having a level playing field to allow Islamic Finance to compete with conventional banking in new countries cannot be underestimated.”

“Firstly, the liquidity in the Middle East resulting from many years of high oil prices, but also the economic growth in Islamic countries such as Malaysia and Indonesia, and the aggressive investment strategies of sovereign wealth funds and Islamic institutions in the Islamic world” says managing partner Tahir Jawed. “Another contributing factor is the exponential growth of the Muslim population. Historically under-banked, the Muslim population is expected to grow twice as fast as the nonMuslim population up to 2030. This has created a need for infrastructure and services in the region which investment funds in particular have focussed on. Given the desire of investors in the region to invest locally, this has generated a market for Shariah compliant investment funds and project finance structures.” There are challenges for Islamic finance which still remain, Quinn explains. “Many of the financial products are closely linked to conventional products and in many cases the allocation of risk between investor and borrower are not as many Islamic scholars would like. “When choosing between Islamic Finance products and conventional banking products, the cost and quality of the products can often be a deciding factor. Therefore, the

Company: Maples and Calder Web: www.maplesandcalder.com Name: Andrew Quinn Email: andrew.quinn@maplesandcalder.com Address: 75 St. Stephen’s Green, Dublin 2, Ireland Telephone: +353 1 619 2038 Name: Tahir Jawed Email: tahir.jawed@maplesandcalder.com Address: 5th Floor, The Exchange Building, Dubai Int’ Financial Centre, Dubai, PO Box 119980, UAE Telephone: +971 4 360 4071

February 2013 /

SECTOR SPOTLIGHT:

The Growth of Islamic Banking

Spain, from a historical context, should be spearheading the development of Islamic Finance in Europe, but initially UK and more recently France took that role. Spain is not following at this stage the progress made in neighboring countries in order to adequate its legislation to Islamic Banking. Unfortunately, insufficient progress has been made in this field, despite the fact that several private institutions and Governmental bodies are analyzing the steps to accelerate this process. Reasons -----------------------------------------------------------------------Thierry Afschrift is a Partner at AFSCHRIFT. -----------------------------------------------------------------------AFSCHRIFT is a boutique law firm with 20 lawyers, specialised in domestic and international tax law and law relating to white collar crime. The firm is the only Belgian member of the ISFIN, the Islamic Finance Group. “AFSCHRIFT often appears as a ‘pioneer’ in respect to the developed argumentation,” commented Mr Afshrift. “Open mindedness and creativity characterise our way of acting. Actually, knowledge of the law alone is very often not enough when facing the complex problems that our clients bring to us; thinking beyond conventions and finding lateral and indirect solutions is often the only way to achieve our clients’ targets: finding solutions is the essence of our profession. Therefore, while trying to achieve in-depth knowledge and operate with permanently controlled quality, AFSHRIFT tries every day to improve its way of thinking… to innovate.” Discussing the implementation of Shariah compliance frameworks, Mr Afschrift stated that it is important to understand that fixed or floating payment or acceptance of specific interest or fees on money loans are prohibited by Shariah, as is speculation. -----------------------------------------------------------------------Glen Roberts is a partner at international law firm, Withers Worldwide. -----------------------------------------------------------------------Withers Worldwide has more than 100 years of advisory experience with clients in over 80 jurisdictions including sovereigns, global financial institutions and family offices.

‘‘

One-third of our lawyers are tax-trained professionals,” states Glen, commenting on what sets the firm apart from its local and global competition. “I hate to put it this way, but tax lawyers are the only lawyers who can regularly show a client precisely how much economic value has been added by them. Our tax team helps us deliver the most comprehensive toolkit of innovative and thoughtful solutions in cross-border Shariah compliant and conventional engagements.

‘‘

There are several factors which have contributed to the industry’s continuing growth and increasing appeal, as Glen explains: “Demographics (more than one million faithful Muslims) and ethics, which draw non-Muslim customers as well, help to increase Islamic finance’s appeal, especially when it is compared with ongoing bad news about conventional financiers.”

50 / February 2013

We do not expect 2013 to see a significant increase in Islamic finance trade, to the extent the drivers remain unchanged. However, we believe an interesting debate is gaining momentum among scholars and practitioners as to what the real aim of Islamic finance is and the results of such debate may lead to a new practice, much easier to develop in Western markets. Some theoreticians argue that, rather than a form-focused, Shari’ah-certificate driven sort of finance, Islamic finance should be seen as an ethical way of approaching the business. If contractual matters become less of a concern and focus is placed on other issues, such as the actual fairness and compliance with general Islamic principles, Islamic finance may become akin to other forms of ethical banking already existing and being carried out along Western legal and regulatory patterns without major concerns. This thesis are worth exploring and may become a sound basis for the development of Islamic finance in the future. “For example, contracts where the ownership of a good depends on the occurrence of a predetermined but uncertain event in the future are forbidden,” he explained. “Moreover, Islamic law prohibits investments considered unlawful, because they are contrary to Islamic values. Transparency of all transactions, requiring for example from a bank a precise indication of where money is invested, is also fundamental. Finally, financial transactions must be based on the sharing of profits and losses.”

Company: Cuatrecasas Gonçalves Pereira Web: www.cuatrecasasas.com Address: Almagro 9, Madrid / Passeig Gracia 111, Barcelona Telephone: +34 91 5247177 / +34 93 2905516 Name: Fernando Minguez Email: fernando.minguez@cuatrecasas.com Name: Josep Marsal Email: josep.marsal@cuatrecasas.com

‘‘

Islamic banking has grown each year during the four past decades and shows signs of consistent future growth. One can also notice an internationalisation of the Islamic banking. To face banking reforms, many markets and individuals could be interested to explore an alternative Islamic finance option, for both economic and tax reasons, he concluded.

AFSHRIFT worked on the creation of financial and banking products for Muslims in Belgium, taking into consideration the specificities of Islamic law. As he noted previously, charging interest is forbidden according to Islamic law so, for example, a mortgage loan to buy a house in Belgium is not allowed under Islamic law. “To solve this issue, AFSCHRIFT set up a financial and banking product in accordance with Islamic Law,” explained Mr Afschrift. “The innovative solution proposed by AFSHRIFT used for instance the legal form of emphyteusis. This legal construction is really attractive notably because of the tax planning that it allows. So, we can guess that in the near future, this solution will also be used by non-Muslims for tax optimisation purposes.

“In 2012, conventional financiers were laying low,” he continues. “Therefore last year was a great year for Islamic finance to grow on its own, not just as part of the broader market. The most significant event, in my view, was Oman’s national initiative to develop Islamic finance.” Shariah audits play a key role in the governance of Shariah products and services, although Mr. Roberts states there is room for improvement.

‘‘

Such audits prove to consumers that financial institutions are serious about a moral framework,” he enthuses. “Improvements in auditing will address the same issue arising throughout Islamic finance; training people to truly understand why they are doing the work. The precise improvements required depend on the institution adopting the auditing framework.

‘‘

It is the result of the merger in 2003 of two of the largest and most prestigious Iberian law firms: Cuatrecasas (Spain) and Gonçalves Pereira, Castelo Branco (Portugal). Cuatrecasas, Gonçalves Pereira is member of ISFIN, the network of Independent Law Firms specialized in Islamic Finance; its Middle East Desk has developed in recent years a deep analysis of the changes to the legal framework that Spain may need to facilitate and ease the growth of Islamic Finance.

for the relative lack of development of Shari’ah compliant financial products in Spain owe to the absence of an internal demand from the local Islamic community and the undisputed recourse to conventional finance mechanics by large investors from Islamic countries when approaching the Spanish market.

‘‘

-----------------------------------------------------------------------With almost a century of professional practice and an excellent reputation, Cuatrecasas, Gonçalves Pereira is a leading international benchmark for all legal issues in Spain and Portugal. ------------------------------------------------------------------------

The main issues relating to Shariah compliant products, their development and also deal structuring, include shortcutting most structural issues altogether through what Roberts calls “Shariah laundering” techniques. “The fix for

Company: AFSCHRIFT LAW FIRM Name: Thierry Afschrift Email: avocats@afschrift.com Web: www.afschrift.com Address: Avenue Louise, 208, B-1050 Brussels Telephone: +32 (0)2.646.46.36

such concerns,” says Roberts, “is to learn the ‘why’ behind the principles of Islamic finance.” While Glen restrains from making predictions for Islamic banking in 2013 he states that so long as sensitivity to the historical origins of local laws is practiced, every day over the next 12 months will be full of opportunity for Islamic finance.

Company: Withers Worldwide Name: Glen W. Roberts II Email: gwr@withersworldwide.com Web: www.withersworldwide.com Address: 430 Park Avenue, New York, New York 10022 USA Telephone: +1.212.848.9873

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Growth of Islamic Banking

-----------------------------------------------------------------------Druces LLP is a solicitors’ practice established in the City of London for over 200 years. -----------------------------------------------------------------------Our Banking and Finance Practice has seen significant growth during 2012 in the area of Islamic Finance. We have been particularly active recently on behalf of a UK based Islamic Bank, with particular emphasis on Murabaha and ijarah transactions.

finance become available, as businesses and individuals become more aware of the applicability and flexibility of Islamic Finance. We also foresee interesting developments as the different approaches to Sharia’ah compliance currently found between the Far East and the Middle East begin to be reconciled.

Our team is led by Corporate Partner Christopher Axford and Property Partners Nicholas Brent and Suzanne Middleton Lindsley.

The current banking crisis gripping the western economies was caused in part by the development of banking products so sophisticated that very few people understood them, and by a culture that developed within the financial systems that rewarded risk and short term gain.

The reluctance, or inability, to lend by a large section of the UK Banking market, has lead to a funding gap and there is a great demand from developers and others for development and acquisition finance. Islamic Banking has had a large part to play in meeting that need.

For that very reason we would put the current appeal of Islamic Banking down to three main factors. The first is its relative simplicity, the second that it is adaptable and the third is the fact that it is seen as an ethical way of doing business, given its foundations on Sharia’ah principles.

In our opinion the use of Islamic Finance will continue to grow and to develop even when traditional methods of

As financiers develop an ever wider range of Sharia’ah compliant products and structures, it would be unfortunate

-----------------------------------------------------------------------Ken Owens is an Audit Partner in the Asset Management Group at PricewaterhouseCoopers (PwC) in Ireland and leads PwC Ireland’s Islamic Finance Group which has been focussing on the Islamic finance opportunities for Ireland for a number of years. -----------------------------------------------------------------------PwC is the largest professional services firm in Ireland and provides integrated audit, tax and advisory services across all industries in Ireland and internationally. In Ireland, PwC employs over 1,800 people in seven locations. Internationally, the network firms of PwC employ more than 163,000 people in 151 countries. Mr Owens has worked with PwC for over 22 years and has been partner since 2001. “With over 1,000 international companies, Ireland continues to be one of the most favoured global locations for investment,” observed Mr Owens. In 2010, Forbes ranked Ireland as the number one place to do business in Europe and has one of the most favourable tax regimes in the world attracting hundreds of foreign companies to locate within the country.

ACQUISITION INTERNATIONAL

Mr Owens stated that the way in which Ireland has looked to develop its offering to the global Islamic finance industry is a prime example of this pro-business environment. “The developments that have taken place have come about through the combined efforts of the Government and civil authorities working closely with those working in the international financial services sector,” he explained. “In 2009 the Irish Tax Authorities clarified the tax treatment of Islamic funds, Ijara arrangements and Takaful arrangements. Enhancements to the tax regime for Islamic Finance were introduced in the Irish Finance Acts in 2010 and again in 2012.” 2012 has been the most successful year to date for the establishment of Shariah compliance UCITS (Undertakings for Collective Investment in Transferable Securities) funds in Ireland. Mr Owens noted that in January 2012, CIMBPrincipal Islamic launched the first Malaysian-based international Islamic funds platform domiciled in Ireland. “Under the newly-launched platform, CIMB-Principal Islamic is registering three new UCITS-compliant equity funds,” commented Mr Owens. “The funds will eventually be registered and distributed in seven jurisdictions, the United Kingdom, Switzerland, Germany, Saudi Arabia, Bahrain, United Arab Emirates and Singapore.”

if the appeal and transparency of Islamic Finance in its current form were to be compromised in any way.

Company: Druces LLP Name: Nicholas Brent Email: n.brent@druces.com Web: www.druces.com Address: Salisbury House, London Wall, London, EC2M 5PS Telephone: +44 (0)20 7638 9271

In December 2012 it was also announced that Saudi Arabia’s largest wealth manager, NCB Capital, would become the first Saudi institution to offer funds on a European-registered UCITS platform in a platform established in Ireland, and has initially made two funds available on it. “The two funds will be marketed internationally in conjunction with Amundi, and TCW under a strategic alliance with NCB in March 2012.”

Company: PricewaterhouseCoopers Name: Ken Owens Email: ken.owens@ie.pwc.com Web: www.pwc.ie/asset-management Address: One Spencer Dock, North Wall Quay, Dublin 1, Ireland Telephone: +353 1 7928542

February 2013 /

SECTOR SPOTLIGHT: Fund Formation

FUND FORMATION

l Whether you’re a first time sponsor, a new or even experienced manager, the legal, tax and accounting issues associated with forming funds are detailed and complex. From forming structures, raising capital, attracting investors, to tax efficiency, virtually every type of fund can raise similar critical issues. Fund lawyers and formation experts can provide full coverage of the laws and regulations that govern fund formation and explain the features, advantages and disadvantages of the various types of fund that exist in their respective region or field. In the early stages of any fund these experts can prove to be invaluable. Acquisition International spoke to a number of industry leaders to get their opinion on fund formation issues. -----------------------------------------------------------------------John Koeppel and Charles Jacobs are partners in Nixon Peabody LLP’s globally recognised Private Equity & Investment Funds practice. -----------------------------------------------------------------------Nixon Peabody is a full-service law firm based in the United States with offices in Europe and Asia. They are one of the leading firms in the world advising institutional investors, private equity funds, and portfolio companies. Over the past eight years, Private Equity Analyst has ranked Nixon Peabody among the most active law firms for private equity fund formation and investments (#3 in 2012). In addition, their attorneys have been recognised as leaders in the field by Chambers USA: America’s Leading Lawyers for Business and U.S. News Best Lawyers/Best Law Firms. What are the key skills required of fund lawyers and formation experts? Aside from the obvious technical legal expertise, it’s essential that fund lawyers have knowledge of the market and market terms. The ability to negotiate in a non-hostile way is also a very important skill. What are the most common legal and strategic challenges confronted when forming funds? In this ultra-competitive market, fund managers need to differentiate on strategy, historical track record, and approach. It’s also absolutely critical that they know “what’s market” and are using terms that investors can accept without objection. How can you help to overcome these challenges and find pragmatic solutions? -----------------------------------------------------------------------John Bohan is the Global Head of Operations at Apex Fund Services Ltd. -----------------------------------------------------------------------Apex Fund Services Ltd. is one of the world’s largest independent fund administration companies. With over $23billion of assets under administration, 30 offices across 20 countries and over 300 employees across the globe, Apex has the ability to reach globally, service locally and provide cross-jurisdictional solutions and best practice. Apex is located alongside its clients providing the highest level of personalised services. Mr Bohan stated that fund lawyers need to have a complete and full understanding of the jurisdiction they are based in, a clear awareness of their client’s requirements and the ability to match these requirements to the appropriate jurisdiction. “Apex Fund Services with its presence across the globe brings a combination of expertise in each jurisdiction along with a determination to assist our clients to create the best and most appropriate fund for their needs,” he commented. Mr Bohan noted that some liquidity and capital began to return to the markets in 2012. With regard to Irish domiciled funds, fixed income strategies remained the single biggest

52 / February 2013

Lawyers need to be skilled at finding ways to strike a balance between the interests of the sponsor and the investor. It’s all about alignment of interests. GPs are looking for the ability to operate without a lot of interference, whereas LPs are looking for protections. The fund agreement has to reach a careful balance between the two.

Do you have any predictions relating to fund formation in 2013? Dodd-Frank came into effect in 2012 so we expect to see more regulatory oversight.

How does the approach taken to fund formation vary depending on each client’s strategic objectives? The GP objective is to get a fund raised in as short a time as possible. The LP perspective can vary depending on a variety of factors such as whether they are an anchor or lead investor and the degree of control they have in driving terms. Each client is different in terms of their situation and what their hot buttons are. The multi-party structure of funds also makes it very challenging because you have to strike an agreement that accommodates all interests, which can include hundreds of parties. What are the main considerations when designing a structure to meet a fund’s investment goals? The type of fund is key. For example, venture funds, distressed funds, and leveraged buyout funds are quite different. There are a number of terms that are unique in each of these funds, even if the structures are similar. But the bottom line is designing a structure and terms in such a way as to give the fund the ability to compete. Have you noticed any emerging trends in 2012? The market continues to be highly competitive. LPs are also more discerning and have stronger negotiating leverage than they have had historically.

winner with net inflows of €12bn and positive organic growth within funds of €4.2bn. On the equity side, modest gains were made averaging 4% with modest capital inflows. “Overall, the equity markets showed positive returns – not a time for shorting strategies,” he observed. “It is clear from the launches that we have been seeing, particularly given the breakaway equity rallies in early January, that confidence and recovery is underway. A lot of nervousness remains in the markets, favouring fixed income safe havens and Irish regulated fund structures.”

Company: Nixon Peabody LLP Web: www.nixonpeabody.com Address: 437 Madison Avenue, New York, NY 10022 Name: Charles P. Jacobs Email: cjacobs@nixonpeabody.com Telephone: +1 212-940-3170 Name: John J. Koeppel Email: jkoeppel@nixonpeabody.com Telephone: +1 212-224-7348

tax requirements, regulatory convenience and distribution routes. “There is definitely a freeing up of capital with the likes of the MF Global collapse achieving 92%+ liquidity, secondary market flows into illiquid securities post-financial crisis helping investment managers and investors moving on from the worst of the recession’s ill effects on the investment management industry,” he concluded.

