Acquisition international April 2013 by AI Global Media

April 2013 /

IN THIS ISSUE/

2013 Q1 REVIEW:

RESOLVING DISPUTES IN THE FRANCHISE INDUSTRY:

Acquisition International’s quarterly review series.

An examination of the key issues in franchise relationships.

CORPORATE IMMIGRATION: ISSUES AND CHALLENGES IN THE CURRENT ECONOMY:

A selection of corporate immigration experts discuss the main current challenges.

2013 INTERNATIONAL START-UP ADVISORY AWARDS / 91

DEALS OF THE MONTH

— Pluralsight Receives $27.5 Million in Funding From Insight Venture Partners. / 18 — Osprey Capital Backs Indexx Markets. / 21 www. ACQUISITION-INTL .com

Cross-Border Business Crime: A Major Target of Enforcement — A discussion on the inevitable development of international legal enforcement, led by Jacob S. Frenkel at Shulman, Rogers, Gandal, Pordy & Ecker, P.A.. / 22

CONTENTS: April 2013

Editors Comment Welcome to the April issue of Acquisition International.

CONTENTS — April 2013

This month sees the release of the highly anticipated International Start-up Advisory Awards 2013 winner’s list, highlighting the best of the best in the advisory profession. We would like to thank all those who voted and to offer our sincere congratulations to the winners – please turn to page 91 to read more. In our Deals of the Month we highlight two significant transactions: Pluralsight’s $27.5 million funding from Insight Venture Partners (page 18); and Osprey Capital’s investment in iNDEXX Markets (page 21). In Cross-Border Business Crime: A Major Target of Enforcement, we discuss the inevitable development of international legal enforcement as a response to globalised markets and the increasing pressure to confront international fraud and money laundering. The report is led by Jacob S. Frenkel at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., and begins at page 22. Acquisition International’s 2013 Q1 Review begins this month, with commentary on the year’s first quarter from experts around the world. AI’s quarterly features have become something of a reference point for senior executives across the globe, who look to our publication at the end of each quarter in order to gain the expert opinions of the major players of the last quarter – turn to page 70 to learn more. This month’s wide-ranging features also include a comprehensive review of Franchise Industry Disputes (page 43); a detailed look at Corporate Immigration (page 48); and an in-depth examination of Cross-Border M&A (page 64). 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-int

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ON THE COVER - DEAL OF THE MONTH – PLURALSIGHT RECEIVES $27.5 MILLION IN FUNDING FROM INSIGHT VENTURE PARTNERS: /18 Aaron Skonnard speaks to A.I. about the company, its growth over the last few years and a recent investment which has made all the difference. NEWS: /04

The Latest News Stories From Around The World.

DEAL GURU: /13

S&P: European Companies Will Curb M&A Until the Economy Picks Up.

Q1 REVIEW: /70 Acquisition International’s First Quarterly Review of 2013.

DEAL DIARY: /78 The Latest M&A From Around The World.

INTERNATIONAL START-UP ADVISORY AWARDS: /91

6/ Hedge Funds News 10/ Appointments 14/ Bureau van Dijk 21/ Osprey Capital 22/ Cross-Border Business Crime: A Major Target of Enforcement 24/ Legal Awards 25/ Doing Business in 2013 27/ Azerbaijan: Diversifying the Economy 29/ Namibia: Promoting Growth and Attracting Investment in 2013 30/ What Does Independence Mean for Scotland’s Economy? 31/ Antitrust Litigation 32/ Turkey: The Potential to Transform the MENA Economies 35/ PGD Strategy Limited – Specialist Corporate Finance and Strategy Consultants 36/ Arbitrating Disputes in Cross-Border Transactions 38/ Employment Litigation: Resolving Workplace Disputes 40/ Completion is Just the Beginning 43/ Resolving Disputes in the Franchise Industry 46/ Resolving Commercial Disputes through Mediation 48/ Corporate Immigration: Issues and Challenges in the Current Economy 51/ Corporate Fraud & the Forensic Accountant 53/ Relocating Expertise 56/ The specialisation of the Oil & Gas Industry 58/ Intellectual Property: the importance of protecting intangible assets 60/ Navigating Indirect Taxes 64/ The Cross-Border M&A Specialist 77/ Meet the Experts

April 2013 /

NEWS:

from around the world

Consultation on FINMA Circular “Distribution of collective investment schemes” The Swiss Financial Market Supervisory Authority FINMA is fully revising FINMA Circular 2008/8 on “Public advertising – collective investment schemes” and is opening a consultation to this purpose. The new Circular will now be entitled “Distribution of collective investment schemes” and will take account of the revised Collective Investment Schemes Act (CISA) and the Collective Investment Schemes Ordinance (CISO) that came into force on 1 March 2013. The consultation will run until 3 June 2013.

In its current circular (FINMA-Circ. 2008/8), FINMA defines the term “public advertising” and sets out what cases qualify as public advertising when offering or distributing collective investment schemes in or from Switzerland.

Therefore, since one of the key criteria, i.e. the term “public” is no longer relevant following the revision of the CISA and CISO, it is necessary to fully revise the current circular. The new Circular will replace FINMA Circular 2008/8.

In the revised Collective Investment Schemes Act (CISA) and the Collective Investment Schemes Ordinance (CISO) that came into force on 1 March 2013, the term “public advertising” has been removed and replaced by the term “distribution”.

The new Circular will implement the changes made to the revised CISA and CISO with respect to the distribution of collective investment schemes. In particular, it will define the term “distribution” and explain what activities qualify as distribution, as well as setting out the legal consequences entailed.

Eze Software Group’s RealTick EMS Issued U.S. Patent for Electronic Trading Eze Software Group, a premier provider of global investment technology, has announced that the United States Patent and Trademark office has issued United States Patent Number 8,352,353 for its industryleading execution management system, the RealTick® EMS. The patent covers the proprietary technology and methodology for the staging of electronic orders into a neutral (aggregation) account for execution, providing ultimate flexibility and workflow efficiency to traders while maintaining their anonymity. “We are excited to have been issued this patent,” said Daniel Rooney, president of Eze Software Group’s RealTick EMS division. “RealTick has always been a leader in providing multi-broker functionality and this patent recognises that strength. Since its release, a majority of our customers have adopted Neutral Account Staging for aggregated orders as their preferred workflow.” This unique, proprietary staging workflow provides RealTick EMS users with an unparalleled level of

control for multi-broker trading. Traders can stage orders without committing to a specific broker, and then send portions of the staged order to multiple brokers. “RealTick’s patented method uses a two-tier accounting system, where the parent-order is staged into a neutral aggregation account and each childorder is placed in a broker sub-account,” said Derek Gover, director of trading systems development for Eze Software Group’s RealTick EMS divisionand coinventor of the patented system. “The details of the child-order are revealed only to the broker executing that portion of the order.” The trader remains in control of execution decisions at the time of the trade, but each broker in RealTick’s extensive broker-dealer network controls attributes of their sub-accounts, such as suitability rules, credit checks, and short locates. RealTick’s patented Neutral Account Staging method simplifies and streamlines the order management process for

multi-broker trading, providing greater control and workflow efficiency to both buy-side and sell-side customers. “This is an important and exciting milestone for Eze Software,” said Tom Gavin, chief executive officer of Eze Software Group. “It is a testament to the talent and expertise of our employees, and of our dedication to providing innovative and cutting-edge technology solutions.” Eze Software Group’s RealTick EMS is an awardwinning, global execution platform providing comprehensive trading, data and risk solutions. RealTick EMS features advanced multi-broker, global cross-asset execution capabilities with access to a network of more than 200 brokers worldwide. RealTick EMS’s unsurpassed flexibility, world-class client service, and fully configurable and intuitively integrated software have earned multiple industry awards and accolades over the course of more than 25 years of industry-leading innovation.

Ific Proposes Excluding Canadian Funds from PFIC Rules IFIC has made a submission to members of the U.S. Congress to propose that Canadian mutual funds be excluded from the Passive Foreign Investment Company (PFIC) rules. Under PFIC, distributions to and redemptions of Canadian mutual funds by U.S. persons are taxed as ordinary income, even when the investor has earned capital gains. “There is sufficient similarity between the treatment (for income tax purposes) of mutual funds in Canada and the U.S. to support the exclusion of Canadian mutual funds from the PFIC rules,” stated Joanne De Laurentiis, IFIC?s president and CEO. The impact of these rules on the estimated one million American citizens residing in Canada include:

/ April 2013

a higher level of tax, potentially punitive tax charges, and significant compliance costs. The PFIC rules are not targeted at companies whose income and assets are generally active in nature. “None of these consequences would apply to Americans resident in Canada who purchase the securities of the active companies underlying the funds,” De Laurentiis noted. “This creates an uneven playing field between products, and is in direct contradiction to the position of the Organisation for Economic Co-operation and Development (OECD), which has adopted the position that an investment in a collective investment vehicle should not result in a different incidence of tax than if the securities were owned directly.”

In its submission, IFIC noted that Canada is not an ‘offshore tax haven’ for Americans who reside here, and that the mutual fund products are similar on both sides of the border. The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together 150 organisations, including fund managers and distributors and industry service organisations, to foster a strong, stable investment sector where investors can realise their financial goals. By connecting Canada’s savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation. The organisation is proud to have served Canadian financial consumers for more than 50 years.

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NEWS:

from around the world

van Biema Value Partners Launches Customised Separate Account Capability van Biema Value Partners, a specialised investment firm focused on deep value-oriented investing, has announced the capability to provide customised fund of fund portfolios for sizable institutional and individual investors. The firm’s first such mandate comes from APG, one of the world’s largest dedicated pension asset managers.

the globe. The new capability, which employs a bespoke “Fund of One” structure, provides customised access to van Biema’s stable of US, Asian, European, and South American managers and allows van Biema to offer a tailored portfolio of managers designed specifically to address the particular needs of a given investor.

van Biema currently offers three commingled investment strategies focused on investing in small, deep value-oriented long/short equity funds around

“We are proud to offer customised solutions to our clients through what we believe to be a best-in-class managed account structure, which not only allows

the creation of portfolios targeted to meet specific investment objectives, but also provides the security and transparency associated with investing in the underlying managers through segregated managed accounts,” said Michael van Biema, the founder and CIO of van Biema Value Partners. “We believe this capability offers yet another option to meet the evolving needs of today’s sophisticated hedge fund investors who are seeking access to the extensive network of small, deep value managers we have developed over the past nine years.”

Northern Trust Expands Fund Administration Services in Hong Kong To help meet demand from asset managers to launch local investment products in the greater China area, Northern Trust is expanding its fund administration and custody capabilities to support locally domiciled Hong Kong funds, including exchange-traded funds, as well as other regional investment funds. For the newly launched service, Northern Trust will provide global sub-custody and fund administration services, including fund accounting and shareholder services, to asset managers looking to broaden their product and distribution base in the Asian region. “We recognise the significant demand from investors, asset managers and regulators for local products in the Hong Kong and greater China markets,” said Camie West, head of Global Fund Services in Asia for

Northern Trust. “This service offering provides our asset manager clients with improved access to these markets through locally domiciled vehicles, coupled with Northern Trust’s fund administration expertise and proven global infrastructure.” The Hong Kong funds will complement the global array of fund structures supported by Northern Trust, including UCITS funds in Europe and mutual funds and collective investment trusts in the United States. For ETFs, Northern Trust brings to the AsiaPacific region a unique service infrastructure that exists in Europe, which it believes will enhance product efficiencies for clients in Asia. “Many successful international and local Asian managers are extending their product reach into

all regions, and in particular there has been an increased focus on Asia for the distribution of funds,” said Paul Fahey, head of Product and Strategy for Global Fund Services at Northern Trust. “We believe our expanded services can help both international and local Asian managers increase their assets under management. We are increasingly moving up the value chain, helping managers implement and execute effective cross-border distribution strategies to help them build their assets and scale quickly.” Northern Trust’s Global Fund Services unit provides fund administration and investment operations outsourcing solutions to more than 450 asset managers across the globe. It supports diverse fund structures across multiple domiciles and jurisdictions and has expertise in traditional and alternative investment vehicles.

Gravitas Cites Growth of Co-Sourcing Business in Move to New, Larger India Office Gravitas, a co-sourcing platform providing cloud technology, collaborative outsourcing, risk support and research to the alternative investment industry, has announced that increasing demand for its services, including its co-sourced risk management offering, has led to the expansion of its India presence, including a move to new, larger offices in Mumbai. “The alternative asset management industry has entered an era of expansion as firms compete for capital while addressing the demands of an increasingly institutional clientele in the most heavily regulated environment ever,” said Gravitas CEO Jayesh Punater. “Hedge funds and private equity firms are responding to these challenges by embracing operational efficiency through the

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innovative use of people, processes and technology. The result is a greater demand than ever for powerful ways of partnering with service providers on data management, analytics and high-quality risk reporting, which is at the heart of our co-sourcing and hosted services model.” This expansion into new, larger offices in India follows the integration of IBM Algorithmics as the risk engine behind Gravitas’s Risk-as-a-Service offering, a key area of focus for the India team. Gravitas’s growing India team of 70 employees, up 110% from a year ago, will occupy a brand new building called Times Square, featuring state-of-the-art services and amenities. The modern Times Square building is proximate to domestic and international airports as well as the Mumbai center of the Indian Institutes

of Technology and the National Stock Exchange. Gravitas expects to make additional hires in the coming months. Overall, Gravitas saw revenues grow by 50% in 2012, reflecting strong demand for its cloud, risk reporting and risk co-sourcing platforms. Punater added, “As buy-side firms focus on tackling the issues of scale, transparency and increased regulation, their need for peak efficiency across risk, operations, cloud computing and research has become mission-critical. Our growing staff and world-class facilities in Mumbai allow us to provide a robust managed services platform with around-theclock reliability to level the playing field for smaller funds while enabling larger funds to scale their businesses more effectively.”

April 2013 /

FUND NEWS:

from around the world

Barclay Hedge Fund Index Gains 1.12% in March Hedge funds gained 1.12% in March, according to the Barclay Hedge Fund Index compiled by BarclayHedge. The Index is up 3.96% year to date, and has enjoyed ten straight months of gains.

and Japan. The Nikkei Index gained 7.25% as the BOJ aggressively moved to reflate Japan’s economy and stressed its commitment to target a 2% inflation rate.”

“Although credit spreads widened in March, demand for US high yield combined with diminished supply resulted in spread compression for the HY sector,” says Waksman.

“The mid-month announcement of a flawed Cyprus bailout plan unsettled global markets and sentiment shifted back to risk-off,” says Sol Waksman, founder and president of BarclayHedge.

Overall, 15 of Barclay’s 18 hedge fund strategies were up in March. The Barclay Healthcare & Biotechnology Index gained 2.95%, Pacific Rim Equities added 2.77%, Distressed Securities was up 2.12%, and Equity Long Bias gained 1.99%.

The Barclay Fund of Funds Index gained 0.90% in March, and is up 3.29% after three months.

“Interest rates moved lower and equity markets were muted with the notable exceptions of the US

The Equity Short Bias Index lost 3.20% in March, Emerging Markets was down 0.52%, and the Technology Index lost 0.31%. Equity Short Bias has dropped 9.38% in first three months of 2012.

Newedge CTA and Macro Trading Indices with Strong Performance in March Eight of Newedge’s 11 hedge fund indices showed positive performance during the month. The Newedge Trend Index increased 1.89% in March, followed by the Newedge CTA Index, which gained 1.29%. The Newedge Trend Index and Newedge CTA Index have risen 3.68% and 2.87%, respectively, for the year.

The Newedge Trend Index, which is equally weighted, calculates the daily rate of return for a pool of the largest 10 trend following based CTAs that are willing to provide daily returns and are open to new investment.

The Newedge Short-Term Trading Index was up 0.80% in March and 3.51% for 2013.

The Newedge CTA Index, which is equally weighted, calculates the daily rate of return for a pool of the largest twenty CTAs that are willing to provide daily returns and are open to new investment. Both indices are rebalanced and reconstituted annually.

The Newedge Volatility Trading Index had the worst performance during the month and was down -0.81%.

The Newedge Short-Term Traders Index is designed to track the daily performance of a portfolio of short-

term, diversified CTAs who have less than a 10-day average holding period, are willing to provide daily returns and are open to new investment. The Newedge Volatility Trading Index is a performance measure for the volatility trading and arbitrage style within the hedge fund universe. It is an equally weighed portfolio of Volatility Trading & Arbitrage funds.

RWC Launches Cayman Based Structure for European Focus Fund with $145m This month RWC launched a Cayman-based European Focus Fund with $145 million under management, representing support from existing investors. The fund will be managed by the European Focus team who joined RWC from Hermes in October 2012 and replicates the existing strategy they have managed in a UK Limited Partnership since February 2009.

market strategy. Constructive Activism provides genuine alpha creation as we work with a firm’s stakeholders to improve long-term shareholder returns. Institutional investors are increasingly seeing the benefit of active ownership, both in terms of straightforward alpha creation and the greater accountability it infers on the management and boards of companies.”

Dan Mannix, CEO of RWC commented: “We believe there are growing opportunities for long-term investors to capitalise on the market conditions in which many companies are undervalued and overlooked. Investors are increasingly looking for different ways to access the equity markets to complement their growing books of broad index exposure. Highly concentrated portfolios that take Active management to its fullest extent are a particularly appealing way to add alpha to a broad

“Our approach to active ownership in Europe focusses on engaging with companies to improve shareholder returns. It is incredibly hard to establish new strategies to operate in this space due to the importance of team size, the experience and the cost of properly deploying the strategy. Maarten, Petteri and their team have been together in their current form for a number of years and have engendered the long term support of their investors through a demonstrable ability to create alpha and returns for

/ April 2013

their investors. We will always limit both liquidity and capacity for the strategy as the best returns come from patience, tolerance for volatility and hunting in the right areas (which are often in the mid and small cap areas). As we roll out the European Focus fund we are looking to raise approximately $750 million of additional assets taking the strategy to $1 billion which offers us the optimum size to generate returns.” “Since the team started managing the strategy in February 2009, they have returned approximately 150% net of fees. The entire team of five joined RWC and have enjoyed a smooth transition, which is reflected in continued outperformance in recent months as well as the on-going support of their investors. YTD the existing fund has returned 7.42% net of fees as at end March.”

ACQUISITION INTERNATIONAL

FUND NEWS:

from around the world

Vanguard Expands Small Business 401k Service to TPAs Vanguard is helping more workers to invest for retirement by expanding the availability of its popular low-cost 401(k) plan service for small- to mid-size businesses to plan sponsors that work with third-party plan administrators. Vanguard Retirement Plan Access™ was introduced in October 2011 to bring low-cost funds to a market long in need of a high-value, reasonably priced retirement plan package combining investments, recordkeeping, and other services. The service was initially directed toward plan sponsors, as well as feeonly advisors and planners who work with sponsors. Vanguard Retirement Plan Access is now also available to third-party administrators (TPAs), which typically provide plan design, compliance, administrative support, and other assistance to plan sponsors. As a result, these sponsors can continue to work with their TPA while gaining low-cost investments and recordkeeping for their participants. The decision to expand the availability of Vanguard Retirement Plan Access was prompted by increased demand for the service, which is approaching $2 billion in assets under management after only a year and a half of existence. A growing number of sponsors of small- to mid-sized plans work with TPAs; in fact, Cerulli Associates predicts that TPAinfluenced assets will increase to 22.5% of 401(k) assets in 2014.*

“Giving plan sponsors greater choice in how they offer this key benefit to their employees can mean more people in the United States will be able to save for retirement with low-cost investments through a high-quality retirement plan,” said Jing Wang, head of Vanguard Retirement Plan Access. “Industry research has shown that Americans will save more through 401(k) and other defined contribution plans with proper incentives and services,” said Chris McIsaac, Managing Director of Vanguard’s Institutional Group. “Making Vanguard Retirement Plan Access available to a wider group may encourage more plan sponsors to offer plans that are low cost, effective, and easy-to-use—all of which is good news for workers who need help saving for retirement.” Mr McIsaac noted that Vanguard has been a long-time advocate of expanding defined contribution plan access, improving plan design, and increasing fee transparency. Vanguard Retirement Plan Access is available to a range of plans, from start-ups to those with $20 million-plus in assets. The service helps plan sponsors and financial professionals fulfill their fiduciary responsibility to select and monitor appropriate investments by offering them a flexible platform that supports thousands of investment options. It emphasises Vanguard’s low-cost, broadmarket index funds, including the Vanguard Target Retirement Funds, to provide participants with

diversified market exposure. Sponsors may also construct their plan’s investment lineup using nonVanguard funds and ETFs. Ascensus Inc., a nationally recognised recordkeeping firm, provides a range of services on Vanguard’s behalf. Depending on whether a plan sponsor accesses Vanguard Retirement Plan Access directly or through an advisor or TPA, these services can include plan design, recordkeeping, administration, call center, compliance testing and documentation, participant education materials, dedicated plan sponsor and participant websites, and trustee services. All investing is subject to risk. Investments in Target Retirement Funds are subject to the risks of their underlying funds. Mutual funds are subject to risks, including possible loss of principal. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date. Investments in bond funds are subject to interest rate, credit, and inflation risk. Diversification does not ensure a profit or protect against a loss in a declining market.

Torstone Technology launches Inferno for secure Virtual Private Cloud deployment Torstone Technology, providers of securities and derivatives processing software to the global financial markets, has announced the availability of the Inferno back office system for Virtual Private Cloud (VPC) environments such as Amazon or Rackspace. Torstone believes it is first in its sector to offer this deployment option with the security and robustness to reassure target customers such as investment banks, larger hedge funds and brokers.

VPCs such as Amazon’s offer a fully secure environment. Taking this option, Torstone clients can benefit from a Virtual Private Network (VPN) which is configured and locked down at the network level so that each Torstone client has a completely private Inferno instance that is fully secure in the private cloud. Inferno is compatible with any industry standard Linux and Oracle cloud environment with the appropriate security.

Brian Collings, chief executive of Torstone Technology said: “We believe Torstone has stolen a march on our competitors and is very early in enabling our customers to take advantage of the flexibility, resilience, scalability and cost-effectiveness of secure VPCs. This is down to the underlying architecture of Inferno as well as our in-house technologists who are equipped with the skills to engineer our solution to utilise the VPC optimally.”

Private cloud computing offers the ability to snapshot instances of the infrastructure required to run applications. Torstone takes advantage of this ‘run book’ automation to deploy a new ready-configured instance of Inferno extremely rapidly – in just a matter of hours – which can then be customised to meet individual client requirements at less cost than other deployment options. Torstone also offers additional flexibility for disaster recovery by enabling

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clients to mix different cloud providers or use a blend of data centre hosting and cloud services. Torstone has always sought to deliver Inferno to meet the preferred IT operational environments of clients. Today’s announcement extends those options from in-house hosting and fully managed software as a service to include VPC. “The infrastructure level is finally becoming a commodity service, which enables software vendors such as ourselves to focus more investment on advancing, developing and supporting financial back office systems to meet the constantly evolving needs of the industry,” Mr Collings concluded.

April 2013 /

FUND NEWS:

from around the world

APRIL 2013 EUREKAHEDGE REPORT Founded in 2001, Eurekahedge is an independent financial data and research company focusing on alternative investments. The company is headquartered in Singapore with a representative office in New York. The company maintains coverage on over 28,000 alternative funds globally. Eurekahedge’s global alternative research covers hedge funds, funds of funds, UCITS III hedge funds, private equity funds, Islamic funds, real estate funds, SRI funds and long-only absolute return funds. The April Report takes a look at the funds of hedge funds and UCITS hedge funds sector - currently standing at US$536 billion and US$215 billion respectively. The report also includes key trend analysis of both sectors for the past year, along with updated asset flows, performance returns and industry breakdowns. Other highlights from this month’s report: •

1Q 2013 witnessed positive asset flows of US$20 billion with hedge funds attracting assets in all three months

•

North American hedge funds hit highest AUM on record with total assets standing at US$1.25 trillion

•

The Eurekahedge Hedge Fund Index was up 0.94% in March and 3.21% in 1Q 2013

•

Japanese hedge funds witnessed the strongest quarter on record, up 10.80% in 1Q 2013

•

Launch activity picks up in 2013 with nearly 200 funds launched so far in the year

•

Asia ex-Japan and European hedge funds outperformed underlying markets by 0.98% and 0.80% respectively

•

Distressed debt was the best performing strategy in 1Q 2013, up 5.41% year-to-date

Performance update Hedge funds were up for the fifth consecutive month in March, a month that saw mixed returns in underlying market indices. The Eurekahedge Hedge Fund Index was up 0.69% during the month while the MSCI World Index finished with gains of 1.76%. March witnessed diverging trends among global markets with US and European indices finishing

/ April 2013

with contrasting results. North America witnessed a continuation of the rally in equity markets amid a slew of positive economic data, while Japanese stocks also extended their winning run with further devaluation of the yen. European markets underperformed during the month as concerns over the region’s sovereign debt situation resurfaced due to Cyprus’ banking crisis and question’s over its bailout.

March 2013 and February 2013 returns across regions Returns were mixed among the various hedge fund regions with Japanese managers posting the strongest returns during the month. This was the seventh consecutive month of gains for Japanese hedge funds and the fourth consecutive month where the regional managers have outperformed their counterparts in other regions. The first quarter of 2013 was also the strongest quarter on record for Japanese hedge funds and managers also attracted some asset flows from investors in March after witnessing net outflows for seven months. The Eurekahedge Japan Hedge Fund Index was up 3.67% in March as the Tokyo Topix gained 6.05%. Bond prices also rallied amid higher trending equity indices as the new Bank of Japan governor is expected to continue the monetary easing policy. Some managers also reported gains from the weakening Japanese yen during the month, although the rate of depreciation slowed down at the end of the month amid concerns over European debt which sent some foreign capital into the currency. North American managers posted returns of 1.31% in March as the equity markets kept up the upward momentum during the month. The S&P 500 reached a record high as positive data on employment and the housing sector provided support for equities. The upward momentum in North American hedge funds has been further supported by investor allocations to the funds with the sector reaching a historically high US$1.25 trillion in assets under management (AUM) during March. European managers also witnessed positive returns during the month as regional managers outperformed the underlying market indices. The Eurekahedge European Hedge Fund Index was up 0.19% in March while the MSCI Europe Index[1] was down by 0.61% - an outperformance of 0.80%. Asia ex-Japan managers saw an end to their seven month winning streak as the Eurekahedge Asia exJapan Hedge Fund Index declined by 0.54% during the month. The MSCI Asia ex Japan Index[2] was down 1.52% in March as major market indices declined. The

ASX All Ordinaries was down 2.74%, the Kospi lost 1.07%, the BSE Sensex shed 0.14% while concerns over the Chinese property market saw the Shanghai Composite and the Han Seng decline by 5.45% and 3.13% respectively. 2013 year-to-date returns across regions Mizuho-Eurekahedge Asset Weighted Index The asset weighted Mizuho-Eurekahedge Index was up 0.45% in March as the largest constituents of the index witnessed a month of flat-to-slightly positive performance. The largest contributor to positive performance of the index was a globally focused CTA/ managed futures fund which witnessed gains from positions in index futures and options, while the largest negative contribution came from a fixed income fund with exposure to European debt. The Mizuho-Eurekahedge Long/Short Equities Index, which accounts for the largest percentage of the assets in the Mizuho-Eurekahedge Index, delivered returns of 0.74% during the month while CTA/managed futures funds delivered the strongest returns of 1.45% among the various strategic constituents of the index. Asset flows update Hedge funds posted positive returns in March amid mixed returns in global markets. The Eurekahedge Hedge Fund Index was up 0.69% during the month as some risk aversion returned to the markets due to developments in Europe. Comparatively the MSCI World Index gained 1.76% during the month. Total assets under management (AUM) increased by US$9.2 billion during the month, bringing the size of the industry to US$1.83 trillion. Performancebased growth accounted for most of this increase as managers posted gains of US$7 billion over the course of the month. The industry also attracted capital from investors for the third consecutive month with positive net asset flows of US$2.2 billion.

Company: Eurekahedge Web: www.eurekahedge.com

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APPOINTMENTS:

from around the world

Schroders recruits Philip Matthews and Alex Breese Schroders has announced the appointment of Philip Matthews and Alex Breese to its UK equity team. Philip will manage the Schroder UK Alpha Plus Fund and Alex will manage the Schroder UK Equity and Schroder ISF UK Equity funds. Philip joins from Jupiter where he was fund manager of the Jupiter Growth & Income Fund. Alex joins from Neptune where he was Head of UK Equities and fund manager of the Neptune UK Special Situations fund. Both are

rated ‘AAA’ managers by Citywire and their funds have achieved top quartile returns over the last three years. Peter Harrison, Global Head of Equities, comments: “I am delighted Philip and Alex are joining Schroders. They are two highly rated UK equity fund managers with excellent performance track records.”

Robin Stoakley, Managing Director of UK Intermediary, comments: “Philip and Alex bring a great combination of experience and talent to our UK equities team, which I believe will be well received by clients. I am very confident that the team will continue to deliver the strong investment performance in UK equities our clients expect.

Two New Fund Managers Join Alceda’s UCITS Platform Alceda Fund Management S.A., the Luxembourgbased leading independent structuring specialist, has announced that two new fund managers have joined the Alceda UCITS Platform (AUP). Both Polunin Capital Markets Ltd (Polunin) and pulse invest GmbH (pulse invest) are highly experienced fund managers with an excellent track record. Polunin began its cooperation with Alceda on 15 June 2012 and pulse invest on 1 August 2012. Michael Sanders, Chairman of the Board of Alceda said: “We are proud to be working with two such

highly-regarded fund managers. Alceda has a wealth of experience in structuring UCITS solutions with current assets of over €3 billion on the AUP. We look forward to supporting Polunin and pulse invest as they continue to grow.” UK-based Polunin is a team-orientated investment management business comprising three highly experienced emerging market investment professionals with over 65 years investment experience between them.

Julian Garel-Jones, Director of Polunin said: “Polunin is delighted to be working with Alceda as we convert our core emerging markets strategies to UCITS. Our experience to date has been excellent and we look forward to a long and fruitful partnership.” Germany-based pulse invest is an investment boutique with a systematic approach to investment. Stefan Knöppler, Director of pulse invest said: “Being a small and highly specialised company that employs a niche investment strategy we found Alceda’s innovative and international approach to be the ideal setup for a successful cooperation.”

Advent Announces Additions to Senior Team in EMEA Region Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services for the global investment management industry, today announced two senior sales appointments. Jad Fares has been appointed regional sales manager for the Middle East and North Africa (MENA) region and will be based in Advent’s Dubai office. Jesper Steiness has been appointed as director of business development for EMEA. The announcement comes as Advent continues to expand its client base in EMEA across a wide range of market segments, including asset management firms, hedge funds, wealth management firms, funds of funds and family offices. Jad Fares joins Advent as regional sales manager for the MENA region, from Bloomberg where he served as Middle East and Africa Manager for Electronic Trading and Execution. He has over ten years’ experience working for companies providing highend solutions to markets in the Middle East and the US as well as has an extensive background with sovereign wealth funds, pension funds, global asset

10 / April 2013

managers, hedge funds and investment banks. In his role, Mr Fares will be responsible for continuing to develop Advent’s position as one of the leaders in the market in Saudi Arabia, as well as the broader MENA region. Today more than 30 MENA-based clients use Advent’s local solutions along with its world-class investment management systems. As evidence of the company’s commitment to the region and understanding of the unique needs of clients in MENA, Advent maintains a full-service office in Dubai, which includes sales, relationship management, professional services and client support professionals. Jesper Steiness will serve as director of business development for the EMEA region with a focus on the Luxembourg market. Mr Steiness has over 20 years’ experience in the global fund industry in Hong Kong, Singapore and Luxembourg. He has an extensive background in fund administration, custody and asset management and has held a number of

independent directorships on fund boards. “We’re thrilled to have Jad Fares and Jesper Steiness on board as part of the Advent team as we continue to strengthen our position in the region by adding more clients and developing a larger footprint with existing clients,” said Håkan Valberg, Senior Vice President and General Manager, Advent Software EMEA. “They bring an impressive background that will be a valuable asset in supporting Advent’s goals of eliminating boundaries between people, information and systems. Our growth in the region is the result of investments in the local solutions as well as Advent’s service delivery. Our new appointments reinforce our strong commitment to building long-term relationships with our clients throughout Europe and the Middle East.” Advent, the Advent logo and Advent Software are registered trademarks of Advent Software, Inc. All other company names or marks mentioned herein are those of their respective owners.

ACQUISITION INTERNATIONAL

APPOINTMENTS:

from around the world

Direxion Appoints Eric Falkeis as President and COO Direxion, a leader in alternative investment solutions, has announced that Eric Falkeis has been appointed President and Chief Operating Officer of Rafferty Asset Management, the advisor to Direxion Funds and Direxion Shares. He was most recently Chief Financial Officer and Director of ExchangeTraded Fund (ETF) Operations at U.S. Bancorp Fund Services, where he worked closely with Direxion for more than a decade. At Direxion, Mr Falkeis will report to Dan O’Neill, Chief Executive Officer of Rafferty. Mr Falkeis is Rafferty’s first COO, and will work alongside Mr O’Neill to oversee day-to-day business operations and lead strategic planning and business development efforts. In the latter area, Mr Falkeis

intends to ensure Direxion’s leveraged and inverse ETF platform continues to experience organic growth. He will also focus on growing the firm’s non-leveraged, strategic index-based ETFs and its alternative strategy mutual fund line-up, in addition to exploring other expansion opportunities. “Working closely with Direxion for 14 years gives me unique insights to help identify ways we can maximise the profitability and efficiencies of Direxion’s ETFs and mutual funds, while pursuing additional avenues for growth,” said Mr Falkeis. “Direxion remains committed to maintaining and expanding its array of alternative investment strategies in order to help short- and long-term investors pursue healthy returns in both bear and bull markets.”

Mr Falkeis spent more than 15 years at U.S. Bancorp Fund Services, where he received Money Management Executive’s Innovator of the Year Award and grew the firm into a top ETF service provider. He holds a Certified Public Accountant (CPA) designation, received his Bachelor of Business Administration degree in Accounting from Marquette University and is a member of the Marquette University Accounting Advisory Board. “Direxion’s products are unique investment vehicles which Eric has played an integral role in building,” said Mr O’Neill. “Eric’s expertise will prove vital to our clients as they seek out a wider variety of dynamic, active and cost-effective portfolio strategies that allow them to grow their businesses.”

Horizons ETFs Management (USA) LLC Appoints Head of Capital Markets Horizons ETFs Management (USA) LLC (“Horizons USA”), a subsidiary of Seoul, Korea based Mirae Asset Global Investments Co., Ltd. (“MAGI”) has announced the appointment of Joe Cunningham as Executive Vice President and Head of Capital Markets for Horizons USA. Mr Cunningham is an investment industry executive with nearly two decades of experience in product and business development, strategic relationships management and the implementation of trading models for global equities and derivatives markets. Previously, Mr Cunningham served as Director of Institutional ETF Order Flow and National Account

Manager at ProShares. Prior to that, he was Vice President of Louis Capital Markets, where he helped to successfully launch the firm’s Algorithmic Trading platform. Horizons USA, through Exchange Traded Concepts, LLC, has filed a registration statement with the Securities and Exchange Commission to issue three covered call ETFs on the New York Stock Exchange. The Horizons-branded Covered Call ETFs seek investment results that, before fees and expenses, generally correspond to the performance of the underlying S&P Indices.*

Mr Cunningham will oversee all market-making and capital-market trading relationships for Horizons USA, and assist with institutional distribution. “We’re really excited to bring Joe onto the team. His depth of experience in working closely with market makers and institutional investors will provide significant advantages in helping to bring these innovative, covered call ETFs to investors in the United States,” said Howard Atkinson, Managing Director of Horizons ETFs Management (USA) LLC and the global head of Sales and Marketing for MAGI’s ETF business.