There has been a steady influx of new funds into Ireland over 2012, and Mr Bohan stated that 2013 has seen a strong start. “There is no doubt that with investment managers refocusing on the AIFMD, managers are being forced to restructure their operations and in the course of that take the option to restructure their fund offering as well,” he explained. “Redomiciliation continues to trickle away between jurisdictions with no great floods in any one direction. There remains a degree of complexity in choosing a jurisdiction when taking into account global preference,

Company: Apex Fund Services Ltd. Name: John Bohan Email: john@apexfunds.ie Web: www.apexfundservices.com Address: Apex Fund Services (Ireland) Ltd., Enterprise House, Watersedge, Midleton, Co.Cork. Telephone: +353 21 4633366

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Fund Formation

New Zealand is undergoing significant regulatory reform of its securities markets. With the establishment of a new ‘super regulator’ and a new licensing and regulatory regime for financial service providers, these reforms, once fully implemented, will have a huge impact on funds formation in New Zealand, making it competitive in the global funds market. Following a recent tax change, New Zealand now offers a conduit vehicle whereby foreign investors can collectively invest into a New Zealand domiciled fund that invests offshore without incurring a New Zealand tax exposure on those offshore -----------------------------------------------------------------------Tim Morgan is a Partner at Ogier, Jersey. -----------------------------------------------------------------------According to Mr Morgan, fund lawyers and formation experts require excellent technical expertise and understanding of the regulation in the jurisdiction in which they work, as well as a breadth of knowledge as to the structuring imperatives driving the planning and implementation of the fund structure as a whole in order to give the best advice and to understand which types of vehicles have the right characteristics for the relevant situation. “Excellent client service and good knowledge of market practice (re approach to key issues and documents), preferences of certain investor groups and awareness of issues regarding upcoming regulation and trends is essential, particularly in the current environment where regulation is a key differentiating factor between jurisdictions,” he added. He explained that the characteristics of an appropriate fund structure for investors will draw on a range of characteristics developed across different asset classes. “For example: balancing the interests of liquidity versus stability, consideration as to tax transparency (as in the case of limited partnership structure) versus opacity (in the case of a corporate),” he commented.

ACQUISITION INTERNATIONAL

investments. This is also tax effective for New Zealand investors, with many global fund managers taking advantage of this by establishing New Zealand based feeder funds which invest into offshore funds. As a consequence, New Zealand has found itself in a better position to compete with Ireland, Luxembourg and the Cayman Islands as an attractive funds domicile.

grow throughout 2013 and beyond, both offshore and in New Zealand. Once the reforms have been fully implemented, New Zealand will increasingly be recognised as an attractive domicile for funds.

Funds formation involves bringing together the expertise and resources of trustees, administrators, custodians and distributors for the benefit of the client. We know the market well and can access these skills and resources both locally and globally to benefit the client. The statutory introduction of a retirement savings regime called KiwiSaver more than six years ago has also increased demand for funds in New Zealand. Managers continue to establish funds that provide a point of difference, with the New Zealand public beginning to recognise the importance of retirement savings. The locked-in nature of these retirement savings vehicles means a steady increase in superannuation assets. We believe demand for investment funds will continue to

Mr Morgan noted that 2012 saw a significant amount of “club deals” where groups of strong investors offer from institutions such as Sovereign Wealth Funds and other nontraditional investors in funds tended to structure deals with other corner-stone investors into assets which traditionally would have been invested into by fund managers.

‘‘

This approach has been applied to a mixture of assets across real estate and direct private equity assets,” he observed. “This has provided a useful mechanism for bringing momentum into the market where traditional fund raising structures have been difficult to move forward.

‘‘

-----------------------------------------------------------------------Alasdair McBeth is a senior partner in the funds management team of New Zealand law firm DLA Phillips Fox, a member of the DLA Piper network. -----------------------------------------------------------------------DLA Phillips Fox is a full service, business law firm with global capability. In addition to core practice areas, which include banking and finance, corporate and commercial, litigation, property and employment, it has one of the largest dedicated funds management practices in New Zealand. It also has a large insurance practice.

Looking ahead in 2013, Mr Morgan believes that it is likely that the first half of the year will be dominated by structuring and marketing processes aimed at completion prior to the coming into effect of the AIFM directive in July 2013. “This is likely to provide a short term momentum to marketing/fund raising in the early part of the year,” he predicted.

Company: DLA Phillips Fox Name: Alasdair McBeth Email: alasdair.mcbeth@dlapf.com Web: www.dlapf.com Address: 50-64 Customhouse Quay, Wellington 6140, New Zealand Telephone: +64 4 474 3257

“Having said this, there is also a move towards increased structuring around the AIFM directive in the medium and long term and this is involving more care in structuring manager substance and procedures in order to provide more demonstrable levels of corporate governance. This is likely to drive more structuring to the better regulated offshore jurisdictions such as the Channel Islands,” he concluded.

Company: Ogier, Jersey Name: Tim Morgan Email: tim.morgan@ogier.com Web: www.ogier.com Address: The Esplanade, St Helier, Jersey JE4 9WG Telephone: 01534 504000

February 2013 /

SECTOR SPOTLIGHT:

Intellectual Property: the Importance of Protecting Intangible Assets

INTELLECTUAL PROPERTY

the Importance of Protecting Intangible Assets

l Intellectual property continues to grow in importance worldwide, with geographic barriers to commerce dissolving as technology and communication systems evolve. In today’s global economy, ownership of and licenses to patents, trademarks, copyrights, trade secrets and other intellectual property (IP) rank among any company’s most valuable business assets. When fully leveraged, IP can be a major source of profitability; when underused and improperly protected, it can put your competitive position at risk. Intellectual property has become one of the most valuable and durable assets a company may possess. Recognizing and exploiting the value of such assets can mean the difference between surviving and thriving. IP assets often account for the majority of the value in most companies today. When properly protected, Intellectual Property can be bought, sold or traded — just like real estate, factories, machines or any other asset. It is difficult to estimate intangible value of Intellectual Property as this valuation field is relatively new and complex. A number of leading professionals give Acquisition International their expert opinion on the importance of protecting IP.

The Value Behind Obtaining Intellectual Property (IP) Rights in Hungary -----------------------------------------------------------------------Michael Lantos is a European and Hungarian Patent Attorney and Partner at DANUBIA Patent & Law Office LLC. -----------------------------------------------------------------------As it is known, Hungary is a medium-size member state within the EU, and it has a healing economy with a large potential for research and development which is widely used by several multinational companies by placing a part of their R&D activities there. The central location and the good road, water and air connection as well as its high level of telecommunication and internet services have made Hungary a preferred place for Far-Eastern and Middle-Eastern companies to house all or a substantial part of their European operations. Finally, Hungary has a developed and reliable IP enforcement system by which owners of IP rights can easily enforce their exclusive market positions provided by such rights. The enforcement is on the other hand cheap compared to enforcement costs in other member states. It is true for all branches of protection intellectual property that what one can see when observing enforcement activities, it is only the peak of the iceberg, as most of the effects of having or not having IP rights are under the surface. With the ever improving search tools both in the patent and trademark fields players in commerce and industry can detect easily what is under protection and what are open for free use, and where the forbidden areas lie. -----------------------------------------------------------------------Bruce Horowitz is a founder and Managing Partner of Paz Horowitz Robalino Garcés. Byron Robayo is a Senior IP Associate. -----------------------------------------------------------------------From its beginning in 1991, the firm has always concentrated on Intellectual Property. Corporate, licencing, franchising, tax, litigation and arbitration, environmental, anti-trust and competition, employment and anti-corruption compliance, have deepened and expanded on the firm’s IP services. According to Mr Horowitz, the key skills required of an IP adviser include: “active listening and knowing the right questions to ask; quick, clear and concise communications in the client’s language; and keeping professional responsibility at the centre of all work and relationships”. Discussing IP due diligence in corporate transactions, Mr Robayo stated that no matter how good the proprietor’s IP asset database, there are almost always some very significant errors that appear in the chain-of-title due diligence process, which affect the acquisition negotiation process. “Internal periodic due diligence brings to light new intellectual property rights that provide additional value and collateral for the company; and which also highlights weaknesses in the protection of traditionally registrable IP, as well as enterprise secrets, confidential information, noncompetition rights, and evidence of unfair IP competition and antitrust issues,” he explained. “Good local IP counsel

54 / February 2013

In the patent field only about 5% of all granted European patents are validated in Hungary, and the recent substantial decrease in patent validation costs by the elimination of the need of translating the full patent specifications has not increased this small proportion. This also means that enterprises operating in Hungary can freely use about 95% of all European patents. The value behind a patent lies mainly in its enforceability. In a recent court decision a preliminary injunction has prohibited use and sale of sildenafil citrate (active ingredient of VIAGRA) by all generic competitors (their number is about 7) and has restored the exclusive market position for Pfizer, although the war on the validity of the ruling patent has been going on. In the trademark field owners of Community trademarks think that they have valid and enforceable trademark rights in Hungary. The experience obtained from several trademark lawsuits has demonstrated that a trademark cannot be enforced if not used in a sufficient extent. Furthermore, the filing of national trademark applications has recently been intensified, as community trademarks are more vulnerable because of oppositions raised by owners of rights in remote countries by opponents having no real business in Hungary. In national proceedings such opponents cannot present themselves. understand and protect these rights and recognise local risks that are unknown to experts from other jurisdictions.”

Trademark enforcement is fast, especially in case of prohibiting sale of counterfeit goods by preliminary injunctions. A different fast remedy is how infringing domain name applications can be opposed. In short: when making an efficiency test whether the existence of having IP rights providing exclusivity in the Hungarian market is connected with more benefits to the rights owner than the costs of obtaining such rights, the answer is clearly in favour of having rights compared to leave a substantial market without any protection.

Company: DANUBIA Patent & Law Office LLC Name: Michael Lantos Email: lantos@danubia.hu Web: www.danubia.com Address: H-1051 Budapest, Bajcsy-Zs. út 16., Hungary Telephone: +36 1 411-8716 Information, Know-how and other intangible assets will become more important, and will need greater protection,” he concluded.

Mr Robayo noted that two recent cases involving major production and retail enterprises have shown that perhaps the two most explosive threats to the value of ‘goodwill’ of both local and international companies in the developing world involve claims of labour violations and corruption. “At the local level those companies may not face inspection in these areas, but when a foreign company takes on or takes over such a local company, then both prosecutorial interest and public criticism awaken,” he explained. “Therefore, in addition to providing due diligence for mergers and acquisitions and supply-chain partnerships, our specialists provide due diligence on the employment and anti-corruption compliance situations, in order to avoid or solve these incandescent problems before they harm the company’s most important asset, its ‘goodwill’.” Looking ahead, Mr Horowitz predicted that unfair IP competition claims in Ecuador will increasingly be resolved by a new government bureau, independent of Ecuador’s Patent and Trademark Office. “Pharmaceutical and Medical Device Patents will become more difficult and much more costly to register. Because of changes in the law, Enterprise Secrets, Confidential

Company: Paz Horowitz Robalino Garcés Web: www.pazhorowitz.com Telephone: +593 2398 2900 Name: Bruce Horowitz Email: bhorowitz@pazhorowitz.com Name: Byron Robayo Address: SITE CENTER, Tower 1, 3rd Floor, Avenida del Establo y Calle E, CUMBAYÁ, Quito, Ecuador, 00000

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Intellectual Property: the Importance of Protecting Intangible Assets

-----------------------------------------------------------------------Christopher Young is a Partner at Minter Ellison Rudd Watts. -----------------------------------------------------------------------Mr Young explained that IP is often an important asset both strategically and in a value context in corporate transactions. “We work closely with other specialists in our firm providing comprehensive and pragmatic IP advice including on the IP aspects of corporate structuring, capital raising, taxation, human resources, securitisation, transactions, commercial contracts, compliance, dispute resolution and litigation,” he commented. Mr Young stated that most businesses have IP which is material to their business, so it is very important to conduct an IP due diligence review focussed on: identifying material IP used in the business; assessing ownership/rights to use the IP; identifying and assessing material issues relating to IP e.g. infringement by the business, or by third parties of the business’s assets/IP; and ensuring that all IP necessary for the operation of the business is available for on-going use. “Conducting a thorough IP due diligence can assist in identifying and assessing issues which can impact on the assets of the target company, the ability to operate the business going forward, and ultimately the sale price,” he added. -----------------------------------------------------------------------Rebecca Chen is the Business Development Manager at SUGIMURA International Patent and Trademark Attorneys. -----------------------------------------------------------------------Ms Chen stated that intellectual property is a critical strategic asset for any company, noting that it is a key tool in creating a business brand and in positioning a company within a market. “Intellectual property rights help differentiate a company’s products and services by making them easily recognisable and help develop a loyal client base through strategic branding,” she explained. “A company’s intellectual property assets can also be used as a means to expand business, build market advantage, raise capital, provide revenue, and supply leverage in negotiations or licensing. “Intellectual property enables innovative developments by protecting the value of companies’ investment in research, development, and market introduction. It preserves the value of these investments as it relates to increased market share. Intellectual property is used throughout the product life cycle to help shape and strengthen a company’s product development and product design, enhance marketing, serve as a resource for financing, and expand businesses abroad through licensing and franchising.” SUGIMURA assists management teams maximise their business brand by ensuring their IP assets are protected, securing companies a competitive advantage by leveraging their ideas, innovations, and creative works.

ACQUISITION INTERNATIONAL

“Our full-service IP practice provides practical advice and strategy on IP throughout its lifecycle. We advise on the creation, acquisition, commercialisation, licensing, protection and enforcement of IP rights,” he continued. “It is often important to take a pragmatic approach and focus protection on key IP assets (i.e. those important strategically or that drive value and revenue).” Mr Young explained that there can be difficulties in enforcing unregistered IP rights if there is a lack of records evidencing the chain of title. For example, unlike in many countries, in New Zealand copyright can be used to protect industrial designs (for a limited period of 16 years), e.g. in plant and equipment, but the owner must be able to prove ownership of the copyright which can be difficult if there are limited records. “It is also important to ensure ownership of IP developed for a business by employees and third party consultants is covered off by contact,” added Mr Young. “In New Zealand an assignment of copyright is not legally effective unless it is in writing and signed by/on behalf of the assignor. If there has been no written assignment, legal title to copyright will remain with the first owner. “We can assist businesses to develop strategies to address risk areas.” “To outperform competitors, companies must differentiate themselves from other brands and maintain their competitive advantage,” commented Ms Chen. “SUGIMURA helps companies act strategically to protect valuable differentiation embodied in novel innovations to prevent these products and services from being imitated.” She explained that maximising a company’s business brand begins with securing trademarks. Trademarks distinguish a company’s goods and services by identifying those goods and services as the company’s alone. SUGIMURA helps companies secure these trademarks and guides management teams through the process of safeguarding them. “Once a company differentiates their goods from those of their competitors through the creation of novel aspects within their products or services, SUGIMURA helps them secure that competitive advantage through patent protection,” continued Ms. Chen. “Use of a company’s registered trademark on the goods further establishes the company’s brand, associating the company with innovative design,” she observed. “This interplay between various intellectual property rights continues with each novel innovation. In time, the trademark will become associated with the benefit of the innovation and the company’s goodwill. The brand will then carry with it a message about the company itself and the differentiation or benefit of its products over its competitors. This goodwill can

New Zealand recently joined the Madrid Protocol. From 10th December 2012 trade mark applicants can designate New Zealand in their international trade mark applications, and New Zealand businesses will be able to file international trade mark applications. “We have a specialist trade mark practice and can assist overseas practitioners to assess and overcome objections raised by the New Zealand Intellectual Property Office,” concluded Mr Young.

Company: Minter Ellison Rudd Watts Name: Christopher Young Email: christopher.young@minterellison.co.nz Web: www.minterellison.co.nz Address: Lumley Centre, 88 Shortland St, Auckland 1010 Telephone: +64 9 353 9910 be transferred to each successive product or service offered by the company. “SUGIMURA works with management teams to develop and maintain sustainable intellectual property strategies, effectively transferring the benefits of a limited monopoly afforded by patented functional uniqueness into the enduring and transferable goodwill afforded by trademarks,” concluded Ms Chen.

Company: SUGIMURA International Patent and Trademark Attorneys Name: Rebecca Chen Email: r.chen@sugi.patco.jp Web: www.sugi.pat.co.jp Address: Common Gate West Tower, 36th Floor, Kasumigaseki 3-2-1, Chiyoda-ku, Tokyo 100-0013 Japan Telephone: +81-3-3581-2241

February 2013 /

SECTOR SPOTLIGHT:

Intellectual Property: the Importance of Protecting Intangible Assets or commercial deal. Know-how can be provided through on-going technical support. Technical drawings, the subject of copyright and often confidentiality can avoid the need to ‘re-create the wheel’.” A business with underused or improperly protected IP can lose the opportunity to leverage those assets. Mr Pullen stated that owning registered IP rights demonstrates R&D activity for grant and/or tax incentive purposes. “IP rights can also be used to raise valuable investment funding, such as from a bank, venture capital fund or private investors,” he continued. “IP rights, being a valuable asset of the business, may be used to ensure bank confidence and continued funding of the business in more troubled economic times.” “Failure to protect IP can allow other players to enter the market and/or copy unprotected products/services and branding.” “The rule of thumb is to protect and manage intellectual assets to maximise control. It’s about being in control of your business and market space for long term sustainability and value.” -----------------------------------------------------------------------Mark Pullen is a Principal at Watermark Intellectual Asset Management -----------------------------------------------------------------------Mr Pullen joined Watermark’s Perth office in 2000 having previously been a patent examiner in the UK patent office, and has worked in the UK railway industry and the Royal Navy. He has a degree in physics, majoring in medical physics. The firm Watermark has been helping innovators protect, manage and use their Intellectual Property for over 150 years. “We’ve succeeded because we’ve kept our advice and our strategies relevant to modern markets.” Founded by Edward Waters, considered by many to be the father of the patent attorney profession in Australia, Watermark now has offices in Melbourne, Perth and Sydney, and a network of associates worldwide. Watermark brings a fresh thinking, modern approach to patent and trademark attorney services, IP legal services, I.P. strategy services (e.g. searching, watches and IP landscape assessments), and R&D tax incentive consulting. “Watermark understands clients’ businesses and provides cost effective strategic intellectual asset management services,” commented Mr Pullen. “Watermark tailors its services to the needs of the client. This includes assessing freedom to operate issues, reviewing the IP landscape, identifying and protecting IP rights, providing IP education and updates for clients, and assisting clients to defend, enforce and utilise IP rights, such as through licensing.” He believes that the key skills required of an IP adviser are: “understanding a client’s business, its culture and its IP position, and providing commercially focused and cost effective IP advice to help sustain their business and help them to achieve their desired business goals”. The importance of IP Mr Pullen explained that IP rights not only play the traditional role of protecting core business, they also literally add value to the bottom line of the business as intellectual assets. They also provide leverage when negotiating with third parties, such as in licensing deals and joint ventures (JVs). Discussing the importance of IP due diligence in corporate transactions, Mr Pullen noted that Watermark can identify the intellectual assets within the business to maximise the business’ position and value. “Overlooked or unmanaged IP rights do not add value to negotiations, and may cause problems later on, such as if valuations or agreements need subsequent amending or updating,” he observed. “At the very least, additional administrative costs are likely to be incurred, and at worst,

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one party may lose confidence and trust in the other thereby putting successful conclusion to a transaction at risk.” He added that due diligence is also needed to ensure freedom to operate in each jurisdiction, stating that understanding the quantum and quality of the IP rights can be vital to a business transaction and on-going sustainability of business operations. “Understanding the current IP landscape is vital when expanding into new territories where third party IP rights can exist that may prevent or restrict entry into a market,” continued Mr Pullen. “Who currently owns rights? What are those rights and what are their limitations? These are essential questions that should be answered before entering a new market.” Many businesses have not integrated intellectual assets into their business strategy, which, according to Mr Pullen, is key to ensuring value-add in a cost effective and commercially useful way. He listed the following key steps to begin effectively integrating IP in a business: identification; protection; management; and utilisation. He added that it is necessary to have one or more personnel in a business with a defined role of ensuring intellectual assets are identified and captured. “This is achieved through regular staff-management/R&D or marketing team meetings with someone tasked with assessing latest IP developments. Staff questionnaires can be used. Marketing staff can be trained to recognise new trade-marks and ensure they are protected to prevent competitors encroaching on those marks.” “Timing can be everything. Launching a new product or service too early can lead to loss of IP rights and market/ product leverage if protection is not put in place in time.” “Watermark’s information services can conduct searches to ensure freedom to operate.”