New faces for Finance Yorkshire Finance Yorkshire has welcomed two new faces to the organisation.

London Technology Fund and most recently ran a consultancy firm raising capital for SMEs.

Stephen Cardwell joins as Portfolio Manager for the Equity Linked Finance team, while John Ellis is the new Portfolio Executive for the Business Loans team.

His new role at Finance Yorkshire involves portfolio managing the Equity Linked Fund’s current investments.

Stephen brings to the role over a decade’s experience of working in SME (small and medium enterprises) finance, primarily as an investment professional working within high-tech venture capital.

John Ellis from Huddersfield joins Finance Yorkshire after many years at Yorkshire Bank, where he most recently held the position of Small Business Manager.

He previously worked for venture capital firm Vertex Management Ltd, part of Temasek Holdings in Singapore, where he invested and ran part of the firm’s European fund. He has also worked for the

ACQUISITION INTERNATIONAL

His new position as Portfolio Executive for the Business Loans team will see him maintaining relationships with existing connections and investigating possible future investment opportunities.

Finance Yorkshire provides seedcorn, loan and equity linked investments, ranging from £15,000 to £2m to help a range of small and medium sized businesses to meet their funding requirements for growth and development. The project is supported financially by the European Union. It has attracted £30million investment from the European Regional Development Fund (ERDF) as part of Europe’s support for the region’s economic development through the Yorkshire and Humber ERDF Programme, £15million from Yorkshire Forward’s Single Programme, and £45million match funding from the European Investment Bank.

April 2013 /

Strachan Partners Integrity, transparency guaranteed... at all times

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DEAL GURU:

S&P: European Companies Will Curb M&A Until the Economy Picks Up

STANDARD & POOR’S

European Companies Will Curb M&A Until the Economy Picks Up

-----------------------------------------------------------------------Mergers and acquisitions (M&A) will remain subdued in Europe over the next six months, according to a report by Standard & Poor’s Ratings Services. ------------------------------------------------------------------------

Titled “The Credit Cloud: For Now, Caution Is Holding Back European Mergers And Acquisitions,” the report explains why European companies remain cautious about M&A activity, in sharp contrast to the exuberance of their North American counterparts. To March 15, 2013, the value of European M&A deals was $49.2 billion--51% lower by value than the same period last year--and 74% lower than North America’s $188.6 billion in the same time frame. “The main cause of the muted M&A environment in Europe is the more subdued economic outlook in the region,” said Standard & Poor’s corporate research analyst Taron Wade. “Economists continue to slash forecasts for growth, which creates uncertainty for companies forecasting their own growth.” Standard & Poor’s most recent economic forecast sees a decline in eurozone GDP by 0.5% this year and only a modest bounce back to 0.8% next year.

ACQUISITION INTERNATIONAL

That said, we do envisage selective M&A activity in Europe this year. Cautious companies are divesting of non-core assets, which will attract private equity buyers. Cash-rich emerging market companies, as well as U.S. firms unwilling to repatriate cash balances, are also likely to seek European assets. We believe the sectors most ripe for buying or selling assets will be cable, telecoms, pharmaceuticals, consumer products, and gaming. Unusually, European M&A activity is slack despite a surge in corporate bond issuance throughout 2012 and the beginning of this year, particularly following the European Central Bank’s measures to increase liquidity in September 2012. However, companies have used most of the debt to shore up their balance sheets by refinancing and extending debt maturities. If these companies were to increase their M&A activity, they would need to re-leverage their balance sheets. This could significantly increase their cost of credit, although with current favourable markets, a spike in funding costs might not happen for some time. Instead, with the current difficult economic environment driving decisions, we foresee that companies will continue to use cash flow from

operations to support organic growth whenever possible. We therefore expect caution to prevail, despite any pick-up in activity in certain sectors. We envisage that most M&A activity will take the form of disposals and smaller acquisitions financed with cash, rather than large debt-financed deals. Until the European economic environment becomes clearer, we believe companies are likely to continue to refinance their debt maturities and protect their credit ratings.

Company: Standard & Poor’s Web: www.standardandpoors.com

April 2013 /

SECTOR TALK:

Private Equity

l In spite of ongoing uncertainty in the financial markets, private equity has made a fairly healthy start to 2013, with 790 deals worth a combined USD 102,745 million recorded in the first three months of the year alone. Private equity activity in 2012 finished on a relative high note, although it remains some way behind the results generated during the heady days of 2006 and 2007. Given the well-publicised market turbulence of the last few years, any steps in the right direction will provide a welcome respite for those keeping an eye on deal activity. According to data from Zephyr, the M&A database published by Bureau van Dijk, the second half of 2012 saw 1,864 private equity deals valued at USD 159,318 million, representing a 25.0 per cent increase by value on the first six months of the year when USD 127,400 million worth of deal-making was recorded. However, this was spread across a larger number of transactions (2,037 to be precise) suggesting that values in general increased in the second half of the year. Indeed, the months between June and December 2013 represented the highest by value since H2 2010, when 2,115 deals worth USD 167,253 million were recorded. However, it is worth noting that in H1 2007, 2,908 deals amounting to investment of USD 616,671 million were signed off, highlighting the fact that there is still a long way to go if the markets are to reach their pre-financial crisis levels. Nevertheless, 2013 has started promisingly, with a number of high-value transactions bumping up the figures for the first quarter. So far, 790 private equity deals with a combined deal value of USD 102,745 million have been recorded, and even though the year is at a very early stage, this is only around 60.0 per cent lower by value than the total for 2012. Without a doubt, a couple of blockbuster deals have had a huge effect on results so far. The quarterâ&#x20AC;&#x2122;s highest value transaction was Berkshire Hathaway and 3G Capitalâ&#x20AC;&#x2122;s USD 28,000 million takeover of US food and condiments manufacturer Heinz. Hot on its heels was the USD 24,400 million acquisition of computing giant Dell by chief executive Michael Dell and Silver Lake Partners.

Number and Aggregate Value (mil USD) of Private Equity Deals Globally: 2006 - 2013 YTD (as at 01 April 2013)

Aggregate deal value (mil USD)

2,486 2,517 2,908 2,882 2,746 2,402 1,680 1,699 2,024 2,115 1,877 1,878 2,037 1,864 790

296,070 443,778 616,671 284,037 214,227 116,177 62,992 88,562 85,740 167,253 124,433 124,493 127,400 159,318 102,745

/ April 2013

Number and Aggregate Value (mil USD) of Private Equity Deals Globally: 2006 - 2013 YTD (as at 01 April 2013) 700,000

3,500

600,000

3,000

500,000

2,500

400,000

2,000

300,000

1,500

200,000

1,000

100,000

500

Aggregate deal value (mil USD)

H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 YTD

Number of deals

Period

0 H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 YTD Aggregate deal value (mil USD)

Number of deals

ACQUISITION INTERNATIONAL

SECTOR TALK:

Aggregate Value (mil USD) of Private Equity Deals by Region: 2006 - 2013 YTD (as at 01 April 2013) Deal Yearly Value (Announced Date) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013

North America Western Europe Eastern Europe Far East and Central Asia Oceania South and Central America Middle East Africa

382,077 285,164 13,377 26,791 14,590 11,378 946 4,214

508,356 301,832 10,819 31,887 10,086 25,115 5,048 9,237

135,268 137,475 14,169 23,335 4,060 10,864 2,860 2,012

57,311 54,882 8,620 24,973 4,383 2,901 1,160 1,096

112,019 97,874 5,407 16,518 6,374 10,715 1,429 770

126,624 80,464 8,873 25,002 9,222 18,782 2,718 954

142,172 85,143 3,092 20,202 4,933 22,139 2,241 1,799

74,751 11,733 6,422 4,552 1,835 1,827 219 38

Number of Private Equity Deals by Region: 2006 - 2013 YTD (as at 01 April 2013) Deal Yearly Value (Announced Date) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013

North America Western Europe Far East and Central Asia Middle East Eastern Europe South and Central America Africa Oceania

2,181 2,100 296 55 169 76 49 71

2,473 2,310 458 69 226 94 61 97

2,073 1,939 572 86 207 95 73 89

1,479 1,231 377 43 95 73 49 30

1,551 1,698 511 48 141 102 34 43

1,541 1,564 553 48 141 112 26 72

1,482 1,622 378 69 131 102 42 62

339 302 62 28 23 14 11 7

Breakdown of Private Equity deals by Region: 2006-2013 YTD (as at 01 April 2013) 100% 90%

1% 4% 2%

3% 4% 1%

16%

7% 2%

3% 7% 4%

80% 70%

38%

42%

60%

7% 1%

12%

6% 3%

33%

39%

2% 7%

30%

35% 50% 40%

74%

30%

56%

52%

41%

20%

45%

37%

46%

50%

10%

Almost half of the USD 299,011 million invested in private equity transactions worldwide in 2012 was attributable to North America, with the region recording investment worth USD 142,172 million across 1,482 deals. It was followed by Western Europe, with USD 85,143 million for the year, putting it some way ahead of its nearest rival, South and Central America, which brought in USD 22,139 million. In addition, the increase in global private equity activity for the year was primarily driven by these three regions, increasing from their 2011 levels, while many other regions, including Far East and Central Asia, Oceania, Eastern Europe and the Middle East, declined. So far, 2013 appears to be following a similar pattern, with North America leading the way with investment of USD 74,751 million, followed by Western Europe with USD 11,733 million. Of course, it is too early to say how things will pan out over the remaining nine months of the year.

0% 2006 Africa

2007 Middle East

2008

South and Central America

2009 Oceania

2010 Far East and Central Asia

2011 Eastern Europe

2012 Western Europe

2013 YTD North America

Number and Aggregate Value (mil USD) of Private Equity Deals by Type: 2006 - 2013 YTD (as at 01 April 2013) Values Deal Type Public takeover by Private equity Leveraged buy out Build up Development capital Other buyouts Total

ACQUISITION INTERNATIONAL

Number

Number of deals

Aggregate

of deals

with known values

deal value (mil USD)

825 570 766 14,091 15,959 32,211

815 264 136 10,635 6,294 18,144

1,039,624 538,164 46,147 274,005 1,140,797 3,038,737

Public takeovers (PTOs) remain the most valuable deal type so far this year, with transactions worth USD 62,509 million agreed in the first quarter alone, representing 44 per cent of the combined value of all private equity transactions. This was followed by leveraged buy outs (LBOs), which totalled USD 52,400 million spread across 11 deals, compared with the 23 PTOs recorded. A similar pattern is apparent when looking at results from 2006-2013, with public takeovers accounting for USD 1,039 billion over the period, although LBOs only totalled USD 52,400 million, placing them in third place, behind the other buyouts deal type.

April 2013 /

SECTOR TALK:

Number and Aggregate Value (mil USD) of Private Equity Deals by Type: 2013 YTD (as at 01 April 2013) Values Deal Type

Number of deals

Number of deals with known values

Aggregate deal value (mil USD)

Public takeover by Private equity Leveraged buy out Build up Development capital Other buyouts

23 11 10 400 346

23 2 3 295 98

62,509 52,400 584 6,500 19,188

Breakdown of Number and Aggregate Value of Private Equity Deals Globally by Type: 2013 YTD (as at 01 April 2013)

100%

14%

90%

80%

44%

Other buyouts Development capital Build up

70%

Leveraged buy out 37%

60%

Public takeover by Private equity

50% 40% 51%

30%

44%

20% 10% 1% 3%

Number of deals

Aggregate deal value

So far this year, wholesaling and retailing has been the most prominent sector by deal value, bringing in investment of USD 57,909 million. Again, this is largely attributable to the Heinz and Dell transactions mentioned previously, which had a combined value of USD 52,400 million, representing 90 per cent of the industryâ&#x20AC;&#x2122;s total investment for the quarter. As such, it is unsurprising the sector performed so well, given that its two largest deals were also the two highest-valued

of the entire quarter, with no others even coming close. Indeed, the next-largest deal in the wholesaling and retail industry was a USD 1,095 million takeover offer for Dutch medical devices player Mediq by its domestic peer Al Garden. Computer, IT and internet services lagged some way behind, coming in second with investment of USD 31,931 million, although it was the most frequently targeted sector, with 244 deals in the industry in Q1 2013.

So, although there is a long way to go and previous years have also started encouragingly, 2013 has already shown some positive signs for the future, with a number of large deals being announced that may make the difference to full-year results. Investors will be hoping the private equity industry can sustain the growth in investment value it saw throughout 2012.

Number and Aggregate Value (mil USD) of Private Equity Deals by Sector: 2013 YTD (as at 01 April 2013) Values Target Sector

Number Aggregate deal of deals value (mil USD)

Target Sector

Number Aggregate deal of deals value (mil USD)

Wholesaling

104

57,909

Computer, IT and Internet services Food & Tobacco Manufacturing Industrial, Electric & Electronic Machinery Retailing Personal, Leisure & Business Services Transport, Freight, Storage & Travel Services Communications Utilities Banking, Insurance & Financial Services Public Administration, Education, Health Social Services Hotels and Restaurants Chemicals, Petroleum, Rubber & Plastic

244 30 138 66 213 35 17 26 56 61

31,931 31,468 31,084 7,505 6,955 4,876 4,762 4,718 3,599 3,061

20 34 8 11 32 15 14

1,967 1,778 1,597 1,381 1,138 920 736

20 47

2,980 2,125

Mining & Extraction Construction Agriculture, Horticulture & Livestock Property Services Metals & Metal Products Printing & Publishing Biotechnology, Pharmaceuticals and Life Sciences Leather, Stone, Clay & Glass products Wood, Furniture & Paper Manufacturing Transport Manufacturing Miscellaneous Manufacturing Textiles & Clothing Manufacturing

13 12 25 4 9

468 291 165 102 16

/ April 2013

ACQUISITION INTERNATIONAL

SECTOR TALK:

Powered by Zephyr/Bureau van Dijk Breakdown of Number and Aggregate Value of Private Equity Deals Globally by Sector: 2013 YTD (as at 01 April 2013) 35% 31% 30%

29%

25%

20%

17%

17% 15%

15%

11%

11% 10%

8% 5%

0% Wholesaling

Computer, IT and Internet services

Food & Tobacco Manufacturing

Industrial, Electric & Electronic Machinery

Number of deals

Retailing

Personal, Leisure & Transport, Freight, Communications Business Services Storage & Travel Services

Utilities

Others

Aggregate deal value (mil USD)

Top 10 Largest Private Equity Deals Globally: 2013 YTD (as at 01 April 2013) Target name

Target business description

Deal type

HJ Heinz Company

Dell Inc.

Miscellaneous food products manufacturer and wholesaler Computer and computer peripherals manufacturer and wholesaler

Acquisition Leveraged 100% buy out, Public takeover Acquisition Leveraged 100% buy out, Public takeover

Gardner Denver Inc.

Compressed air and petroleum equipment manufacturer 4. Tele2 Rossiya Broadband internet and wireless telecommunications services 5. New Albertsonâ&#x20AC;&#x2122;s Online shopping Inc. services 6. NET4GAS SRO Gas distribution services 7. Terminal InvestContainer termiment Limited SA nal operator 8. Cerved Group SpA Business information database developer and operator 9. CSM NV's North Bakery American, Europe- ingredients an and internation- and products al bakery supplies manufacturer operations 10. Matahari DepartDepartment ment Store Tbk, store chain PT operator

IBO 100%

Deal sub-type

Public takeover

Last deal "Deal value Acquiror advisor name status date mil USD" - Venture Capital/ Private Equity 14/02/2013 28,000.00

Berkshire Hathaway Inc.; 3G Capital Management Inc.

05/02/2013 24,400.00*

Silver Lake Partners LP; MSDC Management LP

08/03/2013 3,900.00*

Vendor name

Last deal Deal status status date 14/02/13 Pending

Mr Michael Dell; South05/02/13 Pending eastern Asset Management Inc.; T Rowe Price Group Inc.; Mr Carl C Icahn; Shareholders; ACR Alpine Capital Research; Schneider Capital Management Corporation Kohlberg Kravis Roberts & Company ValueAct Capital Manage- 08/03/13 Pending LP ment LLC; Shareholders; Mr Daniel White

IBO 100%

27/03/2013 3,550.00*

Bank VTB OAO

Tele2 AB

27/03/13 Announced

IBO

21/03/2013 3,300.00

Cerberus Capital Management LP

Supervalu Inc.

21/03/13 Completed

IBO 100%

28/03/2013 2,044.81* 01/04/2013 1,929.00* 02/01/2013 1,492.54

RWE Gas International BV Mediterranean Shipping Company SA Bain Capital LLC; Clessidra SGR SpA

28/03/13 Pending

Minority stake 35% IBO 100%

Borealis Infrastructure Management Inc. Global Infrastructure Management LLC CVC Capital Partners Ltd

IBO 100%

25/03/2013 1,362.31

Rhone Capital LLC

CSM NV

Minority stake 40%

25/03/2013 1,300.45

Schroders plc; Temasek Capital (Pte) Multipolar Tbk, PT; Asia Ltd; The Government of Singapore Color Co., Ltd Investment Corporation Pte Ltd; BlackRock Inc.; Och-Ziff Capital Management Group LLC; FMR LLC

ACQUISITION INTERNATIONAL

Secondary buy-out

01/04/13 Pending 02/01/13 Pending

25/03/13 Pending

25/03/13 Completed

April 2013 /

ON THE COVER:

Pluralsight Receives $27.5 Million in Funding From Insight Venture Partners

PLURALSIGHT RECEIVES $27.5 MILLION IN FUNDING FROM INSIGHT VENTURE PARTNERS -----------------------------------------------------------------------Aaron Skonnard is President and CEO of Pluralsight, based in Utah. He speaks to Acquisition International magazine about the company, its growth over the last few years and a recent investment which has made all the difference. ------------------------------------------------------------------------

Background Pluralsight launched in 2004 as a classroom training company for professional software developers. It built a small team of world-renowned authorities and engaged them to teach short workshops to businesses all over the world. In just a few years the company had become a highly respected brand and a profitable business whose instructors were widely turned to as thought leaders in their respective areas. On an airplane ride back from Europe in 2007, just when his company was running more profitably than ever before, Aaron Skonnard had an epiphany. He realised for the first time that his classroom training company was the same as dozens of others – it wasn’t doing anything remarkable nor was it using technology to increase value for customers. The current business model wouldn’t allow it to scale, yet Skonnard wanted to share the company’s expertise with developers everywhere. This “reality check” left him feeling unsettled.

/ April 2013

He and his cofounders wanted to change the world; they wanted to drive new ways of learning and this meant the company had to pivot dramatically. Skonnard was inspired to move the business online by The Long Tail by Chris Anderson, which made him realise that a “long tail-style” educational model would be perfect for professional software developers who live in a fast-paced world of churn where technology changes every day. The book challenged him to ask tough questions about his business and what customers ultimately wanted. He began to see more clearly that recent advances in technology would open up new online possibilities. Obstacles presented themselves, the largest being that people didn’t believe in online education at the time, but Skonnard knew technology would ultimately prevail and disrupt the traditional models. Taking Pluralsight to an online-only educational system was a major risk for the company. No one else was doing it at the time and success wasn’t guaranteed, but Skonnard and his cofounders, Keith Brown and Fritz Onion, knew they could use technology to improve the way software developers learned their craft. They took a leap of faith, and set

out to make big changes. From this moment forward, Pluralsight became a catalyst for a revolution in technology education literally changing the way software developers learn their craft every day. In 2008, the company released its first online learning library consisting of a dozen courses. With the turn of the economy in 2009, many companies stopped using expensive classroom training. As the only online platform in the software development industry, Pluralsight’s model began to take root. Over the past three years, Pluralsight has continued to rapidly grow its library, while completely phasing out its classroom training business. Doing so has allowed the company to double revenue in 2011 and 2012 and remain on track to repeat this again in 2013. Pluralsight’s future prospects have never looked stronger. Today, Pluralsight offers full library (unlimited viewing) subscriptions starting at only $29 a month. Focus Pluralsight distinguishes itself by focusing on serious, professional software developers, “That’s why we call it hardcore developer training,” states

ACQUISITION INTERNATIONAL

ON THE COVER:

Pluralsight Receives $27.5 Million in Funding From Insight Venture Partners Skonnard. “At the core of the model is a laser-sharp focus on curating quality content from industry thought leaders that provides immediate value to experienced developers. While other companies help beginners learn how to program, Pluralsight remains focused on helping today’s professionals progress in their careers by acquiring new skills or refining existing ones.” Skonnard believes the content curation process is one of the most important factors of the business’s success. “Another difference is production rate,” Skonnard adds. “Pluralsight works hard every day to grow its library and to cover all software development topics that are relevant today. The company is very aggressive with content creation and has doubled its library year after year for the last four years.” Currently Pluralsight has over 450 courses, and by the end of 2013, the goal is to have close to 1,000. “It’s important to note the company plans to accomplish this without sacrificing quality,” continues Skonnard. “The software experts, or authors, are the top thinkers and educators in their fields. Each is hand selected, paid an advance fee and royalties, and given the tools to help produce their courses in their home/office studio, which allows Pluralsight to scale.” Pluralsight authors earn royalties based on how much customers watch their courses. As Pluralsight grows its library, it is able to acquire more customers and drive more revenue. As revenue increases, Pluralsight authors earn more because the royalty pool grows in relation to revenue. Earning more motivates them to produce even more content. “This creates a virtuous cycle,” explains Skonnard. “Authors want to produce content that customers want most; customers reward (and ultimately pay) authors by watching their courses. As the library grows, all subscribers derive more value. Everyone wins. “Pluralsight receives feedback from customers every day expressing gratitude for helping them land a better position, a new job, a more interesting project, or even better pay. We don’t see a lot of other online education companies having that kind of impact in the careers of today’s high-tech professionals.” The Deal Recently, the company received a $27.5 million investment from Insight Venture Partners to accelerate its expansion. Skonnard explains further: “Pluralsight was already profitable when it took the investment from Insight Venture Partners so the motivation was much more strategic than financial. Over the past few years, Pluralsight has noticed a significant shift in perception around online education and believes timing has become more critical than ever. We have started to see that the “right” investment could really impact our business in a positive way. “For starters, it would immediately remove the growth constraints imposed by the realities of cash flow and profits. This investment will allow Pluralsight to move quickly – and grow the library aggressively – in 2013-2014. It opens up new possibilities for content acquisition and strategic

ACQUISITION INTERNATIONAL

partnerships that didn’t exist before. Pluralsight also hopes the industry validation will cause the media to pay more attention to it in the online education space, which is often challenging for companies outside of Silicon Valley.” The Pluralsight founders and executives began to appreciate the benefits of acquiring a partner who could help fill in some “missing pieces” as we accelerate our growth. Pluralsight chose to partner with Insight Venture Partners because of Ryan Hinkle and Bryan Gartner, the IVP investors who now sit on the Pluralsight board. According to Skonnard, “Ryan and Bryan impressed early on by demonstrating a solid, almost inherent, understanding of what’s important in our business model. We believe Insight will help us build and grow in a way that’s consistent with our vision and culture. I personally believe we will go further with them than without them, and that’s why we’re doing it.” The Pluralsight founders spent several months trying to decide if an outside investment was something they wanted to pursue, but once they made that decision, things moved pretty fast. Because the company was already profitable, in the exciting area of online education, it quickly became a competitive process. They had more than a dozen firms interested in investing and a half-dozen term sheets on the table when they made their decision in late November. From the day they signed, it took less than a month to close.

in several topics areas but weaker (or non-existent) in others. Pluralsight customers should notice those weaker areas filling in very quickly and then deepening over time. “Individual subscribers will see new features that help guide them through specific learning paths and that drive deeper engagement and more learning. Large business customers will notice better features and more flexibility for site license scenarios and pricing options that make our library available at a very large scale (e.g. for organisations that have tens or hundreds of thousands of developers).” Skonnard states that the investment will have been deemed a success in 12 months’ time based on three specific things emerging: exceeding 1,000 courses in the library; new authors being acquired in key areas, and reaching our revenue goals. He strongly believes that Pluralsight will have more than 1 million member accounts within the next few years. They also offer free subscriptions to university students, through a formal partnership with Microsoft DreamSpark, and they just released a few free courses designed to teach kids how to program. “Our future demands more software developers, yet our schools are not doing a good job of preparing them today. We want to do our part to help address that.”

The Future The main difference for Pluralsight customers will notice is a faster-growing library. “They will see more courses show up every month – growing from an average of 15-20 courses a month to hopefully 40-50 per month,” says Skonnard. “Customers will also notice broader and deeper coverage. Today, the Pluralsight library is strong

Company: Pluralsight Name: Aaron Skonnard Email: aaron@pluralsight.com Web: www.pluralsight.com Address: Layton, Utah, US Telephone: +1 888 368 1240

April 2013 /

ON THE COVER:

Osprey Capital Backs iNDEXX Markets

OSPREY CAPITAL

BACKS INDEXX MARKETS -----------------------------------------------------------------------Ronan Kearney is Chairman of Osprey Capital Ltd, a firm which invests at seed and development stage in highpotential companies. ------------------------------------------------------------------------

Chairman of Osprey Capital Ltd, Ronan Kearney, explains that the firm invests in high-potential companies at the seed and development stages. A recent investment made by Osprey is highlighted here as an Acquisition International Deal of the Month. “Osprey Capital Ltd is set up as a limited company rather than an LLP,” Kearney states. “This ensures greater transparency and that any profits are attributed to shareholders based on their share ownership. “Osprey invests primary capital only, there are no third party funds; returns are measured solely on the cash returns to shareholders rather than a notional value of the underlying holdings,” he continues, explaining what sets the company apart from others. “Osprey is a response to a problem that the market has long suffered from. The Principal-Agent problem has led to a lack of transparency about what returns are expected or delivered, and subsequently a drop in investor confidence. By focusing on the cash return to investors, it is possible to understand exactly how

the investments are performing, ensuring all parties fully appreciate the reality of returns.” Recently, Osprey Capital invested in iNDEXX Markets, a UK-based financial services firm. “Osprey invests along the value chain in retail financial services,” says Kearney, explaining the strategic rationale for the investment. “The first investment was Allium Capital, a consulting and actuarial firm that worked with fund managers. Subsequently Osprey invested in the Caerus Group, a firm focused on financial advice and the distribution of funds. iNDEXX Markets fits into that chain as a manufacturer of instruments that are commonly held by investment funds. Osprey is also considering investments into discretionary fund managers, and software-based advice solutions focused on the direct to consumer market.” Founded in 2011 and led by Leon Diamond, Director of the company, iNDEXX Markets works with professional firms in the index investment market to deliver innovative managed indices to fund management groups. The deal took 13 months from inception until completion. Osprey first considered the investment before iNDEXX had fully developed the capability or even had its first client. In fact it was little more

than an outline plan on a sheet of paper. However, as Kearney tells us, working with the management team allowed full participation in the development of the plan during that year. “The investment by Osprey financed the detailed legal agreements between iNDEXX and the Investment Banks that allowed for the creation of the indices and supporting documentation,” Kearney states. “This is an extremely expensive and complex process with no certainty of a satisfactory conclusion. By financing this process, Osprey enabled the launch of four indices that rapidly attracted more than $200m of invested assets. If growth continues this will push iNDEXX to the position of profitability in its first trading year.” Kearney and the Osprey team are convinced that the investment will yield success and, as he explains, the future is looking bright. “iNDEXX has a short term target of $500m AuM, and I would expect it to be substantially there by early 2014. From Osprey’s perspective the point at which an investee company is generating sufficient cash to pay Director’s fees is a key one. The IRR to shareholders is impacted significantly by the timing of cash receipts. We therefore work closely with investee companies on their business plans to identify and reach the point at which they are cash generative. “iNDEXX will be announcing some major initiatives in the market during 2013. One new deal is already signed and will be announced in April, and another is in negotiation. By Q1 2015 my expectation is that iNDEXX will exceed $1bn AuM, and be expanding rapidly at that time.” As for Osprey, the firm will be publishing its 5th anniversary report in October 2013 which, says Kearney, will detail not only investment returns, which will be independently audited in cooperation with the BVCA (British Private Equity & Venture Capital Association), but also the social impact of the investments made under a number of key themes. “These will include information such as jobs created; tax contribution to the economy; the economic multiplier of investments made; women in senior positions and charitable support,” he concludes.

Company: Osprey Capital Ltd Name: Ronan Kearney Email: ronan.kearney@osprey-capital.co.uk Web: www.osprey-capital.co.uk

ACQUISITION INTERNATIONAL

April 2013 /

SECTOR SPOTLIGHT:

Cross-Border Business Crime: A Major Target of Enforcement

CROSS-BORDER BUSINESS CRIME

A Major Target of Enforcement

l Globalised markets together with the increasing pressure to confront international fraud and money laundering has led to the inevitable development of international legal enforcement. Corrupt practices around the world, financial fraud, tax evasion, cartel offences and other forms of business misconduct are thought to be top targets for aggressive transnational prosecution. The criminal law in any jurisdiction gives a framework defining the boundaries to acceptable behaviour. Clear and consistent boundaries help to ensure that all businesses are held to the same standards of behaviour, so that appropriate business decisions can be made without the distortions that can result from inappropriate or unfair behaviour. The differences between jurisdictions as to how the law is defined and interpreted can make it difficult for cross-border commerce to develop with a common understanding of what is acceptable and what is not. In light of the escalation of business crime prosecution, those who are advising corporations and individuals in relation to such offences have to respond to the new challenges in order to protect their clients’ interests. Business crime defence lawyers and consultants need to act creatively in an environment plagued with risks, where long-cherished principles like commercial and banking secrecy are swept aside. Leading experts in the field give Acquisition International a detailed look at the key current issues in cross-border business crime. -----------------------------------------------------------------------Kate McMahon is a Solicitor and Director at Edmonds Marshall McMahon. -----------------------------------------------------------------------Edmonds Marshall McMahon is a specialist private prosecutor, dealing with complex cases of fraud and perverting the course of justice. Often the types of cases that the firm deals with involve cross border disputes arising out of fraud in commercial contracts, fraud against and within companies and fraudulent financial transactions. Ms McMahon noted that the firm is seeing a significant rise in clients seeking to resolve matters in the criminal forum rather than the civil forum. She attributes this to the fact that legal enforcement via criminal litigation (if the crime has a nexus to the UK) is often easier to enforce and creates a greater impact. Most of the firm’s clients are companies or high net worth individuals. Many have been the victims of fraud in commercial transactions, such as joint ventures for expansion in foreign jurisdictions, deals which have not materialized or have been party to litigation during which lies have been told to the Court by their opponent in order to secure an advantage; often financial. “Almost all of clients have extensive business interests and wish to set a precedent to be observed in their future -----------------------------------------------------------------------Jorge Bofill is a Partner of Bofill Mir & Alvarez Jana Abogados and is head of the firm’s White Collar Crime practice group ------------------------------------------------------------------------

Our practice has been based on our experience and reputation as a specialized and sophisticated litigation group in high profile and complex cases, with a very successful record. This allows us to give our clients inhouse advice on criminal litigation matters but also on any legal aspect related disputes in areas as broad as civil and commercial litigation and arbitration, regulatory, M&A, finance, mining and natural resources. Among other matters, we have experience in a vast number of cases related to securities and banking, government official’s crimes, all kind of fraud and swindle, intellectual and industrial property felonies, document forgery, misappropriation of funds and tax evasion. Our extensive cross-border practice allows us to help our clients and colleagues abroad the particularities of the Chilean legal system. BMAJ has broad experience in the execution of corporate internal investigations undertaken at the request of client’s Boards of Directors

22 / April 2013

transactions, and they are anxious to send a message that fraudulent conduct will not be tolerated” she commented. “Often our clients have been unable to obtain police interest or involvement, typically because the police categorise the fraud/ theft as a ‘civil matter’.” Ms McMahon stated that the firm has the capability and experience to conduct a full internal review in the event of wrongdoing, but also the ability to conduct high-level reviews if a company suspects that a crime may have been committed. The firm has a number of trained investigators, interviewers and forensic capability. “These additional resources enable us to provide the best legal advice in any situation, and that advice is based on material gathered in a reliable investigation, in an evidentially sound manner. If required, this allows for a subsequent prosecution or potential law enforcement referral – in the UK or internationally. “We only prosecute on behalf of our clients, but we are always able to give detailed advice and guidance regarding selfreporting and whistle-blowing. We are also able to prepare matters in a way which is expected and desired by the Police or Prosecuting Agencies. This assists our clients in making sure their investigation is considered serious and effective.”

or controllers and carried out independently of the corporation’s administration. The counsel provided to clients both in Chile and abroad has covered matters such as corporate governance, legal compliance and the relations between a corporation and its regulators. Also, our relevant contribution to the implementation of the new Chilean Criminal Procedure Code makes the BMAJ criminal law practice to stand ahead from our competitors.

The firm is currently working on a number of cases which are proceeding to trial such as frauds arising out of the 2008 financial crisis. In relation to government cases, Ms McMahon was the senior lawyer on the SFO’s high-profile “Innospec Case”, which is a case involving international bribery and corruption and due for trial next year.

Company: Edmonds Marshall McMahon Name: Kate McMahon Email: katemcmahon@emmlegal.com Web: www.emmlegal.com Address: 5/6 Crane Court, EC4A 2EJ Telephone: +44 (0)20 7583 8392

This law established, for the first time in Chilean legislation, the criminal responsibility of legal entities arising out of bribery, financing of terrorism or money laundering, when these crimes are committed by their directors, managers or an employee reporting to them and the company lacks an adequate compliance program. Most recently, a prosecutor in Santiago has initiated a criminal investigation against a university based on charges of bribery of a public officer.

The constantly evolving legislative environment has increased the clients’ need of advice in some particular areas. Although money laundering was established as a crime already in December 2003, the list of entities subject to reporting duties and the catalogue of criminal offenses which may give raise to money laundering has been extended over the last years. In parallel, the Prosecutor’s Office has intensified its policy of prosecution of money laundering in recent years. Additionally, in December 2009 Law N° 20.393 on Criminal Responsibility of Legal Entities was enacted.

Company: Bofill Mir & Alvarez Jana Name: Jorge Bofill Email: jbofill@bmaj.cl Web: www.bmaj.cl Address: Av. Andrés Bello 2711, piso 8, Las Condes, ZC 755061, Santiago, Chile Telephone: +562 27577805

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Cross-Border Business Crime: A Major Target of Enforcement -----------------------------------------------------------------------Jacob S. Frenkel is a recognized expert in the defense of cross-border business crime investigations and cases. He chairs the Securities Enforcement, White-Collar Crime and Government Investigations Practice Group, and the International Practice Group, at Shulman Rogers in Potomac, Maryland. He is a former United States federal criminal prosecutor and a former United States Securities and Exchange Enforcement lawyer. -----------------------------------------------------------------------We caught up with Jacob after his return from Russia where he is defending clients in a World Bank Sanctions Board proceeding and from London where he was an expert witness in an international arbitration. We sought his insight into critical issues in cross-border enforcement. What do you view as paramount in defending successfully cross-border investigations? The most important issue when counseling clients in crossborder investigations is identifying quickly all government stakeholders in the investigations and agencies within each country that may exercise jurisdiction. Next is determining who is most likely to assert jurisdiction and become the lead or most influential investigating agency. At the same time, in evaluating how best to respond in investigations, counsel must assess limitations on access to evidence, restrictions on the use of information and the ability to transfer data or even attorney work-product between countries. Decisions made in the first days of an investigation may impact the outcome or possible dispositions. Incorrect decisions could impair the ability to defend the matter vigorously. International investigations demand experience and competent decision-making. It is impossible to discuss cross-border enforcement without addressing anti-bribery and anti-corruption enforcement. You have spoken publicly about your concerns of a ‘competition’ between the U.S. FCPA and the UK Anti-Bribery Act. Please explain. US enforcement of the FCPA continues to be a high priority for the Department of Justice and the Securities and Exchange Commission. These cases enable US authorities to extend their prosecutorial reach menacingly beyond US borders. The DOJ and SEC continue to pursue aggressively charging individuals, not just the corporations. The goal of the criminal investigations is jail and civil investigations is large financial penalties. US prosecutors believe that the prospect of jail operates as a deterrent. Also, the SEC’s bounty program has bolstered these efforts, because the FCPA is part of the Securities Exchange Act of 1934, which the SEC enforces. Meanwhile, the UK Bribery Act is more expansive in potential global reach than the FCPA. If you read between the lines of comments by both countries’ enforcement authorities, you can see a simmering rivalry to determine which will bring larger cases and extract more onerous settlements. The US Government’s BAE Systems (subsidiary) FCPA case did not sit well, regardless of the public face of cooperation. Watch for challenges to extradition requests and trials testing the US Government’s theories of prosecution. And, the best medicine is a comprehensive risk assessment and evaluation of anticorruption compliance programs and protocols. Besides anti-corruption, what do you see as the top three cross-border enforcement priorities? One is capital markets offenses, such as stock manipulation, insider trading or insider dealing, and offering fraud. There remains a lack of understanding of the regulatory and operating differences between countries’ over-the-counter markets and exchanges, particularly in emerging markets. There is a belief that insider trading in accounts in financial havens, or simply countries that are different from where the underlying security trades, provides an enforcement safeharbor, which is not true. And offering frauds, including Ponzi schemes, continue to challenge regulators. A second priority is money laundering. Not only is money laundering central to the financing of terrorism and international criminal enterprise, but the US government uses the charge to pursue participants in international bribery cases. The third is export regulations, particularly those governing technology, software and devices with potential dual military and civil applications.

ACQUISITION INTERNATIONAL

Are investigations and cases by the World Bank and other Multilateral Development Banks (MDBs) different? When we refer to the MDBs, we are talking about the World Bank and four smaller regional development banks: the African Development Bank (AfDB), the Asian Development Bank (AsDB), the European Bank for Reconstruction and Development (EBRD), and the Inter-American Development Bank (IDB). The United States is a member of, and major donor to, each of the MDBs. Yes, there are differences, which many American lawyers do not understand. American courtroom techniques are not favored by international panelists. American jurisprudence does not control these proceedings. Each organization with an adjudicative body has its own case precedents, policy and practice guidance, and favored judicial standards when there is a need to apply legal concepts. One of the most significant mistakes that companies make in these investigations is simply opening their books and permitting their staff to engage in interviews without the participation of experienced and knowledgeable counsel. So, by the time counsel becomes involved, the companies have damaged themselves. The consequence of an adverse disposition could be much broader than debarment by the particular MDB. A real outcome is the potential for cross-debarment, as other international contracting organizations will give deference to debarment orders entered by other MDBs that are greater than a certain length. Compliance policies and systems are critical to persuading effectively that the contracting party espouses a good corporate citizen mindset.

costs associated with representing the organization versus implicated individuals. You have been a regular source of commentary for a broad range of media dating back more than 10 years. Television networks include CNBC, CBS, BBC, CNN and CCTV. Radio networks include BBC, CBS and NPR. Print wire services include Associated Press, Agence France Presse, Bloomberg and Reuters. Major publications include the Wall Street Journal, Financial Times and the New York Times. Why do they call you? I try to provide commentary as I like to advise clients – evaluate the facts, address the issues and offer some sense of predictability and meaningful analysis. The media values the perspective of my having served as a government enforcement lawyer for the first 14 years of my career and as a defense lawyer for the past 14 years. I understand and explain how the US Government approaches investigations and prosecutions and analyzes conduct. I use commentary as an opportunity to educate the public about what often are complex financial or criminal issues. Clients, no different than reporters and the public, want to know what are the possible outcomes of the investigation or case, and what lessons can we learn. The media values objectivity and the absence of an agenda.

Can corporations and individuals contain costs in cross-border investigations? Absolutely. The key is selecting counsel who will maximize efficiencies, meaning knowing how to use experts and local resources strategically, not over-staffing the case, offering a competitive fee structure and assigning experienced persons who can work efficiently. I believe that addressing these factors openly and up front have been essential to my law firm securing some of the engagements on which we have worked, above and beyond the wealth of experience we bring to such matters. There also are differences in the

Company: Shulman, Rogers, Gandal, Pordy & Ecker, P.A. Name: Jacob S. Frenkel Email: jfrenkel@shulmanrogers.com Web: www.shulmanrogers.com Address: 12505 Park Potomac Avenue, Sixth Floor, Potomac, Maryland 20854 Telephone: +1-301-230-5214

April 2013 /

2012 LEGAL AWARDS:

Polish Outsourcing Firm of the Year - MDDP

2012 LEGAL AWARDS

Polish Outsourcing Firm of the Year - MDDP

-----------------------------------------------------------------------Rafał Michniewicz is partner responsible for the outsourcing division and service line at MDDP Outsourcing, Poland. ------------------------------------------------------------------------

MDDP Outsourcing, based in Warsaw, Poland, specialises in full scope outsourcing services such as accounting according to polish and international standards, statutory reporting and tax reporting. Partner, Rafał Michniewicz, explains how it felt to be awarded Polish Outsourcing Firm of the Year, as voted by Acquisition International readers. “The Award has been a great summary of our efforts for last six years, since we have founded Outsourcing Division at MDDP. It is a great honour to provide services of a quality that is recognized by leading finance press magazine. We believe our services deserve Polish Outsourcing Firm of the Year award.” An award such as this is recognition of MDDP’s successes, however Michniewicz explains that the company did not have to adapt to working in turbulent economic conditions, as most companies did. “Since very beginning we have develop our IT expertise and provide to our clients business process improvement tools (such as electronic workflow for example). IT tools in our offering expand broadly package of service we may deliver. That makes our services unique – there is little number of companies provide accounting services with specialized IT tools,” he states. “In other words, we are trying to adapt continuously to fast changing business environment and expectation and potential clients by providing services that are not only pure accounting and tax, but also supported by IT technology. From another point of view, stagnant sales and profit force companies to look for cost reduction and efficiency even harder which in our case helps us to win more projects.” Michniewicz believes that much emphasis is placed on team culture at MDDP and that this played a large factor in helping the company secure the award.

24 / April 2013

“Team spirit is important in provision of quality services including outsourcing services,” he states. “But it even more crucial in course of business improvement and working on innovations. We focus our efforts on developing and providing unique, innovative solutions. Innovation is all about discovering new possibilities and breaking barriers. When you think about outsourcing you typically think about doing routine operation every day. This does help to keep our team motivated. So we involve our people in designing and development of our new solutions and give chance to be the team members who have impact on what our company is can be in the future. We want to offer possibility for everyone to work in a company, in which Monday ideas, come true by Friday.” Another key factor in the company’s success can be attributed to how the company fares against the competition. “Our key differentiator and a foundation of our business is the ability to combine professional service provision with dedicated IT systems customised for each client,” says Michniewicz. “Explaining it more deeply – we would like to provide accounting solutions for medium size clients in a way which is out of reach right now, by combining accounting expertise with highly integrated IT solutions. Moreover in our approach we assume deep integration with clients that will be almost transparent to an organisation and its employees.” “The market is changing dynamically, but in fact the more challenges we face the more opportunities we see in long term,” Michniewicz continues. “We still feel that there are huge, quality players on the market, and a plenty of small accounting service providers. However, there is a niche for outsourcing companies like MDDP – interesting for medium size clients yet looking for professional cooperation and advanced IT solutions. In following years the gap between magnates and small providers will increase, which will be our opportunity to blossom.” Michniewicz believes that the biggest issue facing the sector is the relation between cost reduction expectations and quality of the services provided. “This is basically driven by market pressure to lower down service

rates. We see also growing market expectation for so called value added outsourcing offering.” He explains further: “Sophisticated IT solutions are available for biggest companies and typically delivered by biggest outsourcing providers. We believe that medium size companies also would prefer focusing on core activities and at the same time having quality accounting support and access to IT systems improving daily control and operations. So clients that are out of interest for biggest outsourcing market players and do not have financial resources to invest in IT systems or in business process improvement expertise are waiting for its outsourcing partners. This creates an opportunity for local emerging outsourcing companies with service and products and service portfolio addressing market expectations.” Michniewicz knows that predicting the future is not possible, however he does envision opportunities arising for MDDP. “Playing an oracle and believing in what we are capable of doing, we assume that in three years’ time we will serve more medium-size international clients and we will provide specialised BPO services. Regardless of global market recovery from recession we (with very high probability) will continue recruiting. Our recruitment team will search not only for accounting specialist but also for tax advisors, data and information security experts, internal auditors, IT consultants.”

Company: MDDP Outsourcing Name: Rafał Michniewicz Email: rafal.michniewicz@mddp.pl Web: www.mddp-outsourcing.pl Address: Solec 22, 00-410 Warsaw, Poland Telephone: +48 509 155 107

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

DOING BUSINESS IN 2013

Doing Business in 2013

Slovakia

from the crisis, expected to reach one of the highest GDP growth in the Eurozone Area. Recovery in M&A activity is expected in 2013.”

-----------------------------------------------------------------------Tomas Zárecký is a partner in the Slovak law firm Zárecký Zeman Ďurišová. ------------------------------------------------------------------------

Doing business in Slovakia has its benefits and Tomas explains what factors in particular attract investors to the country.

Zárecký Zeman Ďurišová Law Office is a full scope commercial law firm with extensive experience and expertise in providing legal advice and assistance to its international and domestic clients with respect to their activities in the Slovak market. Its legal services range from standard legal advice in corporate, labour, commercial, civil, administrative and regulatory matters to more complex involvement in complicated cross border transactions, including mergers and acquisitions, project financing, green field foreign investments or infrastructure projects.

“There is a qualified labour force with relatively low overhead expenses compared to Western standards, a high and stable investment rankings together with the membership in the EU, Schengen Area, OECD and Eurozone, excellent geographic location in the real geographic centre of the European continent with easy access to all European countries, and, with the Euro being the official currency, this provides stability, easier predictability of various economic factors, lower risk and lower transactional costs (especially in case of investors from other Eurozone countries).”

Tomas Zárecký describes the current economic climate in the country. “Slovakia is an export-oriented market economy with Western standards in the business environment. There are no obstacles in entering the market while access to the market is made even easier due to Slovakia’s membership in the EU, Schengen Area, OECD and Eurozone. The country, even though still fighting high unemployment, is recovering

Tomas has predictions for M&A activity for the remainder of 2013, and the future is certainly looking rosy.

ACQUISITION INTERNATIONAL

“With the GDP growth predicted by Eurostat to be at 2.0%, Slovakia will belong to the fastest growing economies in the Eurozone Area, which fact is expected to be manifested in an increased M&A activity in the private sector,” he states.

“As regards privatisations, no major plans were announced and the six heat power plants in major Slovak cities once included into the government’s privatisation plans will not be privatised in 2013. The government will however most probably sell its stake in the largest Slovak telecom company. New green field investments especially in the automotive industry are expected. Increased drawing of EU funding is expected to be visible in the regional development and infrastructure projects (however even more in 2014).”

Company: Zárecký Zeman Ďurišová Law Office Name: Tomáš Zárecký Email: tomas.zarecky@zzd.sk Web: www.zzd.sk Address: Medená 18, 811 02 Bratislava, Slovak Republic Telephone: +421 2 52 77 56 11

April 2013 /

SECTOR SPOTLIGHT: Doing Business in 2013

authorization, for example in the field of construction and civil engineering To improve the formation process and the business environment in general in our jurisdiction more funds to support formations need to be developed, with improved access to credit, and expedition of the processing of commercial disputes in courts and focus on the implementation of judicial decisions needs to happen. It’s difficult to obtain statistics relating to formations over the coming 12 months, however DEMBS ASSOCIATES expect at least four for the year 2013, depending on the company’s request.

Burkina Faso

-----------------------------------------------------------------------Mr Olle Alain Kam is the Office Manager for Dembs Associates, based in Africa. ------------------------------------------------------------------------

Dembs Associates is a consulting firm with formation services that are based on companies’ experiences and our trainers come from companies and Academic world. Our jurisdiction has witnessed a growth in formation levels mainly due to a need to strengthen companies’ capacity to compete fiercer. The availability of funds to support the formation also contributed to this growth Access to credit is undergoing a positive change with the introduction of an Interbank Financial

Corporation Guarantee Burkina (SOFIGIB). This company manages the guarantee fund to assist the development and the creation firms in Burkina Faso by facilitating access to credit. In real estate, there is a housing bank which facilitates the granting of housing loans. The incorporation process is not fundamentally different from one company to another in Burkina Faso. Of course fees and expenses change. Limited companies must appoint an auditor. Limited Liability Company (LLC) is the company structure which is in the greatest demand. The key challenges of incorporating offshore/foreign companies include knowledge of the country’s taxation; a study of the market sector; and the fact that the exercise of some activities is subject to prior

There will be more business in the coming years in terms of the average number of entrepreneurship in Burkina (about fifty per month) and the development of sectors such as buildings and public works, mining, agribusiness with the advent of growth poles in the agricultural sector in particular.

Dembs Associates Company: Dembs Associates Name: Mr Olle Alain Kam Email: dembsassociates@fasonet.bf Web: www.dembsassociates.bf Address: 06 BP 9731 Ouagadougou 06, Burkina Faso Telephone: +226 50 45 34 59 or 70 36 96 66

VPB Namibia (Proprietary) Limited (‘VPB’) is a Private Equity and Venture Capital Fund Manager established in 2009. VPB is domiciled in Windhoek, Namibia. The VPB maiden fund in Namibia, VPB Namibia Growth Fund is the 2010 vintage, 10-year closed-end with N$160 million in committed capital from institutional investors. The Fund Manager has its holding company based out of Gaborone, Botswana. The Fund Manager has well-defined systems and processes for transaction origination, management of the investment process, portfolio management and Investment realisation. The Fund Manager enjoys the successes that the team has achieved in doing business in the SADC region with the Group’s maiden fund in Botswana recording superior returns on some exits. VPB is a proud member of the African Venture Capital Association (AVCA), and the South African Venture Capital Association (SAVCA).

www.venture-p.com 26 / April 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Azerbaijan: Diversifying the Economy

AZERBAIJAN Diversifying the Economy

l Azerbaijan has been recognised for many years as a location for foreign investment and the country has a significant impact in the wider global economy. Although traditionally in the energy sector, investments have also grown in agriculture, construction and tourism, with all three growing rapidly over the last decade. The country has benefitted greatly from its strategic position, allowing access to both Asian and European markets and it was recently described as authoritative and powerful having great potential for economic development in 2013. The state’s Statistics committee has recently clarified that Azerbaijan’s economy has expanded by 2.8% which is respectably high compared to the 0.8% figure reached last January. Performance in the non-oil sector has shown strong development with an increase of 8.8% this January, with figures expected to increase throughout 2013. Azerbaijan proved its position in the global economy with the high economic growth it boasted from 2006-08 but much of this growth was attributed to the Oil industry; in 2011, when oil production reached a plateau, economic growth slowed to 0.2%. This slowdown demonstrated the wider challenges that the country faces. Roger Gherson, founder of Gherson, a leading specialist UK immigration, nationality and human rights law firm based in London, gives Acquisition International some insight into the Azerbaijan community in the UK.

The Azerbaijan community in UK numbers some 15,000 people and is growing. With commercial opportunity often the key driver behind relocation decisions, individuals continue to flock to the UK. London is widely regarded, and rightly so, as the leading global financial services centre and the pre-eminent hub of professional and business services. Its advantages are manifest: the English language, an ideal time zone and geographical location, and an openness to the world shaped by centuries as the heart of a vast empire. Beyond such commercial benefits, the UK appeals to families of those who seek to settle there, boasting world-leading education facilities, first rate universal health care, mostly free to the permanently settled and a low crime rate – a testament to its multicultural society highly tolerant of all lifestyles. The path to working and living in the UK is not always straightforward. The requirements for eligibility under

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each Tier of the UK Points-Based Immigration System are subject to frequent variation, with hidden pitfalls for those unacquainted with the complexities of the Immigration Rules. Those seeking a move to the UK will thus require professional legal advice, ideally from a local specialist. Gherson offers a comprehensive service for both corporate and individual clients covering the full range of immigration matters and dealing with all applications under the Points-Based System, with a particular emphasis on entrepreneurs and investors under Tier 1 and skilled workers under Tier 2. A firm commitment to its clients, extensive expertise in the field and an impressive track record of success makes Gherson a wise choice. Once clients are settled in the UK, Gherson’s sister firm Discreet Law serves as their general counsel, providing the interface between their immigration needs and other legal affairs. Bespoke legal teams, built on mutual

trust, deliver practical, cost-effective advice and devise innovative solutions to a diverse range of complex legal issues, both personal and commercial.

Company: Gherson Name: Roger Gherson Email: info@gherson.com Web: www.gherson.com Address: 1 Great Cumberland Place, London, W1H 7AL Telephone: +44 (0)20 7724 4488

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

contact@cabinetsefrioui.com

+33 1 47 66 11 00

‘‘

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.

SECTOR SPOTLIGHT:

NAMIBIA

Namibia: Promoting Growth and Attracting Investment in 2013

Promoting Growth and Attracting Investment in 2013 l Namibia’s economy has enjoyed a decade of growth which has been accompanied by structural transformation, huge improvements in labour productivity and higher paying jobs. This growth has now been recognised by some of the world’s leading economists; Bloomberg placed Namibia as the top emerging economy in Africa and 13th in the world, and the International Monetary Fund scored the country 44.4 on its World Economic Outlook, placing it above Hungary, Mexico and Brazil. These statistics demonstrate the huge potential for the country and those willing to invest there over the course of 2013. The recent discovery of Kudu gas and oil resources anticipate Namibia’s economy is set to see a positive turn for 2013; so much so in fact, that the Chinese government is already looking to increase investments. The main areas of investment are predicted to include: processing and labour intensive industries, manufacturing, mining, and transport infrastructure. In conjunction with some of Namibia’s leading professionals, Acquisition International examines the current investment opportunities and pull factors which are bringing foreign direct investment into the region. Windhoek / Namibia

-----------------------------------------------------------------------Romé Mostert is Head of Research at Namibian broking firm, IJG Securities (‘IJG’). -----------------------------------------------------------------------Romé discusses IJG’s expertise and some of the firm’s views on Namibia’s economic outlook this year. “Namibia is seen as a first step into Africa, exhibiting emerging market traits while offering low political risk and a stable economic climate,” Romé says. “IJG is one of Namibia’s leading financial services companies and was recently rated the number one stockbroker in Namibia in the Old Mutual / Namibian Stock Exchange Executive Opinion survey. “In addition to offering stockbroking services, we provide our clients with a full range of investment-related services, including money market, private equity and advisory services. We are well-known and respected for our research and are the only Namibian stockbroker to be awarded first prize in the prestigious Financial Mail broker rating awards in South Africa.” IJG has assisted in listing 18 out of the last 20 companies and five of the last six Domestic Medium Term Note Programmes (DMTNPs) on the Namibian Stock Exchange (‘NSX’) and has helped raise over N$2.0 billion on the NSX through bond

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and equity issues since 1999 for its clients. As a result, IJG is currently the sponsor to approximately 50% of all the companies listed on the NSX. Romé says the firm is currently forecasting growth to slow to 4.6% in 2013, down from registered growth of 5.0% in 2012 and 4.8% in 2011. The forecasted growth rate of 4.6% implies that in 2013 Namibia will be growing at the slowest pace yet since the economy recovered from the global financial crisis. However, the forecasted slowdown is cushioned by very favourable monetary and fiscal policies. “We foresee that the primary industries will be the main drag on the Namibian economy in 2013, with the mining sector coming off a high base after recording growth of 11.3% in 2012,” he says. “The spike in growth in 2012 was a combination of the commissioning of Namdeb’s Elizabeth mine and Langer Heinrich Uranium Stage 3 Expansion, while Rössing Uranium also managed to increase uranium production. Agriculture is expected to rebound in 2013 on the back of increased inventory levels and the probability of a drought leading to higher turnover of animals. The excellent state of the fishing resource due to a number of years of good management will also lead to increases in total allowable catches.”

In its forecasts, Romé’s team expects the secondary industries to be the main driving force of growth in 2013, with both government and the private sector continuing on their aggressive capital expenditure profiles. The manufacturing sector is also forecast to show above trend growth with Namibia Custom Smelters further increasing production capacity and food and beverage producers supported by strong domestic demand.

Company: IJG Securities Name: Romé Mostert Email: rome@ijg.net Web: www.ijg.net Address: 100 Robert Mugabe Avenue, First Floor Heritage Square, Windhoek, P.O Box 186, Windhoek, Namibia Telephone: +264 61 383 500

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SECTOR SPOTLIGHT:

What Does Independence Mean for Scotland’s Economy?

WHAT DOES INDEPENDENCE MEAN FOR SCOTLAND’S ECONOMY? l The Scottish economy is performing better than the UK as a whole, which is great news for businesses and individuals doing business in the region. In a snapshot of labour market conditions, the Bank of Scotland’s Labour Market Barometer registered 53.9% for Scotland, ahead of the UK-wide reading at 53.4% and this January saw the bank’s Purchasing Managers’ Index rise to a sevenmonth high of 52.3. There are some great opportunities for investors; the country’s offshore wind industry has recently received an investment of more than £164m and growth has also been marked in manufacturing, tourism and gas production. This investment demonstrates the considerable level of confidence that developers have in Scotland’s economy. Acquisition International speaks to Barry Love at Environmental Law Chambers Ltd to get his opinion on the possibility of Scottish independence and other factors affecting the country’s economy.

-----------------------------------------------------------------------Environmental Law Chambers Ltd is a firm of businessfocussed environmental lawyers and winners of “UK Environmental Law Firm” for the last three years. Based in Scotland, the firm acts for clients across the UK. -----------------------------------------------------------------------We suspect Independence won’t happen, with voters realising that what’s on offer involves spending a fortune on achieving mere ‘inter-dependence’ within the EU, with no more influence than at present. For example, Scotland would need to import conventional backup electricity to make up for all the times that its wind turbines are not turning. If the vote is “Yes”, we would expect the Scottish Government to welcome investment (e.g. through reduced rates of corporation tax), but we would doubt the underlying solidity of the economy. The problem is the schizophrenic nature of the government which relies hugely on projections of tax revenues from North Sea Oil, while pushing for huge decarbonisation of the economy. How might that tension be resolved? Look at Scotland’s politics, which are firmly to the Left. Almost a quarter of its jobs are in the public sector. Its devolved government believes in state intervention and

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political grandstanding. (While the Parliament only enacts 15 or so Acts of Parliament each year, the insidious creep of regulation continues unabated behind the scenes, with around 450 sets of secondary regulations annually put into force by the government). Witness the rhetoric when Scotland enacted its “worldleading” Climate Change Act in 2009. The EU target was a 20% reduction in carbon emissions by 2020. The UK went further and legislated for a 34% reduction. One-upmanship Scotland went with an even more “ambitious” target of 42%, as its politicians basked in the green adulation, without knowing how the target would be achieved. As the world, currently, refuses to warm in conformity with the “settled science” of the computer projections, it raises the prospect of Scotland’s economy being hidebound, with the government imposing its decarbonisation agenda on a possibly reluctant business community. Similar “green” grandstanding is seen with the recent proposals to give the environmental regulator vastly increased powers, entitling him to carry out a holistic assessment of a business’s overall impact on the environment, rather than by reference to sector-specific rules.

The proposed powers even include a form of corporate self-flagellation whereby non-compliant businesses are compelled to issue press releases disclosing what they’ve done wrong. What will the future hold for a “green” economy which hates fossil fuels, yet depends on oil?

Company: Environmental Law Chambers Ltd Name: Barry Love Email: barry.love@elchambers.com Web: www.elchambers.com Address: 5 Blythswood Square, Glasgow G2 4AD Telephone: +44 (0) 141 225 6499

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SECTOR SPOTLIGHT:

ANTITRUST LITIGATION

Antitrust Litigation – Resolving Competition Disputes

Resolving Competition Disputes

l 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 seeking 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 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 Alex Haffner and Richard Jenkinson, lawyers in the Dentons competition law group in London, to get their opinion of the key current issues. Like our new firm, competition law is global. International regulators such as the European Commission and Africa’s COMESA Competition Commission (which became active in January this year) enforce the law alongside national regulators. Regulators also share information with each other extensively. As a rule, if an industry falls under investigation in one part of the world, it is likely to do so in another. Alleged perpetrators and victims alike must be able to fight on several fronts, facing different issues in different jurisdictions.

information infringing parties give up willingly as part of leniency proceedings, at stake are treasure troves of incriminating material. The seeds are sown for an increase in private competition damages actions in the UK and wider EU, beyond what we have seen in recent years. Potential claimants and defendants should be ready.

Claimants can bring actions for competition damages for losses suffered across the whole EU in the court of one Member State. The currently proposed UK damages regime will therefore impact on all businesses with a presence in the EU. The UK Government intends to pass new laws to make claims easier for competition damages, in what many believe is a claimant-friendly jurisdiction already.

-----------------------------------------------------------------------The recent combination of Salans, FMC and SNR Denton, has created a new law firm, Dentons, which will provide clients a competitive edge. Our new firm will connect clients to talented lawyers across Europe, Canada, the UK, the US, the Middle East, Asia Pacific, Central and East Asia, and Africa who will provide the same high quality advice and prompt service wherever clients do business. ------------------------------------------------------------------------

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English Court claimants already enjoy loser-pays costs and wide-ranging disclosure of documents. The UK Government has also proposed fast track litigation for simpler cases and “opt out” class actions brought by “genuine representatives” of victims (such as consumer groups and trade associations). These class actions may gain the potential to tie in claimants across the EU. A battle is also raging across the courts of EU Member States for access to regulators’ files on those who have infringed competition law. Since these files include the

Company: Dentons Web: www.dentons.com Address: One Fleet Place, London EC4M 7WS Telephone: +44 (0)20 7242 1212 Name: Alex Haffner Email: alex.haffner@dentons.com Name: Richard Jenkinson Email: richard.jenkinson@dentons.com

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SECTOR SPOTLIGHT:

TURKEY Turkey: The Potential to Transform the MENA Economies

The Potential to Transform the MENA Economies

l Turkey is currently ranked among the world’s best performing countries after achieving economic growth of 2.5% in 2012. With the rest of Europe struggling to achieve even 1% growth and the fact that the IMF predicts Turkey to reach 3.4% in 2013, the statistics speak for themselves. Turkey’s stock market outpaced Europe with a positive performance of 58% and the country has had continued high GPD growth, low indebtedness and attractive valuations making it an ideal location for foreign investments. The continued success of Turkey could be inspirational to the MENA economies and the rest of the developing world. Turkey has managed to introduce economic and political reforms simultaneously and this progress has been noticed by the World Development Bank acknowledging Turkey’s success on the areas of regulatory quality, government effectiveness, control of corruption and the rule of the law. The decade ahead is set to see a renovation for the country with the main focus being on systematic transformation in political and economic realms. Turkey has hopes of becoming the ‘China of Europe’, however how realistic is this goal? And further, will surrounding countries have potential to achieve the same economic success? Acquisition International speaks to some of Turkey’s leading professionals, discussing how the country is placed to inspire surrounding economies, how Turkey plans to maintain growth, and how the country will face up to critical challenges arising from the global financial crisis and recent developments in the MENA region.

Galata tower / Turkey

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SECTOR SPOTLIGHT:

Turkey: The Potential to Transform the MENA Economies -----------------------------------------------------------------------Safak Herdem is managing partner of HERDEM&Co, a law firm based in Instanbul. ------------------------------------------------------------------------

Safak Herdem, as well as occupying the position of managing director of Herdem & Co, is also arbitrator of American International Commercial Arbitration Court. HERDEM&Co is an Istanbul-based law firm having offices in four other cities of Turkey and one affiliate in the UK. The firm provides legal and taxation services for national and international companies and individuals in transactions where one party is Turkish. “Our firm mainly focuses on corporate and commercial matters in regulated markets such of aviation and aerospace, finance, banking, capital markets, pharmaceutical, energy and communication and deals with more than EUR 300 mio valued projects per year,” states Safak, “Today Turkey is the 18th largest economy in the world and the seventh largest in Europe and is expected to be the fastest growing economy among OECD members -----------------------------------------------------------------------Alper Işıkal founded Işıkal Law Office, based on his local and international experience in Land Register, Zoning and Public Procurement Laws, as well as corporate law especially mergers and acquisition processes. ------------------------------------------------------------------------

Alper Işıkal began his career in 1995. Until the end of 2000, he followed up many lawsuits and debt enforcement claims. Within the same period, he also worked as the legal advisor for 3M Turkey. He has served for Mc Donalds Turkey in between 2001-2004. From 2004 to 2010, he has served as Chief Legal Director at Multi Turkmall which is a Joint Venture Company established inbetween Turkmall and Multi Corporation, the biggest commercial real estate development company of Western Europe. During this period, he finalized lots of land acquisition processes and financing of the projects, sale and purchase agreements signed between the project owners and the investors such as the land acquisition process for the Forum Bornova Shopping Center, and sale of this project to the German company named CGI. He also finalized the land acquisition process for the Forum Mersin Shopping Center, and sale of this project to DIFA (Union Investment). He finalized the

between 2011-2017,” says Safak, explaining the current economic situation in the country. “The new commercial code entered in force in 2012 as revolution in commerce pushed companies to break the taboos in taking a part of international business environment. Today we can say “the worse of best” for Turkey in business environment.” Turkey has an institutionalised economy fuelled by USD 110 billion of FDI in the last nine years and ranked as the 13th most attractive FDI destination in 2012. “The pull factors for this success are equal treatment to foreign investment,” adds Safak, “In addition to that, the population, competitive and qualified labour force, investment climate and the geographical location of the country attracted foreign investor. “For Turkey the EU accession process and political stability is key driver for continued success. I believe that as long as any country successes in sustainability it easily starts to attract the attention and if you know how to market it the bells start to ring for you. I think the main problem in MENA countries is state effectiveness and quality of improvement. As long as they overcome these two issues the bells will start to ring for them in very near future.” land acquisition process for the Forum Trabzon shopping center land, as well as sale of 50% of the project to the Meinl Group, an Australian Fund, and the partnership agreement between the Meinl Group and the Multi Group. In 2008, he held the legal representation of the Multi Türkiye Fund, a real-estate fund, in the processes for the establishment of the fund and sale of part of its shares to CPP, a Canadian pension fund.

Since the beginning of 2013, he continues his professional career as the founding partner of Işıkal Law Office, together with his partners, Att. Caner Durgut and Att. Seçil Aslan İnandıoğlu, providing legal advice, and representation services to his clients before judicial bodies, especially in real estate law and commercial law. Mr. Işıkal says that: “Although with the recent global and local crisis, Turkish real estate sector is offering great opportunities for the local and foreign investors. Especially, because of Turkey is progressing along the road to European Union membership, the essential

Discussing restructuring tools used in Turkey, Mr Kaçar stated that postponement of bankruptcy(“POB”), which is a more debtor-friendly solution than the other bankruptcy prevention methods represented in the Turkish Bankruptcy Law, is applied to the companies in financial distress and deep in debt. This solution enables such companies to prevent bankruptcy, reorganise and attain their healthy capital structures once again.

We consult clients interested in purchasing assets from, financing, making investments in or obtaining control of distressed entities and insolvent companies.

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“I think the most significant challenge is the split between east and the west of the country in investment opportunities and skilled staff. The others such of energy prices and account deficit can easily be overcame as long as the growth continues.”

Company: HERDEM&Co. Name: Safak Herdem Email: safak.herdem@herdem.av.tr Web: www.herdem.av.tr Address: Uprise Elite Tower Floor 27 No 234 34880 Kartal Istanbul/Turkey Telephone: +90 216 2901277

legislative reforms introduced to Turkey. These new codes have made investing in the real estate market easier and are helping the expansion of the mergers and acquisiton processes.”

After 2010, he has served for several major real estate group companies of Turkmall established in Turkey, Hong Kong, Georgia, Kazakhstan etc.

In an environment with a global financial crisis, public finance troubles originating from the Euro zone and uncertainties resulting from the Arab spring, Mr Kaçar believes that it is not possible for the economy and the commercial activities to not appear distant from the desired point considering the growth rate of %2,2 in 2012 as Turkey’s current high account deficit causes fragility towards such external crisis.

-----------------------------------------------------------------------Çağlar Kaçar is a Partner in Kaçar, Attorneys at Law. ------------------------------------------------------------------------

There are challenges currently faced by Turkey, however Safak believes that these can easily be overcome.

Mr Kaçar noted that in 2012, the increase in the number of applications for POBprocedures made by the large-scaled companies in the construction and textile sectors was remarkable. This increase has been continuing through the first quarter of 2013.

Company: Işıkal Law Office Web: www.isikallaw.com Address: Ebulula Mardin Caddesi, Maya Meridyen İş Merkezi, K:13, Akatlar, Beşiktaş, İstanbul, Turkey Telephone: +90 212 351 91 02; +90 212 351 91 04 Name: Mr. Alper Işıkal Email: alper.isikal@isikallaw.com Name: Mrs. Seçil Aslan İnandıoğlu Email: secil.inandioglu@isikallaw.com Name: Mr. Caner Durgut Email: caner.durgut@isikallaw.com

“People’s anticipation towards the increase of applications for postponement of bankruptcy procedures during 2013 has been raising concerns. Though the confidence index data in the construction sector indicates the continuation of pessimism especially in this sector, urban transformation projects and the regulations easing the procedures for foreigners to purchase property in Turkey have been the positive signs against such pessimism,” he concluded.

Company: Kaçar, Attorneys at Law Name: Çağlar Kaçar Email: caglar@kacar.av.tr Web: www.kacar.av.tr Address: Cumhuriyet Meydanı No:10 Anıt Apt. B Blok K:2 D:3, Alsancak, İzmir, 35220, Turkey Telephone: +90 (232) 464 72 30

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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.

www.deepnfar.com.tw

SECTOR SPOTLIGHT:

PGD Strategy Limited – Specialist Corporate Finance and Strategy Consultants

PGD STRATEGY LIMITED

Specialist Corporate Finance and Strategy Consultants l Acquisition International speaks to Peter Droussiotis, the Founder, Chairman and CEO of PGD Strategy Limited, to discuss the firm and its expertise.

PGD Strategy was established in September 1999 and has built a reputation as a leading provider of corporate development and strategy consulting services to UK, global and international insurance, reinsurance and other financial services businesses. We have delivered multiple assignments for numerous clients in these sectors ranging from UK and cross-border mergers and acquisitions and divestments to joint ventures and the strategic evaluation of businesses as well as markets for entry and development. SECTOR EXPERTISE The sectors in which PGD Strategy has market leading expertise are: Insurance and Reinsurance • Insurance and reinsurance broking and intermediation • Insurance and reinsurance underwriting • Risk consulting • Lloyd’s of London Financial and Professional Services • Banking • Fund management including Hedge Funds

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• • • • •

Pensions businesses Trust administration Independent financial advisory businesses Other wealth management businesses Professional services groups

TRACK RECORD OF SUCCESS PGD Strategy has an impressive track record of success in the following areas: • Strategic consultancy and evaluation – development and implementation of corporate strategies • Origination and transaction execution, including negotiation and ‘due diligence’ in relation to mergers and acquisitions, strategic investments, joint ventures, strategic alliances, disposals, finance raising • Project management and implementation relating to corporate ‘troubleshooting’, change, renewal and restructuring projects, organisational development and performance management initiatives, business planning, capital restructurings, shareholder reorganisations and group relocation exercises

• • • •

Market research and evaluation, including assessment of entry and development options Promotional campaigns on behalf of clients focused on organisational penetration and positioning in targeted markets Interim management Non-Executive board oversight

PGD Strategy is authorised and regulated in the UK by the Financial Services Authority.