15th April 2013 heralds the introduction of the ‘Raising the Bar’ legislation in Australia. The changes primarily affect the Patents and Trade Marks Acts. “This aims to improve the standards and processes for granting rights under those Acts,” said Mr Pullen. “How well that will work in practice remains to be seen.” A wider view of innovation “Innovation is often viewed from close to a business or industry sector. We can take a long step back and see innovation more widely, as a driver of industry and a nation’s economy. Step further back and you realise innovation is a driver of social change and prosperity.” “Take for example the revolution of steam railways displacing canals and horse drawn freight. Imported goods, particularly perishable goods, could now reach into the country within a few hours rather than days or weeks. And for the first time, steam railways enabled the masses to travel long distances in a relatively short time. Holidays to the coast were born. The famous Thomas Cook began his travel agency services as a result of steam railways.” “Consider the invention of the mobile telephone, a step change in communication. When was the last time you used a public telephone box. It’s something we have adopted and take almost for granted in a very short span of time, and yet mobile personal communication has completely changed our working and personal lives.” “Innovation drives industry, commerce, national economies and social change/aspiration. Intellectual assets and IP rights help support those innovative technological and commercial advances by providing protection and an opportunity to generate a return and/or market space for a business in exchange for the valuable contribution they make. Watermark plays its own small but significant part in these endeavours,” concluded Mr Pullen.

Commenting on the exploitation and management of intellectual property, Mr Pullen noted that registered IP is often used in licensing and commercial agreements. A third party is granted rights for a period of time to use the IP in return for a revenue stream or other benefit back to the business. “Control over an area of technology or product range through patents is complemented with strong trademark/ brand presence and reputation for rapid market take up of a new product,” he explained. “Know-how, confidential information and copyright works can also be used to win or negotiate leverage in a licensing

Company: Watermark Intellectual Asset Management Name: Mark Pullen Email: m.pullen@watermark.com.au Web: www.watermark.com.au Address: 362 Rokeby Rd, Subiaco 6008, Australia Telephone: +61 (0) 8 9325 1900

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Intellectual Property: the Importance of Protecting Intangible Assets

advantage over competitors, thus contributing a substantial portion of a company’s value. “One only needs to look at companies, such as Apple, Coca Cola or Disney to realise the value of intellectual property, as the value of the patents, trademarks and copyrights far exceeds the value of the other assets owned by these companies,” he added. Mr Livingston stated that IP due diligence is very important in corporate transactions to insure that protection can be obtained for IP and to avoid a costly infringement problem.

According to Mr Livingston, an Intellectual Property adviser should have experience in all aspects of intellectual property law, including patents, trademark copyrights and trade secrets, as well as related business matters.

“Thus, before embarking on the use of any IP, particularly patents and trademarks, a thorough search and opinion should be obtained from an experienced IP law firm, such as The Livingston Firm.”

“A law firm which acts as an IP adviser should have registered patent attorneys, as does the Livingston Firm,” he commented. “The IP adviser should have the ability and experience in not only procuring protection for its client’s intellectual property, but also in enforcing its client’s intellectual property rights.”

He predicts that IP law and regulation is going to play a greater role in the United States than ever before, particularly in the area of patents due to the passage of The America Invents Act. Thus, businesses need to retain a law firm which has experience and stays on top of IP law developments, as does The Livingston Firm

He explained that IP rights, particularly patents and trademarks, define a company and provide it a competitive -----------------------------------------------------------------------Peter Adediran is the Principal solicitor at PAIL Solicitors. -----------------------------------------------------------------------PAIL Solicitors is recognised as a leading law firm in the area of intellectual property law in the UK and internationally. The firm specialises in IP due diligence in corporate transactions. “IP does not travel well across borders,” stated Mr Adediran. “As a licensed UK lawyer, with first-hand experience of working in the US and Spain, having knowledge of the general principles is not bullet proof. If a specific legal issue is outside of your jurisdiction it is absolutely necessary to consult a licensed lawyer in that jurisdiction.” He explained that the key skills required of an IP lawyer include the ability to: work with senior management to develop and manage IP issues; understand the IP strategy of a business; improve where necessary the IP strategy of a business; and to have a deep understanding of the independent but interoperating parts of IP including: patents, copyrights, trade secrets, and design rights. In Mr Adediran’s view, there are two main reasons why IP rights are such a valuable asset for any business: 1) IP gives a business a competitive advantage by consolidating customer loyalty through brand-building and protection, and 2) IP is a tool to allocate value.

ACQUISITION INTERNATIONAL

Finally, Mr Livingston gave the following advice for businesses or entrepreneurs starting business in the United States regarding their intellectual property: “Although, generally you cannot capitalise an intangible asset on your balance sheet, there are accounting methods for IP asset valuation,” he added. Discussing IP due diligence in corporate transactions, Mr Adediran stated that a secure index of contracts, licenses, trademark, copyright and patent registrations with a corresponding secure certificate storage and retrieval system in electronic and hard copy is required. He added that “not having these systems in place could delay or even break a deal”.

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-----------------------------------------------------------------------Edward M. Livingston is the president and shareholder of The Livingston Firm, headquartered in Naples, Florida, which specialises in intellectual property law. -----------------------------------------------------------------------The lawyers of The Livingston Firm have experience in intellectual property matters, and a business law background so that they have a better understanding of the interrelationship between intellectual property and the business of a company. Thus, The Livingston Firm can provide better representation and counselling for U.S. and foreign companies in intellectual property and business matters, as well.

1: THINK BIG! 2: DON’T BE PENNY WISE AND POUND FOOLISH! 3: PROTECT YOUR INTELLECTUAL PROPERTY AS SOON AS POSSIBLE AFTER ITS CREATION!

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Remember this… if you don’t protect what you create, then you’ve only created it for someone else, he concluded.

Company: The Livingston Firm Name: Edward M. Livingston Email: eml@thelivingstonfirm.com Web: www.thelivingstonfirm.com Address: 963 Trail Terrace Drive, Naples, Florida 34103 Telephone: +1 239 262 8502

“Trade secrets must be kept ‘secret’ to be retained,” he commented. “Google may have published its Page Rank algorithm to secure a patent but it has not revealed every detail of how it computes a search result. Revealing source code doesn’t reveal how the company uses, integrates, or supports the code.” Mr Adediran concluded with a prediction for the next 12 months: “The European Patent Office will finally resolve the issue of patentability of software for all EU member states.

When assisting management teams in maximising their business brand and ensuring their IP assets are protected, PAIL Solicitors take the time to understand the IP policy of that particular business. Mr Adediran added “every business is different and each will have its own strategy”. “Contracts and licenses are the means by which businesses exploit their IP,” he continued. “Contracts and licenses provide access rules to use proprietary content. They also serve to protect the goodwill and reputation attached to a particular good or service.” Unlike copyrights and patents, trademarks must be used and defended to retain ownership. Mr Adediran explained that this is partly because of their utilitarian value but also partly because they are held perpetually as long as they remain in use, are defended and renewed.

Company: PAIL Solicitors Name: Mr Peter Adediran Email: peter@pailsolicitors.co.uk Web: www.pailsolicitors.co.uk Address: 10 Margaret Street, London W1W 8RL Telephone: +44 (0) 20 7305 7491

February 2013 /

SECTOR SPOTLIGHT: Doing Business in 2012

DOING BUSINESS IN 2012 — Forming Companies in...

CLK-AVOCATS is a West African law firm focused on providing domestic and international business entities with high value legal services. The firm consists of four lawyers and six legal associates.

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CLK-AVOCATS provides its clients with valuable formation services by following a multidisciplinary and multilateral approach which encompasses different issues at stake: capital structure issues, management issues, profit distribution policy, profit repatriation issues, tax issues,” said Mr Camara. “Besides, our services are performed in a timely manner in accordance with the needs of the clients.

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Mr Camara stated that the Ivorian economy is a “market maker in West Africa”, noting that it counts for more than 40 % of WAMEU (West African monetary and economy union) monetary emission and GDP. He highlighted the natural resources (oil, gas, ore, agricultural products, etc), the availability of good public infrastructures and high qualified human capital as factors that make the country attractive in West Africa.

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Banking and insurance, micro finance institutions, telecommunications companies, agro industries companies, construction and Public Private Partnerships are the sectors currently seeing the most formations. The Ivorian banking system is reputed to be one of the best in West Africa, and Mr Camara noted that the access for banking and credit facilities for business is submitted to some hurdles that can be overcome. “The bank account can be opened very quickly,” he explained. “Moreover, more and more banks are developing investments segments which fund goods economic projects. At last, the African law organising securities has improved the volume and the quality of lending activities. Concerning the tax system, Ivory Coast is a net importing capital country which has numerous attractive tax regimes for the investors.” The ordinary Corporate Income Tax rate in Ivory Coast is 25%, however many exemptions or tax holidays regimes are available for qualified investments under the tax code and the investment code. A participation exemption is also available to mitigate the double taxation of dividends.

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Ivory Coast also offers a good network of double taxation conventions which makes easier the repatriation of profit abroad, added Mr Camara. To improve the formation process in Ivory Coast, Mr Camara believes it is necessary to allow investors to fulfil the various steps on the internet.

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-----------------------------------------------------------------------Attorney Lassiney Kathann Camara is the Managing Partner of CLK-AVOCATS. He has approximately 15 years of practice covering numerous areas of business law, specifically Public Private Partnership, international trade law, mergers and acquisitions, and company law. ------------------------------------------------------------------------

“Since 2012, business formation has noticeably increased in Ivory Coast,” he commented. “This increase stems from an economic stimulus plan undertaken by the government (PND 2012-2015), the return of more foreign investors in Ivory Coast and the new rules applicable to business areas (new investment code, forthcoming mining code, simplified procedure of business formation, etc.).”

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the Ivory Coast

We expect more business formation in the future owing to the combination of the political stability and the economic stimulus plan which amounts to US$8.6 billion, he concluded.

Company: CLK-AVOCATS Name: Lassiney Kathann Camera Email: lassineycamara@clkavocats.com Web: www.clkavocats.com Address: Ivory Coast, Abidjan, 2 Plateux Vallon, Concession SIDECI, Rue J47 / Villa S No. 5 Telephone: +225 22 52 52 25 Fax: +225 22 53 25

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Abuja / Nigeria

SECTOR SPOTLIGHT:

‘‘ ‘‘

Doing Business in 2012

We have distinguished ourselves over the years in the areas of quality and timely delivery, said Mr Adehi. In the past, the company formation process in Nigeria was hectic and characterised by many artificial obstacles. However, Mr Adehi stated that today through the Corporate affairs commission in conjuction with the Nigerian Investment Promotion Council, these processes have been minimised.

The NIPC has a one stop shop at which all incorporation, immigration, banking and other issues can be resolved,” he commented. “In fact, through that window, a company can be registered within 24 hours.

Nigeria -----------------------------------------------------------------------Sir Steve Adehi is the principal partner of Messrs Steve Adehi & Co, a firm of Legal Practitioners, Notary Public and Capital Market Consultants (Solicitors). -----------------------------------------------------------------------Messrs Steve Adehi & Co has its main office in Kano, in the North West region of Nigeria with a branch office in Abuja, the Federal Capital Territory. The firm has eight lawyers and five support staff. It provides services in areas of incorporation of companies, registration of incorporated trustees, registration of business names. Allied to these, the firm also engages in perfection of title to property and perfection of mortgages.

Switzerland

-----------------------------------------------------------------------The H&P Trust Group is a one-stop shop trust boutique specialized in incorporation, management, corporate and trust services, offering creative and effective solutions. Our staff is experienced in international fiscal structuring and estate planning. The H&P Trust Group focuses on entrepreneurs and wealthy families with international links. ------------------------------------------------------------------------

When establishing a company in Switzerland, you will normally opt for either a limited liability company or a stock corporation. The minimum share capital for a stock corporation, called Aktiengesellschaft (AG) in German, or Société Anonyme (SA) in French, is CHF 100,000, and the minimum paid-up capital required is CHF 50,000. In contrast, a limited liability company, called Gesellschaft mit beschränkter Haftung (GmbH) in German, or Société à résponsabilité limité (Sàrl) in French, legally requires a minimum capital and a minimum paid-up capital of CHF 20,000. There are no provisions regarding maximum capital. At least the legally required minimum paid-up capital has to be deposited in full into an escrow account with a Swiss bank before any incorporation can take place. At least one of the directors or officers with sole signatory right, or two directors or officers with joint signatory right respectively, of a stock corporation or of a limited liability company must be resident in Switzerland. In principle the accounts of stock corporations and of limited liability companies have to be audited annually by an independent auditor. If the stock corporation or the limited liability company is not subject to mandatory ordinary audit, the shareholders of a stock

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lydia / Shutterstock.com

“Nigeria has witnessed a commendable growth rate in formation of companies and this is due largely to the disposition of the government towards encouraging foreign investment in the economy. The sector experiencing the most formation activities for the nationals in Nigeria is small scale industries, however Mr Adehi noted that for foreign investors there are a lot of formations in the oil and gas allied sector, the construction sector, and water resources projects. “The major constraint to doing business is access to power,” he observed. “The power situation is bad so any company willing to do business must factor that into its plan. Companies rely heavily on generators and alternative power sources. But the government is doing a lot to improve on this. In fact, the government has promised great improvement by 2014.

corporation or the members of a limited liability company may waive the appointment of statutory auditors. Such waiver remains valid for the subsequent financial years. However, each shareholder remains entitled to request the conduct of an audit review and the appointment of statutory auditors by the tenth day prior to the general shareholders’ or general members’ meeting, respectively, in the latest. The shares of a stock corporation are freely transferable unless such action is restricted by the company’s statutes. Limited liability companies require every change of shareholder to be recorded by written agreement and to be approved by the meeting of shareholders. Shareholders of a stock corporation are not listed in the public register, while shareholders in a limited liability company are. However, to prevent the actual shareholders being recorded in the public register, use may be made of nominee shareholders.

“Foreign companies with a solid financial base and collateral also have easy access to banking and credit facilities. However, the local companies do not find it easy to access credit.” Locally, small sized companies are in high demand. Mr Adehi added that foreign investors “always have a bigger outlook”; however the process of formation is the same. “Owing to government desire to attract foreign investors, the process has been liberalised and the challenges of the past have been removed to a great extent,” he continued. “The government has already done so much to improve the formation process. Companies can now be registered within 24 hours. “The next 12 months will witness more investment opportunities as the government is doing so much to impress the people by improving conditions. There will be more business opportunities in the construction sector, oil and gas, communications, transportation and water resources,” he concluded.

Company: Messrs Steve Adehi & Co Name: Sir Steve Adehi Email: steveadehi@yahoo.com Address: 5 Zoo Road, Kano, Flat 2, 2nd Floor, 16 Nkwere Street, Garki 11, Abuja Telephone: +234 8036 866 621, +234 8023 040 518

The costs associated with incorporating and running a company are the same for both forms of company. In Switzerland, the tax situation is practically the same for both company types (i.e. a tax-privileged domicile company, holding company, mixed company, etc. may be either a stock corporation or a limited liability company). However, consideration should also be given to the foreign tax treatment of the different corporate forms; a limited liability company may be treated differently from a stock corporation for tax purposes under foreign tax law. At H&P, our aim is to work cost efficient and against reasonable fees combined with excellent quality. Each office has a strong inhouse knowledge in the fields of tax, law and accounting. Due to our partnership structure, the H&P Trust Group can offer continuity and long-term commitments.

Finally, a stock corporation enjoys a somewhat better “image” than a limited liability company. In Switzerland, all larger companies are incorporated as stock corporations, and usually only smaller and less capitalised ones assume the form of limited liability companies. If a company needs capital of at least CHF 100,000 for the purpose of its operations in any case, then it is most often advisable to incorporate it as a stock corporation. If it is important to minimize the capital requirements and “image” doesn’t matter, then a limited liability company is preferable as it requires a lower minimum capital.

Company: H&P Trust Group Name: Mrs. Fréderique van Gelderen Web: www.henleyglobal.com Email: frederique.vangelderen@henleyglobal.com Address: Poststrasse 6, 6300 Zug, Switzerland Telephone: +41 41 729 63 63 Fax: +41 41 729 63 64

February 2013 /

SECTOR SPOTLIGHT: Doing Business in 2012

According to the report “Doing Business 2013: Smarter Regulation for small and medium sized enterprise”, Brunei is ranked 79 out of 185 economies overall (Countries) on ease of doing business. However, Mr Lim noted that the high ranking does not reflect in all areas of business regulation.

Brunei

-----------------------------------------------------------------------Kelvin Lim is a partner in the commerce and transaction section of Ridzlan Lim, Advocates and Solicitors, a legal firm in Brunei Darussalam. ------------------------------------------------------------------------

Ridzlan Lim was formed through the recent merger of K.Lim & Company and Ridzlan & Co. The firm offers a comprehensive range of legal service for the needs of its clients, both individual and corporations, domestically and internationally. Mr Lim stated that Brunei Darussalam has enormous business potential that has yet to be explored and its peace and political stability makes it favourable for business activities.