Company: PGD Strategy Limited Name: Peter Droussiotis Email: enquiries@pgdstrategy.com Web: www.pgdstrategy.com Telephone: +44 (0) 20 8826 0295

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SECTOR SPOTLIGHT:

Arbitrating Disputes in Cross-Border Transactions

ARBITRATING DISPUTES IN CROSS-BORDER TRANSACTIONS l Commercial dispute resolution experts are privy to some of the world’s most sensitive and complex legal cases. Avoiding litigation is a primary goal for many firms who find themselves embroiled in corporate disputes, largely to avoid the publicity, reputational damage and cost that tends to come hand in hand with it. Where possible, arbitration is a great option, which allows disputes to be settled in the most appropriate manner. Cross-border transactions have mushroomed in recent years and have been one of the key driving forces in an otherwise struggling global economy. One side effect of this growth has been the simultaneous increase in the number of cross-border disputes. Commercial arbitration has gained wide-spread acceptance among the international business community for its flexibility and efficiency in resolving conflicts, it can help to resolve business disputes between or among transnational parties through the use of one or more arbitrators rather than through the courts. Foreign court judgements can often be hard to enforce so perhaps one of the biggest benefits provided by international arbitration is the ability to enforce an arbitral award in more than 140 countries, most of which are involved in significant international trade and economic transactions. But as we all know, cross-border often equals complication! Acquisition International examines some of the challenges associated with arbitrating disputes in cross-border transactions with commentary from experts in the field.

Cross border transactions – how can we help businesses facing risks and disputes in cross-border commercial transactions? which are often not (or not significantly) UK-based, and where the counterparty is also not UK-based, but where the underlying contract is under English law. Under such circumstances it has become increasingly common for disputes to be resolved by arbitration (in relation to, for example warranty claims) and expert determination (in relation to completion accounts and earn-out disputes), where the seat of arbitration may not be in the UK but where the underlying law is English law.

fixed there are usually locked box undertakings, leakage provisions and an indemnity, and we are able to assist clients perform a review of the underlying business to ensure that the undertakings have been adhered to and that there has not been any leakage which is not expressly permitted under the agreement. Clients also frequently require a review to ascertain whether accounting and financial warranties have been breached, and we are able to assist in this, working closely with lawyers.

The areas where disputes may arise include: • Breach of warranty • Indemnities (e.g. in relation to leakage where there are locked box provisions) • Completion accounts and earn outs As accountants and tax advisers we are able to assist clients during negotiations in relation to the drafting of accounting and tax warranties, any price adjustment mechanisms, and, where relevant, locked box provisions and related protections. These are areas which frequently give rise to disputes and there is therefore potentially a significant amount to be gained by forensic accountants who have assisted in disputes on past transactions being involved in drafting and negotiations on live transactions.

-----------------------------------------------------------------------Kathryn Britten is a Partner and Chairman at KPMG Forensic, and Ivan Seery is a Director. ------------------------------------------------------------------------

The international M&A marketplace is complex and London is often at the centre of it. We often work for clients based outside the UK buying or selling businesses

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Post-completion we work closely with clients in agreeing any adjustment to the purchase price. This requires accounting expertise but also the ability to interpret and apply the relevant provisions of the contract. There are normally items of dispute during this process and we are able to assist clients in negotiations. If negotiations fail we can assist in preparing submissions as part of the dispute resolution process. If the purchase price is

Company: KPMG Web: www.kpmg.co.uk Address: 15 Canada Square, London, E14 5GL Telephone: +44 (0)207 311 3987 Name: Kathryn Britten Email: kathryn.britten@kpmg.co.uk Telephone: +44 (0)20 7694 5598 Name: Ivan Seery Email: ivan.seery@kpmg.co.uk Telephone: +44 (0)20 7694 2539

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SECTOR SPOTLIGHT:

Arbitrating Disputes in Cross-Border Transactions

-----------------------------------------------------------------------CDR. Litigation boutique. specialises in dispute resolution in Russia. Whether through litigation before the courts, arbitration, mediation or negotiation, our goal is to solve your problem. ------------------------------------------------------------------------

We understand that litigation is not an end in itself and continuously strive to find novel and effective solutions to our clients’ problems. Nothing is left to chance. Our team of professionals determines the optimal strategy for each particular situation and pursues that strategy efficiently and diligently. CDR. Litigation boutique. recognises that each problem is unique. Informing our clients of the variety of commercial and legal solutions available to them is essential. The right solutions are those that respond to our clients’ specific needs. Each member of our firm shares this approach and focuses our services accordingly. The quality of our services maximises the -----------------------------------------------------------------------Yuliya Chernykh is Partner and Head of International Arbitration Practice at ARBITRADE Attorneys-at-Law, based in the Ukraine. -----------------------------------------------------------------------ARBITRADE Attorneys-at-Law is a dispute resolution law firm specialising in international arbitration and litigation. Its practice covers the courts of general jurisdiction, specialised commercial and administrative courts in Ukraine. A specific focus of ARBITRADE is arbitration-related litigation. ARBITRADE represents Ukrainian and international clients before Ukrainian courts in various matters on challenges of the award issued in Ukraine as well as on recognition and enforcement of foreign arbitration awards in Ukraine. International arbitration is an ARBITRADE’s core practice. “Arbitrating cross-border transactions inevitably brings challenges of cross-crush of cultures, differing mandatory rules and variety of applicable law to various issues,” states Yuliya, regarding the main challenges associated with arbitrating disputes in cross-border transactions. “Experience is the strongest weapon to overcome those challenges.” Yuliya goes on to explain how ARBITRADE can help businesses facing risks and disputes in cross-border

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chances of obtaining the best result in the circumstances of each case.

Knowing our clients is essential to our success. It is at the heart of our activities and is reflected in the services we provide on their behalf.

Delivering top-flight professional services to our clients requires the full participation of our support staff selected for their diligence and devotion to the proper management of each file. Our pursuit of excellence drives us not only to assemble the best legal and administrative talent available but also to ensure their proper training and education. Service of the highest quality also requires technical support of the same quality. To provide our clients with the best possible solutions to increasingly complex problems, CDR. Litigation boutique. relies on sophisticated information technology and legal research tools. Effective use of these resources allows us to precisely identify the issues in each case in an effort to obtain the desired results. commercial transactions. “We provide in-depth knowledge and a wealth of experience at all stages of international dispute resolution, from choice of appropriate forum and applicable law, structuring arbitration clauses in complex cross-border transactions, settlement negotiations, conducting arbitrations under various arbitral rules, providing expert opinions on Ukrainian law, through to the recognition and enforcement.”

Name: Dmitry Romanenko (Managing partner) Company: CDR. Litigation boutique Email: rdmu@litigationboutique.ru Web: www.litigationboutique.ru/en/ Telephone: +7 499 714 63 28

With regards to the future, Yuliya has predictions relating to arbitration in cross-border transaction disputes for 2013. “Due to the challenging economic environment, Ukrainian parties of large businesses will be striving to settle disputes amicably. Nevertheless, due to growing competition the number of international arbitrations is expected to increase, as well as the complexity of those arbitrations.”

There are certain strategies which can be implemented to help eliminate risks, the best of which Yuliya believes is to choose the right counterparty. “In-depth elaboration of all transactional steps is vital, with due diligence and careful contract drafting being the key elements.” ARBITRADE tailors all its advice to the specifics of every situation, as Yuliya explains. “In virtually all situations we recommend using arbitration rules of recognised international arbitral institutions. Ad hoc arbitration may be recommended in a very limited number of instances, and in those cases we pay careful attention to questions of formation of arbitral as well as the appointing authority to avoid deadlocks. “With our experience acting as party counsel as well as arbitrators we are able to give reasoned feedback to our clients concerning arbitrator appointment.”

Company: ARBITRADE Attorneys-at-Law Name: Yuliya Chernykh, FCIArb, C.Arb Email: chernykh@arbitrade.com.ua Web: www.arbitrade.ua Address: Ivana Lepse 4, building 1, office 518, 03680 Kiev, Ukraine Telephone: +380444540508

April 2013 /

SECTOR SPOTLIGHT:

Employment Litigation: Resolving Workplace Disputes

EMPLOYMENT LITIGATION Resolving Workplace Disputes

l Not surprisingly, the interests of employers and employees frequently do not coincide and employment disputes inevitably arise. As an employer, there is a very high chance that at some time you will need to deal with a disgruntled employee which can have an impact on your business in terms of time, cost and internal morale. Defending employment litigation is often an unwelcome distraction and a drain on management time as well as a business’s financial resources. However, sometimes despite best efforts, employee disputes escalate and litigation can be inevitable. Employers operating across multiple jurisdictions often find that cross jurisdictional secondments and assignments are essential to the implementation of their global strategy and the effective operation of their business. This can result in complex questions arising in respect of the employment rights that employees acquire across the various jurisdictions. Having the right team in place is essential in an employment dispute. It is imperative that senior executives seek advice from those with expert knowledge of the jurisdiction(s) in question in order to minimise costs and protect the business from any bad publicity or drop in morale of remaining employees. Acquisition International speaks to experts in employment litigation to get their views on workplace disputes. -----------------------------------------------------------------------Tessa Fry is a Partner at GSC Solicitors LLP. -----------------------------------------------------------------------Significant changes to UK employment law will be implemented in 2013. These are aimed at reducing employment claims and the regulatory burden on employers, thus ‘promoting growth and jobs’. The main changes include the introduction of fees and other reforms to the employment tribunal system with a view to reducing spurious claims, limiting unfair dismissal compensation to twelve months’ pay (maximum £74,200) and the introduction of employee owner status i.e. shares in exchange for unfair dismissal rights. So will the changes make any difference to resolving workplace disputes? Most of the proposed changes will affect unfair dismissal claims rather than discrimination claims. This is because most discrimination legislation is now derived from the European Union which means the Government’s ability to implement change is limited. However, by making it harder to claim unfair dismissal, employees are more likely to bring discrimination claims regardless of merit. At present, the qualifying period of service required to bring an unfair dismissal claim is two years whereas no qualifying period is required for discrimination claims. Compensation for unfair dismissal is based mainly on loss of earnings although credit has to be given for earnings from new employment and the claimant is under a duty to mitigate his loss i.e. he must make an effort to find new work. The maximum compensatory award for unfair dismissal is currently £74,200 and the Government’s intention is to limit this further to 12 months’ pay or £74,200, whichever is lower. Compensation for discrimination claims is also based on loss of earnings with a duty to mitigate. However, awards are unlimited and the employee can also be awarded additional compensation for injury to feelings (maximum £30,000 in extreme cases). In practice, most tribunal awards for unfair dismissal and discrimination are relatively low with average awards for unfair dismissal being around £5,000. The Government believes that many claimants have unrealistic expectations of being awarded significantly higher awards which is why it

38 / April 2013

is trying to address these expectations by limiting awards to 12 months’ pay. The problem for employers, however, is not the cost of the award but the time and costs spent in defending any claim which usually far exceed the amount of the award. For this reason, many employers will frequently settle disputes by paying compensation in exchange for the employee signing a compromise/settlement agreement which then prevents the employee from bringing any claim against the employer in connection with his employment and/or its termination. The limit of 12 months’ pay is likely to assist employers in negotiations, particularly in dealing with higher paid employees (assuming there are no discrimination issues) who tend to negotiate rather than litigate but relying on the maximum award (which may explain the amount of the average award in the tribunal). Unlike civil court proceedings, costs are rarely awarded in the Employment Tribunal which means that each side pays its own costs. No fee is charged either for the issue of proceedings unlike in the civil courts. Faced with criticism that the lack of financial penalties encourage weak claims and thus favours employees, the Government is proposing to introduce fees in the Employment Tribunal in August 2013 as well as other reforms to the Employment Tribunal Rules to make it easier for the Tribunal to strike out weak claims and/or to require a deposit or costs warning before the claimant is allowed to proceed. However the general rule that each side pays its own costs (except in extreme circumstances) will continue. Whilst the ET fees may deter some claimants, many will argue that they are entitled to a waiver of fees due to being unemployed and therefore unable to pay. This is likely to be approved based on the system in the civil courts. As the basis of most employment claims is that the claimant has been dismissed and is therefore unemployed, this will be relied on frequently in practice so may not make much difference to the present position. The employee shareowner scheme is aimed at employees giving up unfair dismissal and certain other employment

rights (not discrimination) in exchange for shares and an exemption of capital gains tax from £2000 - £50,000 when sold. The scheme is aimed mainly at start-up companies and has received much criticism, including from employer groups. Following a rejection in the House of Lords in remains to be seen if the scheme will now be introduced. By making it harder to claim unfair dismissal, employees are more likely to bring discrimination claims, regardless of merit. Given the bad publicity that can also follow with discrimination claims, employers will still rely on negotiations and settlement rather than risk employment tribunal proceedings. Faced with a litigious employee, the best outcome is to negotiate a settlement at the lowest possible cost. Whilst some settlements can be negotiated without reference to solicitors, specialist advice on employment law and procedures will assist in negotiations and ensure that the employer is fully protected in any settlement agreement. Tessa Fry, Partner and Head of Employment Law has over 20 years’ experience in advising companies and individuals on UK employment disputes including employment tribunal claims for unfair dismissal and race, sex and disability discrimination. She advises on all aspects of employment law from appointment to dismissal including contentious terminations and settlement agreements. She also advises on civil claims to enforce restrictive covenants and for high value breach of contract claims for non-payment of bonuses.

Company: GSC Solicitors LLP Name: Tessa Fry Email: tfry@gscsolicitors.com Web: www.gscsolicitors.com Telephone: +44 (0) 20 7822 2222

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Employment Litigation: Resolving Workplace Disputes

OTHER EXPERTS IN THIS AREA

Littler Mendelson P.C.

Teshome GabreMariam Law Firm

Company: Littler Mendelson P.C. Name: Johan Lubbe Email: jlubbe@littler.com Web: www.littler.com Address: 900 Third Avenue, New York, NY 10022, US Telephone: +1 (212) 471-4490

ACQUISITION INTERNATIONAL

Company: Teshome Gabre-Mariam Law Firm Name: Teshome Gabre-Mariam Bokan Email: tgmb@ethionet.et Telephone: +251 115518484

April 2013 /

SECTOR SPOTLIGHT:

Completion is Just the Beginning

COMPLETION IS JUST THE BEGINNING

l Any merger or acquisition is a massive undertaking and with complexities arising throughout all stages of a transaction, many companies focus so greatly on the completion they neglect the importance of post-merger integration; a vital step to ensure the quick and successful marriage of the two businesses. Mergers, acquisitions and divestitures provide many opportunities but there’s a significant risk of failure, especially when little or no effort is put into the process of PMI. There’s a lot to manage - from re-evaluating current practices, understanding cultural differences, kick starting projects, integrating methodologies, systems and processes - not to mention keeping up with the day job! A post-acquisition specialist can help senior management and directors to build a plan that will help to complete integration, these plans include people, processes and systems across all departments. Once the plans are finalised and the deal has been announced the plan can be implemented with a consistent, structured approach. It’s important to remember that whilst transactional activity can be an exciting stage for those involved at the top of the chain, it can be threatening to those lower down, some will leave, but the majority will stay if the future of the integrated business can benefit them. Acquisition International speaks to leading PMI specialists to discuss the integration process. “I have experienced this in two very acquisitive companies (General Electric and First Data). Some of the factors that made the integration process work well include: - Executive management and even board involvement in the evaluation of integration effort - An integration plan as a key part of the overall business case to approve the deal - Dedicated Integration team and specialists with internal credibility and leverage - An Integration team involved in the deal from the early stages of the transaction - Clear milestones and metrics to measure integration result “Correct documentation of all the material created for a transaction in a virtual data room is key. This ensures that the administrative side is secure and minimises the time spent looking for documents, lost information etc.” -----------------------------------------------------------------------Francisco Lorca is Founder and CEO of EthosData, based in London. ------------------------------------------------------------------------

EthosData was founded in 2006 and serves global M&A transactions. With offices in Asia, America and Europe, the firm’s virtual data room services are used throughout all stages of M&A transactions. Francisco Lorca is the founder and CEO of EthosData, a leading global provider of virtual data room services. He has broad M&A experience in General Electric, First Data, McKinsey & Company as well as in companies he has created and built. Here, Francisco explains what gives EthosData the edge over its competition.

40 / April 2013

“The firm was built and is run by M&A professionals with deep technology expertise. We provide our virtual data room focused around the needs of deal makers and corporate development specialist. This sets EthosData apart from it’s competitors who are often technologist trying to sell a tech platform. “All the professionals in EthosData are selected based on their problem solving skills and ability to become a fundamental part of a deal team.” Francisco’s extensive experience has given him insight into how acquisitive companies structure and fine-tune their capabilities to integrate new businesses.

Company: EthosData Name: Francisco Lorca Email: Francisco.lorca@ethosdata.com Web: www.ethosdata.com Address: 1 Knightsbridge Green, 8th Floor London, SW1X 7NE London United Kingdom Telephone: +442070451138

ACQUISITION INTERNATIONAL

Dedicated professional 24/7 deal coordinators at your service. Global provider of Virtual Data Room services. Data Rooms set up in minutes.

Virtual Data Room Secure, efficient, simple, fast 24/7 professional support No hidden fees

SECTOR SPOTLIGHT:

Completion is Just the Beginning a systematic structure in place before the first 100 days kick off is what it is all about. A good integration plan is like a step-by-step roadmap that guides everyone involved and keeps the deal from falling off tracks. “All phases of the PMI process are to be clearly identified with business value drivers and overall goals written down. Tasks also need to be clearly established in order to start delegating responsibilities across the team. To ensure a sense of urgency and to keep things moving throughout the PMI process, speed of action is key and can be achieved through clearly identified deliverables. Transparency of information and a central depository of documents are also important elements contributing towards a smooth workflow.

-----------------------------------------------------------------------Kaija Katariina Erkkilä is the CEO of Midaxo, a software company offering an online platform for buy-side M&A to manage pre and post deal activities. It is designed for small and middle size corporates with large deal activity. The platform provides a deal pipeline management application and a single case, transaction and integration project management application. ------------------------------------------------------------------------

Midaxo embraces the philosophy of a holistic approach in M&A and sees transaction and post-merger integration as an intertwined, inseparable process. Kaija Katariina Erkkilä explains more: Our goal is to help companies to succeed in M&A better with a dedicated technology solution that empowers them with this holistic approach. Our service is really for those who are looking to discipline and systemize their M&A process.

It is designed to bring repeatability into deal making. With our tool, companies can improve their overall M&A capability and achieve better value creation and capture synergies more effectively. “Our company operates with a Software-as-a-Service concept and delivers its service to the customer over the web. There are no software installations needed. A customer can register to the service over the web and pay a subscription fee to access and use the platform.” “Even though being a technology company, we have a lot of M&A experience of which our entire product development springs from. Midaxo is all about achieving a better PMI process for the customer. When it comes to taking charge of your PMI process, having

“A dedicated tool specifically designed for M&A will help you begin your deal pipeline, transaction and PMI processes faster and complete it with better results. Compared to a generic project management tool, Midaxo meets the special requirements and characteristics of M&A management and will make your integration more successful.”

Company: Midaxo Name: Kaija Katariina Erkkilä Email: kaija.katariina.erkkila@midaxo.com Web: www.midaxo.com Address: Unioninkatu 7 B 17, 4krs., 00130 Helsinki Finland Telephone: +358 (0) 400 813 691

We are a commercial law firm operating in the Republic of Hungary with offices in Budapest. Since 1991 we have been advising multinational companies that invested in Hungary. We cover the following areas of Hungarian law: acquisition, general corporate, competition, banking, compliance, green-field, commercial litigation, arbitration, project finance, concession and private public partnerships, property, public procurement, funds and venture capital, tax structures, share/bond offerings, trade mark, and special trust structures.

www.deri.hu 42 / April 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving Disputes in the Franchise Industry

RESOLVING DISPUTES IN THE FRANCHISE INDUSTRY l Whilst of course so many franchisor/franchisee relationships work well if the original franchise agreement has been properly drafted, the fact that disagreements do arise is of little surprise given the complexity and the longevity of many franchise relationships. It is common for franchisors and franchisees to disagree at some point after a franchise agreement is first drawn up. Often circumstances and aspirations have changed over time and the appropriate documentation has not changed to reflect the situation.

Both franchisors and franchisees alike should recognise that there is a likelihood of disputes arising and budget accordingly. Litigation can be hugely distracting for both parties as well as costly, it is therefore of the upmost importance that both franchisor and franchisee seek advice from those with specific knowledge of the complexities relating to the franchise industry. Acquisition International examines the key issues with commentary from experts in the field. -----------------------------------------------------------------------Robert Toth is a Partner and Accredited Business Law Specialist, and head of the Franchise, Licensing and Distribution Group, at Wisewould Mahony Lawyers, Melbourne. -----------------------------------------------------------------------Robert Toth, Partner at Wisewould Mahony Lawyers, explains a little more about the firm. “Wisewould Mahony is a mid-tier, Melbourne-based law firm that acts for business clients throughout Australia and overseas,” he begins. “We offer our corporate clients full breath of corporate services, including advice on establishing their business operations in Australia, corporate and tax advice, identifying regulatory requirements, workplace relations and employment law and protection of intellectual property. “We also have expertise in the areas of licensing, distribution and franchising and advise in highly regulated industries. “The firm provides fees based on the scope of services and in many cases, can provide fixed fee services to clients which assist our clients to budget for their legal costs with certainty.” The firm is also a member of the International Franchise Lawyers Association (IFLA), the Franchise Council of Australia (FCA), Franchise Association of New Zealand (FANZ), the US Commercial service. “We are connected with a worldwide network of specialist franchise, licencing and intellectual property lawyers around the world via the IFLA and our membership of the -----------------------------------------------------------------------Judy Rost is a pre-eminent commercial litigator, recognized by Lexpert as a leader in the franchise industry. She is a partner at Alexander Holburn and the head of the Franchise group. She acts primarily for franchisors, both local and international, and Canadian Master Franchisees. She also regularly works collaboratively with franchise lawyers in other jurisdictions. -----------------------------------------------------------------------Judy Rost and her team have considerable experience in obtaining injunctions to preserve and obtain key evidence, enforcing non-competition agreements, preventing trademark infringements and passing off activities and enforcing franchisee terminations. She has also represented clients with respect to both area development and Master Franchise agreement disputes. In our experience, franchise disputes can be reduced through careful initial selection of franchise partners. Some clients have developed questionnaires based on their most successful franchisees’ characteristics in order to work towards replicating those successful models. Many use their franchise discovery day as a means to ensure that the match is a good one. The most frequent mismatches that result in disputes between franchisors and franchisees occur when franchisors are too concerned about expansion, as opposed to selection, or where a franchisor purchases a faltering franchise system for a song. In other words, you should

ACQUISITION INTERNATIONAL

Themislink network with a network of lawyers throughout Europe,” Toth adds. Despite the increase in disputes arising from the financial and market pressures that have occurred in the last two years the market seems to have levelled, as have the number of disputes and many systems are now experiencing a new phase of growth, Robert explains. “The economy in Australia is buoyant and existing franchise systems are now actively rolling out. Australia is also seen as an excellent market to expand into by international franchisors.

“In relation to Master Franchise Agreements the main issue has been that many Master Franchisees have not been able to meet their KPI’s and this has required renegotiation of Master Franchise Agreement and KPI’s and greater support from the head franchisor. “The past few years have caused many franchisors to consolidate their operations and reduce the number of franchise outlets before they were in a position to grow. Franchisors need to more actively support their franchises, ensure product development, supply of competitive product and being more proactive in their own market segment.”

“There are strong signs of growth in the industry in Australia. We have also seen a substantial increase in interest by international and overseas franchise systems and companies looking to enter the Australia market, whether through licensing, distribution and/or franchising.” The areas of activity have been in home help and personal services, business services, health and beauty and ftness as well as the traditional food and hospitality industries He explains further: The main areas of dispute acting for franchisees over the past 2 years have been in relation to the fees paid by franchisees to franchisors for marketing fund contributions, the issue of supply of product from approved suppliers at uncompetitive prices, forcing stock and promotional campaigns upon franchisees. Reduced margins led to financial pressure on franchisees which led to tension in the franchise relationship.

expect a cost when you try to accelerate the expansion of your franchise system. Franchise disputes can also be avoided, of course, through open communication. It is important to incorporate systems that will allow for the free flow of communication through many different means, such as telephone, email and newsletters, as not all individuals will be comfortable with the same forms of communication. Also, regularly checking in with franchisees is important to address concerns early on, before they become too big to handle. When franchise disputes do arise, the parties will look to the franchise agreement to see what rights and obligations they have. Unfortunately, it is often at this stage that they discover the holes in the agreement itself. A regular review of franchise agreements is recommended to avoid these later disappointments. When disputes arise, it is important to involve legal counsel right away to ensure that the right steps are being taken both to comply with the franchise agreement and also the local legislation governing the parties. Again, we would recommend open communications between the parties to see if the issue can be resolved. Often agreements will have a mandatory dispute resolution system. These can work in the right circumstances, but frequently the parties settle after a lawsuit has been commenced. We can help preserve the franchisor’s rights and stick handle them through these situations.

Company: Wisewould Mahony Lawyers Name: Robert Toth Email: robert.toth@wisemah.com.au Web: www.wisemah.com.au Address: Level 8, 419 Collins Street, Melbourne VIC 3000 Telephone: + 61 3 9629 7297

About Alexander Holburn Beaudin + Lang LLP Alexander Holburn is a full-service Vancouver-based Canadian law firm, recently ranked by Canadian Lawyer magazine as one of Western Canada’s leading regional law firms. With 70+ lawyers operating across 22 practice areas, we are one of Vancouver’s largest law firms. We have the depth of knowledge and resources to advise our diverse client base on all aspects of dispute resolution and commercial law.

Company: Alexander Holburn Beaudin + Lang LLP Name: Judy Rost Email: jrost@ahbl.ca Web: www.ahbl.ca Address: 2700-700 W Georgia Street, Vancouver, BC Canada V7Y 1B8 Telephone: +1 604 484 1700

April 2013 /

SECTOR SPOTLIGHT:

Resolving Disputes in the Franchise Industry According to Sönke, the firm’s franchise expertise spans a wide range of disciplines, including franchise agreements, area developer agreements and master franchise agreements as well as franchise disclosure documents. It deals with purchase or sales of franchises, dispute resolution and litigation, mergers and acquisitions and project finance, as well as licence agreements, trademark and IP prosecution and real estate development, leasing and financing.

-----------------------------------------------------------------------Sönke Lund is a Partner at Spanish law firm Monereo Meyer Marinel-lo Abogados. He has a wide ranging corporate practice and is a Chambers Global 2013 recommended lawyer in the area of Intellectual Property. He also appears on the list of the best Spanish lawyers in the independent directory “Who’s Who Legal of Franchise Lawyers 2012”. -----------------------------------------------------------------------Monereo Meyer Marinel-lo Abogados has an exclusive international focus, specialising in advising foreign companies, especially those from German-speaking countries with activities in Spain, as well as Spanish companies operating in Germany.

The most common disputes Sönke is currently seeing relate to franchisees who are in financial difficulty and want to get out of the franchising agreement and those that involve other parties such as landlords. He also sees disputes between a franchisor and a particular franchisee for reasons of incomplete contracts which can affect other franchisees. “Effective communication between a franchisor and franchisees is the key to avoiding disputes,” Sönke says. “Further, it is important to have procedures to follow should a dispute arise. Procedures for resolving disputes provide the necessary tools for identifying problems, discussing them and working out a solution.” Sönke says that some franchise systems have their own internal dispute resolution processes. “We recommend implementing a simple system for resolving disputes at the earliest possible time after they begin,” he adds. “A dispute firm only represents franchisees, dealers and distributors. With this focused concentration, the firm’s 10 attorneys have been able to build a powerhouse of knowledge, skill and proficiency that they use to obtain practical results for their clients through negotiation, mediation, arbitration and litigation. Dady & Gardner has clients throughout the United States, and have assisted master franchisees from around the globe in resolving their disputes with US-based franchisors and manufacturers. We have represented masters from EVERY country in the EU, as well as masters from Russia, Ukraine, Kazakhstan, India, Mexico, Costa Rica, Brazil, Argentina, China and many others.

-----------------------------------------------------------------------Ronald K. Gardner is the managing partner of Dady & Gardner, P.A. -----------------------------------------------------------------------A law firm founded in 1994, Dady & Gardner’s mission is to help franchisees, dealers and distributors effectively and efficiently resolve their disputes, and to preserve and enhance the value of their businesses in the process. The -----------------------------------------------------------------------Delene Bertasso is a Senior Associate at the law firm Adams & Adams situated in Pretoria, South Africa. -----------------------------------------------------------------------We are well acquainted with the general nature of franchise agreements and the laws applicable thereto. When consulted by a client we familiarise ourselves with the particular facts of the matter and then apply the provisions of the franchise agreement and any other applicable law to those facts. It is imperative to obtain all relevant facts from the client and ensure that the client does not omit any essential facts. This process is usually then followed by the preparation of a substantive demand or breach letter. Depending on the facts such a letter may be coupled with a without prejudice letter calling for a round table conference and/or for settlement negotiations. We have found that such a meeting can be invaluable, in that the issues between the respective parties are aired and often resolution follows. Frequently in a franchise relationship a miscommunication or a misapprehension concerning a certain issue is resolved through discussion and negotiation. It is imperative that we bring objectivity to the negotiations and ensure that any emotion is, in so far as is possible, removed from the issues at hand. In those instances where resolution is not achieved, we then assist clients in proceeding to litigation whether this be to the

44 / April 2013

On the international front, our managing partner, Ron Gardner, has been invited to speak at both the International Bar Association’s Franchise and Distribution conference in Dublin and the International Dispute Institute’s meeting in Venice, within the last year alone. His client base includes franchisees and masters from around the world, and he has been recognized as “the premier franchisee lawyer in the country.” (Chambers USA—2012) Dady & Gardner is also committed to protecting its clients all over the world, whether they are single owner-operators High Court or to formal arbitration, which is often provided for in terms of the franchise agreement. Throughout the matter we communicate with the client, ensuring that they understand the process and procedures involved in each stage and the relevant legal costs. This is particularly important given that litigation is costly and time consuming for all parties involved. The nature of disputes that we frequently encounter pertain to non-payment of monthly franchise and / or marketing fees by the franchisee, non-performance in respect of the training of the franchisee’s staff and disputes regarding ambiguities in the franchise agreement. We also encounter disputes where the franchisors fail to perform their obligations in terms of the franchise agreement. More than often franchise disputes can be avoided by ensuring that the franchise agreement and accompanying documentation contain clear and unambiguous provisions that are understood by both parties upfront. The Consumer Protection Act goes someway in ensuring that this occurs. Prior to entering into a franchise agreement, franchisees are well advised to carefully and thoroughly investigate the franchise that they will be acquiring so that they are well informed about the franchise system. Contacting other franchisees within the franchise system and getting

resolution procedure provides for negotiation involving different levels of management sometimes going as high as the Chief Executive. “We assist franchisees and franchisors to resolve disputes in the early stages in order to avoid matters escalating unnecessarily, liaising with both parties to help them better understand the issues and to explore options to resolve the dispute; we can intervene as mediators when requested to do so.”

Company: Monereo Meyer Marinel-lo Abogados Name: Sönke Lund Email: slund@mmmm.es Web: www.mmmm.es Address: Passeig de Gràcia, 98, 3r, E-08008 Barcelona, Spain Telephone: +34 93 487 58 94

or large multi-unit franchisees, from wrongful termination, unfair competition and encroachment, as well as harmful changes that often accompany mergers, sales, acquisitions and consolidations. The firm has successfully resolved disputes against more than 400 different franchise and supplier organizations, and the firm currently represents more than 40 different national and/or international franchisee and dealer associations.

Company: Dady & Gardner, P.A. Name: Ronald K. Gardner Email: rkgardner@dadygardner.com Web: www.dadygardner.com Address: 80 South 8th Street, Suite 5100, Minneapolis, MN 55402 Telephone: +1(612) 359-9000

their view on the pros and cons of the specific franchise is advisable. In terms of the Regulations to the Consumer Protection Act it is incumbent upon the franchisor to place in the disclosure document the details of other franchisees in the franchise system. Similarly, the franchisor should obtain as much information as possible about the prospective franchisee. Thereafter, it is advisable to seek legal advice regarding a franchise agreement before concluding a franchise relationship.

Company: Adams & Adams Name: Delene Bertasso Email: delene.bertasso@adamsadams.com Web: www.adamsadams.com Address: Lynnwood Bridge, 4 Daventry Street, Lynnwood Manor, Pretoria, South Africa Telephone: +27 (0) 12 432 6511

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving Disputes in the Franchise Industry

-----------------------------------------------------------------------Ms Swati Sharma is a Partner at Anand and Anand and has a significant experience in contractual and commercial exploitation of Intellectual Property including License and Franchise Agreements, IP due diligences, take over, mergers and acquisitions. -----------------------------------------------------------------------Anand and Anand specialises in drafting and negotiating Franchise Agreements. The Firm has significant experience in handling Franchise transactions involving some of the largest food chains in the Country. The Firm plays a pivotal and an all-encompassing role right from searching and conducting due diligence on the potential franchise partner, understanding and reviewing the franchise model to help localise the same and draft a suitable Franchise Agreement. The firm also assists in drafting of the Franchise Manual. Swati Sharma explains more about the firm and what gives it the competitive edge. “Anand And Anand has a rich history in relation to Intellectual Property Laws in India,” she begins. “The firm has a multidisciplinary practice and provides competent and personalised advice on all.” Swati continues to explain more about her work in franchise agreements and, in particular, the most common disputes faced in the franchise industry. -----------------------------------------------------------------------Yanos Gramatidis is Founding and Managing Partner of Bahas, Gramatidis and Partners Law Firm based in Athens, Greece. ------------------------------------------------------------------------

For the last twenty five years our Firm has been the leader in franchising in Greece. It’s status as a firm meeting international standards is recognized by the most valid foreign directories of legal services. Our franchise attorneys are highly qualified and experienced and they are supported by trainees, skilled administrative personnel and a well-organized accounting and tax consultancy department. Our Firm is a member of the World Law Group, one of the largest networks of law firms worldwide, for Greece and Cyprus. This cooperation ensures that our clients will be serviced anywhere around the world, and guarantees the qualitative provision of law services in every country. At the same time, our Firm is a member of the Euro Franchise Lawyers Group, whose members are among the top European law firms in franchising.

ACQUISITION INTERNATIONAL

“Our firm has negotiated several Franchise Agreements between big retail and food giants in the world that have extended their franchise operations into India,” she explains. “Luckily, most of these franchise deals have been smooth on account of selection of a like-minded partner and hence the firm has not seen too many disputes in the franchise space. However, at the stage of negotiation of a franchise agreement, the firm has helped in resolving some of the major issues which relate to guaranteed minimum royalty and guaranteed minimum net retail sales, the obligation to open a minimum number of stores in X years, renewal period of the Agreement, Internet rights, auditing rights of the franchisor, the obligation on the franchisee to obtain an appropriate insurance coverage, restraint on trade.”

business relationship between the parties and a healthy and better understanding of the rights and obligations of the parties to the contract.” Swati also has predictions for the future with regards to 2013 and the franchise industry, as she explains. “The emerging trend in the franchise industry is the selection of likeminded business partners in order to maintain a healthy and harmonious relationship. The focus of the parties is to grow and expand the business and hence going forward, the trend of resolving to alternate mediums of dispute resolution will gain momentum.”