Guatemala

-----------------------------------------------------------------------Salvador Saravia Mendoza is a Partner and IP Manager at SARAVIA & MUÑOZ. ------------------------------------------------------------------------

Juan José Saravia y Figueroa began practice in 1805; from this date Saravia lawyers have provided first class services for over two hundred years. In the year 1954, Salvador A. Saravia Enríquez and Juan José Muñoz Valdez join practices to establish SARAVIA & MUÑOZ. The firm provides legal services in the fields of corporate, taxation and intellectual property law, as well as general practice. Discussing the ease of setting up a company in Guatemala, Mr Saravia explained that the Commercial Registry enabled the agile plus counter (Ventanilla Ágil Plus), in which the procedures and paperwork for incorporation and registration at the Tax Authority (SAT) are consolidated. Another implementation is that the application form (SATRM-02) can be downloaded from the Commercial Registry website. The new service attempts to eliminate 30 steps from the incorporation process, reducing it from 47 to 17 days. “From our point of view, as long as no stable and clear rules are introduced in present regulation, business growth in the country will be unfavourable,” commented Mr Saravia . “In terms of prospective companies, a remarkable highlight is that Guatemala represents 35% GDP of Central America. Besides, Guatemala is the

60 / February 2013

“This decline is as a result of the inability to access information and communication for the public and interested parties,” he observed. “This leads to a lack of understanding on the procedures and requirements that are introduced and applied.” Mr Lim stated that the ease of doing business varies according to the type of business involved. He noted that if the business involved construction, its recent reform enables construction permits to be obtained more easily and the tax reduction has acted as an incentive to local and foreign investment in this area. “However, with regards to the bank and credit facilities, according to the report, despite scoring high on the protection of legal rights for borrowers and lenders, it scored a zero on the accessing credit information,” he explained. “This may change due to the recent establishment of the Credit Bureau as a unit under the regulatory department of the Autoriti Monetari Brunei Darussalam (AMBD) in 2011 where bank and finance institutions can finally gateway to Mexico and the United States, which in addition, has trade agreements with both countries. The country also counts with access to the Atlantic and Pacific Oceans.” Guatemala has witnessed a lack in formation levels. According to Commercial Registry statistics, the year 2012 experienced a decrease compared to 2011, in both the formation of new companies as well as the incorporation of foreign companies. In fact, in 2012 only 17 foreign companies were incorporated compared to the 23 established in the year 2011. “This can be attributed to different factors,” observed Mr Saravia. “The recurrent problem is the insecurity as well as legal uncertainty. Another factor which should be noted, are the provisions contained in recently issued laws, i.e. Ley de Extinción de Dominio (Extinction of Ownership), which enforces limited companies (sociedades anónimas) to convert bearer shares into nominal shares. Also, the new tax law update, which became in force in January 2013.” Since the tax regulation update became in force, legal remedies have been invoked against provisions prescribed in the new tax reform. Mr Saravia stated that this could result in a partial suspension of the law. “Conflicts between the mining sector and local communities have resulted in an appeal of unconstitutionality lodged against the mining law, which pretends a significant reform on this sector’s regulation,” he explained. “This may cause that communities must be consulted if mining projects

access credit information on borrowers but the Credit Bueau has yet to begin operation.” Discussing how the formation process and the business environment in general could be improved, Mr Lim highlighted that the use of electronic services is relatively new amongst government departments and it is progressing at a slow-moving pace. “There is a need to exploit this technology which would eliminate unnecessary interaction and delay among government authorities and promote a more sophisticated delivery of services electronically”, he opined. “Reforms such as STARS and the new Business Licensing System (BLS) were not reflected in the report. There could be an increase in awareness to encourage the use of these e-services which are accessible, convenient and user-friendly. STARS help enhance and streamline tax administration while BLS provides an easy avenue for entrepreneurs and foreign investors to apply for business licenses and permits to start a business,” he concluded.

Company: RIDZLAN LIM Name: Kelvin Lim Email: kelvin@ridzlanlim.com Web: www.ridzlanlim.com can run or not. In the case that the Constitutional Court dictates a favourable decision, this ruling would have broader implications not only in the natural resources sector but in a considerable portion of the legislation issued since 1996, giving greater decision-making to indigenous communities.

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In conclusion, the authorities are making efforts on improving security and repairing the country’s infrastructure which remained abandoned for a long period. Despite the efforts, there are still many issues to improve, i.e. incorporating a company can take more than two months despite the agile plus counter (Ventanilla Ágil Plus).

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“The government encourages economic diversification by offering low tax rates. The establishment of the Brunei Economic Development Board (BEDB) in November 2001 is evidence that the government is serious in developing and attracting new economic opportunities,” commented Mr Lim.

Company: SARAVIA & MUÑOZ Name: Salvador Saravia Mendoza Email: sasaraviam@saraviamunoz.com Web: www.saraviamunoz.com Address: 14 calle 4-32 zona 10, Edificio S&M, Nivel 4, Ciudad de Guatemala, Guatemala 01010 Telephone: + 502 2337-0057 / 2337-0059

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Doing Business in 2012

the UAE - Jumeirah Lakes Towers Free Zone – UAE’s fastest growing Free Zone -----------------------------------------------------------------------Jumeirah Lakes Towers (JLT) is a 200 hectare dynamic waterfront community at the heart of new Dubai. ------------------------------------------------------------------------

Central to the development are the Armada Towers, headquarters of the Europe Emirates Group and also Almas Tower, headquarters of the Dubai Multi Commodities Centre (DMCC), the licensing authority for businesses operating in the JLT. Over the last decade, the DMCC has seen strong growth in attracting businesses and today is recognised as the free zone of choice for many business activities ranging from oil and petrochemicals, gold, diamonds and shipping to recruitment, IT and advertising. DMCC has been successful in attracting a range of commodity businesses, as well as support service companies such as Xstrata, Rosy Blue, Topaz Energy, Sucden, Harley Davidson, Dunkin Group, GAC, Vertu. It was the first UAE free zone authority to offer freehold business premises to its members, in addition to other free zone services such as 50-year tax exemption on corporate and income tax and full foreign ownership rights. DMCC has built state-of-the-art infrastructure in JLT including the Almas Tower (Almas is Arabic for ‘diamond’). The 16th tallest commercial tower in the world and the tallest office tower in the Middle East, Almas Tower houses DMCC’s corporate offices, the Dubai Diamond Exchange, Pearl Exchange in addition to gold and diamond vaults and business and client centre facilities.

JLT now stands at 62 completed mixed-use commercial and residential towers with over 160 retail outlets and 50,000 people living and working there. Its position at the heart of new Dubai, with direct access to the main artery road in the city (Sheikh Zayed Road), close proximity to the logistic and port authorities, airports and walking distance to two Dubai Metro Stations – combined with the fully equipped community has made it the free zone of choice. Europe Emirates Group has also made the ease of doing business in the area a priority, opening a dedicated Client Service Centre at our Headquarters in JLT to offer personalised services including registering, licensing, immigration, banking and finance. The service allows for faster and more efficient registration for our new and existing clients.

• •

Regional network offices in strategic locations throughout the UAE A total commitment to assisting our clients in achieving their commercial objectives.

Our business solutions are bespoke according to each client’s specifics needs and will be delivered by trusted specialist advisors offering responsive, commercial and pragmatic advice. It would be our pleasure to meet with you and discuss your requirements at any time. For more information on establishing your business in the JLT Free Zone please contact us on +971 4 311 6547 or send us an email at info@uae-eu.com.

Whether our clients are investing into the region or expanding, we are able to service their needs by providing responsive, cost effective, commercially focused services. The depth of our UAE resources means we assist our clients in best achieving their operational and strategic objectives by providing the following from our offices in JLT. • • •

On-the-ground support and guidance In-depth understanding of the region. Understanding of regulatory environments, market drivers and legal practices

Company: Europe Emirates Group Name: Adrian Oton Email: adrian@uae-eu.com Web: www.uae-eu.com Address: Jumeirah Lakes Towers, Armada Tower 2, 12th Floor, Office 1209, Dubai, UAE Telephone: +9714 311 6547

International Legal Counselling

Our expertise and practice mainly focus on the following areas corporate law, energy law, real estate law and employment law (m) +90.532.262.12.00 (e) bkepkep@kepkep.av.tr

(w) www.kepkep.av.tr

Risks Managed, Riddles Solved

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February 2013 /

SECTOR SPOTLIGHT:

Company: Baker Tilly Kosovo Name: Petrit Zeka Email: petrit.zeka@bakertillykosovo.com Web: www.bakertillykosovo.com Address: Bedri Pejani 3, 10000, Prishtina, Republic of Kosovo Telephone: +381 38226942

Tanzania

Kosovo

Doing Business in 2012 - Forming Companies in...

Company: REX Attorneys Name: Alex Thomas Nguluma Email: a.nguluma@rexattorneys.co.tz Web: www.rexattorneys.co.tz Address: Rex Housem 145 Magore Street, Upanga, P.O. Box 7495, Dar Es Salaam Telephone: +255 22 211 4291/4899

Bangladesh

Malawi

the DRC

Company: City Apparel-Tex Co. Name: Md Aminul Islam Email: cimport@bol-online.com Web: www.catcobd.com Address: House: 430, Road: 30, New D.O.H.S., Mohakhali, Dhaka-1206, Bangladesh Telephone: + 880 2 9886968

Company: First Merchant Bank Ltd Name: Joseph Chavula Email: Joseph.chavula@fmbmalawi.com Web: www.fmbmalawi.com Address: Livingstone Towers, Glyn Jones Road, Private Bag 122, Blantyre Telephone: +265 1 821955 / 821942 / 821943

Company: Chikuru & Associés Name: Nicaise Chikuru Munyiogwarha Email: chikuru_nicaise@yahoo.fr Address: 5331 Avenue Démocratie (ex-Huileries), Imm. ex-Clinique des Anges, Rez-de-chaussée, Kinshasa/Gombe, RDC Telephone: +243 999 994 179

62 / February 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing Business in 2012 - Forming Companies in...

Austria

Peru

Company: Bilanz Data Wirtschaftstreuhand GmbH Name: Erich Baier, MBA, LL.M. (Int’l Tax Law) Email: baier@austrian-taxes.com Web: www.austrian-taxes.com Address: Austria, 1010 Vienna, Schwarzenbergstraße 1-3 / 14a, Austria Telephone: +43 (1) 516 12 0

Company: PricewaterhouseCoopers S. Civil de R.L. Name: Katherine Carranza Email: katherine.carranza@pe.pwc.com Web: www.pwc.com Address: Av. Santo Toribio No. 143, Piso 8, Lima 27, Peru Telephone: +51 (1) 211 6500 / (1) 411 5800

Barbados

Senegal

Anguilla

Company: Thompson Henry & Associates Name: F. Howard Henry Email: fhhenry@thompsonhenry.com.bb Web: www.taxspecialistgroup.ca Address: Suite 203 - Building 8, Harbour Road, Bridgetown, St. Michael, Barbados W.I. BB11145 Telephone: +1 246-836-8557

Company: Transfret Dakar Name: Tamsir Ousmane TRAORE Email: tamsir.traore@transfret.sn Web: www.transfret.sn Address: Rue Huart x Amadou Assane, Ndoye, Immeuble Fayçal, 1er étage à droite, Dakar - Senegal Telephone: +221 823 46 68

Company: Webster Dyrud Mitchell Name: Pam Webster Email: pwebster@websterdyrud.com Web: www.websterlawbwi.com Address: P.O. Box 58, Victoria House, The Valley, AI-2640 Anguilla, British West Indies Telephone: + 264 4612060

ACQUISITION INTERNATIONAL

February 2013 /

A MS T E R D A M ∙ A ME R S F OO R T W W W. M E N D . N L

DUTCH MID-MARKET M&A LAW FIRM OF THE YEAR

SECTOR SPOTLIGHT:

Meet the Experts - Resolving Commercial Disputes through Mediation

MEET THE EXPERTS

â&#x20AC;&#x201D; Resolving Commercial Disputes through Mediation l In recent years, the use of mediation as a form of alternative dispute resolution has been steadily gaining pace, saving time and money for the opposing parties. Mediation can be used to help settle disputes across a wide range of industries and in some cases, particularly in small claims; it has become a mandatory part of the dispute resolution process. Compared to other methods, mediation is well suited to the current economic climate; it is cost-effective and non-confrontational, which makes it a popular choice for solving all manner of business disputes. Resolutions can often be met within a short time of meeting the mediator and it often provides a more satisfactory outcome for all parties due to the fact that everyone is empowered to negotiate, therefore terms are agreed to a greater extent than they are imposed. Finding a neutral third party to facilitate the process can be challenging, especially finding one that all parties agree on. Until fairly recently, many mediators have not actively advertised their services, rather they have relied on gatekeepers and institutional clients to feed their supply of work

Law Firm: The TCM Group Name: David Liddle Email: david.liddle@thetcmgroup.com Web: www.thetcmgroup.com Address: The TCM Group, Ground and first floors, New House, 67-68 Hatton Garden, London, EC1N 8JY Telephone: +44 (0) 20 7404 7011

ACQUISITION INTERNATIONAL

February 2013 /

DEAL DIARY:

M&A from around the world

DEAL DIARY — Deal index 67

2 CAN

HUCKLEHOVEN

7 LAWYERS

INTERTRUST

ALVEST

ISTRAT AND MARKETGATE

ANTHONY INTERNATIONAL

iWELCOME

APOLLO

KISTA GALLERIA

ARCELORMITTAL S.A.

KRAUSSMAFFEI

ASSETIC PTY LTD

LA FÉE MARABOUTÉE

ATLANTIC FINANCIAL GROUP

LATEXX

AURORA VERSICHERUNGS AG

LGE

AVIO S.P.A

MERLIN ELITE

B&M BARGAINS

MONITOR

BEERENBERG HOLDING

PACIFIC ISLAND RESTAURANTS

BLOHM + VOSS INDUSTRIES GMBH

POXEL

CATACAP

PROXIAD

CES

PUBECO

CIMBRIA

REXAM

COMMUNITY FOODS LIMITED

SCOLOCATE

CONTEX

SINNLEFFERS

DELCREDERE

STATOIL OSLO

DELFMEMS

STX OSV

GEORGSTOR

UNITUS SEED FUND

GESTAMP AUTOMOCION

VALVE TECH ENGINEERING

GROUPAMA PRIVATE EQUITY

WINDER POWER

HELVEA

66 / February 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world

2сan is the Russian version of the mobile acquiring service “Square”. Launched in 2009, the US analogue has attracted two million clients and closed its Series D round (totalling $200 mln), which valued the company at $3,25 bln. The 2сan project was launched at the end of September 2012 and is the first Russian mobile acquiring service which fully complies with the security standards of Visa and MasterCard. To secure the transactions, the service provides users with a card reader encoding the cardholder information. 2can was founded by Nikolay Zhmurenko and Yury Vladimirov, the venture fund InVenture Partners and a number of business angels. The company has raised a total funding of $2.3 million since its launch. Nadmitov, Ivanov and Partners Law Firm LLC successfully represented the interest of founding shareholders of Russian company Smartfin CJSC (which operates under the brand name of 2Can) in a number of transactions aimed at raising financing from venture funds Almaz Capital Partners, InVenture Partners and angel investors.

Alexander Nadmitov

Managing Partner, Alexander Nadmitov, and Partner, Sergey Lapin, Partner, lead the team. Nadmitov commented: “The firm advised on restructuring of the holding structure of Smartfin, drafting and negotiation of the subscription agreement and shareholders agreement governed by English law and the constituent documents of the Cyprus holding company.”

www.nplaw.ru alexander.nadmitov@nplaw.ru

ALMAZ CAPITAL INVESTS IN 2CAN

l Bureau Veritas has acquired 7Layers, a specialist in wireless electronic products testing, certification and engineering solutions, headquartered in Germany.

l Leading European private equity firm AXA Private Equity has signed an agreement together with Equistone Partners Europe and the management team of Alvest to sell the company’s entire capital to LBO France. AXA Private Equity first invested in Alvest six years ago and has since actively supported its management in the company’s international development strategy.

7Layers’ expertise, global coverage and established position will complement Bureau Veritas’ existing presence within global brands and their supply chains. This acquisition positions Bureau Veritas as a global leader in wireless testing, almost doubling its footprint in a fast growing market. The wireless testing market will continue to experience significant growth for years to come, especially with continued innovation in the Machine to Machine (M2M) and telecommunications sectors. Since its foundation in 1999, 7Layers has been offering integrated solutions to mobile device manufacturers, suppliers of electronics parts as well as telecommunication network operators. The company provides testing services to assess security, reliability, functionality and interoperability of a wide range of mobile devices as well as certification and engineering services. Headquartered in Ratingen, Germany, 7Layers employs 220 highly qualified employees and has engineering centers and accredited laboratories in Germany, mainland China, South Korea, and the United States as well as representations in Japan, Taiwan and South Europe. Its 2012 revenue is estimated at EUR 24 million. Oliver Butler, Bureau Veritas’ Executive Vice President, Consumer Products, added:

‘‘

I am delighted to welcome Dr. Hans-Juergen Meckelburg, the President & CEO of 7Layers, his leadership team and all the staff of the 7Layers group to Bureau Veritas. The combination of 7Layers’ technology know-how coupled with our Electrical & Electronics footprint creates a world class global technical and service delivery network. Our comprehensive offering will support our clients seeking to improve time to market, and supply chain efficiency. It will also enable their products and services to meet the ever increasing demands of a smarter world.

‘‘

The service is predominantly aimed at internet-shops, taxi services, insurance agents, and businesses that are not able to use traditional POS (Point of Sale) terminals due to different organisational or financial implications.

ALVEST

Alvest is a French industrial group and global leader of ground support equipment for airports. The group also produces and markets high-tech adhesive films, which are used for aeronautical applications. Alvest now has 1,350 employees, a global proprietary sale network and operates eight factories in the United States, Canada, France and China, which together serve customers in over 130 countries. The group plans to reach a turnover of more than €300 million in 2012, more than double the 2006 level.

‘‘

Jean-Marie Fulconis, CEO of Alvest, said: AXA Private Equity’s support has been a key element in our successful development. We are now ideally positioned to continue our growth. The innovative products we have launched offer good growth prospects and the high value added projects we have in the pipeline make us confident in our Group’s future. Euromezzanine provided the mezzanine financing for the transaction, with the team being led by Managing Partner Bruno Froideval and Associate Pierre-François Gueit.

‘‘ ‘‘

Froideval commented: In order to help LBO France providing a firm and binding offer on time to the seller, Euromezzanine underwrote the total amount of senior debt and mezzanine structured in an unirate. Since then, banks have obtained their committee approval, and the central assumption is that this unirate will never be issued, and that a senior debt + mezz structure will be in place at Closing. Advention Business Partners performed the strategic due diligence for LBO France and the team was led by Alban Neveux, the Group Managing Director.

‘‘

l Venture fund Almaz Capital Partners, created by Alexander Galitsky, has invested in the Russian start-up 2сan. 2Сan is a new acquiring service, which enables Russian users to securely accept Visa and MasterCard payments with their smartphones or tablets anywhere and at any time. The mobile service of 2can consists of two parts: a special mobile application and a card-reader.

7 LAYERS

‘‘ ‘‘

2 CAN

Alban Neveux said: The strategic review had to be performed on a truly global scale so as to reflect Alvest’s business footprint. Technology issues also had to be properly assessed in order to validate the Group’s positioning and the quality of its innovation pipeline.

BUREAU VERITAS ACQUIRES 7LAYERS

AXA PRIVATE EQUITY SELLS ALVEST

Financial Adviser

Financial Adviser to the Equity Provider

Strategic Due Diligence Provider Legal Adviser to the Management Team

Vendor Due Diligence Provider Tax Adviser

Legal Adviser

Financial Due Diligence Provider

Russian Law Legal Adviser Legal Adviser to the Equity Provider

ACQUISITION INTERNATIONAL

February 2013 /

DEAL DIARY:

M&A from around the world ANTHONY INTERNATIONAL

APOLLO

ARCELORMITTAL S.A.

l Anthony International has been purchased by Dover Corp for $602.5 million as the diversified manufacturer looks to expand its global footprint. The company was sold by private-equity firm Avista Capital Partners.

l RTR Capital, a subsidiary of Terra Firma, has acquired Apollo from Acea Reti e Servizi Energetica SpA following winning a competitive bid process which attracted 30 PV operators.

l A consortium of companies, led by South Korean steel giant POSCO and Taiwan-based China Steel Corp is to invest $1.1bn for a 15 percent stake in the Canadian iron ore business of Luxembourgbased ArcelorMittal S.A., one of the world’s largest steel producers.

Anthony, based in California with locations in Italy, China and South Africa, joins the refrigeration and industrial platform of Dover’s engineered systems segment. Dover expects the deal to dilute per-share earnings from continuing operations this year by two cents. The deal will add modestly to per-share earnings in 2013, with Anthony’s 2012 revenue estimated to be about $310 million.

‘‘

Dover Chief Executive Bob Livingston said:

‘‘

Consistent with our growth strategy, Anthony’s global operations will allow us to leverage a worldwide customer base and open new markets for our existing refrigeration business. “Anthony opens up the important conveniencestore market to all our product categories,” said Tom Giacomini, Dover’s engineered systems segment CEO. He added that Anthony is a major player in the emerging ‘close-the-case’ business, which means installing doors on traditional open refrigeration cases. Earlier this month, Dover’s board authorised it to buy back $1 billion in shares, while also unveiling plans to divest certain non-core businesses that serve the electronic assembly and test markets. The company noted that its acquisition pipeline remains robust, and that it expected to close a couple of opportunities before year end. Shares of Dover edged down 27 cents to $63.74 in recent trading. The stock has risen 16% in the past 12 months.

Apollo manages a portfolio of PV plants, with a combined capacity of 32.5MW, which are located in Puglia, Lazio and Campania in Italy. RTR Capital paid €102.5m for the company, which equals approximately €3m per megawatt. Following the acquisition, RTR Capital now operates 297.5MWp of installed PV capacity in Itlay and produces more than 400GWh of electricity each year. Moroni & Partners assisted RTR Capital since its establishment, executing instrumental and thermographic verifications on its plants portfolio as well as on plants to be acquired through extraordinary operations. In particular, M&P has recently supported RTR Capital in the acquisitions from Toto Group and ACEA. Thanks to its methodology and to a large team with great experience and competence, M&P completed in less than two weeks a positive technical assessment of the 32,5 MW plants called “Apollo”. With this operation, M&P confirms its leadership in the photovoltaic secondary market and enforces its partnership with RTR Capital. Vitali Romagnoli Piccardi and Associati acted as tax advisor of the in this deal. An experienced team led by Giuliano Foglia (partner) and including Marco Emma and Giovanni D’Ayala Valva (associates) was fully committed to the transaction. The main challenges faced Giuliano Foglia by the team were given by the complexity of tax impacts of the deal structure. The firm assisted ACEA in structuring the transaction in order to satisfy the various corporate/financial/legal needs of the parties and avoid tax traps and insecurity for a more efficient tax treatment of the deal. Rothschild and Banca IMI assisted in the transaction with Directors, Alessandro Bertolini and Luca Matrone leading the teams. Rothschild has a strong relationship with the buyer and has assisted in the sale of most of the other PV plants acquired by RTR Capital

Kim and Chang, as lead counsel, worked with Osler, Hoskin & Harcourt LLP, as Canadian transactional counsel. From Kim and Chang, Jason William Lee led the documentation and negotiation of the purchase agreement and the ancillary agreements, with the support of Jae Hak Kim, Hyun Soo Jin, Hyun Sun Park, Soon Yun Jeon and Chang Heon Kwak. All matters relating to the consortium, structuring and government approvals were led by Sung Uk Park, Yun Goo Kwon and Yong Taek Lim, with the support of Hae Kyung Sung, Jae Hoon Cheong, Daniel Sangwook Han, Scott Steele, Hyung-Woo Song and Jan Kooi. Norton Rose Canada LLP was representing ArcelorMittal in connection with the M&A, joint venture and offtake transactions, with a team led by Dawn Whittaker, Canadian leader of the firm’s mining and commodities practice. Shearman & Sterling is advising long-standing client ArcelorMittal in its agreement pursuant to which ArcelorMittal’s wholly owned subsidiary ArcelorMittal Mines Canada (AMMC) and a consortium led by POSCO and China Steel Corporation (CSC) will enter into a joint venture partnership that will own ArcelorMittal’s Labrador Trough iron ore mining and infrastructure assets. The consortium will acquire a 15% interest in the joint venture for total consideration of $1.1 billion in cash, with AMMC and its affiliates retaining an 85% interest. The Shearman & Sterling team is being led by partners George A. Casey (New York-M&A) and George Karafotias (London-M&A). Dawn Whittaker

Shahir Guindi

Osler, Hoskin and Harcout assisted in the transaction with Shahir Guindi, Partner of the Corporate Group and Managing Partner of the Montreal office, leading the team consisting of Chima Ubani (Corporate), Mark Brender and Nadia Rusak (Tax) and Michelle Lally (Competition).

www.osler.com sguindi@osler.com

ANTHONY PURCHASED BY DOVER

RTR CAPITAL BUYS 32.5MW FROM ACEA RSE

CONSORTIUM ACQUIRES INTEREST IN ARCELORMITTAL

Virtual Data Room Provider

Tax Advisor for ACEA (SELLER)

Advisors

Tax Adviser to Purchaser Technical Advisor for RTR (PURCHASER)

Environmental Due Diligence provider

Representations and Warranties Insurance Provider

Financial Advisor for ACEA (SELLER)

Legal Advisor for RTR (PURCHASER)

KIM & CHANG

Tax Advisor for RTR (PURCHASER)

Anti-trust Compliance Advisor Industrial Advisor for ACEA (SELLER)

68 / February 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world

Australian infrastructure is one of the hottest sectors for investors right now, as the appeal of industries like coal mining wanes due to weak commodity prices, and other areas of the economy rein in their spending Citigroup estimates Australia will need to invest A$770 billion on improving its infrastructure in the decade through 2018. Assetic’s “outstanding growth rates” and “position as the leading supplier of strategic asset management software to local government in Australia were key attractions for investors,” said Antony Lynch, director of M&A Partners, which advised Assetic’s owners on the equity selldown. The investment was made through Carnegie Venture Capital Fund and the Carnegie Private Opportunities Fund, M&A Partners and Assetic said in a statement. KPMG supported Carnegie Venture Capital by providing tax due diligence support on the acquisition.

Stephen Carpenter

Stephen Carpenter, Partner, Josh Chye, Senior Manager, and Steve Plant, Consultant, headed the team. Mr Carpenter commented: “We are delighted with the opportunity to continue to enjoy a strong working relationship with MH Carnegie & Co Pty Ltd. “Our assistance included providing a summary of the historical and forecasted tax positions of Assetic Australia Pty Ltd and how these attributes would be relevant to MH Carnegie & Co Pty Ltd post acquisition.”

Josh Chye

www.kpmg.com.au scarpenter@kpmg.com.au jchye@kpmg.com.au

AFG will take an equal stake along with the Moroccan banking group Banque Centrale Populaire (BCP) of Banque Atlantique, which owns the subsidiaries created over the past two decades. Fonds Cauris Croissance II is funding the development of the group activities.

‘‘

Koné Dossongui, chairman, commented:

The partnership Cauris-AFG is the escalation of a business relationship started over five years ago with an investment by Cauris in Moov Togo, owned in majority by Atlantic Telecom, the group former telecom division, now part of Etisalat. I hope this new partnership will also benefit from Cauris proven experience in the banking sector and will generate value for shareholders as was the case with our joint telecoms experience. Africa Capital is representing AFG in the transaction. Mr. Patrick KOUAME, managing director of the Abidjan office, led the Africa Capital (AC) team. He commented: “AC has enjoyed a successful track record in structuring, conducting and closing AFG transactions.

‘‘

AURORA VERSICHERUNGS AG l Compre Holdings Limited, an investee company of Milestone Capital Partners LLP is to acquire Swiss insurance company Aurora Versicherungs AG, from Swiss Reinsurance Company Limited. Aurora was acquired by Swiss Re in 2007 and has a portfolio of largely motor liability claims. Aurora had shareholders’ funds of CHF 11.4m at the end of December 2011. The acquisition is subject to approval from the Swiss Financial Markets Authority. Compre has been keen to grow its business in German speaking Europe for several years and sees the acquisition of Aurora as a further step in its expansion within these markets.

‘‘

Nick Steer, CEO of Compre commented:

We are delighted to have acquired Aurora from Swiss Re. This represents an important commitment to the German speaking insurance and reinsurance legacy markets and a statement of our credibility as a counterparty for major insurance and reinsurance groups considering finality for their legacy business. “We are keen to grow our operations in Switzerland, Germany and Austria and will consider further transactions of portfolios or companies. “We look forward to working with the team at Swiss Re to finalise the transfer of the business to Compre in the first quarter of 2013.

Our main challenge was the negative publicity surrounding the group, and its willingness to retain some control over the banks. We therefore focused discussions on the intrinsic value of AFG, its people and its presence on the ground, and ensured throughout the process that all interested parties knew that they were involved in a very competitive bid.

Mazars acted as a financial advisor to Compre in this cross border acquisition of Aurora a subsidiary of Swiss Re in Switzerland. Mazars provided due diligence services, with a focus on financial, tax, regulatory and IT issues.

www.africa-capital.com pkouame@africa-capital.com

Vincenzo Braiotta

‘‘

Carnegie paid 10 million Australian dollars (US$10.6 million) for a 55% stake in the Melbourne-based technology business, whose software is used by local governments to track and predict how billions of dollars should be spent on Australia’s infrastructure such as roads, housing and sewers in the coming years.

l Fonds Cauris Croissance II, a West African fund manager owned by Cauris Management, is to invest 4.1 billion FCFA in Banque Atlantique, the regional banking group, through Atlantic Financial Group (AFG).

‘‘

l Australian private equity firm M.H. Carnegie & Co has acquired a majority stake in software provider Assetic Pty Ltd.

ATLANTIC FINANCIAL GROUP

‘‘

ASSETIC PTY LTD

CARNEGIE ACQUIRES ASSETIC

FONDS CAURIS CROISSANCE II INVESTS IN BANQUE ATLANTIQUE

Financial Due Diligence Provider & Tax Adviser

Financial Adviser to the Vendor

The team was led by Vincenzo Braiotta, Head of Transactions Services Switzerland. He is an executive with over 20 years of experience in M&A, due diligence and valuations in the financial sector.

COMPRE TO ACQUIRE AURORA

AFRICA CAPITAL Virtual Data Room Provider Financial Due Diligence Provider Legal Adviser & Risk & Insurance Due Diligence Provider

Financial Due Diligence Provider Financial Adviser & Commercial Due Diligence Provider

M.H. Carnegie & Co. Virtual Data Room Provider

Expert Associés (Togo)

Legal Adviser to the Purchaser

Legal Adviser to the Vendor

Cabinet FADIGA (Côte d’Ivoire) Legal Adviser to the Purchaser

Cabinet DOGBEAVOU ACQUISITION INTERNATIONAL

February 2013 /

DEAL DIARY:

M&A from around the world AVIO S.P.A

B&M BARGAINS

BEERENBERG HOLDING

l GE announced on December 21st 2012 that it has entered into an agreement with BCV Investment S.C.A. (“BCV”) and its portfolio company Avio S.p.A. (“Avio”) to acquire for $4.3 billion U.S. (€3.3 billion) the aviation business of Avio, an Italy-based manufacturer of aviation propulsion components and systems for civil and military aircraft.

l US private equity firm Clayton Dubilier & Rice (CD&R) has acquired a significant stake in discount chain B&M Bargains, in a deal understood to be worth £965m.

l Segulah IV LP has entered into an agreement to acquire Beerenberg Holding AS, a leading company within maintenance services for the oil and gas industry both onshore and offshore, from Norwegian private equity firm Herkules Capital and Management.

Founded in 1908 and headquartered in Turin, Italy, Avio operates in four continents and employs about 5,300 people, 4,500 of whom are in Italy, including approximately 3,700 in the aviation unit. In the jet propulsion industry Avio is a provider of low-pressure turbine systems, accessory gearboxes, geared systems, combustors and other components. BCV retains through Avio 100% of the space unit which designs and manufactures components for launchers, including Vega and Ariane 5. In 2011, the division generated revenues of €297 million. Christophe Diricks, Tax Director at Deloitte Luxembourg advised BCV.

‘‘

We identified and dealt with various issues towards the successful conclusion of the Christophe Diricks transaction whilst remaining aware of the consequences for the space business unit which is kept by BCV. GE TO ACQUIRE AVIATION BUSINESS OF AVIO S.P.A Tax Advisor

B&M Bargains, which has more than 300 stores, was acquired by the Aroras in 2004 when it had just 21 stores.

‘‘

David Novak, partner at CD&R, said:

B&M is a fantastic retail format in the growing discount sector. “We are pleased to have the opportunity to partner with the management team to accelerate the growth of the business by widening its market presence outside the UK and continue to build the B&M brand. “We believe the value-based general merchandise retail model could have significant appeal in overseas markets. Debevoise & Plimpton is advising its long-standing client, Clayton, Dubilier & Rice, LLC, on the debt financing aspects of its agreement to acquire a stake in B&M Retail Limited. The Debevoise team is lead by partner Alan J. Davies and includes partners Matthew D. Saronson and Richard Ward, international counsel Nathan Parker, and associates Stephanie Hacker, Andrew C. Rearick, Thomas Smith and Gregg Young. CDR ACQUIRES STAKE IN B&M BARGAINS

Beerenberg is primarily active on the Norwegian Continental Shelf and within the fields of surface treatment, fire proofing, insulation, architectural works and outfitting, access technologies, subsea insulation, decommissioning and related engineering and inspection services. The Company is headquartered in Bergen with additional presence in Stavanger, Husøy, Hammerfest, Houston (US) and Atyrau (Kazakhstan). Beerenberg’s CEO Morten Walde comments: “We look forward to working with Segulah to take Beerenberg to the next level”. After Segulah’s acquisition has been completed, Ketil Lenning (former CEO of Odfjell Drilling) will be appointed new Chairman of Beerenberg. “Beerenberg is a leading company in an interesting niche of the growing Norwegian oil and gas market and I look forward to supporting Management in further developing the business”, says Ketil Lenning. “We are very pleased with this transaction. We have followed Beerenberg’s development for some time and have a strong belief in the Company”, says Sebastian Ehrnrooth, Segulah Advisor AB. Merlin Piscitelli, Director, Merrill DataSite Interna¬tional, worked on provision of the virtual data room (VDR) for this deal.

‘‘

He commented:

‘‘

The acquisition of Avio’s aviation business, which provides components for GE Aviation and other engine companies, would further GE’s participation in jet propulsion, one of the most attractive sectors of the aviation industry.

CD&R has pledged to help continue the business’s rapid growth and to push the B&M brand overseas.

‘‘

BCV, the investment holding company majority owned by Cinven - a leading European private equity firm - and Finmeccanica - the 2nd largest industrial firm in Italy- acquired Avio in December 2006 for an enterprise value of €2.57 billion. The transaction is subject to regulatory and governmental approvals.

Former Tesco boss Sir Terry Leahy has been named chairman of the retailer, run by Manchester brothers Simon, Bobby and Robin Arora, as part of the deal.

This was an extremely complex deal that started almost two years ago. They used DataSite very early on in the process so that the Advisors could create Vendor Due Diligence (VDD) reports and share information prior to going to the market. The site had an above average amount of due diligence material. SEGULAH IV ACQUIRES BEERENBERG Virtual Data Room Provider

Vendor Due Diligence Provider Legal Advisor to the Management Team

Financial Advisor to the Management Team

Legal Adviser to the Vendor

Commercial Due Diligence Provider

Financial Adviser to the Vendor

70 / February 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world BLOHM + VOSS INDUSTRIES GMBH

CATACAP

l SKF is to acquire German-based ship components provider Blohm + Voss Industries (BVI) from Star C apital Partners. SKF will pay 80 MEUR for 100% of the equity of BVI and assumes net loans/cash of 18 MEUR. The acquisition is in line with SKF’s strategy to further position itself as the preferred application development partner offering a full asset life cycle management approach for marine solutions. Blohm + Voss Industries is a leading manufacturer of, and service provider for, premium quality equipment for critical marine applications, including shaft components (seals and bearings), stabilizers, and oily water separators. The company has around 400 employees and originates from the Blohm + Voss shipyard, which was founded in 1877. Sales for 2011/2012 were around 100 MEUR with an operating margin in line with the SKF Group.

‘‘

‘‘ ‘‘

We are excited to have Blohm + Voss Industries become part of the SKF Group. The synergies between the SKF and BVI marine portfolio will support SKF to be an even stronger partner for critical shaft components to the marine industry and marine specific applications for both OEM and end users, says Tom Johnstone, SKF President and CEO.

‘‘

We are very positive about joining the SKF Group. The combination of our technologies, strategies, and organisations will be a good basis to make SKF an even stronger supplier to the marine industry, says Martin Johannsmann, CEO Blohm + Voss Industries. IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk. IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents.