When disputes do arise, Anand and Anand are able to deal with them quickly and efficiently, thus mitigating any serious complications. “The firm has a very strong arbitration, mediation and conciliation practice,” says Swati. “The firm specialises in amicably resolving disputes between parties. In the past as well, the firm has been instrumental in arriving at out of court settlements without creating any animosity between the parties. The settlements have ensured a continuity of

Company: Anand And Anand Name: Ms Swati Sharma Email: swatisharma@anandandanand.com

Being Head of the Franchise Sector of our Firm, I am also member of the Greek Franchise Association, of the Euro Franchise Lawyers Group, in the Legal Committee of the European Franchise Federation and of the Forum on Franchising of ABA. I am also Accredited Mediator of the Greek Franchise Association, of which I was also Legal Counsel in the recent years.

for the settlement of disputes arising in relation to franchise contractual relations and for the avoidance of lengthy and costly litigation procedures. Our attorneys handling franchise disputes, have been accredited as Mediators by the Greek Franchise Association, and they are capable and willing to provide their assistance for the amicable settlement of any franchise dispute.

We cover every area of law relating to franchising, from the development of a franchise system till its dissolution, both from the aspect of the franchisor and of the franchisee. We systematically handle issues relevant to intellectual property protection, disputes between franchisor/franchisee, termination disputes, post-termination enforcement of restrictions and employer/employee disputes. Unfortunately, due to the general economic crisis, such disputes have increased in number in the recent years. Since last year, Greek Franchise Association Board of Directors promotes the Simple Mediation procedure directed by its Accredited Mediators, in other words the Amicable Settlement procedure,

Company: Bahas, Gramatidis & Partners Name: Yanos Gramatidis Email: y.gramatidis@bahagram.com Website: www.bahagram.com Address: 26, Filellinon Str., 10558 Athens, Greece Telephone: + 30 210 3318170

April 2013 /

SECTOR SPOTLIGHT:

Resolving Commercial Disputes through Mediation

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. Acquisition International spoke to experts in mediation to learn more about the ADR technique and its advantages in commercial disputes.

Commercial Mediation in the UK -----------------------------------------------------------------------Howard Gardener is senior director, solicitor and mediator at Phillips Solicitors. ------------------------------------------------------------------------

Commercial mediation is well-established within the UK, which has a strong reputation in this area. According to figures given by The Centre for Effective Dispute Resolution (“CEDR”) in 2012, the size of the civil and commercial mediation market in the UK is in the region of 8,000 cases per year, and has been growing by approximately 15 per cent each year since 2010. It is a highly competitive market place in which a mediator’s track record is very important. Courts and judges are making efforts to develop the practice and factor it into pre-litigation procedures, particularly after the implementation of the EU Directive on Certain Aspects of Mediation in Civil and Commercial Matters in 2011, which has seen the expansion of mediation as a resolution tool in small and civil commercial claims. Howard Gardener is senior director and solicitor at Phillips Solicitors, a leading law firm in Hampshire, England. A Judge since 1992, he is also nationally accredited as a Commercial and Civil Mediator and set up the first regional mediation practice, Town Gate Mediation, in 1993 to offer

46 / April 2013

clients a cost-effective way of resolving disputes without having to go to court. Howard has pioneered mediation in personal and commercial disputes for the last 20 years. ‘Our approach emphasises practical understanding of our clients’ business problems and we have experience across every segment of the corporate and financial world. We specialise in managing complex cases. As a judge, I can only impose decisions, there is little or no flexibility as to the outcome; the law does not always operate in commercial and business reality.

always determined to bring matters to resolution as soon as possible. Evidence shows that business conflicts which are taken to mediation are not only resolved faster, but also allow for a better relationship between the two parties afterwards. In contrast, after the judge has pronounced the verdict, the relationship is pretty well dead and at least one party, if not both, have lost. Our mediation outcomes presently record 80% resulting in a negotiated solution.’

In my role as a mediator, I act as an impartial third party, attempting to make sure both points of view are heard and understood. I will have studied the facts to gain a clear understanding of the commercial drivers for settlement and identified the negotiating opportunities. It is difficult to say how many sessions are needed in commercial disputes. The mediation usually goes on in a single session, perhaps for a whole day, until a resolution is found. The subject matter and the amount of information needed to make an informed decision can be vastly different from one case to another. As mediator, however, I am

Company: Phillips Solicitors Name: Howard Gardener Email: hgardener@phillips-law.co.uk Web: www.phillips-law.co.uk Address: Town Gate, 38 London Street, Basingstoke, Hampshire, RG21 7NY Telephone: (+44) 01256 460830

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving Commercial Disputes through Mediation

Mediation: The First Line of Dispute Resolution quickly reach a settlement agreement and thereby avoid a “lose-lose” (which because of the costs, delay and other “ externalities” involved frequently result from a court or arbitration adjudication) even if the mediator is sometimes not always able to produce the sought after “win-win” which can be achieved in mediation. The complexity of the business issues present be they financial, technological, or specific to the type of commerce or industry involved, calls for the parties to select a qualified and mediator for whom the subject matter and/or legal issues do not require reinventing the knowledge wheel. -----------------------------------------------------------------------By Les J Weinstein Esq., FCIArb. -----------------------------------------------------------------------To be direct, business people worldwide are growing weary of using the national court systems of both their own and foreign states and even reluctant to use arbitration proceedings to resolve complex disputes be they local, cross-border or international in nature. The time such proceedings take, the disruption, risks, costs; uncertainty and negative publicity involved are often too great for those who need stability and predictability to run their businesses. Additionally, the growing need for specialized knowledge in a given field of business or industry increasingly makes mediation with a subject matter knowledgeable neutral more appealing than relying on a randomly selected judge or an often-expensive arbitration panel. Hence, early mediation and the concurrent expanding role for skilled, trained and specialized mediators is rapidly becoming the first and a more efficient and civilized choice of dispute resolution if direct negotiations between the parties prove unsuccessful. A skilled mediator can help bridge the gap to help the parties

ACQUISITION INTERNATIONAL

In the US, almost all state and federal courts have adopted a compulsory mediation-first component with large and specially trained panels of mediators in an effort to avoid unnecessary trials and spare the overburdened courts from their exploding dockets. Even the venerable American Arbitration Association (AAA/ICDR) has rapidly expanded its panels and services into mediation as the needs and demands have grown exponentially. Mediation First is the command increasingly many found in contracts. Today, if the disputants jointly select a qualified mediator with specialized knowledge of both the subject matter of the dispute and/or law and an understanding of the psychology of resolving disputes, their common interests can often be better served. This is especially important when the preservation of ongoing or future business relationships are involved and there is great value in seeking both a fair outcome and peace over a bitter victory, which may be Pyrrhic. Many experienced lawyers and retired judges with specialized subject matter knowledge (e.g., patent, construction, international law) gain training in the art and social science

of mediation where the tools and techniques used differ from adjudicated proceedings and can range from the “facilitative”(guiding the parties to focus on their “interests” rather than their “rights”) to being “evaluative” (which is more outcome judgmental and tribunal like.) Today businesses are increasingly turning to mediation in advance of initiating an adversary proceeding and meeting with the reward of a successful and prompt agreed upon resolution. Les J. Weinstein Esq. Mr. Weinstein is a US based an arbitrator and mediator serving on the AAA, ICDR, CPR, CIArb and WIPO panels. Additionally he serves as a panel mediator for the US Federal District Court and The US Court of Appeals for the Federal Circuit. In addition, he is the Director of ADR Services for DecisionQuest, Inc., the leading dispute resolution research firm consulting to law firms and companies preparing for mediations, arbitrations and court trials.

Company: DecisionQuest Name: Les J. Weinstein, Esq. Email: lesweinstein@decisionquest.com Web: www.decisionquest.com Address: 21535 Hawthorne Blvd., Suite 310, Torrance, California 90503 Telephone: + 1 310 618 9600

April 2013 /

SECTOR SPOTLIGHT:

Corporate Immigration: Issues and Challenges in the Current Economy

CORPORATE IMMIGRATION Issues and Challenges in the Current Economy

l Relocating across international boundaries is extremely common in today’s increasingly global economy. Many businesses prefer to look further afield than their base country in finding quality personnel and many operate from various globalised locations to better service their customers. As such employers now face a growing number of administrative regulations, national policies and international treaties governing foreign workers. Not only do immigration regulations differ from country to country, but also the management of international assignees is extremely complex and time-consuming. Business executives are advised to seek the support from committed and experienced professionals who can offer expert guidance on immigration issues and policy. It is important to gain advice from the right people in order to remain informed and updated with current procedures and processes across all jurisdictions in question. Acquisition International speaks to a selection of corporate immigration experts to discuss the current key issues.

-----------------------------------------------------------------------Gabrielle M. Buckley is a Shareholder in the Corporate practice area of US law firm Vedder Price and also leads the firm’s Business Immigration group. ------------------------------------------------------------------------

Ms Buckley has over 20 years of experience counselling companies around the world with regard to all aspects of employment-related immigration laws. “Having spent 10 years as an antitrust and M&A attorney prior to focusing on global immigration/ employment issues, I have a deep understanding of business practices and structures, which is an advantage when dealing with corporate change,” she says. She believes that when advising on corporate immigration, there is a need for extensive knowledge of the laws relating to immigration compliance; deep familiarity with the enforcement policies of the various government agencies; and an understanding of how policy is developed, implemented and enforced within an organisation. A typical client of Ms Buckley’s practice is a multinational manufacturing and distribution company seeking to hire or transfer the best and the

48 / April 2013

brightest to the US in various positions as quickly and efficiently as possible. “In the past 12 months, we have seen a large uptick in United States companies hiring foreign nationals in the United States and transferring talent from offices abroad to the United States,” she says. When working with clients, Ms Buckley’s team meets with them to gain an understanding of their short- and long-term global workforce issues. “We work to create training and informational materials to encourage managers to plan ahead as far as possible to ensure that the correct visas/work authorisations are in place in a timely manner to avoid delays, expedite fees and keep employees/managers happy,” she says. Looking ahead, Ms Buckley says that if the US Congress continues down the current path to overhaul the country’s immigration system, there will be many changes with regard to corporate immigration. Indeed, proposals to ‘attach a green card to STEM (science, technology, engineering and math) diplomas’ may allow companies to more easily hire employees of their choice in the United States.

“Even if the massive overhaul is not successful, US businesses have organised and are lobbying the government to increase the numbers of visas available to hire STEM graduates and other foreign nationals necessary to US business,” she says. “We believe that it will be very difficult for elected officials to turn their backs on determined corporations and other business owners. We are quite optimistic that the pro-immigration mood of Washington, D.C. will result in positive changes in immigration laws for employers.”

Company: Vedder Price P.C. Name: Gabrielle M. Buckley Email: gbuckley@vedderprice.com Web: www.vedderprice.com Address: 222 North LaSalle, Chicago, IL 60601, USA Telephone: +1 (312) 609 7626

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Corporate Immigration: Issues and Challenges in the Current Economy -----------------------------------------------------------------------Peter Do is the Founding Partner of Doconade Legal & Migration law firm based in Adelaide, South Australia. He is responsible for the growth and development of the company’s brand name. ------------------------------------------------------------------------

Doconade Legal & Migration has a background in corporate consultancy and immigration law specialising in work visas and business and investment visas. Founding Partner, Peter Do, explains: “We have operated from our Australian base since 2009. We have recently expanded into the Asia-Pacific region working into Hong Kong, Singapore, Malaysia, China and Vietnam. “Our competitive edge over other law firms comes from the fact that we are both lawyers and registered migration agents who can give both legal advice on corporate structures, estate planning and any other general legal advice relating to business. As registered migration agents, we are able to give important immigration advice pertaining to a client’s personal or business needs. We also have the added advantage of working globally with firms across the Asia-Pacific region to work collaboratively to ensure client’s needs are met.”

Peter explains that economic climate and government policy are the two greatest areas that affect business immigration in Australia. “The high Australian dollar at present does not make Australia an attractive destination for foreign direct investment however for stable government, a very steady economy, world class health and education systems, Australia still makes very attractive destination to live and operate business.”

AU 5 million into a designated investment have clear migration advantages.”

Over the last 12 months Peter has seen an influx of immigrants in the mining and corporate sectors in order to secure high-skilled labour and to ensure that the country’s mining projects are able to go ahead with the right fusion of local and overseas expert labour. He also has predictions for the forthcoming 12 months ahead.

If you have an immigration question, you can contact Peter below on the firm’s email address.

“We are expecting the Australian Government to make Australia a more attractive place to invest for business and investors Downunder. We are expecting a greater release of all policies and rule changes that make corporate immigration a lot easier than it has been. One of these is the newly announced significant investor visa for those who are able to invest at least

As the global economy shifts, and countries in the east continue to develop their economies and education, we are seeing a definite shift in how people are migrating and why. We have developed our International Employment Preparation Service in order to assist clients with achieving and maintaining a competitive edge, and to ensure that they stand the best chance of finding lucrative employment on the international market.

-----------------------------------------------------------------------Global Visas is the world’s leading immigration and relocation consultancy. Since 1996, we have helped millions of people to start a new life abroad, and provide advice to over 4 million people every year. ------------------------------------------------------------------------

We are a global company with a local service. We have offices in 10 countries around the world – in the world’s most popular immigration departure and destination countries – to ensure that we can provide localized support for each and every one of our clients. Our dedicated staff consist of lawyers and ex-immigration officials, many of whom have personal experience of the immigration process and understand the challenges that our clientele face.

In addition to ensuring our clients maintain a competitive edge, our staff are always fully informed of any upcoming changes in legislation, skills shortages, and quotas in advance. This provides our clients with a key advantage when migrating to work abroad, and ensures that their applications are timed well and filled out as necessary – factors that make or break a visa application. The new Australian SkillSelect programme, and numerous updates and pauses with Canadian skilled worker visas have greatly impacted our clients and we are pleased that we have been able to achieve positive outcomes and guide them through this stressful process. We are ready for the inevitable increase in corporate immigration as the world gets even smaller and Mr Sverre states that he believes price and experience are the two key factors which give Brækhus Dege the competitive edge. He explains: “The key skills of our professionals advising on corporate immigration policy need knowledge of the law and how it is practiced by courts and government officials.” Typical clients for Brækhus Dege include large foreign EPC (Engineering, Procurement and Construction) companies involved in the Norwegian oil and gas industry. Although client demands have not changed recently Mr Sverre states that the legal and economic framework that such companies work under changes continuously, keeping Brækhus Dege on its toes.

-----------------------------------------------------------------------Mr. Øystein A. Sverre is a partner at Brækhus Dege Advokatfirma, a Norwegian law firm. -----------------------------------------------------------------------For over 20 years, Brækhus Dege law firm has rendered advice and assistance on tax- and immigration compliance to more than 200 companies. Mr Øystein Sverre has worked as advisor to the foreign companies working in the oil and gas industry and the building and construction industry for many years.

ACQUISITION INTERNATIONAL

The current economic climate has had little effect on business immigration procedures within the jurisdiction, as Mr Sverre explains: “Norway is part of the EEA, enjoying the four freedoms. Because most of the stricken countries are in the EEA, their nationals could move freely to Norway before the crisis and still can.” Despite the economic climate having little effect, changes to immigration legislation have seen some impact. The latest change came in early January 2013. “A simplified rule regarding high-earning immigrants was dropped because

“There will always be challenges in people movement given a post 9/11 world that we live in but if you engage the right people, the right experts who have a blend of passion and skill, you can achieve all that you set out to do.”

Company: Doconade Legal & Migration Name: Peter Do Email: mail@doconade.com.au Web: www.doconade.com.au Address: Adelaide, South Australia, Australia

companies continue to expand beyond borders. We believe that trends will move away from Top 500 companies sending executives to developed countries, towards smaller businesses sending smaller teams to developing regions. China and India will continue to have an overwhelming need to expand their business interests beyond their borders, and as the economy in these countries continues to develop more of their citizens will be able to seek opportunities in the west.

Company: Global Visas Web: www.globalvisas.com Address: Salisbury House, First Floor, 5 Cranmer Road, London, SW9 6EJ, UK Telephone: +44 (0)207 190 3903 of extensive abuse,” states Mr Sverre of the new regulations. He also states that areas struggling to find qualified people at the moment include the oil and gas industry, due to these sectors being in dire need of qualified engineers. Brækhus Dege, he continues, can assist with all strategic advice and provide immigration solutions. “It is by knowing the ins and outs of the field of law and of how it works in the real world that we are able to hold the competitive edge,” he adds.

Company: Brækhus Dege Advokatfirma DA Name: Mr. Øystein A. Sverre Email: sverre@bd.no Web: www.bd.no Address: P.O.BOX 1369 Vika, NO-0114 Oslo, Norway Telephone: +47 23 23 90 90

April 2013 /

SECTOR SPOTLIGHT:

Corporate Immigration: Issues and Challenges in the Current Economy The firm operates in the industrial, civil, contract and commercial fields, with a particular specialization and main focus in matters concerning business related immigration, providing services to foreign companies and individuals operating in Italy and looking to make investments in the Country. Mr Berretta, a Bologna University graduate, specialised as an international lawyer in the United Kingdom and the US and has created a streamlined structure within the firm in order to provide foreign clients (mainly from US, Russia and Asia), seeking to enter the Italian market, with a comprehensive global consulting service. -----------------------------------------------------------------------Berretta Law Firm was founded in the middle 90’s and is based in Bologna (for northern Italy) and Siracusa (for southern Italy), but operating all across the country. ------------------------------------------------------------------------

Since its formation, the firm has expanded to become a full service business able to meet any client needs. Four lawyers have joined the firm, each one highly specialised in a particular field of the law (immigration, trade, real estate, company law, business criminal law, intellectual property law). -----------------------------------------------------------------------Shehzad Raja is a Licensed Immigration Adviser with New Era Visa Consultants, which trades as MyVisa Manager. ------------------------------------------------------------------------

MyVisa Manager is a professional migration company set up to provide personal, trustworthy and high quality services to companies, individuals and families planning to move to New Zealand and Australia. According to Shehzad, with the company’s staff having over ten years of experience means it can offer a cost effective, consistent client-focused service. “Thousands of settled migrants are proof of our professional expertise,” he says. “Each client is treated with the care, respect and the individuality that their personal circumstances require.” Shehzad believes that MyVisa Manager sets itself apart with strong values of integrity - mutual fairness, transparency, honesty, and accountability - and says the company prides itself on excellent client care and transparent communication. “We anticipate client needs, own any problems, respond quickly and deliver customer-focused solutions,” he says. “We review our service regularly to ensure that what we deliver embodies and reflects our values, abilities and the standards our clients expect from us.”

The firm provides advice on all aspects of immigration, including those related to the establishment of foreign company offices, their branches or secondary seats, and the establishment of trading company contracts and contracts with public or private organisations, movement of workers and personnel. We provide global assistance on initial entry of individuals into the Italian/European territory, their visas, stay and work permits, family reunification, Blue Card, and generally to all aspects of their presence in Italy. In addition, the firm is strictly connected and co-operates, all over Italy, with leading tax-advisers, accountants,

“A typical client of ours wants to come to New Zealand with a job already in place,” Shehzad says. “In the last 12 months it has become more difficult for those potential immigrants to find a skilled employment easily even from the traditional source countries like UK and South Africa. Those wanting to migrate under Business categories are often in more difficult financial circumstances than they were previously, so finding it more difficult to meet the threshold in regards to availability of funds.” Shehzad states that MyVisa Manager can assist clients by ensuring they keep good documentary evidence of all their work and business experience; by ensuring they appropriately match their occupation with the correct ANZSCO occupation category; by offering support and assistance in liaising with their potential employers about their immigration needs; and ensuring they apply for the most appropriate visa. Looking ahead, he sees employers, especially in big cities like Auckland, Wellington and Christchurch looking more towards the global skill pool like their Australian counterparts. “We can’t envisage a dramatic change however, the Christchurch rebuild activity will intensify the corporate movement and as a result migration,” he says.

She believes the keys skills involved in advising corporate clients on these issues include knowledge of the trends in other countries combined with deep knowledge of Spanish law. “Every detail is important, you need to have an open mind and respect the law of the countries involved in the process,” she says. “I can provide a perspective of the current legal framework and indicate how to accomplish the same in Spain. I analyse in detail the rules and try to be updated and I am willing to listen to understand all the details and provide the standard that best fits each specific case.” -----------------------------------------------------------------------Marla Bojorge is a Corporate and Immigration Lawyer at Spanish practise, Bojorge & Associates. ------------------------------------------------------------------------

Here she explains the qualities needed to advise on corporate immigration and how the policy landscape in Spain may change: “I have experience in international areas and knowledge of the local idiosyncrasy, which allows me to understand issues that are important in corporate immigration and immigration,” Marla says.

50 / April 2013

Marla notes that the economic crisis has somehow revealed the pitfalls to avoid and the improvements that must be made in this area, including the removal of obscurities and the introduction of new policy areas. “The new rules seek to promote entrepreneurship, the focus on fresh ideas, the preservation of historic customs of promotion through tourism,” she says. Looking ahead, Marla believes that regulators may amend certain types of residence permits in line with any new policies to attract new investment in Spain. “The

public notaries, engineers, financial and insurance brokers and professionals to give to the client a fully-global service. The firm is a member of the European Immigration Lawyers Network (www.eiln.com), which was founded in 2000 and consists of 34 law firms in 21 European countries. The participating firms all have an established reputation for immigration work in their own jurisdiction. Some are smaller firms specialised in immigration and one or two legal aspects of legal work, but with a national network of support in all fields of law, others provide expert legal service in all major fields of law.

Company: Berretta Law Firm Name: Ettore Berretta Email: studiolegaleberrettasr@gmail.com; ettoreberretta@gmail.com Telephone: +39 338 9670 586

“Migration whether temporarily or permanently is a big decision and could be a stressful process for an individual and also for a company/employer who is employing personnel from overseas or someone establishing a new business in New Zealand. Careful, professional and candid advice can make this process for the individual and/or company’s less stressful.”

Company: MyVisa Manager Name: Shehzad Raja Email: Shehzad@myvisamanager.com Web: www.myvisamanager.com Address: 10 Halifax Avenue, Epsom, Auckland 1051, New Zealand Telephone: +64 9 5205304

administrative regulation on businesses is changing gradually and this will influence the immigration law,” she says. “From the point of view of taxes, there is now a department with expertise in international taxes and officials to monitor compliance, although some sectors fear these changes will be negative.”

Company: Bojorge & Associates Name: Marla Vanessa Bojorge Zúñiga Email: marla@visalawspain.com Web: www.visalawspain.com Address: Sorolla Center -Avenida Cortes Valencianas, 58- 5, 46015 Valencia - Spain Telephone: +34960451676

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Corporate Fraud & the Forensic Accountant

CORPORATE FRAUD & THE FORENSIC ACCOUNTANT

l 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 speaks to experts in the field for their opinion on corporate fraud and the role of the forensic accountant. -----------------------------------------------------------------------Michael G. Kessler is President & CEO of Kessler International. -----------------------------------------------------------------------Michael G. Kessler established forensic accounting, computer forensics and brand protection firm Kessler International in 1988. Under his leadership, Kessler International has become a world renowned authority in these areas that is called upon regularly to lend expertise to complex matters worldwide. Kessler lays claim to over 35 years of experience via the New York State Metropolitan Transportation Authority as Deputy Inspector General, the New York State Department of Taxation and Finance as Chief of Tax Investigations, the New York State Special Prosecutor as Assistant Chief Auditor/ Investigator and Blue Cross Blue Shield as Senior Auditor. Kessler explains what he believes gives the firm the competitive edge and makes it stand out in its areas of expertise. “With rapid growth in any industry, there are always associated growing pains,” he begins. “An accountant who takes a certification course and labels themselves a forensic accountant is not any more capable of fettering out fraud and corruption than they were previously. Forensic accounting is learned through experience and enrichment and complimented only by instinct and an investigative mind frame.” -----------------------------------------------------------------------David Alexander is a partner in the forensic services team at Smith & Williamson, where he leads the fraud and financial crime team. -----------------------------------------------------------------------According to Mr Alexander, one of the biggest emerging challenges in forensic accounting is not the lack of information available during an investigation, but the fact there is too much information. “The digital age has brought with it a hundred; some might say a thousand-fold, increase in the amount of potential evidence, at least 90% of which is electronic,” he explained. “This can only be overcome by integrating digital forensic services into the fraud investigation and more specifically giving the investigators themselves the tools they need to efficiently identify the key evidence.” Many reputable commentators, such as the Association of Certified Fraud Examiners and the UK’s National Fraud Authority, consistently report year on year increases in reported fraud in the UK. This is mirrored by Smith & Williamson’s case load which continues to grow not only in the number of cases investigated but the size of losses involved. “The cause is less certain but undoubtedly the downturn in the global economy has pushed otherwise honest individuals into perpetrating corporate fraud,” observed Mr Alexander.

ACQUISITION INTERNATIONAL

There are challenges in many of the cases which Mr. Kessler deals with; he describes in further depth what they are and how they can be overcome. “When fraudulent activity occurs, it is typically the main goal of the perpetrator to prevent that activity from ever coming to light. Finding that evidence and following the trail is the main challenge for any forensic accountant. Having the best possible tools, software, databases and staff available are critical to getting the job done right.”

research those they are considering hiring. A forensic accountant is able to thoroughly investigate complex situations and determine whether fraudulent activity has occurred. An accountant without depth of experience and instinct in the area of corporate fraud is not a suitable choice and this can often be revealed with a careful review of their CV.”

Technological developments have an impact on forensic accounting and in the digital age businesses are at potentially greater risk from fraudulent activities. “Businesses are unequivocally increasingly open to fraud in the digital age,” says Kessler. “The flow of information is immediate, and within seconds critical information and systems can be transferred, uploaded and stolen. False identities can easily be forged, and it is progressively easier for individuals to misrepresent themselves using digital shields. To combat digital perils, Michael Kessler has ensured that Kessler International is at the forefront of the industry, using digital forensics to enhance and support their forensic accounting services. “The industry of forensic accounting is expanding at an alarming rate,” he adds. “It is critical that those who wish to obtain the services of forensic accountants thoroughly

“This however has to be balanced against the probability that more fraud is being reported than ever before. The regulatory requirement to report money laundering and the introduction of the UK Bribery Act 2010 have both focused directors’ minds on addressing fraud issues and taking decisive action rather than sweeping them under the boardroom carpet.” He stated that the advances in technology with respect to both communication and mobility have made investigations all but impossible without computer forensic support.

Company: Kessler International Name: Michael G. Kessler Email: mkessler@investigation.com Web: www.investigation.com Address: World Headquarters – 45 Rockefeller Plaza, Suite 2000, New York, NY 10111-2099 Telephone: +1 212-286-9100 UK Address: 29th Floor – One Canada Square – Canary Wharf, London E14 5DY UK Telephone: 44 20 7956 8849

you will have a better chance of stopping and detecting the fraud before it potentially strangles the business.” Looking ahead in 2013, Mr Alexander predicts that reported fraud will continue to increase as it has for the last ten years. “The SFO will bring its first case to court on the back of the Bribery Act 2010, and this will involve a household name. We wait to see if SMEs will see this as a concern and start implementing effective controls to prevent and detect bribery and fraud,” he concluded.

“The days of thumbing through filing cabinets looking for forged documents are a distant memory, even electronically thumbing through word documents, excel spreadsheets and an email is becoming impractical without the advances of technology assisted review,” he continued. “At Smith & Williamson, we have a dedicated forensic technology team who can assist with digital investigations.” In order to deter corporate fraud, Mr Alexander stated that it is necessary to accept that there are risks and to understand what those risks are. Only then can controls be implemented which match those risks. “You won’t stop all fraud as a sufficiently motivated fraudster will still find a way, particularly if the fraud involves collusion between two or more people. But at least

Company: Smith & Williamson Name: David Alexander Email: david.alexander@smith.williamson.co.uk Web: www.smith.williamson.co.uk Address: 25 Moorgate, London, EC2R 6AY Telephone: +44 (0) 20 7131 8290

April 2013 /

SECTOR SPOTLIGHT:

Corporate Fraud & the Forensic Accountant

OTHER EXPERTS IN THIS AREA

Cabinet Aziz Dieye Company: Cabinet Aziz Dieye Name: Aziz Dieye Email: azizdiey@cabinetazizdiey.sn Web: www.cabinetazizdiey.sn Address: 2, Place de l’Indépendance BP 188 Dakar -Sénégal Telephone: +221 338218588

52 / April 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

RELOCATING EXPERTISE

Relocating Expertise

l Despite the on-going challenges associated with the fragility of the global economy, there continues to be an increased appetite for cross-border deals as businesses seek growth outside their home markets. This growth pushes individuals and teams around the world as corporations move their most talented employees both domestically and to foreign locales in order to ensure the success of a recent merger or acquisition. Moving people requires more than just booking a flight; it involves the upheaval of families and possessions and the navigation of complex fiscal, legal and visa restraints. It can be quite a daunting process for the individual involved, so much so that a whole industry is based around helping professionals and their families to relocate. Acquisition International spoke to a panel of relocation experts to analyse current trends and discuss projections for 2013. -----------------------------------------------------------------------John Rason is Head of Consulting Services at Interdean, based in London. -----------------------------------------------------------------------John Rason is an International HR Professional who works with corporate clients to help develop their mobility and relocation programmes. John will assist clients by drawing on his experience of working within International HR and Mobility functions. As a Fellow of the CIPD, John is a recognised thought leader and speaker on key subjects of; strategic International HR, Talent Management and Global Mobility. Now Head of Consulting at Interdean, John explains what gives the firm the competitive edge. “Interdean works for a global customer base of blue-chip clients providing scalable relocation services on a local, regional or global level,” he states. “Services are managed through a conveniently located account management centre, offering a central point of control and simplified communication for our clients and their relocating employees.” The major factors impacting on the relocation process can be listed as follows: • Talent Management • Risk and Compliance • Meeting the business needs – development into emerging markets and cost containment John tells us more: “Over the last few years the focus on talent has become top of many Chief Executives’ agendas -----------------------------------------------------------------------Helmut Berg is Managing Shareholder and General Manager of RSB Deutschland GmbH, which is one of the leading destination service providers in Germany. ------------------------------------------------------------------------

Between May 1987 and October 1990, Helmut was General Manager of PHH Homequity in Germany, at a time when US-based PHH was the leading relocation management company worldwide. Here, he discusses the services offered at RSB Deutschland and how the relocation market is changing. “We have got almost 23 years of expertise in Destination Services and the ability to deliver a wide range of services, and that gives us an advantage over local competitors,” he says. “We have also been the proud holders of the EuRA Global Quality Seal since 2008. The EGQS is the only quality accreditation for the relocation industry and holding this seal is proof of the top quality we always strive to deliver.” Helmut believes that one of the most important factors in the relocation process is what he describes as the ‘management of expectation’. This means that expatriates and their families or partners should get as much information as possible about their new host country. It includes communicating facts about the housing market,

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and international mobility is fast becoming an important part of their company’s development and success strategy. Long term talent development programmes are now more prevalent with international experience only a part of their progression.” One of the greatest challenges faced by HR and Global Mobility professionals is to marry the need of the business with the expectations of the employee and their family. “Business requirements are often at short notice and, more commonly, into new and unfamiliar emerging markets,” says John. “Trying to select the most suitable candidate with the appropriate level of technical expertise is often not the best long term business solution. An increased awareness within the HR and Global Mobility functions are now looking at the employees, and their families’, cultural and social aptitude to succeed in the new location and whether this will increase the probability of realising the business and personal goals plus achieving a return on investment.” John describes the industry in 2012 as encouraging, with companies breaking into new and emerging markets. He has also noticed emerging trends within the relocation sector. “Effective management of mobility costs remained at the top of the list of priorities with 58% of respondents reporting it to be a high priority in the recent Global Mobility Survey. While this statistic may not be surprising, we saw HR and Global Mobility professional look within their own organisations to realise cost savings and improve cost control. 43% of participants highlighted process efficiencies as their key to realising improvement

information on the “red tape” that might be expected as well as an intercultural preparation about different norms and values in the new host country. “Every expatriate faces different challenges,” Helmut says. “We recently made a small analysis about their experiences in Germany and the ‘top list’ of challenges is: disability to speak the language, irritation about small apartments/houses and a inability to distinguish ‘normal’ behavior of the locals from what the expatriates rate as unfriendly treatment.

with vendor management and change in benefit packages coming second and third respectively.” With regards to 2013, John believes volumes will grow as companies continue to expand into new and existing markets to support their business strategies. “Industry sectors such as Oil & Gas and Pharmaceuticals will continue to lead this growth however much will depend on global growth to provide corporate confidence that the economy is recovering,” he says. “With this in mind, there will continue to be pressure on costs and the need to tailor policy provisions to be utilise assignment investment and talent development.”

Company: Interdean Name: John Rason Email: john.rason@interdean.com Web: www.interdean.com Address: Central Way, Park Royal, London, NW10 7XW Telephone: +44 (0)20 8961 4141

contributing to the economical success of international corporations. “There is a trend that relocation is becoming more than simply a transactional activity involving orientation, home search and settling-in. It is developing to be a partnership with HR departments when it comes to the development of assignment policies and – as a result – taking care of the entire process of assignment management.”

“Again, the best way to overcome all this is unbiased information, support with home finding and dealing with the authorities and giving the feeling that the counterpart is very welcome.” Helmut says that 2012 was a very good year for his company, with relocation volumes constantly growing – and competition in the market growing as well. “This is true from the national perspective in Germany and even more so from the international perspective,” he says. Overall, Helmut believes the relocation industry – while small and not in the focus of public interest – is successfully

Company: RSB Deutschland GmbH Name: Helmut Berg Email: helmut.berg@rsb-relocation.de Web: www.rsb-relocation.de Address: Dreieichstr. 59, 60594 Frankfurt, M., Deutschland, Germany Telephone: +49-(0)69-61 09 47 - 0

April 2013 /

SECTOR SPOTLIGHT: Relocating Expertise

-----------------------------------------------------------------------Nick Kerr is the Managing Director of DT Moving Ltd and a veteran of over 38 years in the moving and relocation industry. In 2007, after 33 years service, he bought out Davies Turner Worldwide Movers from the Davies Turner Group and rebranded the company to DT Moving. ------------------------------------------------------------------------

“DT Moving was founded as Davies Turner and established in 1870 by the entrepreneur Alfred Davies,” Nick explains. “The company’s first customers were the Victorian adventurers of the day, famous trailblazers whom we supported with the shipping of their goods all over the world.” DT Moving was at the fore of the emergence in corporate relocation services during the 1950’s and 60’s, winning contracts such as Unilever and Ford Motor Company and managing the relocation of key executives around the globe. “To this day, the corporate relocation market accounts for the lion’s share of work for our team of 60 full time relocation professionals,” Nick says. He believes that the company’s people and its processes are what gives it its edge over competitors. “Average -----------------------------------------------------------------------Anja Graf is the founder, owner, and CEO of VISIONGROUP, a Swiss company that specialises in the rental of high-quality furnished apartments. -----------------------------------------------------------------------Anja began building her company in 1999 at the age of 21 and is now in the process of expanding throughout Europe and making VISIONAPARTMENTS the leading name in furnished living. She explains: “As the majority owner of its buildings, VISIONGROUP fully furnishes its apartments based on its own living concepts. This produces the added value that sets VISIONAPARTMENTS above others: exclusive interior design, high quality materials, and a rich palette of colours and forms balanced down to the last detail to create a holistic living experience.” According to Anja, among the major factors affecting the relocation process in Europe at the moment are the complications of the host country working and resident permits, especially with expatriates from third world countries. She also has concerns about the lack of transparency around the expat and employer budget ratio as well as the availability of suitable international accredited and able schools for expat children in the city of relocation. -----------------------------------------------------------------------Abhilash Nair is Manager of the Removal Division at ISS Worldwide Movers in Dubai, which is a division of Inchcape Shipping Services. -----------------------------------------------------------------------Inchcape Shipping Services is one of the world’s leading maritime services providers with 290 offices employing over 3,800 people across 65 countries. That means ISS provides its customers with an unparalleled global resource delivered locally and tailored to each customer’s individual needs. Abhilash specifically says and standby to the fact that “In the relocation and removal (packing and moving ) business, experience is everything, which is why our long and successful history sets us clearly apart as a meticulous quality service provider for Individuals and corporates around the world” he says. “Industry experts, streamlined systems, latest techniques, usage of superior and latest packing material, global network with core professionals, courteous and most experienced operational staff, are all features of our operations that come as standard in this competitive arena of relocation/removal business other than the companies credibility in the competitive market.” He also adds that “Our experience is evident in our understanding of packing, scheduling, consolidation, routing and handling, which translates directly into an

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industry experience within the company stands at 15 years per person and this understanding and knowledge is priceless,” he says. “Alongside great people we have great processes and our quality defined relocation management programme is at the core of excellent service delivery. Our programme, and associated technology, has been tweaked over the years to suit the global mobility market and client requirements.”

movement has meant that the infrastructure is not quite in place everywhere. Finally, Nick claims the third biggest challenge is that the whole family buys in to a relocation. “A happy spouse and family generally means a happy employee, and in turn a successful relocation,” he says. “It is imperative that the assignee’s family is provided with information, support and reassurance well in advance of their relocation. This kind of preparation is underestimated at your peril.”

Nick cites three key factors that influence the relocation process: the economy, governmental immigration policy and global mobility education. He says all three are absolutely pivotal and the one that receives the least headlines – that of education – should not be ignored. In terms of challenges, Nick again points to three key areas, the first of which is cross border compliance. Tax, payroll, expense and social security requirements vary from country to country and this poses a huge challenge to HR & Global Mobility departments. He also believes there is a challenge connected to regional service quality, particularly in markets such as Brazil, Russia, India and China, where the sheer growth rate of corporate Among the major challenges involved in relocation, she points to the lack of secured date of arrival of expats and their budget constraints to afford decent rental prices offered. “We believe that the way forward to securing a solid furnished apartment date of reservation is sound cooperation and coordination between the traditional relocation companies, the expats, their employers and host country’s departments responsible for expat living and working permits,” Anja says. She also believes there is a great need for the employers receiving the expats to be more flexible with their employee/ employer short/medium/long term furnished apartment budget ratio to make it possible for a more convenient relocation of their assignees/expats. Looking ahead, VISIONGROUP believes that 2013 looks very promising in terms of relocation activities. Anja is confident that there will be an increased inflow of expats to the European job market. That will be driven by the acute shortage of skilled labour and aggressive policies to attract foreign workers. “Overall, we strongly believe that for the global mobility regime to acquire a reliable relocation services system there is a great and urgent need to bring down political barriers

extremely competitive, packaged solution for our clients.” Packing & Removal (FIDI FAIM audited and approved Office) - ISS Worldwide Movers is a wholly owned subsidiary of Inchcape Shipping Services, forming an integral part of its Cargo Division from six centers within the Middle East; Dubai, Abu Dhabi, Bahrain, Kuwait, Qatar and Oman. Abhilash believes that success to this business is what he calls efficiently managing 3M – money, manpower and material with experience, network and quality affiliations. He believes that the challenge is surviving in front of small operators offering cheap prices due to zero overhead and in the market can ultimately customers being caught out with service issues and failure with commitments. “2012 was good for us and business has got better in 2013 in the first quarter but the challenges continue – it’s all about maintaining service quality with minimum cost,” he says. “It has been noticeable that outsourcing has becoming more common as a result of costs control reducing overheads by bigger or small brands but this in turn reduces quality and degrades service levels if the management loses control.” Abhilash also notes that corporate relocation or control over employee relocation by corporates are reducing day by day as a result of which companies paying individual employees to

Company: DT Moving Limited Name: Nick Kerr Email: n.kerr@dtmoving.com Web: www.dtmoving.com Address: 49 Wates Way, Mitcham, Greater London CR4 4HR Telephone: +44 207 622 4393

to enable global skilled labour immigration in Europe. Secondly, the traditional relocation companies need to come up with more sophisticated mobility strategies to match the ever growing expatriate deployments. “Moreover, the HR and Mobility departments of the host multinational corporations need to become more effective, honest brokers between their decision making mechanisms and the relocation partner companies to secure suitable budgets to support the needs of their incoming expat for a win-win situation.”

Company: VISIONAPARTMENTS Name: Anja Graf Email: visionapartments@visiongroup.eu Web: www.visionapartments.eu Address: Birmensdorferstrasse 5, CH-8004 Zürich Telephone: +41 44 248 34 34

run their own relocation process Where employees then try to save cost by going for the cheapest option in comparison to quality service provider. However, he believes the industry has changed significantly over the last five years and remains in transition period till it reaches a saturation point and some regulatory authority interferes to streamline the quality and grade the companies on the positive and negative.

Company: ISS Worldwide Movers (Division of Inchcape Shipping Services) Name: Abhilash Nair Email: abhilash.nair@iss-shipping.com Web: www.iss-worldwidemovers.com Address: 5th Floor, Office court building, Oud Metha Road, Dubai, POE Box 33166 Telephone: +971 50 5520978

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SECTOR SPOTLIGHT: Relocating Expertise

“Mobility is a challenging but strategically critical component of business today,” she begins. “Some of the most common challenges we experience in working with our customers is involving Human Resources and Global Mobility early enough in the process to have an impact on candidates being offered domestic and/or global mobility (transfer or assignment opportunities), and how a Return on Investment is calculated to objectively define the success of the mobility program.”

-----------------------------------------------------------------------Jennifer Murr is Director of Consulting Services at AIReS, based in Pittsburgh, USA. ------------------------------------------------------------------------

American International Relocation Solutions LLC, or AIReS, is a global relocation solutions provider with a reputation for metric-based, world-class performance and a unique family-focused approach to customer service and support. A strict focus on quality oversees every aspect of our business, proven through membership in industry organizations like FIDI, OSA, and OMNI, along with FAIM, C-TPAT, and ISO registrations. With over 30 years of experience, AIReS concentrates exclusively on relocation programs for corporate clients and their transferees, and owns no subsidiaries or vested interests in other aspects of business. Jennifer Murr, Director of Consulting Services at the firm, tells us a little more about what she believes are the major factors which impact the relocation process, and how they can be overcome.

2012 was a great year for the relocation industry, as Murr explains: “Companies are moving more employees, at more levels, to more locations than ever before. There have been some exciting changes, or at least discussions about change, in how we can leverage mobility and relocation to achieve organizational strategic goals. Examples of some trending topics include the increased visibility of the importance of Global Mobility/ HR having a “seat at the table” regarding Talent Management, an emerging interest in providing more robust renter programs as well as the rebounding (hopefully) U.S. Real Estate market for our U.S. domestic activity, and the importance of creating more flexible or situation policies and programs to provide a cost effective and transferee-friendly experience.” Jennifer has also noticed some trends emerging within the industry. “Globally we see an increased focus on the importance of Candidate Assessment, retention of our repatriates, a shift from the centralized “one policy fits all” approach to a more location-based/regional program for some of our emerging market locations, and an increased sensitivity to “why” we are supporting international assignments/activity,” she states. “The last point has led to formalization of many new and/ or hybrid programs to continue to encourage global assignments/transfers while applying strong business acumen.”

With a sterling year behind them, AIReS looks set to have another great 12 months in 2013. Recently, the firm delivered a quarterly webinar on its predictions for the forthcoming months. “The focus of the presentation was on what’s happening in the U.S. Real Estate market, Temporary Housing (on a U.S. domestic and global basis), expected global and U.S. domestic policy trends, and the vital role information security will play in mobility going forward,” says Murr. “We are starting to see the return of consumer confidence in the housing market, which will help new home sales catch up to existing home sales. This has also led to a decline in overall months in inventory for homes worldwide. Home values and prices are also expected to rise. The impact on corporate home sale and purchase programs will be welcomed!” All of the data and information in the industry points to increasing global and U.S. domestic relocation activity in 2013, and AIReS is committed to bringing market and industry trends to our customers proactively to ensure global and domestic relocation programs exceed organizational goals.

Company: AIReS Name: Jennifer Murr Web: www.aires.com Address: 6 Penn Center West, Suite 200, Pittsburgh, PA 15276 Telephone: +1 412 788 0461

Portugal: Your Gateway to Growth Vasco da Gama bridge / Lisbon, Portugal

Portugal opens doors for your company to grow through investments in Brazil, which is spending heavily as it prepares for the World Cup and Olympic Games; Angola, whose oil wealth has opened up a rich variety of development opportunities; and Mozambique, one of the world’s fastestgrowing nations. NAU Relocation is Portugal’s oldest and most prestigious provider of professional mobility packages. It was the first company in Lisbon to obtain the Quality Seal of EURA, the European association of relocation companies, and has some of the world’s leading companies among its clients. NAU Relocation has deep and sophisticated knowledge of the relocation market, operating with international partners as we shepherd investors through their moves abroad. NAU Relocation provides a first-class, personal service which makes it easier for your executives to settle in their destination. NAU’s international team includes consultants from Portugal, Spain, Brazil and Poland, all fluent in English and several other languages.

-----------------------------------------------------------------------NAU Relocation is a company with more than 20 years’ experience in the mobility industry in the Portuguese market. -----------------------------------------------------------------------Lisbon is excelling as a staging post for international expansion, offering a path to profits for companies looking to gain a foothold in Portuguese-speaking countries around the globe.

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Portuguese government has introduced new, more attractive procedures aimed at bringing investors and highly-qualified staff to the country. Portugal has strong advantages as a base for European operations, with skilled, multilingual, ambitious workers. The authorities, for example, are now offering an investor permit whereby anyone investing more than 500,000 euros in real estate or set up businesses that create more than 10 jobs are entitled to legal residence, even if they spend only seven days a year in Portugal. Such permit-holders can travel as tourists or businessmen within Schengen countries for periods up to 90 days. After six years as a resident, investors qualify for Portuguese nationality. NAU Relocation’s long immigration expertise, its top-quality team of relocation experts and its commitment to customer satisfaction make it the first stop for foreign companies seeking new horizons.

We design tailor-made programmes for our clients according to their needs. Our Relocation programmes may include finding a new home for executives, school searches, helping people settling in or assisting with the rental negotiation and the check in. NAU’s solicitors obtain visas and permits and take care of legal procedures. Inside Portugal, where the Eurozone financial crisis has thrown up growth opportunities, NAU Relocation is the provider of choice for the cream of foreign investors. The

Company: NAU Relocation Email: comercial@nau.pt Web: www.nau.pt Address: Rua Sta Monica, 51, 2750-115 Cascais, Portugal Telephone: +351 21 485 8230

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SECTOR SPOTLIGHT:

The Specialisation of the Oil & Gas Industry

THE SPECIALISATION OF THE OIL & GAS INDUSTRY l The oil and gas industry has been subject to huge transformation over recent years and 2013 sees potential for yet more change. Global energy demands continue to rise whilst access to ‘easy’ oil has diminished; as such the industry has been forced to enter a new dawn. This reality means accepting that the working environment will remain challenging and facing up to tighter margins, higher risks, stricter regulation and the global deficit of skilled professionals. Performance in 2012 has proven that there is clear overall faith in the industry, however oil and gas companies will have to work harder in order to grow profits in 2013. From exploration right the way through to marketing, the industry involves many stages and in the past many firms have made huge profits by offering a broad range of services across the board. In the new reality, creating real value will require firms to think smart, build more streamlined business plans and offer services in niche areas; overall we expect to see a real shift toward specialisation in 2013. Acquisition International discussed this specialisation and other developments with experts in the industry.

-----------------------------------------------------------------------Following her retirement from partnership at De Brauw Blackstone Westbroek, attorney-at-law Elisabetta Aarts began working as of counsel with Loyens & Loeff to strengthen the legal team at the firm’s multidisciplinary energy and projects group in Amsterdam. -----------------------------------------------------------------------“Loyens & Loeff traditionally have a strong presence in the oil & gas sector, based on their upstream tax, transactional and regulatory expertise and skills,” Elisabetta says. “This, and the premium quality of the services of the seamlessly combined tax and legal team, sets them apart both from local and multijurisdictional firms in The Netherlands and the wider Benelux region.” Of the biggest developments in the sector recently, Elisabetta notes that the shale gas debate is gathering pace in The Netherlands, as in other parts of Europe, as a result of spectacular developments in tight and shale gas in the US. Indeed, the Dutch ministry of economic affairs has so far issued two shale gas exploration permits. However, those permits may not be used (and further permits will not be granted) until a recently commissioned study into the risks (notably methane emissions, heavy metals pollution, subsidence and earth tremors) of shale gas production has been carried out (expected mid-2013) and its result discussed by the government and Parliament.

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“Recent earth tremors and a general trend of subsidence in the northern Dutch province of Groningen, commonly ascribed to (traditional) oil and gas exploration and production activities in the region, have led to concerns over the sustainability of (onshore) oil and gas exploration and production in The Netherlands,” Elisabetta said.

“These factors have contributed to new techniques, such as in the field of horizontal and casing drilling and seismic exploration, being applied and developed further,” she says. “Geothermic projects are being looked at for further innovation in drilling, as is borne out by State owned O&G participation vehicle EBN participating in the Delft geothermal energy pilot project (known as DAPP).”

“They are however not expected to cause a significant change in Dutch energy policy, which, both economically and as to energy mix in industrial and household consumption, still heavily relies on gas.” Elsewhere, price developments over the past years combined with new exploration and production techniques have caused small oil fields to be looked at more favourably. “The industry is characterised by a constant drive for technological improvement,” Elisabetta said. “This isn’t different in The Netherlands from elsewhere in the world.” In fact, she believes The Netherlands is more challenging to the innovative powers of the industry for a range of factors. These include the fact that the country is one of the most densely populated in the world, part of its offshore oil and gas reserves are typically located in nature protection areas and it has a high density of road and railway infrastructure and water works. The Netherlands’ traditionally winnable oil reserves are also in decline.

Company: Loyens & Loeff Name: Elisabetta Aarts Email: elisabetta.aarts@loyensloeff.com Web: www.loyensloeff.com Address: P.O. Box 71170, 1008 BD AMSTERDAM, The Netherlands Telephone: +31 20 578 54 50 mobile: +31 6 513 12 938 general office number: +31 20 578 578 5

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SECTOR SPOTLIGHT:

The Specialisation of the Oil & Gas Industry

-----------------------------------------------------------------------Alberto Varillas is a partner of García Sayán Abogados, where he is head of the Natural Resources Law Area. ------------------------------------------------------------------------

Discussing the key factors currently affecting the industry, Mr Varillas noted that current projects are being affected due to the delay by Government entities in issuing all the permits and licences (environmental and others) required for the performance of their activities. He added that future projects are seriously affected by the Government’s inability to implement the Previous Consultation Process referred to in ILO treaty No.169 which was regulated in a law enacted in 2011. “This situation is affecting the possibility of offering blocks in the Peruvian jungle due to the existence of native communities that need to be consulted by the Government before approving any private investment project in their territories.” Commenting on the most attractive industry investment locations, Mr Varillas highlighted Talara on Peru’s north coast as an historical area and site of the first well which was drilled, 150 years ago.

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Talara has on-shore and off-shore production and the country’s second largest refinery which is about to start a complete modernisation process. “The north jungle is also a very interesting area since it hosts blocks which started production in the 1970s and two blocks (64 and 67) with new discoveries to be developed in the near future,” he continued. “The Peruvian Pipeline crosses this area and brings the oil produced down to the port of Bayovar at the Pacific Ocean coast.”

In conclusion, Mr Varillas stated that specialisation is a serious problem for the oil and gas industry in Peru. “Since it was opened to the private sector in the early 90s, the country lacks specialists in the private sector (attorneys, environmentalists, geologists etc.). Although a problem, it is also an opportunity that is making more young professionals consider the oil and gas business as an area in which to develop their professional skills.”

Mr Varillas noted that the Camisea field area is also very important to watch due the large gas reservoirs being exploited and those recently discovered. “Private owned pipelines transport the gas and its liquid to fractioning, GTL and marine transportation facilities to the ports of Pisco and Melchorita in the central coast and, from there, to Lima for its industrial and domestic distribution. Tthe largest refinery, la Pampilla, located nearby the Callao port area is owned and operated by Repsol which is, as it is of the public domain, looking for a buyer.”

Company: Garcia Sayan Abogados Name: Alberto Varillas Email: avarillas@garciasayan.com.pe Web: www.garciasayan.com.pe Address: Reducto 1310, 7th floor, Lima 18, PERU Telephone: 511 615 0202

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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.

Good Business Decisions Evaluate IP Many business transactions often trigger high-value, time-sensitive intellectual property (“IP”) due diligence investigations. Whether gearing up for a product launch, brokering a merger/acquisition, contemplating a legal battle, or negotiating a licensing agreement, companies must thoroughly evaluate the relevant IP prior to sealing the deal. The strength or weakness of the target IP often dictates the financial terms and structure of the transaction or even whether the deal goes through. Depending on the business sector and transaction, the IP involved will differ and can include patents, trademarks, copyrights, and/or trade secrets. Publishing or television deals may include copyrights, whereas consumer products implicate trademark, trade dress, and design patents. Patents and trade secrets dominate pharma, biotech, and other technology sectors. While each type of IP requires unique due diligences, every one may evaluate the freedom to use, the validity, enforceability, and the ownership of the IP. Ultimately, a strong due diligence seeks to assess risks, consider ways to resolve or mitigate those risks, and maximise the comfort level of the engaging company to limit post-deal surprises.

-----------------------------------------------------------------------Bryan Diner, a partner in Finnegan’s D.C. office, managed the European office for several years. His diverse practice includes IP portfolio management and due diligence investigations. Dr Erin Sommers is an associate in Finnegan’s D.C. ------------------------------------------------------------------------

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Often a strong IP due diligence exceeds consideration of the IP alone. IP counsel should consider all of the relevant business-related facts to ensure a sound business decision. For example, sharing information between target and buyer may be risky—a shared opinion of counsel could waive any attorney-client privilege and down the road become discoverable. Transactions with ex-U.S. companies may require evaluation of foreign privilege laws to determine which communications, if any, will be protected under attorney-client privilege. An IP due diligence may also include a consideration of whether certain foreign activities amount to a disclosure, especially with the implementation of the American

Invents Act in March 2013. A thorough IP due diligence may implicate antitrust laws if the transaction includes two competitors. An IP attorney, skilled in IP due diligence investigations, can help her client to navigate not only IP-related analyses but also broader business and legal concerns associated with a transaction. Bottom line: smart companies engage good IP counsel to safeguard their investments and assets, and to minimise risks associated with making business decisions that involve IP.

Company: Finnegan Henderson Farabow Garrett & Dunner Web: www.finnegan.com Address: 901 New York Avenue, NW, Washington, DC 20001-4413 Telephone: +1 202 408 4000 Name: Bryan Diner Email: bryan.diner@finnegan.com Name: Dr Erin Sommers Email: erin.sommers@finnegan.com

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SECTOR SPOTLIGHT:

Intellectual Property: The Importance of Protecting Intangible Assets

-----------------------------------------------------------------------Nicholas Womsley, Director at Swindell & Pearson Ltd, explains how intangible assets such as Intellectual Property can be a company’s most valuable assets, and why protecting IP rights is vital. ------------------------------------------------------------------------

IP rights can be the most valuable assets of a business. They can create and protect critical revenue streams, as IP can be sold, licensed or mortgaged and can also be used to leverage outside investment. IP can enable a business to enjoy a market monopoly for protected products, enabling revenue from such assets to be maintained and often valued at a premium. IP can be used by businesses to give them a competitive edge. Patents can make a technology the preserve of a business, while trade marks can protect a business’ reputation and goodwill. IP can enable a business to extract the greatest possible benefit and return from its investment in its products, processes, brands and market position. Businesses can do this by way of establishing a presence and/or by means of transferring or licensing IP. Thorough due diligence of IP rights is vital in corporate transactions. Not only should IP be identified, but -----------------------------------------------------------------------Chinyere Okorocha is a Partner in the intellectual property department at Jackson Etti and Edu in Lagos, Nigeria, which provides legal services throughout Africa and beyond. -----------------------------------------------------------------------JEE’s trademark services are wide ranging and Chinyere says that over 16 years of existence, the firm has built a distinctive practice based on division and unitisation. “Operational excellence, client satisfaction and relationship management are the firm’s targets for 2013,” she says. “The partners are also looking at new product lines and processes that will complement and enhance the services that are currently on offer.” The firm’s other unique selling points include the continued four strategically located offices including an international office in Ghana, which allows provision of service throughout Africa. “In today’s dynamic and fast paced society, an IP adviser must be a most intelligent, experienced and proactive individual with excellent written and communication skills,” Chinyere says. “They must possess good advocacy and analytical skills in order to assist clients to identify key legal issues at hand. In addition, a penchant for research and deductive reasoning will help as well as negotiating skills for complex transactions.

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its status, value and validity should also ideally be checked. It is critical that transfers of registered IP are recorded following their transfer. Swindell & Pearson is able to advise the best way of transferring registered IP rights, in particular for foreign IP rights. It is recommended to use the services of an IP adviser to provide guidance and assistance in this specialised field. The key skills of an IP adviser include attention to detail, an aptitude for swift technical understanding, an appreciation of the commercial aspects surrounding IP and an understanding of the interrelation of IP rights and businesses’ needs and aspirations. Swindell & Pearson provides invaluable insight into the often critical role of IP in business and can assist with due diligence. As a result of managing large multinational IP portfolios, we have trusted associates around the world, which enables us to provide global expertise as part of a business acquisition. We can also assist businesses during strategic planning, by conducting trade mark and patent searches and advising on registration of IP assets. “Finally, an IP adviser must have a good level of empathy for clients, whilst appreciating the fact that the commercial goals, constraints and concerns of each client are just as important as understanding the legal issues and framework, within which the clients operate.”

If a business fails to use its registered trade marks, such registrations can become vulnerable to cancellation on the ground of non-use. It is important that a business protects its current brands and products and for this reason, regular IP reviews are recommended. Swindell & Pearson is able to advise businesses on the best time to apply to register IP rights, both from a commercial and legal perspective.

Company: Swindell & Pearson Ltd Name: Nicholas Womsley Web: www.patents.co.uk Address: 48 Friar Gate, Derby DE1 1GY, United Kingdom Telephone: +44 (0)1332 367 051

Chinyere believes this means the successful acquisition, protection and management of these IP assets alongside an effective IP management system can play a key role in the success and failure of businesses worldwide.

According to Chinyere, IP is increasingly playing a vital role in the growth of most 21st century businesses, and they cannot ignore the value and role that IP has to play to make the company relevant in the highly competitive economy in the world today. “IP assets are intangible in nature and are therefore generally overlooked in the classification of the assets of a business,” she says. “The resultant effect is that IP is usually not being recognised as income-earning assets of the company and are therefore not given the opportunity to play their role in the growth and success of the business. Corporate bodies today need to fully maximise the sources of revenue that can accrue to them through the exploitation of their IP assets in terms of company merger, acquisition, takeover or sale; or when negotiating a license or franchise agreement; or when buying or selling a patent, trademark or copyright or other types of IP and even outright sale, but to mention a few.”

Jackson Etti and Edu Company: Jackson Etti and Edu Name: Chinyere Okorocha Email: chinyereokorocha@jacksonettiandedu.com Web: www.jacksonettiandedu.com Address: RCO Court, 3-5 Sinari Daranijo Street, Off Ajose Adeogun Street, Victoria Island Annex, Lagos, Nigeria Telephone: +234-1-4626841-2

April 2013 /

SECTOR SPOTLIGHT:

Navigating Indirect Taxes

NAVIGATING INDIRECT TAXES

l In the on-going battle against the financial crisis, international governments are increasingly turning towards indirect taxes to raise additional funds. There are a wide range of indirect taxes, which makes them a popular way to increase revenue because the expense is spread across multiple platforms; however they are often ruled by complex regulations which change frequently. From VAT, sales and use tax to customs and excise duties; these taxes pose many challenges for businesses, especially businesses that operate across international boundaries. Keeping up with the latest regulation consumes valuable time and resources for any business and even those with in-house tax professionals can struggle to keep a grasp of new and complex legislation. To successfully manage indirect tax requirements, ensure compliance and reduce international trade costs, it is wise to turn to a tax expert who is experienced in global trade strategy, exports and imports. Acquisition International speaks to leading experts in the field to get a deeper understanding of indirect taxes.

Austria: Substance required for VAT refund?

-----------------------------------------------------------------------Dr Robert Schneider is a General Partner of SchneideR’S attorney-at-law LLP, Vienna, Austria. ------------------------------------------------------------------------

The European Union has established a VAT system where VAT is levied at each stage of a production or service process. In order to achieve the goal of VAT as a tax on consumption, VAT can be generally deducted by the entrepreneur using goods and services for the purpose of taxed transactions. VAT deduction is core to achieving tax neutrality within the entrepreneurial chain. In the standard case, the entrepreneur seeking to deduct his input VAT on supplies must hold an invoice drawn up in accordance with the Articles 220 et seq. of the VAT Directive. According to Art 226 para 5 of the VAT Directive the invoice shall disclose the full name and address of the taxable person (the supplier) and the customer. In the past, Austrian entrepreneurs deducted input VAT on the basis of invoices issued by brass plate companies that never filed VAT returns. This has resulted in a significant loss of revenue to the Austrian fisc. As a consequence, Austrian tax authorities and the Administrative High Court developed the practice of denying deductions for such invoices. They argued that an address where no business activity is pursued does not fulfil the conditions for a proper invoice, which is not merely a formality but a material condition for the VAT refund.

60 / April 2013

Unfortunately, the Austrian tax authorities are now extending this practice to cases where no VAT fraud is involved. In a decision issued by the independent appeal tribunal in 2010, VAT deduction on basis of invoices issued by a company seated in Liechtenstein has been denied even though that company correctly filed VAT returns and paid VAT. The argument was that the business activities had been evidently performed in the Czech Republic and thus the address in Liechtenstein shown on the invoice was wrong. The appeal against this decision is still pending at the Administrative High Court. In a very recent case the tax authority denied VAT deduction based on invoices issued by a Cyprus company with an Austrian VAT identification number for supplies of goods made in Austria. The argument was that the company had only a nominee director but no employees and no office space and thus could not perform business activities at the registered company address that was correctly shown on the invoices. In fact, the company acted as an intermediary trading company, purchasing goods from European subsuppliers who delivered the products directly to the customer in Vienna. The company’s business activities were largely outsourced to service providers, so there was actually no need for a big office and a big number of employees. Even though the company correctly filed VAT returns in Austria and its VAT burden would have been covered by transfers of tax credits resulting from VAT deductions claimed by the customer, the tax

authority applied the jurisdiction developed for tax fraud cases. In our opinion, this is against the principle of tax neutrality within the entrepreneurial chain and a breach of EU law, which provides that the member states may not require stricter conditions than stated in the VAT Directive. If the full name and address of the supplier as registered in the companies register and with the tax authorities of the supplier’s country of residence is shown on the invoice, the Austrian tax authorities should not be entitled to deny VAT deduction, unless tax fraud is involved. Nevertheless, companies are strongly advised to take account of the current Austrian practice which requires sufficient substance not only for corporate tax, but also for VAT purposes.

Company: SchneideR’S Rechtsanwalts-KG Name: Dr Robert Schneider Email: r.schneider@tax-law.at Web: www.tax-law.at Address: Hormayrgasse 7a Top 18 A-1170 Vienna, Austria Telephone: +43 1 486 720 900

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Navigating Indirect Taxes -----------------------------------------------------------------------Finbarr Sexton is a Tax Partner at Ernst & Young Qatar. ------------------------------------------------------------------------

Indirect Tax in MENA The seemingly benign indirect tax environment in the Middle East North Africa, (MENA) region is in actuality complex and fraught with costly impost. There are various customs, VAT, sales tax and municipality tax systems to navigate, each with their own country specific rules and compliance challenges. Within the GCC there is the unified customs duty code which appears straightforward with a standard duty rate of 5%. However, in practice, compliance can be arduous in terms of origin, valuation, and documentary evidence requirements and inconsistent application of the legislation by individual member states. Proposed VAT implementation in the GCC The introduction of a VAT regime in the GCC has been considered for a number of years. However, due to the consequences of the Arab Spring and

impact of the global economic slowdown, actual implementation has not transpired. We understand that implementation of a VAT regime at a GCC level has been pushed back to around 2016. It is also, widely anticipated that GCC member states will implement and enforce their own domestic law within agreed derogation.

through identifying supply chain efficiencies and utilization of free trade areas and agreements. For more information and specific tax advice, please contact Ernst & Young Qatar Tax Partner Finbarr Sexton: finbarr.sexton@qa.ey.com or Senior Director, Garrett Grennan: garrett.grennan@qa.ey.com

The challenges that will come from the implementation of VAT should not be underestimated. The key issues for business will include adapting existing accounting systems and practices, and addressing tax considerations relating to contracts spanning the introduction of VAT. Ernst & Young MENA Indirect Tax services Our indirect tax professionals assist clients across a wide range of industries in navigating the complexities of indirect tax compliance and practice in the MENA region. As well as advising on specific laws and practice requirements in each jurisdiction, our tax professionals help clients to proactively plan for international trade

Company: Ernst & Young Qatar Name: Finbarr Sexton Email: finbarr.sexton@qa.ey.com Web: www.ey.com Address: 24th Floor, Burj Al Gassar, Majilis Al Taawon, Onaiza, West Bay, P.O Box 164, Doha, State of Qatar Telephone: +974 4441 4599 that nothing has been missed. Alvarado y Asociados provides advisory services and a full spectrum of highly efficient outsourcing and co-sourcing solutions.” There have been recent changes to legislation in Jose’s jurisdiction, as he explains: “On December 12, 2012, Nicaraguan National Assembly approved Law No. 822 “Law of Tributary Concertation” establishing material changes to the current income tax framework for both corporations and individuals.

OTHER EXPERTS IN THIS AREA

Teshome GabreMariam Law Firm Company: Teshome Gabre-Mariam Law Firm Name: Teshome Gabre-Mariam Bokan Email: tgmb@ethionet.et Telephone: +251 115518484

-----------------------------------------------------------------------Jose Anibal Olivas Cajina is a Corporate and Tax lawyer at Alvarado y Asociados, based in Nicaragua. ------------------------------------------------------------------------

Jose Anibal explains more about Alvarado y Asociados and its experience: “Our tax practice provides thoroughly considered and legally sound transactional tax advice to local and international financial institutions, corporates and individuals,” he begins. “The tax practice aims to combine its commercial and tax law expertise to provide efficient tax solutions. Our Indirect Taxes practice is one of the largest in Nicaragua and, through our VAT professionals, clients have access to a wide variety of experiences and skills, extensive specialisation, strength in depth and a powerful global network of tax and related resources.” As tax adviser, Jose works closely with the rest of the firm to ensure that the tax aspects of any transaction are thoroughly considered and planned. “We regularly act on some of Nicaraguan’s leading transactions, including mergers and acquisitions,

ACQUISITION INTERNATIONAL

restructures and capital raisings, cross-border financing, and project and structured financing,” he states. “We are also fully equipped to support clients in tax disputes.

“In addition to Nicaraguan nationals and residents, the changes will impact foreign corporations and individuals with business and investments in Nicaragua. Law No. 822 “Law of Tributary Concertation” derogates Law No. 453 “Tax Equity Law” and was published on the Official Gazette, La Gaceta on December 17, 2012 and became enforceable as of January 1, 2013. “In the new concepts including Law No. 822 Law of Tributari Concertation (Ley de Concertacion Tributaria), published in the Gazette No. 241 of December 17, 2012, which allows a better application of the management business planning under the concepts mentioned which is the Transfer Pricing to be in force from 2016.”

“The members of our tax practice regularly contribute to publications and write articles on developing tax law. We participate in seminars and courses that give us a constant updating of our lawyers in all the aspects of international tax law.” Indirect taxes pose certain challenges for businesses, particularly those operating across international boundaries, however Jose tells how these issues can be overcome. “VAT is broadly based on transactions, and liability will arise regardless of profitability,” he says. “Alvarado y Asoacios can help with timely planning and the application of technology-based compliance management solutions to help reduce costs and minimise risk while increasing confidence

Company: Alvarado & Asociados Name: Jose Anibal Olivas Cajina Email: jaolivas@akvaradoyasociados.com.ni Web: www.alvaradoyasociados.com.ni Address: Planes de Altamira III Etapa, Semáforos ENITEL Villa Fontana 2 Cuadras al Este, 2 ½ Cuadras al Norte, Managua, Nicaragua, P.O. Box 5983 Telephone: (505) 2278-7708/2277-2308/2277-2417 Cellular: (505) 888-23990; (505) 885-09590 Fax: (505) 2278-7491

April 2013 /

SECTOR SPOTLIGHT:

Navigating Indirect Taxes

good in the country (customs clearance) is performed by an establishment located in one State, while the establishment to which the goods are ultimately destined to is located in a different State. For some time, this matter seemed to be conclusively settled, considering that Supplementary Law N. 87, of 09.13.1996, (which is the legal instrument to be used in order to establish general rules regarding ICMS) determined that ICMS should be collected to the “establishment where physical entrance occurs;”

-----------------------------------------------------------------------Gustavo M Brigagão is a partner at Ulhôa Canto, Rezende E Guerra Advogados. ------------------------------------------------------------------------

In general terms, imports into Brazil are subject to four Federal taxes and one State tax. The aforementioned State Tax, which is called ICMS, is a value-added indirect tax levied by each of the 27 Brazilian States. As per the Brazilian Federal Constitution (FC), regarding imports, said tax “will be due to the State in which the establishment for which the goods are destined to is located” (art. 155, § 2, IX, a) The highlighted expression has caused much controversy in the Brazilian legal community, especially in cases where the physical entrance of the

62 / April 2013

However, as of 2002, there started to be an increasing trend in the Brazilian jurisprudence in the sense that the State entitled to collect ICMS due on importation was the one in which the establishment that is ultimately responsible for the importation of the goods is located, which is to say, where the true acquirer of the imported object is located (therefore deeming the place of customs clearance or the “physical receiver” of the goods to be absolutely irrelevant). On 06.30.2004, this trend was confirmed by the First Chamber of the Federal Supreme Court while ruling on a case in which a company located in the State of Pernambuco imported certain goods through a port in the State of Rio de Janeiro. Said company intended to sell these goods to a client located in Rio de Janeiro. In an effort to avoid the costs of transporting the goods back and forth between the two States, it arranged for such goods to be delivered to its clients’ establishment immediately after customs clearance. Considering such elements, the Supreme Court understood that the tax should be

collected to the State of Pernambuco since that was the location of the “legal recipient” of the goods. Notwithstanding the decision above and several others issued in the following years, there is still much controversy regarding the exact scope of the expression “legal recipient”. For instance, is actual economic use of the imported goods a requirement? Hence, the safer option from a tax perspective is to import the goods through the State in which the goods are ultimately destined to and where they will effectively be used. If the recommendation above is not a feasible option, due to the controversy on the matter, it is recommended that each case be analysed taking into consideration its specific peculiarities and how this may affect taxation.