SKF GROUP TO ACQUIRE BLOHM + VOSS INDUSTRIES GMBH Virtual Data Room Provider

CES l A Cheshire-based car parts distribution business has been acquired by a private equity firm. CES UK has been purchased by HgCapital in a multi-million pound deal after founders Howard Warren and Charles Colton sold their stakes in the business. The duo will remain directors in the business to support HgCapital in its growth strategy. Steve McCann will continue as managing director.

l New buyout fund CataCap held a first close at DKK 500 million. The new fund aims to catalyse growth among Danish SMEs with a potential for long-term business development and significant increase in earnings. The formula is to exercise proactive ownership by providing a combination of growth capital, operational skills and a distinct approach to portfolio company development. In addition to the three founding partners of CataCap, the group of investors include the large Danish institutional investors Dansk Vækstkapital, Danica Pension and Lægernes Pensionskasse (Medical Doctors’ Pension Fund) and a number of private investors. Bruun and Hjejle assisted in the transaction with partner, Mogens Thorninger, leading the team. www.bruunhjejle.com mth@bruunhjejle.dk Mogens Thorninger

CES UK was founded in 1984 by Howard Warren and Charles Colton. The pair met at Liverpool University and whilst studying agreed to one day set up business together. They stayed in touch and did so eight years later, forming CES UK, both having gained experience working in the automotive sector. CES UK has turnover of £50m and supplies a full aftermarket range that includes exhausts and catalytic convertors. It employs more than 500 people at 18 branches across the North West, Midlands, North Wales and the Isle of Man. Howard Warren, said: “The market has changed considerably in recent times and the time was right to structure a deal. There are ambitious plans in place for the business and we’re looking forward to working with the team. “We started the process of gearing up for sale two years ago with our advisors and have had various approaches. HgCapital had lots of relevant experience and knowledge of the automotive sector and were the natural choice.” Moira O’Shaughnessy, Partner at Financial Planning Corporation has advised the Warren and Colton families for over 20 years as CES developed from a £3m to a £50m turnover business. FPC’s role is to help our clients plan the future they want for themselves and for their business and we have been working towards this moment for many years. The transaction was a testament to teamwork and it was a pleasure to work alongside like-minded advisers who were totally focused on meeting our clients’ objectives. With HG’s backing an exciting future lies ahead for CES and the Parts Alliance.

NEW DANISH FUND CATACAP RAISES DKK 500 MILLION

CES UK SOLD TO PRIVATE EQUITY COMPANY

Virtual Data Room Provider

Financial Adviser to CES

Financial / Tax Due Diligence Provider (Purchaser)

Other Advisers Financial Adviser Vendor (VDD) & Tax Adviser Vendor (VDD)

Legal Adviser to the Equity Provider

Legal Adviser to the Purchaser Legal Adviser to the Purchaser & Tax Adviser Environmental Due Diligence Provider (Vendor)

ACQUISITION INTERNATIONAL

February 2013 /

DEAL DIARY:

M&A from around the world

l European private equity firm Silverfleet Capital is to acquire A/S Cimbria, a leading manufacturer of equipment and processing lines for handling and processing of seed and grain, for DKK 1,025 million (€137 million). Headquartered in Thisted in Denmark, Cimbria is a leading global manufacturer of equipment used for either seed processing or post-harvest grain handling. The company’s products include equipment for cleaning, drying and storing grain and seed, as well as conveyors linking equipment in a handling or processing line. Products range from standalone equipment pieces to large custom built project installations. Cimbria operates two production facilities in Denmark, and one in each of Austria, the Czech Republic and Italy, and today has approximately 740 employees. Total sales are approximately DKK 1,050 million (€140 million), with EBITDA of DKK 145 million (€19 million). Silverfleet Capital’s fund will acquire a majority investment in Cimbria from Axcel, a Nordic mid market private equity fund, and members of Cimbria’s management team will reinvest a significant amount of money for a minority stake. Debt is to be provided by Nordea. Gareth Whiley, the partner at Silverfleet Capital with responsibility for the Nordic region and who led the transaction, will join the board as a non-executive director. He commented: “Cimbria is widely recognised for its high-quality products serving the seedand grain-equipment markets. In particular it has an excellent reputation in the fast-growing markets of Eastern Europe, Ukraine and, increasingly, Russia. Expanding demand for grain and other crops, primarily due to population growth, is driving a need for greater agricultural productivity, which Cimbria’s products are well-placed to serve.” Leading the team at Handelsbanken was Peter S. Olesen, Head of Corporate Finance, Denmark.

SILVERFLEET CAPITAL ACQUIRES A/S CIMBRIA

COMMUNITY FOODS LIMITED l Micross Natural Foods has recently participated in a management buy-out and acquisition of Community Foods Limited. For 40 years Community Foods has been engaged in the importing of a variety of dried fruits, nuts and seeds for sale into the health food market and more recently into major food manufacturers and retailers. The business is well respected by its peers and customers, particularly with respect to organic produce. The management team of Community Foods have completed the acquisition from the parent company, Community Foods Group Limited, which was formerly known as Milk Marque.

The Danish company Contex A/S is the world’s largest manufacturer of large-format 2D scanners. Contex sells both under its own brand and as an OEM supplier to HP, among others.

The Directors were advised by Kingswood Corporate Finance, who also arranged an £11.1m new ABL working capital facility from Close Brothers Invoice Finance.

In 2011 Contex A/S’s sales totalled USD 46.1m and operating profit (EBITA) adjusted for costs affecting comparability amounted to USD 4.9m. Ratos acquired Contex Group in 2007 when the company consisted of three subsidiaries: Contex A/S, Z Corporation and Vidar Systems. The two latter companies were sold to the American company 3D Systems in 2011.

Jonathan Massing, Managing Partner at Kingswood commented:

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This was a particularly difficult and complex transaction. The parent company pension was in substantial deficit. Careful negotiations with the pension trustees, and three leading Jonathan Massing banks were required. “The transaction required equity investment, as well as complete refinancing of existing working capital from Lloyds Bank and Barclays Bank respectively. “After some four months of protracted negotiations we are delighted to have advised the management team on securing the future for Community Foods and in the process achieving a management buy-out to secure their own future. jonathan.massing@kingswood.org.uk www.kingswood.org.uk

MICROSS NATURAL FOODS LIMITED ACQUIRES COMMUNITY FOODS LIMITED

Corporate Finance Advisor

Legal Advisors

CONTEX l Ratos’s subsidiary Contex Group has signed an agreement to sell Contex A/S to the private equity fund Procuritas (Procuritas Capital Investors V LP). The selling price (enterprise value) amounts to USD 41.5m. In conjunction with completion of the deal Contex Group will be wound up and a dividend paid whereby Ratos will receive approximately SEK 175m. The exit result in Ratos is expected to amount to approximately SEK -125m.

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CIMBRIA

The selling price (enterprise value) amounts to USD 41.5m. Once the sale is completed, Contex Group will be wound up and a dividend of the remaining assets in the company (approximately SEK 175m) will be paid. CORE Strategy Consultants conducted the commercial due diligence for Procuritas Partners. The CORE team was led by Partner Karsten Petersen and Managing Partner Poul Bukh. The cooperation is the most recent in a long series of co-operations between CORE and Procuritas senior people, which started in 1997. A substantial challenge in the work was establishment of a trustworthy market overview as Contex’ business is a niche to a large extent. Centre of gravity was development of a bottom-up market qualification model where CORE worked closely together with Contex management. Through this, alignment across Contex and Procuritas was established on strategic focus going forward, before the deal was closed.

CONTEX A/S SOLD TO PROCURITAS Commercial Due Diligence Provider

Corporate Finance Adviser to Micross Natural Foods Limited Advisers

Financial DD Advisor

Commercial DD Advisor

72 / February 2013

Corporate Finance

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world DELCREDERE

Delcredere, a limited liability company under Belgian private law, was established in 2004 as a 100% subsidiary of ONDD. The subsidiary specialises in short-term export credit insurance while the public parent company focuses on mid- to long-term export credit insurance. Delcredere is supervised by the National Bank of Belgium. As a credit insurer, Delcredere offers solutions to European businesses to cover the political and commercial risks of international trade transactions in the short term. The group is recognised within its sector for its expertise in insuring risks in emerging markets. Delcredere, with its headquarters in Brussels, also has offices in Paris, London and Wiesbaden. Through its subsidiary Kupeg, the group also has an office in Prague. Peter Maenhout, Managing Partner at Gimv and Head Gimv-XL, commented: “With this investment, the Gimv-XL fund is playing a major part in the further privatisation of a solid Belgian enterprise. Internationally, Delcredere has a very strong reputation for its expertise in credit risks in emerging markets. Gimv is pleased to make its resources and expertise available for this project.” inno.com participated in an acquisition deal on behalf of GIMV, in the evaluation of the ICT-services and landscape. The challenge for the team was to evaluate the operational and strategic risk of the ICT-environment. inno.com managed to give a sound professional advice, thanks to its organizational and technical knowledge and its vast experience in similar assignments. inno.com is THE independent specialist with regards to Enterprise Architecture. inno.com provides strategic ICT consulting as well as ICT delivery services to both the private and public sector. Next to its consultancy business, inno.com runs a master-course in Enterprise Architecture, officially recognized by the government as an academic master-degree.

GEORGSTOR

l DelfMEMS has secured $10.5m in a Series B funding round from CDC Entreprises, Iris Capital, Capitalaria, VIVES as well as existing investors A2D Invest, Alliansys, Finorpa, Inovam, and RhôneAlpes-Création. The funding will be used to support the company’s growth in MEMS based switching products used as front end wireless modules for mobile devices like smart phones and tablets.

l Germany’s Quantum Immobilien KAG has acquired two car parks in Cologne and Erfurt and sold an office building and adjacent hotel in Hamburg.

“DelfMEMS’ technology enables its customers to increase bandwidth while minimizing cost, size, and consumption,” explains founder Olivier Millet. “These funds will enable us to qualify first design wins and DelfMEMS manufacturing process including Thin Film Packaging with our partner for high volume manufacturing entity in the USA. The goal is to support the aggressive production ramp-up of our customers to penetrate the market.” Along with the investment, DelfMEMS appoints Guillaume d’Eyssautier as its new CEO. Olivier Millet, the company’s former chief executive officer and founder, will remain on the board and will take the role of chief strategy and marketing officer of DelfMEMS. Guillaume d’Eyssautier career has spanned over the past 30 years in the semiconductor industry, including management positions in both Europe and the USA. Guillaume d’Eyssautier commented: “I have worked across the semiconductor industry in a variety of first-rate companies and I am very proud to have joined DelfMEMS. We have an incredibly attractive technology, as recognized by our great customers and partners. I look forward to building on these achievements and DelfMEMS becoming a wonderful success.” The Grünecker Patent Attorneys and Attorneys at Law team was led by patent attorney Dr. Wolfgang Neubeck (partner).

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l Gimv is to acquire an interest in Delcredere, the Belgian public credit insurer, through the Gimv-XL fund. Gimv is investing €36m in Delcredere, by acquiring shares owned by ONDD. After completion of this deal, the Gimv-XL fund will be holding a minority interest of 49% in Delcredere.

DELFMEMS

He commented: We represented DelfMems in IP related matters. Grünecker’s task was to provide a detailed analysis of its patent portfolio and technology for review by the Investors. Emphasis was put on the strength of DelfMems patent families and the positioning of DelfMems technology with respect to third party patent rights. www.grunecker.de

GIMV ACQUIRES MINORITY INTEREST IN DELCREDERE

DELFMEMS SECURES FUNDING

Systems Due Diligence Provider

IP Due Diligence

The car parks in Cologne and Erfurt were bought for the Spezialfonds City Parking fund representing an investment of €34m. The underground car park in Cologne was built in 2005 and offers 340 spaces. The property is operated by Apcoa Parking. The parking garage in Erfurt was delivered in 2000 and provides 730 parking spaces operated by Q-Park. The purchase brings the total number of assets owned by the fund to 13, representing a combined value of €120 mln. The planned volume of the core/core-plus fund is €200 to 250 mln. Separately, Quantum said it has sold the Georgstor office building and the adjacent Motel One Hamburg Alster. Georgstor is fully leased and provides 23,445 m2 of rentable space. Main tenants include E.ON Best Service which occupies 15,500 m2. The asset was acquired by local investor Real IS. Opened in April 2010, the Motel One hotel offers 464 rooms on 20 floors and was acquired by Bayernfonds Property Management. The seller was advised by JebensMensching and the buyer by Rödl & Partner. CBRE brokered the transaction. Rödl & Partner assisted in the transaction with the team being led by Harald Reitze, LL.M. (Partner), and involving multiple members, in particular Alexandra Giering and Dr. Andreas Demleitner (tax). The team which advised the acquisition financing was led by Jürgen Siegl (Associate Partner). Reitze commented: “We represented the two purchasing entities which belong to the Real IS group. Real IS is a long-standing client which we represented in multiple transactions in the last years, including the 250 million acquisition of Hamburger Meile in 2011.”

QUANTUM SELLS GEORGSTOR

Advisor to the Buyer

Legal Adviser to the Purchaser & to the Equity Provider

Financial Due Diligence Provider, Tax Adviser & Pensions and Actuarial Adviser

Legal New Investors Advisor to the Seller Legal Society & Existing Shareholders

Legal Adviser to the Vendor Brokerers of the Transaction Financial Adviser to the Vendor

ACQUISITION INTERNATIONAL

Nomos Accounting Due Diligence

February 2013 /

DEAL DIARY:

M&A from around the world

l Mitsui & Co. Ltd. has acquired a 30 percent stake in Spanish auto parts maker Gestamp Automoción’s North and South American operations for $391.4 million. The deal includes 15 of Gestamp’s plants in the United States, Mexico, Brazil, and Argentina. GA’s Americas Companies currently have a total of 15 plants in USA, Mexico, Brazil and Argentina. Subject to regulatory approval by relevant authorities, Mitsui will initially acquire newly issued shares of GA’s Americas Companies through a third party allocation of newly issued shares for a 15% stake and also provide convertible loans, for a total amount of investments and loans of approximately €300m. After the conversion, Mitsui will ultimately be holding up to 30% shares of GA’s Americas Companies. LVHS acted as Mexican counsel to Mitsui for this transaction; since early stages providing general advisory with respect to Mexican law and conducting a due diligence for identifying any red flags or issues potentially having an effect over the transaction, and up to the implementation of the acquisition structure and drafting and negotiation of the transaction documents. For purposes of the above and until after achievement of closing on the transaction, LVHS liaised with Mitsui’s team of advisors in the US, Brazil, Argentina and Spain. The LVHS team was led by Rogelio Lopez-Velarde Estrada, and primary assisted by Daniel E. Sanchez Morales and Luis Fernandez Lagunas.

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GROUPAMA PRIVATE EQUITY l French insurance company Groupama is selling its private equity operations to ACG Group. UBS worked as sole financial advisor to Groupama on: (i) the disposal of Groupama Private Equity (‘GPE’) to ACG. GPE, which was wholly-owned by Groupama, manages a series of Private Equity vehicles on behalf of Groupama and third-party institutional investors across three investment strategies, each with its own dedicated investment team and branding (Quartilium for fund-of-funds, ActoMezz for mezzanine investments and Acto Capital for small cap buyout transactions). And, in parallel : (ii-a) the secondary sale of Groupama’s anchor investments in the two funds managed by Acto Capital to Luxempart (part of “Le Foyer” Group) and Five Arrows (part of the Rothschild Group) (ii-b) the spin-off of the incumbent management team (Acto Capital) into a newly formed investment company backed by Luxempart, which will continue managing the Acto assets. Within UBS, the transaction was led by the Private Funds Group (Nicolas Lanel, Managing Director and Jasmine Hunet, Associate Director) in partnership with the Paris investment banking team (Xavier Paturel, Managing Director and Quentin Boucly, Associate Director).

Nicolas Lanel

They commented:

Indeed, LVHS has a long-standing working relationship with Mitsui, and have represented them in a wide array of transactions in the energy, infrastructure, automotive, railroad, water treatment, regulatory and administrative fields in Mexico, either for development of green field projects, joint ventures, M&As, or financing transactions.

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www.lvhs.com.mx rlopezv@lvhs.com.mx

Jasmine Hunet

Despite the complex nature of the two interrelated transactions, notably relating to the existence of three teams with their own identity as well as to various structuring issues generated by the secondary transaction and team spin-off, UBS successfully executed both operations simultaneously in order to safeguard Groupama’s LP interests post disposal of GPE, as well as those of third-party investors. In addition, this solution allows both GPE and the Acto Capital team to continue to develop the businesses they have built alongside new experienced and reputable partners.

UBS acted as sole financial advisor to Groupama on the structuring, negotiation and execution of both transactions. These two transactions further establish the strength of UBS’ Private Funds Group as a leading secondary adviser for complex and/or large transactions. Nicolas.lanel@ubs.com Jasmine.hunet@ubs.com

MITSUI ACQUIRES STAKE IN GESTAMP AUTOMOCION

GROUPAMA SELLS PRIVATE EQUITY DIVISION TO ACG GROUP

Advisors

Financial Adviser to the Vendor

HELVEA l Baader Bank has reached an agreement for a friendly takeover of Helvea Holding SA, headquartered in Geneva, thus continuing the expansion of its institutional equities platform. Helvea is the largest independent Swiss equities broker, with a focus on domestic equities and operations in Geneva, Zurich, London, New York, and Montreal. A corresponding agreement with the aim to take over 100% of the company’s outstanding share capital has been signed today in Unterschleissheim. By this acquisition Baader Bank is following up on its strategic objective of complementing its current spectrum of services.

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GESTAMP AUTOMOCION

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With this takeover, we are continuing the expansion of our institutional equities business explains Nico Baader, member of the Board of Managing Directors responsible for capital markets.

Following the merger, customers of both companies will benefit from expanded research coverage in Germany, Austria, and Switzerland. In the future, roughly 220 companies from the GAS region will be continuously covered by the team of analysts. The takeover is scheduled to be completed by the end of the first quarter of 2013, subject, inter alia, to approval by the supervisory authorities and other customary transactionrelated reservations. Lenz & Staehelin represented the majority shareholders of Helvea Holding SA. Lenz & Staehelin team was lead by David Ledermann, M&A partner. Lenz & Staehelin has been assisting Helvea Holding SA and Helvea on corporate law matter since the incorporation of David Ledermann Helvea Holding SA. Lenz & Staehelin prepared the share purchase agreement and assisted the management and Millennium AG in the subsequent negotiation. The negotiation rounds with the management, Millennium AG and Baader Bank and its Swiss counsel (Catrina Luchsinger Gähwiler of Froriep Rengli) were focused and deal oriented and resulted in a rapid and balanced agreement.

FIRENDLY TAKEOVER OF HELVEA Legal Adviser to the Vendor

Legal Adviser to the Purchaser

74 / February 2013

Legal Adviser to the Purchaser

Financial Due Diligence Provider

Financial Adviser to the Purchaser

Financial Due Diligence Provider

Legal Adviser to the Vendor

Virtual Data Room Provider

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world HÜCKELHOVEN

INTERTRUST

ISTRAT AND MARKET GATE

l Redefine International has completed the acquisition of a newly developed retail property in Hückelhoven, Germany. The Property was acquired through the Group’s jointly controlled entity RI Menora German Holdings S.a.r.l..

l Blackstone, the global buyout giant, is to acquire Intertrust, the Dutch tax consultancy business, for a reported value of approximately €675m.

l Publicis Groupe has acquired two different agencies in India: iStrat and Market Gate.

The Property was acquired directly from the developers and has an area of 30,276m(2) with 317 parking bays. The lettable area of the store is 11,371m(2.) The property was acquired at a net initial yield of 7.3%. The lease is linked to German CPI. The acquisition was funded by the proceeds from the Company’s recent capital raise and represents the fourth acquisition in joint venture with Menora Mivtachim Group, a leading Israeli pension and insurance company. The acquisition complements the existing discount retail market investments held in Germany and demonstrates Redefine International’s ability to purchase quality assets in the European market in a low interest rate environment. HauckSchuchardt assisted in the transaction with Henning Schuchardt-Weymann (tax advisor - tax) and Volker Szpak (attorney at law and tax advisor – legal) leading the team. www.hauckschuchardt.com

ACQUISITION OF RETAIL PROPERTY IN HÜCKELHOVEN, GERMANY

Banks including Bank of America Merrill Lynch, Deutsche Bank, Nomura and UniCredit are understood to be working on a debt package of between €400m and €500m to support the deal. Cinven, Pamplona, Carlyle and Goldman Sachs Private Equity were all previously said to be interested in the business.

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David De Buck, CEO of Intertrust, commented: Blackstone is one of the largest private equity firms in the world with investments spanning a wide range of industries and continents in businesses large and small. The firm’s strong track record and continuous commitment to achieving the best long-term outcomes for businesses and investors will prove extremely valuable to Intertrust. “Many opportunities for expansion of our service offering are foreseen, but first and foremost, our focus remains on continuing to deliver the highest quality services to you and your clients, while always striving to exceed your expectations, as we have done for over 60 years. IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk. IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents.

BLACKSTONE TO ACQUIRE INTERTRUST Vendor Due Diligence Provider & Tax Adviser to the Vendor

Tax and Legal Adviser

MarketGate on the other hand was founded in 2005 and delivers a range of services such as business growth planning, marketing strategy, brand positioning, portfolio strategy, brand architecture development and marketing skills development. The agency has 7 consulting experts who aim to rejuvenate brands and power their growth by deploying marking processes throughout their clients’ organisation. As a part of the acquisition Publicis Groupe will also acquire MarketGate Dimensions, a subsidiary providing research based solution to business, marketing and brand issues with offices in Mumbai Delhi and Bangalore. After the acquisition a couple of changes have been announced. iStrat will be rebranded to Publicis iStrat and will open as a unit within Publicis Modem, Publicis Worldwide’s global digital network. Both companies’ leaderships will report to Nakul Chopra, CEO South Asia for Publicis Worldwide. Bharucha & Partners represented the selling shareholders, Shripad Nadkarni and Sharda Agarwal and were involved in negotiating the transaction documents, including the Share Purchase and Shareholders’ Agreement. The Bharucha & Partners team comprised of Alka Bharucha, Senior Partner, Natasha Mahajan, Senior Associate and Srinivas Anirudh, Associate.

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Alka Bharucha

Alka Bharucha commented: A unique aspect of the transaction was that the selling shareholders would continue to lead the two companies. The challenge was therefore, to ensure adequate protection of the rights of the selling shareholders, in their capacity as shareholders as well as employees, while aligning the management and Natasha Mahajan operation of the two companies with Publicis Groupe’s requirements.

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The Property is leased to OBI AG on a 15 year lease. OBI AG is Germany’s leading DIY chain with over 580 stores throughout Europe.

The sale price is understood to be about €675m based on nine-times the company’s gross operating profit.

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RI Menora acquired the shares in the property owning company, ITB FMZ Hückelhoven BV & Co. KG for €3.7m. The Property has a value of €11.6m and has a senior debt facility of €7.9m secured against it from Bayerische Landesbank. The senior debt facility has a term of 5 years and bears interest at a rate of 1.5% above Euribor. An interest rate fix is currently being negotiated.

The company, which provides tax advice to large companies, was sold by Dutch private equity firm Waterland, which bought Intertrust in 2009 for about €210m.

iStrat was founded in 2003 and it is an integrated digital agency which provides solutions across all forms of digital marketing. The agency headquarter is based in Delhi and employs a team of 50 , providing the full range of digital communication services including e-commerce store fronts, search engine optimisation, social media and rich media .

PUBLICIS ACQUIRES ISTRAT AND MARKETGATE IN INDIA Legal Advisers to the Vendor

HauckSchuchardt Environmental Due Diligence Provider & Technical DD

Financial Due Diligence Provider Legal Adviser to the Purchaser

Insurance Due Diligence Provider

Financial Due Diligence Provider Property Valuer

AI Appollo ACQUISITION INTERNATIONAL

Virtual Data Room Provider

February 2013 /

DEAL DIARY:

M&A from around the world KISTA GALLERIA

iWelcome is created by IAM experts in Europe. Its seasoned engineers know from experience the challenges and difficulties of implementing IAM within corporates and large organisations. Therefore the iWelcome platform is architected bearing the complexity and the specific requirements of these customers in mind. In order to comply with securityand privacy regulations, iWelcome is ISO 27001 certified and hosted in the Netherlands.

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AKD assisted in the transaction with the team being led by Nathalie van Woerkom. She is a lawyer and partner of Nathalie van Woerkom the corporate / M&A department of AKD in Rotterdam. Nathalie said:

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AKD represented Newion, together with Filsa Capital the investors of iWelcome. Nathalie has a longstanding relationship with Newion. She assisted in various deals including Service2Media, IDES, Vector Fabrics, Mirror42, Lightweight and Collibra.

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Marcel Kokkeel, Citycon Oyj’s CEO, commented: This strategic acquisition offers us a unique opportunity to increase our relevance in the eyes of international retailers, increase the quality of our portfolio and at the same time substantially strengthen our position and market share in Sweden where we already have nine shopping centres. The acquisition will help us balance our portfolio geographically, as Sweden’s share increases from approx. 25% to 40% in regards to net rental income.

Carl Wingmark

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IWELCOME SECURES SERIES A FUNDING

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Peter Lindstrand

www.pwc.com WSP participated in the transaction as Technical and Environmental advisors, which also included M&E, structural and fire safety assessments. The team was lead by Johnny Wahlström, Technical Director at WSP Real Estate

Kajsa Boqvist

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PwC Management Consulting provided both commercial and operations due diligence support to Onex, the buyer. We forecasted the market size and growth for Automotive injection molding machines in Europe based on interviews with major European Tier 1 molders and PwC’s deep plastics machine and tool maker industry expertise. PwC’s operations due diligence support focused on reviewing and assessing KraussMaffei’s historical performance and management’s plan for operations processes, assets and cost in R&D/ Engineering, Manufacturing, Supply Chain/ Procurement and Sales/ Service. Leading the team at PwC was Dietmar Ostermann, Principal, Global Automotive Advisory Leader. He commented:

www.wspgroup.se/realestate

ACQUISITION OF KISTA GALLERIA

Financial and Tax Adviser

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We were representing the buyer, Onex, whom we have a long-standing working relationship with.

They commented: PwC represented Citycon and CPPIB on the buyer side of the transaction. PwC has a long working relationship with both Citycon and CPPIB on a global level.

“The process actually proceeded very successfully. All parties had a flexible and positive approach and were prepared to take significant steps towards each other. nvanwoerkom@akd.nl

PwC provided Financial and Tax Due Diligence as well as structure and deal support. The financial team was led by Carl Wingmark, Director. The tax team was led by Peter Lindstrand, Partner and the VAT team was led by Kajsa Boqvist, Partner.

l Onex Corporation (“Onex”) (TSX: OCX) has completed the acquisition of KraussMaffei Group, a leading manufacturer of plastic and rubber processing equipment, for €568 million. Onex Partners III invested $353 million, of which Onex’ share is approximately $89 million as a limited partner in the Fund.

PwC uses a proven approach to due diligence that allows us to quickly identify the critical revenue and cost levers to better understand and test the core value and EBITDA drivers. Further, PwC brings a global firm with deep functional and industry expertise to our deal support and due diligence engagements. Dietmar Ostermann

dietmar.ostermann@us.pwc.com www.pwc.com

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Danny de Vreeze, CEO of iWelcome, commented:

Kista Galleria has 90,000 square meters of gross leasable area (GLA), including 60,000 square meters of retail space and the remaining 30,000 square meters comprising a hotel, student housing, healthcare premises and municipal services. Under the terms of the transaction, the shopping centre will be owned 50 per cent by Citycon and 50 per cent by CPPIB.

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iWelcome provides a cloud based Identity and Access management service that allows organisations to securely and efficiently manage employee, partner and customer credentials and access rights across internal, external and cloud applications. The iWelcome platform is architected as a generic cloud service, yet accommodates the extensive security and integration requirements of enterprise customers.

l Citycon Oyj and the Canada Pension Plan Investment Board are to acquire the Kista Galleria shopping centre in Stockholm for approx €526m from DNB Livsforsikring ASA, part of DNB Group, the largest financial group in Norway.

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l iWelcome, the European Identity Service provider has closed a Series A investment round with new Investors, Newion Investments and Filsa Capital joining founder Cloud Ventures. The funding will be used to boost development capability, accelerate growth in the Netherlands and fuel European expansion.

KRAUSSMAFFEI

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iWELCOME

All amounts in U.S. dollars unless otherwise stated

ONEX COMPLETES ACQUISITION OF KRAUSSMAFFEI GROUP Operations and Commercial Due Diligence

Legal Adviser to the Equity Provider

Other Advisers

Technical & Environmental DD

Legal Adviser to the Vendor Property Valuer

76 / February 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world LA FÉE MARABOUTÉE

LATEXX

This transaction reaffirms Silverfleet Capital’s expertise in the retail sector, and interest in well established brands that have the potential to grow strongly both within Europe and worldwide. Founded in 1996 in Roanne, which is located west of Lyon, by its founder and current head designer, Jean-Pierre Braillard, La Fée Maraboutée is a women’s fashion brand that is distributed by c. 1,700 French and international wholesale partners, as well as a store network of 90 outlets including 35 own and affiliate stores and 55 franchise stores (37 of which are in China). Approximately 35% of total sales are to customers based outside France.

l Semperit AG Holding informs that the Securities Commission Malaysia has consented to the contents of the offer document for the voluntary conditional offer for Latexx Partners Berhad.

l The UK’s leading engineering support services company, Babcock International Group PLC, has acquired LGE Process from The Weir Group PLC for an enterprise value of £23m.

Semperit AG Holding informs that the Securities Commission Malaysia has consented to the contents of the offer document for the voluntary conditional offer for Latexx Partners Berhad. The offer is being made via Semperit Investments Asia Pte Ltd, a wholly-owned subsidiary of Semperit.

LGE, based in Edinburgh, designs and builds plants for the processing, storage and handling of liquid gases and is a market leader in the supply of these solutions to the marine and onshore liquid gas sectors.

The voluntary conditional offer is still subject to anti-trust clearance in Austria and Germany, as well as Semperit Investments Asia Pte Ltd having received valid acceptances, which when taken together with the shares already acquired, held, or entitled to be acquired or held by it, of more than 50% of the issued shares of Latexx Partners.

La Fée Maraboutée’s high quality products, which have a contemporary style and strong individual identity, are sourced almost exclusively from Italy. Both French and international customers are also offered a broad range of products from which to make their selection. Brand sales are approximately €100m at retail.

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Maïré Deslandes, joint head of Silverfleet Capital’s Paris office who led the investment alongside her colleague, Alexandre Lefebvre, said: We are very impressed by the La Fée Maraboutée brand and collections which have an elegant, timeless appeal while also being both good quality and affordable, features which mean that the company has a strong and loyal customer base both in France and internationally.

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Advention Business Partners represented the buyer, Silverfleet Capital and lead the strategic due diligence. The team was led by Alban Neveux, the Group Managing Director of Advention Business Partners, along with Marion Duchein, Vice President. Alban Neveux commented: In this deal two particular challenges had to be faced and properly assessed: First, the international dimension of La Fée Maraboutée’s market environment which led to conducting investigations in France as well as in China through our local office, and second the specific business model of La Fée Maraboutée.

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Dr. Knut Unger, partner of Luther LLP, and his team (Thi Thuy Trang Phan, Alexander Bohusch) acted as advisors for Semperit AG during the take-over of Latexx Partners Berhad. Dr. Knut Unger

Dr. Knut Unger has been advising Semperit AG on its investments in Southeast Asia for more than ten years. During the take-over of Latexx Partners Berhad, Luther LLP was responsible for the establishment of the Singapore holding company and various other legal aspects of the transaction. www.luther-lawfirm.com

BUYOUT OF LA FÉE MARABOUTÉE

SEMPERIT AG ACQUISITION OF LATEXX PARTNERS

Strategic Due Diligence

Singapore related matters, Acquisition Vehicles

LGE will be combined with Babcock’s Design Services business unit, within the Marine and Technology division. DS operates in both the naval and commercial marine markets, including the oil and gas market, and has built an excellent reputation with its key customers for developing innovative and cost effective design and conversion solutions for a range of marine vessels. The combined businesses will create a medium-sized, specialist energy and marine technology business delivering a wider offering including the design and installation of mechanical, electrical and chemical process equipment for ships, oil and gas platforms and onshore support facilities. In the financial year ended 30 December 2011 LGE generated gross revenue of £26.3 million and operating profits of £3m. The acquisition was completed on 28 December 2012. Peter Rogers, Chief Executive of Babcock, commented:

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l Silverfleet Capital, the European private equity firm has acquired La Fée Maraboutée, a French wholesaler and retailer of women’s fashion for €65m. The founder of the company and its jointCEOs are also making a significant investment alongside Silverfleet Capital.

LGE

The acquisition of LGE and its combination with our existing expertise in Design Services will create a strong business, well positioned to build on its current positions and develop into new commercial marine markets, particularly within the oil and gas market.

ACQUISITION OF LGE PROCESS

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February 2013 /

DEAL DIARY:

M&A from around the world MONITOR

l Ad agency M&C Saatchi has acquired a majority 60% stake in UK-based talent management agency Merlin Elite, in a deal worth an estimated £1.5m. Launched in 2003, Merlin Elite represents a host of sports and entertainment stars including former England cricketer and professional boxer Andrew Flintoff, former England footballer Jamie Redknapp, former supermodel and actress Jodie Kidd, and British Olympic athlete Denise Lewis. Through the deal, Merlin Elite will become M&C Saatchi Merlin and sit within M&C Saatchi Sport & Entertainment. The agency’s founder Richard Thompson will remain as chairman and report into M&C Saatchi Sport & Entertainment global chief executive Steve Martin and M&C Saatchi UK head Lisa Thomas.

This is not about selling Merlin’s talent portfolio back to our existing clients,” says Martin. “It is a pioneering business model and the combination of creativity with strategic personal management will really freshen up a part of the industry that has been doing the same thing for a long time.

Bray & Krais represented the seller, Richard Thompson. Both Richard Thompson and Merlin Elite, along with various of its sport and entertainment client base, have been long-standing clients of the firm in relation to both corporate and commercial matters. The team was led by Ben Gisbey, a senior corporate associate at the firm, with partner Mark Krais leading on commercial matters and consultant Robin Davis on employment and property matters. www.brayandkrais.com 60% STAKE IN MERLIN ELITE ACQUIRED

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Deloitte in Switzerland is one of the fastest growing consulting practices, one of the top three consulting providers and the largest consulting practice of the big 4. Nick Davies, managing partner of consulting at Deloitte AG in Switzerland, explains:

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The acquisition of Monitor further enhances our ability to serve clients from strategy to implementation – helping them solve their most critical challenges and capitalise on opportunities in a global economy. Our ability to implement the advice we provide has always been a differentiator; however, this acquisition will transform our strategy consultancy practice on a global scale and further accelerate our impact in Switzerland. The growing business demands placed on our clients mean their needs for strategic support are increasing. Together, Monitor and Deloitte will be well-positioned to provide the highest quality advice that we are able to implement quickly while also providing them with measurable results.

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Bansi Nagji, president of Monitor, commented: We are hugely motivated by the opportunity to serve clients with our newly combined strengths. Together we are an effective force with distinctive capabilities, and are deeply committed to helping our clients create new value and achieve transformational growth. We will collaborate closely with senior executives to help ensure they have the confidence to make bold, well-informed choices and take timely and decisive action, by providing fresh, actionable analysis, leading edge methods and deep hands-on implementation guidance.

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Thomas commented: With the quality of people I have met, to the level of creativity and professionalism, I have no doubt this merger of talents will help create a new breed of Management Company - the first of its kind anywhere in the world.

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The transaction combines Monitor’s strong brand and leadership, as well as exceptional talent, with Deloitte’s extensive reach, access, and resources to consolidate Deloitte’s position as a worldwide leader in strategy consulting. Monitor’s talent and assets will combine with Deloitte’s consulting strategy service lines, resulting in a new global presence that will redefine our industry.

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l Monitor, one of the world’s leading strategy consulting firms, has been acquired by Deloitte.

PACIFIC ISLAND RESTAURANTS l Leading consumer-focused private equity firm, Brentwood Associates, has sold Pacific Island Restaurants, Inc to Nimes Capital, LLC. PIR is the sole franchisee of Pizza Hut and Taco Bell throughout Hawaii, Guam and Saipan. Since acquiring PIR in 2004, Brentwood has worked with the PIR management team to help them build upon their very strong market positions in both brands. The Company implemented one of the most successful call centres in the Pizza Hut system, while also opening six new restaurants and acquiring six restaurants. They have been able to capitalize on the strength of the Taco Bell and Pizza Hut brands to drive what has been a very successful investment.

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MERLIN ELITE

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Anthony Choe, Partner at Brentwood, commented, The PIR management team under Henry Katsuda ‘s leadership has done a tremendous job executing on the company’s growth initiatives. We are confident the company will continue to thrive under new ownership. McGuireWoods LLP represented Bank of America, the administrative agent for a group of lenders who financed the acquisition and provided credit for operations of the target companies.

Manley Roberts, a partner in the firm, led the McGuireWoods team. The financing transaction went remarkably smoothly, given the tight schedule to close in 2012. The smooth closing was a result of Bank of America’s long experience with Pacific Islands Restaurants and the excellent working relationships that developed between Manley Roberts Bank of America and Nimes Capital, and among the law firms on the financing transaction (McGuireWoods, Perkins Coie, and Chun Kerr). IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk. IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents.