Ulhôa Canto, Rezende E Guerra Advogados Company: Ulhôa Canto, Rezende E Guerra Advogados Name: Gustavo M Brigagão Email: gbrigagao@ulhoacanto.com.br Web: www.ulhoacanto.com.br Address: Av. Presidente Antônio Carlos, 51 – Centro, Rio de Janeiro – RJ – CEP 20020-010 – Brazil Telephone: +55 21 3824-3227

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Navigating Indirect Taxes “The Federal Ministry of Finance published a circular dated March, 7th 2013 with respect to VAT Groups, i.e. with respect to the requirements for an organisational integration,” states Ober. “In general, on the one hand the circular provides legal certainty. However, on the other hand it is recommendable having reviewed the respective VAT Group’s structure as there might be the need of modifications under company-law. For some backgrounds a transitional period until December, 31st 2013 has been granted. “Another change is that the Federal Court of Finance has ruled in its decision dated November, 14th 2012 (Az. XI R 8/11), that the VAT-exemption for intraEU supplies of goods is not applicable in case that the respective invoice does not include a reference to the intra-EU supply’s VAT-exemption. Therefore, we recommend VAT registered persons to be aware of this ruling. In particular, since many companies do not differ between references for VAT-exempt intra-EU supplies and export supplies to territories outside the EU this decision is of a high practical use, i.e. companies should be aware of the kinds of references shown on their invoices. “Furthermore, there will be several changes with respect to the so-called Amtshilferichtlinie-Umsetzungsgesetzes (AmtshilfeRLUmsG) which will be affecting VAT. For example the draft AmtshilfeRLUmsG intends that there will be changes with respect to the invoicing requirements and the intention to extend the reversecharge procedure to particular services connected to the delivery of natural gas.

-----------------------------------------------------------------------Karl Ober is an Associate at Luther Rechtsanwaltsgesellschaft mbH and specializes in indirect taxation, with a focus on VAT, at the Munich office. Luther is part of the world’s largest independent tax organisation, Taxand. ------------------------------------------------------------------------

Having graduated in business administration, Karl Ober worked from 2009 to 2013 as a tax assistant for a medium-sized auditing firm in Dusseldorf and for a medium-sized consulting company in Munich. Simultaneously, he graduated in “tax sciences” at the University of Münster, Germany, where he obtained a Master of Laws degree. After having passed the German tax advisor’s exam, Ober joined Luther in 2013.

with nearly 400 tax partners, over 2,000 tax advisors in nearly 50 countries. Taxand focuses on delivering high quality, integrated tax advice and does not audit work. Taxand advisors work together to provide global tax services for clients. “Taxand has limited membership to one tax advisory firm per country. Each firm has to comply with rigorous quality standards in order to be included in the network. In this way, the structure of the network remains straightforward, and at the same time a consistently high level of advice is guaranteed on a national and international basis.”

Ober explains what he believes gives Luther its competitive advantage over local and global competitors in its areas of expertise.

There are certain challenges faced by businesses regarding indirect taxes, particularly those which operate across international boundaries, as Ober explains.

“We think and advise from a business perspective,” he begins. “We are aware of the importance of efficient resource management and the significance of planning that is viable and far-sighted. We also always bear in mind the business and financial implications of our advice. This applies to both litigious and structuring advice.

“The challenges in our industry start when negotiating agreements with customers or associated entities and end when businesses are liquidated or sold,” he says. “Furthermore, different intentions of the participating parties might cause a challenge for one or both parties as well. For example the structure of an agreed on supply chain might have several disadvantages like the obligation to register for VAT purposes in another country and to contribute VAT and comply to further obligations there. If applicable, such an agreement will have an effect on the obligations arising for customs purposes as well.

“Our advice extends beyond borders. We are an independent German partnership of lawyers and tax advisors with 11 offices in Germany. We also have 6 international offices in the relevant European and Asian markets which offer cross-border advice and project management. In addition, we are exceptionally well networked internationally through our membership in the worldwide tax organisation Taxand. “Taxand is a global organisation of tax advisory firms. It is the world’s largest independent tax organisation

ACQUISITION INTERNATIONAL

“To sum up, since there are several challenges and even potential risks for businesses there is the need of being assisted by a reliable and well-skilled tax advisor.” Recent changes to legislation in the indirect tax industry have meant changes for Luther.

“Another upcoming change will be the change of the Umsatzsteuer-Durchführungsverordnung (UStDV; VAT-Ordinance / -Directive). Thus, besides the so-called “Gelangensbestätigung” (acknowledgment of receipt / arrival) also other proofs will be accepted by the UStDV when proving the requirements for the VAT-exemption of intra-EU supplies. The change will come into effect by October, 1st 2013. There is the possibility to apply to §§ 17a to 17c UStDV as effective by December, 31st 2011 for intra-EU supplies made until September, 30th 2013.” With regards to predictions for the future, Ober can see another stellar year with regards to 2013. “Basically, since the globalisation proceeds and business relationships become even more complex, indirect taxes will extend their importance within commerce.”

Company: Luther Rechtsanwaltsgesellschaft mbH Web: www.luther-lawfirm.com Address: Karlstraße 10-12, 80333 Munich Telephone: +49 89 23714 0 Name: Peter Fabry, Partner, RA, FAfStR, StB / Lawyer, Specialist Lawyer for Tax Law, Tax Advisor Email: peter.fabry@luther-lawfirm.com Name: Karl Ober, LL.M. StB / Tax Advisor Email: karl.ober@luther-lawfirm.com

April 2013 /

SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist

THE CROSS-BORDER M&A SPECIALIST l In spite of the on-going volatility across international markets, cross-border M&A transactions remain a crucial part of the global economy. A recent survey conducted by a Magic Circle firm found that 80% of large companies focussed their current growth strategy on developing core business; cross-border deals allow growth outside home markets and can help a business to take advantage, in many cases at lower prices, of new synergies. These deals are extremely challenging and careful management throughout all stages of the transaction is critical to their success. In preparation, many business owners look beyond their go-to solicitors and approach larger, more specialist law firms or M&A advisory firms. These experts can help to identify key areas of legal risk across multiple jurisdictions, they can negotiate global regulatory issues such as anti-trust and merger control, they can help the client to interact efficiently with the vendor (taking into account time, language and cultural barriers) and they can work effectively under current market pressures to execute the transaction in a timely fashion. But, completion is not the end; following on from any transaction it is important to consider the post-acquisition strategy and this need is highlighted even more in cross-border circumstances. Few firms are specialist in all stages of the process but many have a deep global network of talent that they can draw on, or are so experienced in the cross-border arena that they are well attuned to local variations in doing business. Acquisition International speaks to leading M&A/investment specialists to analyse the major risks facing companies entering new markets and the greatest challenges to cross-border M&A in 2013.

-----------------------------------------------------------------------Andreas Rötheli is a Partner and Co-Head of the Corporate/ M&A practice group at the Swiss law firm, Lenz & Staehelin. -----------------------------------------------------------------------Lenz & Staehelin is Switzerland’s largest law firm and enjoys a leading position in domestic and cross-border private and public M&A transactions, with approximately 70 partners and associates making up its Corporate and M&A practice group. According to Andreas, as a true national firm, Lenz & Staehelin is perfectly suited to efficiently assist any client on the buy- or sell-side in Switzerland. “In response to the complex requirements of domestic and international mergers and acquisitions and the many areas of law involved, our diverse M&A practice group brings together the knowledge, skills and experience of different practice areas in order to form customized teams for specific transactions,” he says.

by the legal team, but also by a wide support cast. Assuring that all players are working as a team falls on the M&A lawyer in many cases.” Andreas notes that with the Swiss economy (still) sound, the M&A market has continued to receive positive signals, from which both domestic and foreign players have been able to benefit and carry out large transactions in Switzerland. He says: “The sectors that saw the highest number of M&A opportunities in Switzerland in 2012 were financial services, healthcare and life science, as well as luxury goods, such as the watch industry. In addition, the small and mid-sized company business, which reflects the predominant market environment in Switzerland, has provided an interesting and challenging range of deal opportunities.”

Andreas says that an M&A lawyer requires ‘business savvy’, needs to understand fundamental concepts of business and be able quickly to grasp what is important from a commercial perspective about a particular deal.

Looking ahead, Andreas believes that the outlook for 2013 looks promising, but it is not without its own set of challenges. As the Euro zone crisis remains unresolved and global economic uncertainty persists, he thinks some executives may indeed be hesitant to carry out M&A transactions.

“Negotiating skills are obviously important, and an effective M&A lawyer also requires management ability,” he says. “M&A deals are typically done on a short time line and are often complex. Numerous tasks must be performed, not only

“That being said, the private banking business sector has begun to see a wave of consolidations resulting in increased M&A activity, largely due to heightened market and regulatory pressures,” he says.

64 / April 2013

“Finally, certain PE funds mainly active in the Swiss market are coming to the end of their lifecycles and therefore require exits from portfolio companies. Considering these prospects, PE deal opportunities including secondary (or tertiary) buyouts are likely to be available in Switzerland to those private equity houses that are willing and able to take advantage of the current economic environment by actively identifying potential targets with operational skills and thus substituting for weaker financial leverage.”

Company: Lenz & Staehelin Name: Andreas Rötheli Email: andreas.roetheli@lenzstaehelin.com Web: www.lenzstaehelin.com Address: Geneva, Lausanne, Zurich Telephone: +41 58 450 7000

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist -----------------------------------------------------------------------Mr Cyril Shroff is Managing Partner of Amarchand & Mangaldas & Suresh A. Shroff & Co in Mumbai, India. ------------------------------------------------------------------------

Mr Shroff has over 30 years of experience in a range of areas, including corporate laws, securities markets, banking, infrastructure and others. He is regarded and has been consistently rated as India’s top corporate, banking and project finance lawyer by several institutions. Founded in Mumbai in 1917, Amarchand & Mangaldas & Suresh A. Shroff & Co. (AMSS) today is a full service law firm with 69 Partners and over 550 lawyers with offices at Mumbai, New Delhi, Bangalore, Hyderabad, Kolkata, Ahmedabad and Chennai. Mr Shroff believes that the fact that AMSS has handled many of the largest and most intricate M&A deals in India’s history is what gives the firm the competitive edge over other firms. “We handled the first ever “open takeover offer” in India,” he states. “The firm is also considered the “go to” firm for cross-border M&A deals.” -----------------------------------------------------------------------Mr. Tao Yang is a partner at AllBright Law Offices. ------------------------------------------------------------------------

The economy of the People’s Republic of China (the “PRC”) has grown rapidly since the PRC Government began to encourage the creation of a market economy in the late 1970s. An increasingly open market, remarkable economic growth and burgeoning private sector have all contributed to making the PRC an attractive proposition for foreign investors. As the market in the PRC continues to open up, more and more international investors are moving away from making green field investment, towards directly acquiring businesses from domestic owners. Foreign investment in the PRC is governed by an approvalsbased system. In general, the acquisition by an international purchaser of PRC companies or PRC assets will need approval by at least one governmental authority. This approval will be a substantive one and may require amendments to the transaction documents. An international purchaser will definitely require assistance from local lawyers to manage the risks and the approvals during the process.

“Given the current environment, there has been slowdown in M&A deals,” he continues regarding the current demand for cross-border M&A transactions. “However, given the volatile environment, we are noticing that clients are becoming risk-averse and given our vast experience, are approaching us for our expertise.” The legal and regulatory environment in India, along with the political landscape, means foreign investors are cautious about their investment. “Overcoming and understanding local sensitivities should be borne in mind here and this can be mitigated by working with local firms.” Mr Shroff has seen the metals and mining sectors experiencing the most popularity regarding attracting investment, and he attributes India’s favourable demographics and growth opportunities to this trend. “Technological innovation has also played an integral part in M&A activity globally with virtual data room facilities facilitating quick and secure environment,” he adds. “The videoconferencing facility has reduced the need of travel for key stakeholders.”

AllBright Law Offices (“AllBright”) is one of the leading full-service Chinese law firms in the PRC. AllBright provides a comprehensive range of high quality legal services to both domestic and international clients from the offices in Beijing, Shanghai, Chengdu, Chongqing, Hangzhou, Nanjing, Shenzhen, Suzhou and Taiyuan. AllBright regularly provides legal services to Fortune 500 companies and other multinational companies, foreign invested enterprises incorporated in the PRC, and international and local financial institutions and investment funds. Mr. Tao Yang is a partner of AllBright Beijing Office. Prior to joining AllBright, Mr. Yang was an attorney with a top UK law firm and another top PRC firm. Mr. Yang specializes in corporate transactional matters and advisory work involving the PRC and has extensive experience advising multinational clients on onshore and offshore mergers and acquisitions, joint ventures and other direct investment projects, corporate restructuring, and other cross-border corporate advisory work concerning the PRC. He also advises on various PE and VC structuring and investments, commercial agreements, and general dispute resolution matters in the PRC. We bring a different perspective to the market…. our focus is on bringing strategy and marketing to the M&A equation, as opposed to just focusing on financials. We are seeing a trend of smart entrepreneurs and family business owners starting the process much earlier when making the decision to sell a business and seeking the advice of specialised M&A leaders to work with them to create exit plans based on their objectives, using a more holistic strategic analysis of their businesses. The key is to understand strategic business drivers and assess the value from the perspective of different potential strategic buyers, and then effectively position the opportunity with each of them.

-----------------------------------------------------------------------Rob Follows is the Founding Chairman of STS Capital Partners. -----------------------------------------------------------------------STS Capital Partners was established in 2003 by a group of experienced and successful entrepreneurs, former CEOs and executives. The name STS stands for Success to Significance™, a reflection of the firm’s mission to help successful entrepreneurs and private business owners transform their business success into personal significance by maximising value when selling to international strategic investors.

ACQUISITION INTERNATIONAL

For 2013, Mr Shroff has predictions relating to crossborder M&A activity. “I think we will witness more strategic buyouts with companies trying to enter fast growing market and increase market share/broaden global footprint. Number of cross border transactions made by companies globally is set to increase as global capital markets shows signs to stabilizing.”

By bringing international strategic investors to the table with our clients, we have been successful in breaking the paradigm of selling at 3 to 5 times EBITDA by generating industry leading multiples, with results as high as 50x and 60x EBITDA. Competitors of ours often don’t believe these numbers but they are proof of the value of taking a strategic approach and directly linking international investors to individuals selling their businesses. Being based in Barbados allows clients from countries that have tax treaties with Barbados to benefit from zero

Company: Amarchand & Mangaldas & Suresh A Shroff & Co Name: Mr Cyril Shroff Email: cyril.shroff@amarchand.com Address: 5th Floor, Peninsula Chambers, Peninsula Corporate Park, G.K. Marg, Lower Parel, Mumbai - 400013 Telephone: + 91 22 24964455/66604455

Mr. Yang holds a B.A. degree from University of International Relations, an LL.M. degree from University of International Business and Economics and a second LL.M. (Hons) degree from Northwestern University. Mr. Yang can negotiate and draft professionally in both English and Chinese.

Company: AllBright Law Offices Name: Mr. Tao Yang Email: taoyang@allbrightlaw.com Web: www.allbrightlaw.com Address: 6/F, Office Tower C1, Oriental Plaza, No. 1 East Chang An Avenue Beijing 100738 China Telephone: +86 10 8523 0688

capital gains and very low income tax when domiciling deal structures there (based on advice they get from from tax advisors). Barbados also brings asset protection and confidentiality for individuals/companies in some countries where it is important to keep transactions strictly confidential from both a security and competitive standpoint. The STS formula: Success to Significance™ by Selling to Strategics… to maximise value for sellers and strategic investors.

Company: STS Capital Partners Name: Rob Follows Email: rob@stscapital.com Web: www.stscapital.com Telephone: +1 314 330 5899

April 2013 /

SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist is uniquely positioned to support the investment strategies of international financial sponsors and strategic players interested in Puerto Rico given our deep knowledge of the local market combined with long term relationships in the island. In essence, we offer clients a focused approach to deal making, carefully narrowing down the search for opportunities based on established criteria and overall strategic objectives. In cross border M&A it is also fundamental to bridge cultural barriers between a local seller and a foreign buyer. Hand in hand with local expertise, FCP’s executives’ international background enables foreign players to transition into the local environment, serving as a catalyst in negotiations and interactions with local management teams and shareholders. -----------------------------------------------------------------------Fortaleza Capital Partners (“FCP”) is a leading investment banking boutique active in M&A and capital market transactions with a focus on Puerto Rico and the U.S. Hispanic market. FCP’s founding partners, Mr. Millán and Mr. Rodríguez-Suárez, bring three decades of combined experience in global financial services. -----------------------------------------------------------------------In our view, it’s highly important to understand local customs, regulations and market dynamics for a cross-border transaction to be successful and accretive to investors. FCP

Despite the challenges associated with cross border M&A, we have seen increased interest by foreign investors for assets in Puerto Rico, which offers attractive investment opportunities in selected sectors. Healthcare, education, food and beverage and auto services, among others, offer value opportunities for acquirers. FCP also sees Puerto Rico as a jurisdiction to set up export oriented companies given the island’s incentives and its stability resulting from being part of the United States. Finally, Puerto Rico’s companies can serve as a platform to penetrate the growing Hispanic market, especially in the U.S. east coast.

-----------------------------------------------------------------------Charles Smith is Managing Partner at Pegasus Intellectual Capital Solutions.

known about, and email, virtual databases, and virtual meeting sites make it possible.”

------------------------------------------------------------------------

Charles Smith, Managing Partner of Pegasus Intellectual Capital Solutions is a 35-year veteran of corporate finance. “I’ve had the privilege of working with companies ranging in size from some of the global titans like Cargill and Del Monte to smaller SMEs,” he explains. “My focus is now predominantly SMEs.” Having first started working in cross-border M&A for the Industrial Bank of Japan during 1985-1995, Mr. Smith believes that this extensive experience provides PegasusICS with the competitive edge over other companies. He also states that he has witnessed an increase in the demand for such services in relation to cross-border M&A. “There has been a dramatic increase in global trade which has spurred cross-border investment. The Internet has made it possible to identify opportunities and counterparties that before we would never have -----------------------------------------------------------------------Schneider Boerema provides legal services in the areas of business, mergers and acquisitions and tax planning. The firm has highly credentialed attorneys with diverse backgrounds in areas like corporate governance and accounting. ------------------------------------------------------------------------

SB is unique among its competitors in that we support a creative, collaborative environment where attorneys and clients work together to address legal needs AND solve overarching business challenges. The firm’s expertise in law and business functions makes it attractive to companies around the world that are looking for a comprehensive view and long-term planning. As a CPA and an attorney, Jason Schneider’s combined experience in financial, tax, and legal matters has proven very beneficial in aiding his business clients throughout the company life cycle. Schneider regularly counsels clients on the tax and legal aspects of mergers, acquisitions, and divestitures as well as the business, legal and tax issues relating to global business expansion and cross-border transactions. Prior to SB, Schneider was a partner with a large U.S. based regional law firm. Jason started his career as a tax consultant with Ernst & Young in Miami, Florida.

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There are many risks which face companies entering new markets. However Mr Smith believes these can be mitigated. “The biggest risk is making the assumption you know what the consumer is like, how business is conducted, and how to manage your human capital. When Wal-Mart went into Africa, it did so through the acquisition of a retailer that already was multinational within Africa. Wal-Mart was smart enough to find an acquisition candidate that knew the home turf.” There are countries and sectors which Mr. Smith has witnessed attracting more investment than others and here, he explains these trends. “Investment in China is moving inland. The U.S. will always attract capital due to its economic mass and common law legal system. And Africa intrigues me. There are a number of countries that have developed nicely. There are good acquisition candidates to acquire a local presence. Globally, among industries, I am fond of food, agriculture and their supply chains.” Have you witnessed an increase in the demand for your services in relation to cross-border M&A? Yes, our firm works primarily with privately owned and family businesses with some connection to the Southeast region of the U.S., especially the Research Triangle Park, where our firm is located. Our involvement has often coincided with a strategic decision by these businesses to expand internationally. Most of these businesses know what they want to achieve, but often don’t know where to start and don’t have the depth of tax and legal experience to navigate the process. As part of our engagement, we often first help these business executives understand the lay of the land and the pros and cons of different global expansion options, from simply engaging a sales agent in another country, to forming a joint venture, to engaging in a full-blown acquisition of a target company. What are the main challenges faced in crossborder deals? How can they be overcome? When it comes to cross-border M&A, one of the key elements of success is establishing, early on, a core team of business, finance, and legal advisors to guide

Company: Fortaleza Capital Partners, LLC Web: www.fortalezacp.com Address: Metro Office Park 6, Street 1 Suite 104, Guaynabo, PR 00968 Name: José J. Rodríguez Suárez Email: jrodriguez@fortalezacp.com Telephone: +1 787.749.4772 Name: David Millán Email: dmillan@fortalezacp.com Telephone: +1 787.749.4771

Regarding cross-border M&A over the next 12 months, Mr. Smith predicts big improvements. “I believe we will see an improved market over the next few years as volatility subsides. We did a study recently that showed the adverse effect of market volatility on business activity. Businesses need certainty to invest, and certainty is improving.”

Company: Pegasus Intellectual Capital Solutions LLC Name: Charles Smith Email: csmith@pegasusics.com Web: www.pegasusics.com Address: 70 West Madison Street, Suite 1400, Chicago, IL 60602-4270 Telephone: +1 312-951-0100

the company from the early stages through post-closing integration. Often, deals fail due to lack of thorough due diligence on the front end, lack of trust between the negotiating parties, and lack of focus on postclosing integration issues. The failure to focus on these issues may result in a host of problems, ranging from higher transaction costs, inefficient tax structures, and dysfunctional board governance, to name a few.

Company: Schneider Boerema Name: Jason Schneider Email: jschneider@scbolaw.com Web: www.scbolaw.com Address: 1511 Sunday Drive, Suite 214, Raleigh, NC 27607 Telephone: +1 919 324 3600

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SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist While Europe still dominates cross-border activity, the U.S. continues to generate the most M&A activity. Technology dominates the M&A landscape, with medtech showing particularly strong growth. Asian investment continues to be mostly inward focused, but in 2013 we’ll see China starting to expand into cross-border M&A and large Japanese conglomerates beginning to focus and divest non-core businesses. Since we joined M&A International (MAI), a 45-member worldwide consortium, as the Silicon Valley headquarters, we’ve seen significant growth in our crossborder services. With MAI, we’re able to provide our clients with the high touch of a boutique investment bank coupled with the reach of a large investment bank. Our partners all have prior CEO experience and deep domain expertise. -----------------------------------------------------------------------Rudy Burger is the Managing Partner & Managing Director of Woodside Capital Partners. ------------------------------------------------------------------------

Since day one, our focus at Woodside Capital Partners has been on global, cross-border transactions. With our original focus on U.S – European M&A, more than 50% of our transactions each year have been cross-border. -----------------------------------------------------------------------Gabriel Pardo Lelo de Larrea is Managing Partner at CRECE Investment Banking, based in Mexico. -----------------------------------------------------------------------Throughout his career, Gabriel Pardo Lelo de Larrea has been an advisor for strategic alliances, mergers and acquisitions, project finance, sale of assets, and financial restructurings. Gabriel has extensive practice in Latin America, having worked and closed deals in Brazil, Argentina, Chile and Mexico. He has been a senior associate at tier one law firms Von Wobeser y Sierra, S.C. and Mijares, Angoitia, Cortes y Fuentes, S.C., and Legal and Regulatory Director for MetroED Telecom Group, Ltd., (a former Fidelity Investments Company) with operations in Brazil, Argentina and Mexico as well as Director for Strategic Alliances for Mexican operations. Gabriel explains more about his current company, CRECE Investment Banking, where he occupies the position of Managing Director. “CRECE, Investment Banking is a one-stop-shop, where every aspect of an M&A and Private Equity transaction is covered. We provide financial, business, and legal advice as well as access to our network of professionals and market participants through the AM&AA. “The key skills required of a cross-border M&A specialist include an understanding of cultural differences in the way -----------------------------------------------------------------------Jonathan Golden is a partner in the Mergers and Acquisitions Practice of Arnall Golden Gregory LLP. Mr. Golden is chair of the firm and a member of the Executive Committee. ------------------------------------------------------------------------

Since 1949, Arnall Golden Gregory LLP, with offices in Atlanta, Washington and Miami, has helped companies reach their next stage of growth. AGG offers the full array of legal services required for a successful merger, including tax, financing, regulatory compliance, real estate and immigration, both for inbound U.S. and outbound activities.

Time zones, distance, culture, and language can each pose challenges in cross-border deals, and having employees in every country is impossible for smaller investment banks. To overcome these challenges, it’s important to maintain constant, close dialog with both sides to the transaction throughout the process. Being cross-border M&A specialists, we understand how to accommodate different cultural norms for business communications

Management norms vary enormously from country to country, creating risks when companies attempt to enter new markets through acquisition. These risks can be mitigated by focusing on “Reverse Integration” - what the acquiror can learn from the target. It’s equally important to hire a team of post-acquisition integration specialists. Failure to understand how to handle postacquisition integration issues are a main reason so many acquisitions fail.

Company: Woodside Capital Partners Name: Rudy Burger Email: rudy.burger@woodsidecap.com Web: www.woodsidecap.com Telephone: +1 650 391 2075

of doing business in other countries, including the way a potential transaction is structured and negotiated.”

With regards to future transactions, Gabriel has some predictions relating to cross border M&A.

Recently, Gabriel has witnessed an increase in demand for CRECE’s services, particularly in relation to cross-border M&A activity.

“As far as Mexico is concerned, M&A transactions in the telecom and energy industries are expected to see a significant increase in 2013, due to expected amendments to the industry regulation, fostering increased competition.”

“We have seen both Mexican companies selling business units abroad, as well as foreign companies seeking to make partial acquisitions in Mexico. “The main challenges we face in these sorts of deals include building trust among the parties. The challenge can be overcome by conducting an entire process with absolute transparency and equal treatment to all participants, especially in auction processes.” As with any deal, there are certain risks, however companies facing new markets can face additional risks, as Gabriel states. “In the low to mid-market, companies are not so used to having monthly or quarterly reports on performance. This potential lack of timely information may prevent companies from taking the right decisions at the right time. Establishing a clear and relevant KPI, usually in the form of a Balanced Scorecard- report system can help mitigate this hurdle.”

and Argentina. The strategic deal combined two of the leading temperature-controlled warehouse companies. AGG also represented industry-leading food company Rich Products Corp. when it sold its People’s Republic of China subsidiary KangXin Logistics, which operates temperature-controlled distribution centers in China, to China Merchants Americold Logistics Co. (CMAC).

AGG represented Sysco Corporation (U.S.: NYSE) when it acquired another food distributor to become the dominant U.S. company in that space, and one of the largest food distributors in the world.

CMAC is a joint venture between China Merchants Holdings (International) Co., Ltd., and Americold Realty Trust. The approximately $90 million deal also involved CMAC acquiring 70 percent of China Merchants International Cold Chain.

The firm continues to represent Sysco, now a $44 billion global company. AGG Chairman Jonathan Golden serves on Sysco’s board.

India-based NIIT called on AGG for assistance in selling U.S. subsidiary Element K Corporation to SkillSoft Corporation for approximately $110 million.

Recently, AGG helped Americold Realty Trust buy Versacold International Corp.’s warehouses and operations in the U.S., Australia, New Zealand

AGG also assisted the Russian company Ilim Timber Industry in acquiring family-owned Tolleson Lumber of Perry, Georgia.

ACQUISITION INTERNATIONAL

and negotiations, and how to build trusted relationships that can span geography, culture and language.

Company: CRECE, Banca de Inversion/ Investment Banking Name: Gabriel Pardo Lelo de Larrea Email: gpardo@crececapital.com Web: www.crecebancadeinversion.com Address: Insurgentes Sur 105, 12th Floor, Colonia Juarez. Delegacion Cuauhtemoc, México, D.F. 06600 Telephone: +52-55-52-81-62-76

Hedy Rubinger, Chair of the Healthcare Practice, led a team that represented Genesis HealthCare in the $2.4 billion sale of its real estate assets to Health Care REIT. The transaction included 147 facilities in 11 states. “The firm believes increasing globalization and regulation are two forces that will drive further consolidation,” Mr. Golden said.

Company: Arnall Golden Gregory LLP Name: Jonathan Golden Email: jonathan.golden@agg.com Web: www.agg.com Address: 171 17th Street NW, Suite 2100, Atlanta, Georgia 30363 Telephone: +1 404 873 8500

April 2013 /

SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist -----------------------------------------------------------------------Julio Cardenal is a Senior Partner at Landmark Capital, which is a corporate finance firm specialising in mid-market M&A. The firm is based in Chile and has offices in Argentina, Brazil and Colombia, with operations throughout Latin America. -----------------------------------------------------------------------Here, Julio explains Landmark’s significant track record and the current climate for cross-border M&A activity. “Landmark was established in 1998 and has successfully closed 71 M&A mandates and worked on approximately 250 mandates throughout the region,” Julio says. In 2005 the firm joined M&A International (www.mergers.net), a network of 46 middle-market M&A firms present in 40 countries which provides the firm with a useful distribution network for sell-side mandates. Julio believes Landmark has a unique platform, with few competitors offering regional coverage with local presence in the Latin American markets. The firm has a highly experienced team with senior partners directly involved in local deal execution. “Landmark specialises in helping multinationals through its knowledge of different markets and industries and local execution capabilities, and helping local family-owned companies identify and approach potential international buyers,” he says. -----------------------------------------------------------------------Ian Wooden is the President of IJW Management Inc, a corporate finance boutique offering M&A, corporate finance, and business valuation services to small to mid-cap companies in Canada. ------------------------------------------------------------------------

IJW Management was founded in 2004 and has recently become one of the fastest growing corporate finance boutiques headquartered in Montreal. The firm specializes in advising companies with enterprise values between $5 million and $50 million. Whether advising its technology, food and beverage, consumer products or healthcare clients, the firm’s core competency is by far its valuation expertise. According to Ian, “Whether it is a corporate finance or M&A engagement, our clients rely on our professionals to provide objective and accurate valuation advice,” he says. When it comes to International M&A, Ian says “Crossborder M&A specialists need to have a thorough understanding of the value drivers in each market in order to properly identify opportunities for their clients. They also need to have a deep understanding of the regulatory, legal, and tax environments.” Ian believes that not knowing the implications of these metrics can truly impede a deal as well as waste valuable time, effort and resources. -----------------------------------------------------------------------Rene-Pierre Azria is President and CEO of Tegris Advisors, which is a New York-based merchant banking firm focused on strategic advisory work, cross-border M&A and restructuring transactions. ------------------------------------------------------------------------

Rene-Pierre talks about the firm’s wide-ranging expertise and problem-solving capabilities and how the cross-border M&A market is shaping up in 2013. “Since being founded in 2008, Tegris has completed over $24 billion in transactions for our clients,” says Rene-Pierre, who originally established the firm. He has over 30 years of cross-border financial advisory experience having worked for leading global firms like Rothschild and Blackstone before founding Tegris. “Tegris’ professionals come from a diverse set of backgrounds,” he explains. “Tegris has lawyers, bankers, turnaround consultants and even a former physicist on staff, but what unifies the team is an underlying desire to solve complex problems. We also credit much of our success to having a global network of partners who are based locally across North America and Europe.”

68 / April 2013

In the last two years, Landmark has been awarded the M&A International Deal of the Year Award, granted exclusively to cross-border transactions (in 2011, for the advisory on the sale of 100% of Fondomonte, an agribusiness company in Argentina, to Almarai, the largest integrated dairy foods producer in the Middle East, for US$83 million; and in 2012, for the advisory on the sale of 51% of Centrovet, the leading Chilean laboratory of veterinary vaccines and pharmaceuticals, to the French animal health company, Virbac). Julio notes that demand for cross-border M&A advisory services has increased for several reasons over the past years. “High economic growth in Latin America when compared to the US and Europe has meant that multinationals have moved to Latin America in search for expansion outside their home markets,” he says. “In addition, most local markets have become more prone to foreign investment both from multinationals and regional companies who have expanded into neighbouring countries.” He believes the main challenges in cross-border deals involve understanding the business culture of the target market, knowledge of local regulations and practices and the existence of significant contingent liabilities (especially tax and labour). “These challenges can be overcome by involving local advisors who can provide experienced execution, with knowledge of industries and local regulations and practices,” Julio says.

IJW being principally a sell-side firm has realised through experience that value maximization is derived from the ability to canvas the market for all suitable acquirers. Ian remarks that the most effective way for the firm to achieve its clients’ objectives is to look internationally. “We have been witness first hand to situations whereby international buyers have paid a premium for our clients in order to gain their local know-how, market presence and inherit an established domestic brand,” he says. “I am biased but being a Canadian based M&A firm, I do see a multitude of Canadian companies as logical targets for European, American, and Asian buyers. These targets are typically in the resource sector. However, there are tremendous opportunities in technology, as Canada has a well-established R&D tax credit system that has been attracting start-ups and talent in many sectors.” Ian thinks that things will heat up throughout the year, but there is still a long haul ahead. “Acquirers are still very cautious, prolonging the acquisition process as a safety check to see whether the target’s performance align with their projections.” “Although transactions are taking longer to close these days an area we expect to see some improvement in

Tegris has partnerships with European investment banking teams in France, Italy, Poland and Belgium – partnerships which Rene-Pierre says gives the firm unprecedented access to proprietary deal flow, immediate knowledge of the local customs, financial partners and established relationships with banks and other sources of capital. Rene-Pierre says one of the major challenges in cross border transactions is a lack of understanding as it relates to local regulations and social issues, such as how to navigate sensitive political issues in crossborder transaction. He believes the best way for a company to mitigate these issues is to ensure they have an experienced team of M&A and legal advisors with practical experience in the countries involved in a given transaction. “Tegris’ pipeline of deal flow continues to be as robust as ever,” he says. “With the global markets recovering and the major indices scaling to new heights, there is a renewed interest by our clients to more aggressively seek growth and liquidity either through financings, the sale or acquisition of any number of business lines

In terms of regional preference, he points to Brazil, Mexico and Chile as the countries attracting most investment in Latin America, while in recent years there has been increased interest in Colombia and Peru as a result of economic reform and high growth. “Retail, Financial Services, Agribusiness, Food & Beverage, Healthcare, Mining and Forestry have been the most active sectors in the last few years and we expect strong growth in cross border M&A for many years to come.”

Company: Landmark Capital Name: Julio Cardenal Email: cardenal@landmark-cap.com Web: www.landmark-cap.com Address: Isidora Goyenechea 3000, Las Condes, Santiago, Chile Telephone: +56-2 2636-7300

2013 is valuations. Over the past few years, sellers have suffered from what we refer to as “Phantom Valuations”. This is a sellers’ belief that their current valuation is equivalent to that prior to market contractions and adverse financial performance. Though many attempted to structure deals using earn-outs to address this issue, it still has impeded deals getting done, as the valuation gap was just too large between buyers and sellers. We believe this gap will begin to close in 2013 allowing more deals to get over the goal line.”

Company: IJW Management Inc. Name: Ian Wooden Email: iwooden@ijw.ca Web: www.ijw.ca Telephone: +1-514-685-8047 ext. 103

or any combination therein across a multitude of industry sectors. “We believe that cross border M&A activity will continue to increase during 2013. The abundance of financing available in the capital markets coupled with a renewed sense of positive business sentiment will continue to drive companies to seek growth.”