DELOITTE ACQUIRES MONITOR

SALE OF PACIFIC ISLAND RESTAURANTS

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78 / February 2013

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DEAL DIARY:

M&A from around the world POXEL

PROXIAD

l Poxel SA has raised €13m in a Series B funding round. The financing was led by Edmond de Rothschild Investment Partners and included all existing investors.

l Gimv, a European investment company, has invested in ProxiAD, a French software engineering services company specialising in new object technologies and business intelligence systems.

A significant part of the funds will be used to confirm efficacy data of the company’s lead program, Imeglimin, a novel anti-diabetic agent. Imeglimin is the first in a new Tetrahydrotriazine-containing class of oral anti-diabetics, the Glimins. It has already demonstrated efficacy and safety in clinical proof-of-concept trials. Imeglimin is being developed through phase II trials as a monotherapy and as an add-on therapy to the main anti-diabetic agents, starting with metformin and sitagliptin.

LGE, based in Edinburgh, designs and builds plants for the processing, storage and handling of liquid The investment means Gimv has become a key shareholder in the business, alongside Eric Rozanès and Stéphane Lévy, both well-known professionals in the information technology consulting sector.

Imeglimin has a mitochondrian-based mechanism of action, targeting the respiratory chain. Through this new mechanism, Imeglimin acts on the three key defects of Type 2 diabetes, inhibiting hepatic gluconeogenesis, increasing muscle glucose uptake and restoring normal insulin secretion. Poxel has further promising anti-diabetic programs in early development, including a new class of direct AMPK activator. Poxel was founded as spin off from Merck Serono and in 2010 raised €16m through a Series A round. IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk. IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents.

POXEL RAISES €13M

ProxiAD, founded in 1997, is a software engineering services company specialising in new object technologies and business intelligence and is particularly well-established in the Retail banking/Insurance and Distribution sectors. The company recorded a turnover of EUR 31 million in 2012. It employs more than 500 people and boasts one of the best returns in the sector. Moreover, ProxiAD offers a major competitive advantage with its service centres in the North and West regions of France and in Bulgaria (120 people). This allows it to offer externalised technical support.

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Arnaud Leclercq, Head of Gimv France, commented:

Through its Smart Industries Platform, Gimv aims to invest in those Growth companies which add value through enabling productivity and worldclass intelligence to innovative manufacturing and smart services. The ProxiAD Group is a highquality company which, under the leadership of its founders, has progressed exceptionally well since it was founded. Gimv is delighted to offer its support to Stéphane Lévy and Eric Rozanès, two wellknown professionals in the information technology services industry in France, in their efforts to renew and reinvigorate the ProxiAD group.

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Encouraged by recent positive data from 2 phase II combination trials that showed significant benefit for patients, the company now plans to strengthen Imeglimin’s efficacy profile as a monotherapy treatment in a large six-month trial involving 400 diabetic patients.

PUBECO

D’Alverny Avocats represented management with a team led by partner Hubert d’Alverny, assisted by associates Véronique Mervoyer on corporate and contractual aspects and Célia Dufour on labour matters, and independent attorney Eric Bonin advising on tax issues.

l Pubeco, which specialise in helping retailers digitalize paper advertss and catalogs, has raised €1.25m from French VC ISAI. Since its founding in 2008, by Romain Sarels and Yannick Lalleau, Orchies-based (in Northern France) Pubeco has grown steadily to reach a solid 700k consumer subscriptions and more than 100 retail outlets. With the ISAI capital injection, the company plans to accelerate its growth, double the size of its team, and triple its number of subscribers in the next two years. Having ISAI as an investor, which has undergone several investments in the social shopping and shopping promo space, is definitely a big win Pubeco. Having the backing of a good VC that has experience in the sector will be a big advantage for them as they push to accelerate their growth. Pubeco has been very successful in getting retailers on their platform. But, getting 2.1 million consumers to, at the very least, occasionally go on their platform to scroll through the various promos available will be a very difficult proposition. In addition, although their platform eases the promo process and reduces costs for the retailer, it doesn’t necessarily make the whole process of discovering relevant promos that are out there easier for the consumer. Even if consumers signup and specify some preferences on their platform, many retailers (not all) still present offers in the same format as they do. Given what they’ve achieved thus far coupled with the positive trends in this space, it’s hard to deny that Pubeco definitely looks promising. However, in addition to driving adhesion to their platform, if they haven’t already, perhaps they should consider investing in improving the user experience to make sure that a good chunk of those new joiners actually become active users. Aston, which has a long-term relationship with Pubeco, assisted in the transaction, with partner Olivier Sanviti leading the team.

GIMV ACQUIRES PROXIAD GROUP

PUBECO RAISES €1.25M

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2CFinance Hamelin February 2013 /

DEAL DIARY:

M&A from around the world REXAM

SCOLOCATE

l Albéa, an affiliate of Sun European Partners LLP, has completed the acquisition of Rexam Personal Care, Cosmetic division, a leading producer of dispensing systems and make up packaging for the Cosmetic and Personal Care markets.

l Scotland’s leading independent co-location provider, ScoLocate, has been acquired by managed cloud, hosting and connectivity expert, Pulsant. The move boosts Pulsant’s operational scale and presence in Scotland and is part of a continued strategic growth programme to become one of the UK’s leading data centre services providers.

Cushman & Wakefield’s global real estate advisory service, Valuation & Advisory, assisted Sun / Twist with its evaluation of its bid for the Company through the provision of real estate due diligence and opinions of Market Value with Vacant Possession of the Company’s properties in China, France, Indonesia, Netherlands and USA. C&W delivered its service centrally through its EMEA region HQ in London, UK, while drawing upon the market expertise of its local professionals in each target country. Cushman & Wakefield’s team was led by Stuart Logan, Partner, Cushman & Wakefield LLP, Valuation & Advisory, based in London, UK.

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He commented: The particular challenges for real estate were i) geographic spread, ii) market opacity and iii) timescale. Cushman & Wakefield overcame these through its extensive office network matching the global distribution of the properties, and the accumulation of its wealth of market knowledge through Stuart Logan its active participation in these markets. With resource already in place, Cushman & Wakefield can deliver product critical to time sensitive transactions.

All of ScoLocate’s existing 25 staff will join Pulsant’s 150-strong team of highly-skilled data centre services personnel, further enhancing the delivery of its managed hosting, cloud infrastructure, managed network and co-location services. ScoLocate’s data centre in Edinburgh provides 75,000 sq ft of space and hosts over 30 telecommunication carriers, making it one of the most connected commercially available data centres outside the M25. The acquisition represents a significant step in the continued development of Pulsant. The combined business will have 240,000 sq ft of data centre space, a total rack capacity in excess of 4,000, and will service over 3,000 public and private sector clients directly, and many thousands more indirectly.

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Mark Howling, CEO of Pulsant, commented:

SINNLEFFERS l Wöhrl, a Nuremberg fashion store chain, has acquired its competitors SinnLeffers. SinnLeffers operates 22 branches, with just under 2000 employees, and generates revenue of €300m per annum. The company has been owned by financial investor Industry Holding DIH. The investment bank Viscardi oversaw the transaction. The group includes 37 fashion houses, which are located mainly in Bavaria and Eastern Germany. Formerly, SinnLeffers belonged to KarstadtQuelle. In 2008 the chain went through an insolvency restructuring plan and since the branch network has thinned considerably. BTU Simon assisted in the transaction. The team was led by partner, H. Eberhard Simon. He commented:

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We represent the purchaser in this deal, whereby the purchaser, a SPC, is held by the family Wöhrl, owner of the Wöhrl-Group. “Beside the normal difficult negoti-

H. Eberhard Simon ations with respect to the scope of

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ScoLocate is a fantastic acquisition for Pulsant – and a great fit in terms of culture, customer-centric approach and facilities. Not only does it support our business growth in Scotland, it also adds to our UK data centre presence by adding outstanding network connectivity and additional capacity. At the same time, it provides us with a strong team of like-minded, highly skilled individuals who are experts in supporting data centre services. This moves us further towards our goal of being the data centre services partner of choice for UK businesses.

the representations and warranties we were faced with the review of the structure and details of the various lease agreements during prior to the acquisition.

ALBÉA ACQUIRES REXAM PERSONAL CARE

SCOLOCATE ACQUIRED BY PULSANT

WÖHRL ACQUIRES SINNLEFFERS

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IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents.

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IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk.

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“The entrepreneurial family Gerhard Wöhrl, sole shareholder of the retail chain Wöhrl with its main seat in Nuremberg intends to acquire the SinnLeffers-Group with its seat in Hagen. The SinnLeffers-Group operates overall 22 clothing stores in Germany and generates with nearly 2.000 employees a turnover of EUR 300 Mio. The Wöhrl-Group generates with 37 clothing stores in South- and East-Germany a turnover of around EUR 350 Mio.

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www.cushmanwakefield.com stuart.logan@eur.cushwake.com

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80 / February 2013

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DEAL DIARY:

M&A from around the world STATOIL OSLO

STX OSV

UNITUS SEED FUND

l Madison International Realty (Madison), a New York based investment company, has completed the acquisition of Statoil complex in Oslo, Norway, for NOK 392m.

l Fincantieri, an Italian shipbuilder, has acquired a 50.75% stake in offshore support vessel specialist STX OSV through its wholly owned subsidiary, Fincantieri Oil & Gas.

l Unitus Seed Fund has secured more than $8m of investment for its seed-stage venture capital fund focused on accelerating “BoP startups” – startups serving low-income consumers – in India.

The transaction represents the second largest single asset transaction in the Norwegian market in 2012.

Norway-based STX OSV, which is listed on the Singapore Stock Exchange, was bought from STX Europe, for a price of SG$1.22 per share, totalling approximately SG$730m (€455m).

USF invests in for-profit scalable companies that will provide economic self-reliance, education, and basic necessities to millions of low-income people living at the base of the economic pyramid.

In compliance with the rules of the Singapore Code on takeovers and mergers, Fincantieri Oil & Gas has also announced its intention to make a mandatory unconditional cash offer for the company’s remaining shares for the same price.

Dave Richards, Managing Partner of Unitus Seed Fund, commented:

Oslo is one of the fastest growing and wealthiest major cities in Western Europe, and the Fornebu sub-market is the established corporate headquarter location in Oslo attracting domestic and international companies such as Accenture, Telenor, Aker Solutions, Norwegian Airshuttle, Evry, Alcatel and Hewlett Packard. Derek Jacobson, Managing Director at Madison International Realty in New York, commented:

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Madison is an ideal partner for owners and developers seeking to monetize equity embedded in their assets.

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“As real estate fundamentals in core markets continue to improve, owners, especially developers seek creative ways to extract capital from their existing portfolios in order to pursue other opportunities.

MADISON ACQUIRES STATOIL OSLO FOR €52.5M

Fincantieri must keep its offer for a minimum of 28 days from the offer document dispatch date, which is expected to occur within the next two or three weeks. The acquisition was financed mainly by Fincantieri’s internal resources and with a syndicate loan provided by a group of banks. The total value of the transaction, including both the acquisition of the 50.75% stake and the mandatory cash offer, is expected to amount to around SG$1,450m (€900m). Fincantieri says that the acquisition of STX OSV, which employs around 9,200 workers at 10 shipyards around the world, will double its size to become the fifth largest shipbuilder in the world, and the only western producer capable of competing with the Asian giants. IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk. IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents.

FINCANTIERI ACQUIRES STX OSV

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We are delighted that leading investors share Unitus Seed Fund’s conviction that serving low-income customers with free-market principles and business discipline can sustainably improve the lives of those living on under $4/day. “Our investees will do this by bringing products, services and income-generating enterprises directly to their communities. Tomsen Riley LLP acted as legal counsel to Unitus Seed Partners (USP), providing initial structuring and regulatory advice regarding the Fund, advising USP regarding appropriate Fund terms in the current capital raising environment, drafting disclosure and legal documents, negotiating with investors on behalf of USP, coordinating input from legal counsel in non-U.S. jurisdictions, managing the Fund’s closing and making post-closing regulatory filings on behalf of the Fund and USP. David Riley, C0-Founder and Managing Partner, led the team and commented:

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The transaction involved complex tax structuring and other structuring issues, due to the multi-jurisdictional nature of the Fund (U.S., David Riley Cayman Islands, Mauritius, India), its management team and its investment program, as well as the relatively large amount of capital raised from strategic investors.

USF SECURES FUNDING

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Developed by the internationally renowned architects, a-lab, the project won the “Future projects - Commercial” category prize at the World Architecture Festival in 2009 as well as the “Commercial Sector” category prize at the World Architecture News Awards in December 2012. As of October 2012, the property is fully occupied by the tenant and is in full operation.

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The nine storey, 65,768 m² Class A ‘headquarter style’ office building including 846 parking spaces is located in the Fornebu sub-market of Oslo, Norway. The property is 100% and long-term (15 years) leased to Statoil ASA.

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February 2013 /

DEAL DIARY:

M&A from around the world VALVE TECH ENGINEERING

WINDER POWER

l EnerMech has completed the first of five acquisitions it has planned for the next six months with the acquisition of Melbourne-based Valve Tech Engineering in a multi-million dollar deal.

l Winder Power announces that it has completed a management buy-out, backed by Enterprise Ventures and Bank of Ireland UK, which ideally positions it to take advantage of the growth opportunities arising in the key utility and industrial sectors.

Established over 20 years ago, Valve Tech is a well respected provider of servicing, engineering, modification, testing and supply of valves to the oil and gas, power generation, petrochemical and refining industries throughout Australia. Valve Tech founder and managing director, Chris Tabone, will take a new position in the enlarged business, heading up EnerMech’s valve offering in Australia.

BHP Corporate Finance advisors and dealmakers from Yorkshire participated in the deal with Hamish Morrison and Andy Haigh leading the team.

Hamish Morrison

The deal represents a major expansion of EnerMech’s global valve services, procurement and manufacturing network and complements its existing valves supplies and servicing facility in Perth, Western Australia. EnerMech managing director, Doug Duguid, revealed the company would invest £10 million (AUD $15 million) in its Australian business over the next two years and plans to open bases in Gladstone, Brisbane and Karratha to better service oil and gas, power industry and mining clients.

The Insurance Due Diligence Review and Report were undertaken by Peter Warburton and Gavin Ruben. Peter and Gavin are Board Directors at Bridge Insurance Brokers and lead the M&A team at their Manchester and London offices. Peter Warburton

EnerMech views its valves business line as a vital element of its growth strategy in Australia, where it plans to more than double its workforce to 180 in the next 12 months.

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“Our valves business line is key to EnerMech’s expansion plans in the Australian energy market and we are really pleased to be working with Chris Tabone and his team. The combined strengths of both businesses give us a very strong platform to become a major player in the valves supply, repair and overhaul market and there are many benefits for both parties. ENERMECH ACQUIRES VALVE TECH ENGINEERING

Bridge Insurance Brokers were instructed by Enterprise Ventures to undertake the insurance due diligence on their behalf. With the deal set to close Bridge were able to complete the Insurance Due Diligence including a meeting with local management in 10 working days.

Mr Duguid said:

Valve Tech is an excellent strategic fit for our business and gives us significant maintenance and repair capabilities in addition to our existing offering in the region. It strengthens our geographic reach in eastern Australia and introduces EnerMech to Valve Tech’s broad client portfolio.

Irwin assisted in the transaction with Paul Johnson (Partner in the Corporate department) leading the team. Irwin acted as advisors to YFM Equity Partners and three individual Vendors. We have previously advised YFM.

“The team at Pannone LLP acted for Bank of Ireland (UK) PLC on this transaction. The team was led by Rob Fawke. Rob is head of the Corporate Banking & Finance group at Pannone LLP. The team comprised Rob, Richard Cowan (Corporate Banking) and Tom Hall (Corporate Finance). The bank provided a term loan facility to Utopia Newco Limited to assist in funding the transaction, together with invoice finance and working capital facilities to Winder Power Limited. Gavin Ruben

We have a long standing relationship with the bank, and have worked with David Chell and the bank on numerous leveraged finance transactions over the last 12 months, and many years. We were delighted to be involved in the transaction, and to assist the bank in providing funding to support the ambitious growth plans of Enterprise Ventures and an excellent management team, involved in an innovative and excellent UK manufacturing and export business.”

WINDER POWER COMPLETES MBO Risk & Insurance Due Diligence Provider

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SEFRIOUI LAW FIRM 72 boulevard de Courcelles, 75017 Paris, France

contact@cabinetsefrioui.com

+33 1 47 66 11 00

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Sefrioui Law Firm has been a respected Paris-based arbitration practice from its beginnings in 1969. We have acted in dozens of international commercial arbitrations and developed a very specific expertise in the fields of construction, aviation, maritime law, investments and project finance.

DEEP & FAR

Attorneys-at-Law 13th F1., No. 27, Sec. 3, Chung San N. Rd. Taipei 104, Taiwan, R.O.C. Tel: +886-2-2585-6688 Fax: +886-2-25989900/25978989 email@deepnfar.com.tw Deep & Far was founded in 1992 and is one of the largest law firms in this country. The firm is presently focused on the practice in separate or in combination of all aspects of intellectual property rights (IPRs) including patents, trademarks, copyrights, trade secrets, unfair competition, and/or licensing, counseling, litigation and/or transaction thereof. Since this firm edges itself into the IPRs field, the firm quickly comes to fame. As an illustration, this firm often is one of the largest sources from which foreign filing orders originate. The fascinating rise of this firm begins from the founder of Deep & Far attorneys-at-law, C. F. Tsai, who is the one first patent practitioner in this country who both has technological and law backgrounds and is qualified as a local attorney-at-law. The patent attorneys and patent engineers in this firm normally hold outstanding and advanced degrees and are generally graduated from the top five universities in this country and/or the university in the US. Our prominent staffs are dedicated to provide the best quality service in IPRs. As a proof, about one half of top 100 incorporations in this country have experiences of seeking patented their techniques, but more than one fifth of the top 100 incorporations are/were clients of this firm. Furthermore, Hi-Tech companies in the science-based industrial park located at Hsin Chu play an important role in booming the economy of this country. About one half of which have experiences in seeking patented their techniques, and out of more than 60% of the patent-experienced companies in that park have ever entrusted their IPR works to this firm. We have experienced in seeking IPR-protections for our clients in more than 100 territories all over the world. We have thousands of IPR-cases respectively prosecuted before official Patent Offices of major industrialized countries. This firm not only is the most competent in IPR-related matters in this country but also is very familiar with IPR-practices in major industrialized countries. As a matter of fact, this firm oftentimes tries and makes precedents of new claim-drafting styles. While we might have become wonderfully famed locally with remarkable appreciation and respects, we would like to extend our services for internationalized or quality service-requiring foreign conglomerated giants, corporations or individuals. We strongly believe that we will win more applause from clients all over the world.