Company: Tegris Advisors Name: Rene-Pierre Azria Email: tegris@tegris.com Web: www.tegrisadvisors.com Address: 400 Park Avenue, Suite 1510, New York, NY 10022, US Telephone: +1(212) 488-5320

ACQUISITION INTERNATIONAL

[ We go beyond... ]

SECTOR SPOTLIGHT: 2013 Q1 Review

2013 Q1 REVIEW l 2012 was a year of pronounced economic uncertainty for many countries across the globe, with the Eurozone crises, the weight of fiscal austerity and banking sector stress and several countries struggling to maintain bond market access. Global growth is however set to strengthen at a gradual level throughout 2013 according to the International Monetary Fund in an update to its World Economic Outlook, as the constraints on economic activity start to ease this year. 2013 is set to be the year businesses recognise that global growth and commodity prices are now to be driven by developments in the emerging markets with the advanced economies taking the back-seat of global growth. 2013 will be the first time since reliable records began when the emerging and developing economies will be bigger than the advanced economies in terms of GDP measured in PPP terms. PwC analysis recently commented on 2013 M&A deal activity and described activity as looking promising and set to be stronger this year. J.P. Morgan has revised higher its forecast for U.S. economic growth following stronger-than-expected retail sales in February, now expecting annualised first-quarter U.S. gross domestic product to grow 2.3%, compared with an earlier forecast of 1.5%. Acquisition International speaks to leading experts around the world to their experiences of the first quarter of 2013.

-----------------------------------------------------------------------Eurobank Properties REIC (EUPRO) is the largest listed Greek Real Estate Investment Company and amongst the 20 strongest companies in the Athens Stock Exchange (ASE) with a market capitalization of approximately €350 million. It’s an independently managed company operating under the Greek REIC legislation framework and monitored by the Capital Commissions Committee. ----------------------------------------------------------------------------------------------------------------------------------------------Florian Diener is Managing Partner and founder of Diener Advisory. ------------------------------------------------------------------------

Diener Advisory has been named “Swiss Accountancy Firm of the Year 2012” at the Acquisition International M&A Awards. Mr. Diener has extensive experience in interim management and advisory of companies from a strategic, financial and organizational perspective. He gained his experience through his positions as Country Controller Switzerland and Head of Controlling and Reporting EMEA for one of the largest US public listed management and technology consulting companies, as Manager for one of the largest audit and business consulting companies, as co-founder of a start-up company and as the General Interim Manager of a small and medium-sized family-owned manufacturing company. Mr. Diener holds the equivalent of a Master’s degree in business administration from the Munich School of Management and a banking degree from the Bavarian chamber of commerce. He has also published various business articles and is a Professional Member of the Institute of Management Consultants USA.

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The main shareholders, are the following: a) Eurobank Group (55.6%), b) Fairfax Financial Holdings (19,1%), c) Fidelity Management and Research LLC (5,8%). Currently retail investors hold 7.0% of the outstanding shares, International Investors 6.8%, Greek Institutionals 3,9% and the Treasury Stock is 1,8%. The Company’s main activities include investments in commercial real estate projects, management of real estate portfolios, and maintenance of long-term lease agreements with corporate tenants. The recent amendment governing the REIC regulation, will have a positive impact on the growth of the company, as the scope of its activities will be widened, allowing investing in the residential and the hotel & leisure sector and participating in developing projects as well. Restrictions in participation in Joint Ventures and maximum leverage are also relaxed. As at December 31, 2012 Eurobank Properties’ portfolio consists of 56 properties. The majority of the properties are located in Greece and more specifically 38 are in Athens and the remaining 12 are located in other Greek major cities. The Company also owns two (2) commercial properties in Serbia, three (3) in Romania and one (1) in Macroeconomic Switzerland

situation

and

forecast

Ukraine. The total size of the portfolio is 335.223 square meters and it is valued at approximately €547 million. Major tenants are Eurobank Group, Praktiker (DYI), Marinopoulos Group, Marks & Spencer, Carrefour, Kuehne & Nagel, L ‘Oreal, Singular Logic, and H&M. Additional information can be found at the company’s website: www.eurobankproperties.gr

Company: Eurobank Properties REIC Email: eurobankproperties@eurobank.gr Web: www.eurobankproperties.gr Address: 117, Kifissias Avenue & Agiou Konstantinou, Maroussi 151 24, Athens Telephone: +30 210 81 29 671

for

positive impact on all Swiss export (chemicals, machinery, equipment, watches) oriented companies.

For 2013, official sources forecast moderate growth of the Swiss GDP by 1.3%. By end of the year the economy will accelerate and the GDP will increase to 2.1 % in 2014. Unemployment rate is expected to be 3.3% in 2013 and 2014. Consumer spending is a major supporter of the growth rate. Private spending is expected to be 1.9% in 2013 and 1.7% in 2014. Public spending will be 1.3% in 2013 and 1.5% in 2014. Import activities will rise from 3.0% to 4.3% and export activities from 2.6% in 2013 to 4.8% in 2014 (Sources: KOF, SECO).

Nevertheless the debt crisis in the euro zone, effective performance of structural reforms, the ongoing avoidance of a “fiscal cliff” in the USA, social coherence, political instability (i.e. Italy) and further regulation and supervision of the banking industry are major upcoming challenges with an inevitable impact on Switzerland.

The economic performance in 2012 was slightly weaker than initially forecasted. Confidence seems to come back to the market. The overall global economic stimulation and stabilization of international financial markets will support Switzerland. Switzerland will also benefit by the growth impulse from Germany. Its GDP growth is expected to be significant due to recent publications. Stable economic activities in the Swiss home market and increasing export activities will have a positive impact on the overall GDP growth rate. The external value of the Euro recently rose against Dollar and Swiss Franc. A weaker Swiss Franc has a

Company: Diener Advisory GmbH Name: Mr. Florian Diener Email: contact@diener-advisory.com Web: www.diener-advisory.com Address: Rathausstrasse 14, CH-6340 Baar, Switzerland Telephone: +41 76 424 33 73

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SECTOR SPOTLIGHT: 2013 Q1 Review

Philippines 2013: Investor and Financing Sector Confidence in a Growing Economy -----------------------------------------------------------------------Manuel Gonzalez is a Partner at Martinez Vergara Gonzalez & Serrano. -----------------------------------------------------------------------Philippines 2013: Investor and Financing Sector Confidence in a Growing Economy The overall investment climate in the Philippines in the past two years is undoubtedly very promising. Growth forecasts were increased in January 2013 by market observers and the Philippines was given an investment grade rating by Fitch Ratings in March 2013, raising the country’s long-term foreign currency debt rating to BBB- from BB+. Martinez Vergara Gonzalez & Serrano (MVGS) was actively involved in some of the major deals that were successfully undertaken in the last two years, more particularly in the areas of acquisitions and project finance. For the partners of the Firm, the investment upgrade hardly comes as a surprise, considering the upsurge in investment and lending activities both from the public and the private sectors. In particular, Philippine banks and financial institutions (FIs) have been actively financing Public-Private-Partnership (PPP) projects. MVGS acted as counsel for the largest bank in the Philippines, BDO Unibank Inc., and government FIs Development Bank of the Philippines and Land Bank of the Philippines, in the P11.5 billion (about US$282 million) fundraising for the Tarlac-Pangasinan-La Union Toll Expressway (TPLEX) project in June 2011, a project which garnered the Asia-Pacific-Transport Deal of the Year award of the Londonbased Project Finance. MVGS has also acted as counsel to the

ACQUISITION INTERNATIONAL

consortium between Megawide Construction Corporation and Citicore Holdings Inc., which was awarded the P12.8 billion ten-year contract under the Public-Private Partnership for School Infrastructure Project (“PSIP”) of the Department of Education for the construction of 7,100 public classrooms. The consortium recently concluded the successful offering of P6.5 billion corporate notes to partially finance the PSIP. With the availability of cheaper funds, a number of holders of similar government concessions refinanced their project debts in the first quarter of 2013, such as water concessionaire Maynilad Water Services Inc. (Maynilad) for an aggregate P22 billion (about US$550 million), and land titling modernization franchisee Land Registration Systems Inc. (LARES) for P6.5 billion (about US$162 million), both arranged by leading investment house, BDO Capital & Investment Corporation. In acquisitions, major deals of note include the P800 million acquisition by Pacific Meat Company, Inc. (a whollyowned subsidiary of Century Canning Corporation) of the trademarks of “Swift” and “Swift’s”, formerly manufactured and distributed by RFM Corporation. Last month, the Firm closed a deal for an integrated hotel casino and entertainment complex involving an investment of at least US$1 billion to be operated by Macau gaming giant, MELCO Crown Entertainment (listed with the Hong Kong Stock Exchange and on the NASDAQ Global Select Market). The Firm represented listed companies SM Investments Corporation, the biggest conglomerate in terms of market capitalization in the Philippines, and Belle Corporation in the deal.

From the Firm’s perspective, the above deals and other acquisitions and financing projects handled by MVGS in the first quarter of 2013 and in the past 2 years indicate a growing confidence and optimism on the Philippine economy from both institutional investors and the financial sector. The Firm hopes that this growing optimism will translate to more significant deals in the next year or two, although it is the Firm’s view that the country needs to catch up in terms of faster improvement in transparency and efficiency in government processes, as well as certainty in tax and fiscal administration, which are aspects of the business environment that are perceived to be equally important in achieving continued economic success.

Company: Martinez Vergara Gonzalez & Serrano Email: manuel.gonzalez@mvgslaw.com Web: www.mvgslaw.com Address: Suite 2401 The Orient Square, F. Ortigas Jr. Road Ortigas Center, 1600 Pasig City, Metro Manila, Philippines Telephone: +6 32 687 1195 / +6 32 687 1196

April 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

-----------------------------------------------------------------------Peter Visser is a partner with De Metz Advocaten. ------------------------------------------------------------------------

De Metz

De Metz Advocaten was set up in 1997 as a boutique law firm by a team of lawyers with years of experience in one of the largest international law firms in the Netherlands. The firm’s lawyers have extensive international experience in corporate and financial law and general commercial practice. We offer high level expertise to our clients, including many national and international corporations, financial institutions and private equity investors. We have acted on many M&A transactions, joint ventures, management-buy-outs/ins and investorbuy-ins in various shapes and situations including share and asset deals and (legal) mergers. Economic forecasts and facts Q1 In a press release issued mid March 2013 the CPB (Netherlands Central Bureau for Economic Policy Analysis) projects GDP volume, despite a slight -----------------------------------------------------------------------Richard Dingemans, CEO and Michael Kretschmer, Fund Manager Japan at Pelargos Capital, describe the latest macro economic developments in Japan as well as latest hedge fund developments. -----------------------------------------------------------------------Pelargos Capital was established in 2008 and currently manages 360mn USD in long / short Asian equities. The Pelargos Japan Alpha Fund has one of the best risk adjusted track records among its global peers and is managed by Richard Dingemans and Michael Kretschmer. The fund delivered a positive return in 4 out of 5 years and appreciated 42% since inception, whilst Japanese equities declined 22%.

Japan has had a highly dysfunctional political system for many decades, but now it seems that with new prime minister Abe, there is a leader who wants to change things dramatically. His economic policies, popularly termed as Abenomics, are centered around three basic components: an aggressive monetary policy, flexible fiscal spending and a growth strategy aimed at generating private-sector investments. For the first time in many years, there is close co-operation between the Government and the Bank of Japan (BOJ) to reflate the economy. Initial focus has been on monetary policy, which has been much more aggressive than many expected. The newly

recovery later this year, to decline in 2013 by ½ %. For 2014 an economic growth of 1% is projected. The decline in 2013 is largely attributed to lagging domestic consumption levels, whereas the fragile growth for 2014 will mainly be due to recovering world trade.

In Q1 our firm was involved in a number of deals varying from the industrial energy services sector to the sale of Dutch coupon website www.actiepagina. nl to US based RetailMeNot, Inc (formerly named WhaleShark Media).

In addition, according to Q1 reports from Statistics Netherlands 25% of Dutch companies active in various industry sectors experience financial impediments affecting their businesses and expect to be seriously restricted in investing in their businesses in 2013.

1 2

Source: www.cpb.nl press release 13/03/2013 Source: www.cbs.nl article 20/02/2013

Meanwhile, the number of companies having gone bankrupt in Q1 has increased and is expected to increase further during 2013. Deal opportunities However, in the midst of this not too cheerful environment, it is our impression from Q1 that there are many good deal opportunities in the Netherlands, especially for those investors not depending on bank financing, but having own or committed readily available resources. appointed board of the BOJ under leadership of Governor Kuroda, has confirmed its commitment to do whatever it takes to beat deflation and to reach a 2% inflation target by late 2014.The BOJ is adopting aggressive Quantitative Easing policies, buying hundreds of billions US dollars worth of Japanese Government Bonds (JGB’s), equity ETF’s and REIT’s. This process has put pressure on the yen, which is now boosting export related sectors such as automobiles and technology. If Abe’s LDP party wins a majority in the upcoming Upper House elections in July, which looks increasingly likely, he will be able to implement structural reforms to further enhance economic growth in Japan. Recent macro economic data is showing some clear signs of the unfolding economic recovery. GDP growth turned to a positive 0.2%, business confidence for large companies (Tankan) and SME’s (Shoko Chukin) has been picking up reaching the highest levels in years and finally, both housing starts and bank lending are growing at the fastest clip since early 2009. After years of low interest in dedicated Japan L/S equity funds, inquiries in this space are markedly picking up. Surprisingly, demand is not coming from the largest hedge fund allocators in the US or the UK, but from domestic Authority (SRA). The firm combines two important business services: solid corporate and commercial legal advice as well as full management consultancy. A longstanding proponent of renewable energy, Tessa has assisted companies in the wind energy, solar and waste arenas. In the media world, Tessa has advised on numerous independent TV production company disposals, acquisitions and disposals of marketing services and advertising interests and investments in on and offline print.

Company: De Metz Advocaten N.V. Name: Peter Visser Email: peter.visser@demetz.nl Web: www.demetz.nl Address: Paulus Potterstraat 38, 1071 DB Amsterdam Telephone: +31203053636

Japanese and Hong Kong based institutions. From Japan, there is a growing appetite for hedge funds among institutional investors as an alternative for Japanese equity beta. Over the last few challenging years, hedge funds have proven to be solid investment vehicles which offer downside risk protection whilst participating in the upside. Hong Kong based investors are being drawn to Japanese hedge funds because of the recent strong returns and the potential for much more upside now that Abe’s reflation policies are gaining traction.

Company: Pelargos Capital Web: www.pelargoscapital.com Address: WTC E-Tower 7th Floor, Prinses Margrietplantsoen 43, 2595 AM The Hague, The Netherlands Telephone: +31 70 756 8032 the deal; we provide energy and efficiency and a proactive approach to deals.” With regards to the future, Tessa believes there is much to look forward to. “We feel very positive,” she explains of newlawslegal. “Our pipeline is healthy and while we continue to focus on the renewable energy market we are looking seriously at our growth in the technology space and in the media space.”

“We are growing,” she continues, “both in terms of turnover and headcount and were most recently joined by Michael McFall, previously of McDermotts and Dorsey & Whitney.” -----------------------------------------------------------------------Tessa Laws is a Partner at newlawslegal, based in London. -----------------------------------------------------------------------Tessa Laws, who previously worked at Rosenblatt for 15 years, is now partner at newlawslegal and explains her role further. “I set up newlawslegal nearly three years ago to capture the market for companies and individuals who like a consigliare.” newlawslegal is a provider of forward thinking, completely hands-on and commercial legal advice. The practice is authorised and regulated by the Solicitors Regulation

72 / April 2013

Many deals have been signed in the first quarter of 2013 – mainly in the UK market – together with a Turkish sale of a medical services company to an Arab fund, and Tessa states that deals are moving fast, with a start to finish in typically under three months. Recent trends are emerging, as Tessa states: “We are seeing more cross-border work for which we rely upon our network of similarly-minded people.” She continues to describe what she believes is imperative in making the firm successful to date. “We like to advise; we enjoy the thrill of

Company: newlawslegal Name: Tessa Laws Email: tessa@newlawslegal.co.uk Web: www.newlawslegal.co.uk Address: 21 Arlington Street, London, SW1A 1RN Telephone: +44 20 7989 0511

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

maintain majorities which tends to create populist policies however those countries that are not already in the EU are clearly heading in the direction of Brussels (even if slowly) and legislation is increasingly consistent with EU-norms. The ever-present opinions of NGOs and multilaterals seek to maintain positive momentum and build transparency generally. However the individual economies of the region are quite small so many M+A deals are based around x-border consolidations to build footprint and market-share. Few sizeable companies are able to prosper without significant exports. Virtu Partners have several deals closing in Q2-2013 that are local manufacturers of products that finish in UK supermarkets or Russian construction projects

-----------------------------------------------------------------------Chris Butters is a Member of the Advisory Board at Virtu Partners. -----------------------------------------------------------------------Virtu Partners is an M+A advisory boutique with specialist subsidiaries focussed into proprietary PE investment, energy projects and a new research group. We operate throughout ex-Yugoslavia with a focus on Serbia but with projects also in Macedonia, Croatia, Slovenia and the UK at present. We anticipate additionally that municipal infrastructure will become core to our activities during 2013 and are recruiting at present. There is no doubt that the investment environment of the Western Balkans remains challenging by most measures and that the global financial situation has a tangible impact as most of the banks in the region are foreign with a strategy to return capital to head-office rather than expand lending. This creates significant problems in financing business but as a partial benefit also drives the development of the PE and mezzanine lending sectors who seek to fill the gaps left by traditional lending. We are seeing many deals where investment funds are taking positions that would â&#x20AC;&#x153;normallyâ&#x20AC;? have been satisfied by banks or capital markets if either were operating as designed.

As the Western Balkans operate on the edge of EU there is increasing evidence of globalisation with investors from Russia and UAE having a high profile as well as EU countries which would have been more evident previously. In Serbia the level of Russian intent is clear with companies such as LUKoil and particularly Gazprom expanding into areas such as electricity quite aggressively. The inter-dependence of the region for electrical supplies is a key feature of this market as there is a dependence on carbon-based generation and old hydro facilities. Therefore the new pipeline can be quite important as the profusion of subsidy-reliant green-energy as seen in Czech Republic will not happen in the poorer Balkans where politicians believe consumers cannot bear the price impact of substantial subsidy levels from wind or solar projects. However some pilot projects are happening and Virtu Partners advised on the sale of a large windfarm to GazpromNeft which closed in Q1-2013. There are significant wind and solar opportunities in SE Europe as the climate is suitable however the affordability is not present although a considerable volume of new river-turbine projects are being offered. The levels of political instability in the Western Balkans remains relatively high with Governments struggling to

Virtu Partners have recently co-founded a research thinktank (as a not-for-profit foundation) in Belgrade which will provide independent economic research, sectoral studies, reliable statistics and empirical thought. This is necessary to supplement the less-than-complete information available throughout the region and represents a unique facility to secure access to world-class economists.

Company: Virtu Partners Name: Chris Butters Email: chris.butters@virtupartners.rs Web: www.virtupartners.rs Address: Takovska 23-25, Belgrade, Serbia Telephone: +381 11 3330555

Pelargos Capital was founded in March 2008 as a joint venture by Richard Dingemans, Kees Rigter, Roelof Salomons, Patrick van de Laar and AEGON Nederland N.V., part of the global insurance carrier AEGON. Pelargos combines its institutional roots, client base, and entrepreneurial business model to deliver absolute return products to professional investors. Our entrepreneurial and fiduciary culture is paramount to the firm. Partners and portfolio managers invest their own capital alongside our clients. Pelargos aims to be a stable and solid long-term business partner. We enjoy solid strategic backing and favor profitability through return generation. Performance as the main driver of growth aligns our clientsâ&#x20AC;&#x2122; interest with our own.

www.pelargoscapital.com

ACQUISITION INTERNATIONAL

April 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

“In the past 12 years I have covered the same role in two top ten International Law Firms as Partner and Senior Assistant level and have published over 50 articles, both in Italian and English, regarding financial services, real estate finance, banking law, mezzanine finance and financial instruments.” Massimiliano Fabrini joined Giambrone Law’s Rome office in 2011, after 18 years of experience within four different international law firms in London, Rome and Milan. Significant transactions for Giambrone Law in the last 12 months have included: -

Advising Elmo International in connection with the demerger from Turati Project. Value of the deal was € 94.000.000.

Advising De Vert Insurance Company in connection with its winding-up processes. Value of the deal is not quantifiable.

- Advising Poltrona Frau Spa in connection with commercial contracts in UK. -----------------------------------------------------------------------Massimiliano Fabrini is an Italian Avvocato at Italian law firm Giambrone Law. -----------------------------------------------------------------------Massimiliano Fabrini has been a lawyer since 1997. As Head of Banking and Finance at Giambrone Law’s Corporate Department, Massimiliano specialises in banking, corporate finance, financial services and general transactional finance. Massimiliano also has extensive experience in capital markets, financial services, distribution of funds sectors and property/asset finance. He explains further about his experience: “This has included representing lenders, borrowers, private equity funds, real estate funds, umbrella funds and institutional investors in a wide range of international transactions.

The Italian implementation of the Agreement of Basilea III will provide significant changes in the Italian lending market as it would implement the Italian lending regulations with significant changes on the ratios regarding the lending capacity of the Italian banks. Another recent change in the Italian financial regulations has been introduced by Law Decree n° 179 on 18.10.2012 provided significant changes in Italian Financial Instruments regulations, allowing the PMI (small and medium size companies) to issue new kinds of financial instruments with a favourable tax treatment to finance their activities. “We are involved in re-financing of old facilities, de-merger of acquisitions or Joint Ventures Restructuration,” adds Massimiliano. “This is for sure the more profitable sector in this period. “In these particulars days in Italy the banking and finance sector is not a flamboyant sector, but we hope that the next State real estate dismissal and privatisations that we have in agenda will have a positive impact also on the banking and finance sector.”

Advising Behoston Alyaf Gharb Co in connection with the an M&A transaction in Italy. Value of the deal was € 36.000.000.

Massimiliano Fabrini states: “The Banking and Finance industry has been in decline in the last five years. In fact most of the transactions we are involved in are re-financing of old facilities, de-merger of acquisitions or Joint Ventures Restructuration. “From instruction to completion we need between two and four weeks. Most of the transactions are funded with intercompany loans granted by the parent companies. The small number of Credit Facilities granted by banks is caused by the credit crunch we are suffering in Italy in the last three years.”

Company: Giambrone Law Name: Massimiliano Fabrini Email: massimiliano.fabrini@giambronelaw.com Web: www.giambronelaw.com Address: Largo Antonio Sarti 4, Lungotevere / Flaminio, 00196 Roma - Italy Telephone: +39 06 326 498

LAW OFFICE The law office VÁLKY PARTNERS s.r.o. has been present on the market since 2003. The firm’s managing partner Ladislav Války studied law both in Bratislava, Slovak Republic and at Suffolk University Law School, Boston, Massachusetts, U.S.A. Ladislav Války being also the founder of the firm has represented, since the firm’s establishment in 2003, number of multi-national companies in many M&A transactions and projects throughout the Slovak Republic including the cross-border transactions. Since January 2009 the firm has been operating and providing its legal services as a limited liability company and under the current business name since March 2013. VÁLKY PARTNERS s.r.o. provides a full set of legal services to local as well as to international clients tailored to the client needs. To help the clients to satisfy their needs and to deliver legal services tailored to the clients’ individual requirements, the law office uses experience and knowledge gained during years of working on various types of business transactions including M&A transactions. The law office has knowledge, overview and experience not only in local law, culture and trade, but also in cross-border and international legal issues and transactions. The law office VÁLKY PARTNERS s.r.o. provides professional and pragmatic solutions to the clients’ legal matters.

74 / April 2013

www.valkypa

r tners.sk

Muškátová 36 821 01 Bratislava Slovakia office@valkypartners.sk +421 905 941 274 Ladislav Války ladislav.valky@valkypartners.sk

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

OTHER EXPERTS IN THIS AREA

Rano & Company Company: Rano & Company Name: Wilson Henry Rano Email: ranocompany@solomon.com.sb Telephone: +677 38741

-----------------------------------------------------------------------Tuomo Kauttu is a partner at Kauttu & Co, based in Helsinki. -----------------------------------------------------------------------The current firm Kauttu & Co was formed in 2007 and has its origins in law partnership established in 1996. Partner, Mr Tuomo Kauttu, explains more about the firm. “We work on commercial transactions and international operations in a diverse collection of industries including technology, manufacturing, energy, and transportation. Our main practice areas are: corporate law, mergers and acquisitions, finance, technology and IPR, industrial supplies.” In Q1, the firm, and Mr Kauttu in particular, has been involved in stock-for-stock acquisition and related consolidation. “It is challenging in terms of complexity. Also, a case regarding recapitalization of a Finnish corporation is notable because of duration. Typically, deals are taking 1-2 years to complete,” explains Mr Kauttu and he continues to describe how deals are funded. “Small-value activities are typically funded by private equity or institutional finance

ACQUISITION INTERNATIONAL

when the buyer is a small company and by equity (cash) when the buyer is large company. High-value transactions are typically funded by a combination of diverse collection of funds and by structure of the acquisitions, for instance stock for stock.” There have been recent trends which Mr Kauttu has noticed emerging within certain sectors of the industry. “Export and investments to China continues to grow,” he says. “Also, export to USA is finally growing. In ICT sector, game industry, such as Angry Birds, is growing. Regarding conventional industries, investment activity in mining industry has been recently increased.” Recent changes to the industry have had an effect on the industry as a whole, and Mr Kauttu explains more about the reforms. “The implementation of the business and investment-friendly tax reform is especially notable in the decrease of corporate tax rate. The corporate tax rate was

first lowered from 26% to 24.5%, being effective from 2012, followed by the Government’s proposal of March 2013, reducing corporate tax rate to 20%.”

Company: Kauttu & Co Name: Tuomo Kauttu Email: tuomo.kauttu@kauttu.fi Web: www.kauttu.fi Address: Aleksanterinkatu 17, FI-00100 Helsinki Telephone: +358 10 229 1244

April 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:

Meet the Experts - Ukraine & the Green Tariff Law

MEET THE EXPERTS

â&#x20AC;&#x201D; Bangladesh: The Next Hotspot for Investment

l China and India between them have vast and increasingly prosperous populations. Bangladesh is well situated in every sense to take advantage of this opportunity. With improving education, technology and economic growth, Bangladeshâ&#x20AC;&#x2122;s own market of 146.6 m people is becoming increasingly attractive to business and foreign investors. The cost of doing business in Bangladesh has significantly and visibly decreased in recent times. It is a democratic country, providing broad and non-partisan political support for market-oriented reforms and for active encouragement of foreign investors. Bangladesh has many positive aspects that make it a desirable location for foreign investors, such as lower production costs when compared with other regions, a reasonably low cost of living, the widely spoken English language and the fact that working capital loans from local commercial banks are permitted to foreign capital industries. Bangladesh is fast becoming a preferred destination for Southeast Asian investors due to its cost competitiveness and suitable geographical location.

Company: Robi Axiata Limited Name: Amin Ruhul Email: amin.ruhul@robi.com.bd Web: www.robi.com.bd Telephone: +88 2 9887146-52

ACQUISITION INTERNATIONAL

April 2013 /

DEAL DIARY:

M&A from around the world

DEAL DIARY — Deal index 79

ACENTA STEEL

P.R. SINGLETON LIMITED

ALADDIN MIDDLE EAST

PIXMAC

BERGEN GROUP ROSENBERG AS

PREMACURE

BETTERMARKS

REBUY

CMA CGM’S TERMINAL LINK PORTFOLIO

ROSENGAARDCENTRET

COPEINCA

ROYAL COPENHAGEN

DEMATEC

SARCODE BIOSCIENCE

DP WORLD HONG KONG ASSETS

WEBEX

DYNAMIC ROCK SUPPORT

EMC TALOTEKNIIKKA

FLYBRID AUTOMOTIVE

GASBUDDY

HELLO AXIATA AND LATELZ MERGER

INTERACTIVE AVENUES INDIA

IPH GROUP

JAMES SUTHERLAND & CO

M E WATERHOUSE LTD

METRASENS

NANOCHEM

78 / April 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world

More latterly Gambit advised the management team, Tarlok Singh and Colin Mills, on buying Endless’s stake in the business. The business is now entirely owned by its management team which has been made possible with its long term funding partner GE Capital. Leading the team at Gambit were Adrian Jones, Partner (leads Birmingham office of Gambit), and Andy Charter, Director.

‘‘

They commented: Over the last three years, and alongside the company’s legal adviser Adrian Cutler at DWF, we have developed a really strong Adrian Jones working relationship with the management team and they not only trust in our ability to deliver a good deal but also listen to our more general business advice, something that many of our clients call upon us to deliver to them.

‘‘ ‘‘

‘‘

Adrian Cutler of DWF added: Having advised on the original acquisition of Niagara Lasalle UK and the investment by Endless LLP, the sale of their stake is testament to the strong underlying performance of Acenta Steel under the management team in the intervening period.

‘‘

Gambit continued: Any deal in the current economic environment has its inherent challenges. However, when you have willing parties on both sides of a transaction it is genuinely half the battle. In both Tarlok Singh (CEO) and Colin Mills (Finance Director) you have two incredibly grounded individuals whose absolute primary concern will always be the long-term future of Acenta Steel, and no deal would ever had been done by them that would jeopardise this. I think that we have been fortunate to have all parties to this deal, Endless, the Acenta Steel management team and GE Capital willing to reach a deal which made sense for all.

l 4D Global Energy Advisors is pleased to announce the investment by its third fund, 4D Global Energy Investments plc (“4DGEI”), in a significant equity position in Aladdin-Middle East Ltd. (“AME” or the “Company”), (www.amer.com.tr) an independent oil and gas company with primary operations in Turkey. Founded in 1962 by an American independent oil investor and a Turkish entrepreneur, and led by Cem Sayer as President and Chairman of the Board, the Company holds a balanced portfolio of exploration and production assets in conventional and non-conventional basins in Turkey. Contributing $17 million of a $20 million pooled investment to fund the Company’s works program and working capital requirements for 2013, the Fund will join the two founding investors as the second largest shareholder.

‘‘

Ivan Murphy & Paul Richards, Partners at Murphy Richards commented: We were acting for Aladdin Middle East on this deal retained to advise and source USD$20m. We initially met them 10 months ago. There were no special challenges faced in completing this deal, we were fortunate that Aladdin Middle East is a 50 year old company and very well managed. Furthermore 4DGEA are a well experienced private equity house focussed on the sector. www.murphy-richards.com

‘‘

Gambit Corporate Finance originally provided advice just over two years ago, negotiating a deal to purchase Niagara Lasalle UK from its US parent Niagara Lasalle Corporation. The business was then renamed Acenta Steel, following an exercise involving the workforce to choose a suitable independent business brand.

BERGEN GROUP ROSENBERG AS

The Natural Resources team at Crowe Clark Whitehill worked with the management team at AME for approximately twelve months. We assisted the company to prepare an investment memorandum, to build an integrated financial model for its drilling programme and the potential financing options available and to prepare for and manage the investor due diligence process. The Crowe Clark Whitehill team was led by Stephen Bullock (Partner and Head of Natural Resources) and Paul Blythe (Corporate Finance Director).

‘‘

www.gambitcf.com

ENDLESS SELLS STAKE IN ACENTA STEEL

Corporate Finance Adviser to MBO

4D GLOBAL ENERGY $17 MILLION INVESTMENT IN TURKISH E&P COMPANY ALADDIN MIDDLE EAST

l WorleyParsons is pleased to announce an agreement to acquire 100% of the shares of Bergen Group Rosenberg AS (“Rosenberg”) for a cash consideration of NOK 1,088m (including more than NOK 200m of acquired cash). Rosenberg is a wholly-owned subsidiary of Bergen Group ASA, a listed Norwegian company. Completion of the acquisition is expected by the end of February 2013. Rosenberg currently employs approximately 650 people. Operating in a fully-integrated engineering, fabrication and construction environment, Rosenberg has a strong track record in the offshore oil and gas front end engineering and design, reimbursable EPC, long-term maintenance, modifications and operations, subsea fabrication, installation and hook-up markets. The company has provided more than 100 years of continuous service to the maritime and offshore oil and gas industries, supplying high quality solutions engineered and fabricated at its facilities in Norway’s oil capital, Stavanger. From Stavanger it has strategic access to the Norwegian Continental Shelf (NCS) North Sea operations, now the largest offshore market in the world.

‘‘ ‘‘

WorleyParsons’ CEO Andrew Wood said: The impressive history, capability and depth of client relationships of Rosenberg provide the ideal platform for us to expand our presence in the Norwegian Continental Shelf offshore oil and gas market. I am excited that this acquisition will continue to strengthen and grow our ability to support our hydrocarbons clients in this region and globally particularly through our Improve offering and modular expertise.

‘‘ ‘‘

l Endless LLP has sold its stake in Acenta Steel, the UK’s largest independent processor and distributor of bright steel bars, for an undisclosed value.

ALADDIN MIDDLE EAST

‘‘

ACENTA STEEL

Rosenberg CEO, Kristin Færøvik, said We have been actively looking for a partner to help us grow our business and are very pleased that we now join the WorleyParsons group. We see that by combining the local Norwegian experience of Rosenberg with the global support of WorleyParsons, we can continue to expand our support to our clients.

WORLEYPARSONS ACQUIRES LEADING NORWEGIAN FIRM

Murphy Richards Capital LLP Advised the Vendor and Introduced the Purchaser

Financial Adviser and VDD

Financial Adviser

Legal Adviser to the Purchaser

Legal Adviser to MBO Legal Adviser Property Valuer

TBS Consulting Legal Adviser to the Vendor

ACQUISITION INTERNATIONAL

Legal Adviser to the Vendor

April 2013 /

DEAL DIARY:

M&A from around the world

l The media group Neue Zürcher Zeitung (NZZ) acquired a 20% stake in the German platform for elearning Bettermarks. The latter sells online learning systems for mathematics developed by professors and experts. This acquisition allows NZZ to move forward in the digital business, NZZ mentioned in a statement. Bettermarks is among the leading suppliers in the field of adaptive learning systems. Bettermarks, headquartered in Berlin, was founded in 2008 and employs a team of 80 people. The team at Sallfort Privatbank which conducted the due diligence and advised NZZ during the process was led by Michael Bornhaeusser, Co-Owner and Managing Director.

‘‘

Sallfort Privatbank had this to say about the deal: We represented NZZ Management AG, Zürich. Michael Bornhaeusser and his team has a long-standing relationship with NZZ advising them in various acquisitions and strategy development projects. “The challenges when investing in mid stage growth companies are always the same – as such companies are very often facing complex competitive landscapes where a sophisticated competition analysis is needed. Furthermore, it is important to define and agree on a fair current valuation of such a company and to evaluate the long term potential of it. Sallfort Privatbank provided these parameters based on the results of the due diligence and its own research and close relationship to the digital media market. “Sallfort’s focus in M&A services is based on the entrepreneurial experience of Michael Bornhaeusser who is a serial entrepreneur in the internet and mobile space. He maintains a global network in these industries including larger enterprise top executives, founders and CEOs of fast growing startups and leading VC firms, which gives Sallfort’s clients access to intelligence and insights into the TMT space.

‘‘

Email: mbornhaeusser@sallfort.com Websites: www.sallfort.com

NZZ ACQUIRES STAKE IN E-LEARNING PLATFORM BETTERMARKS

CMA CGM’S TERMINAL LINK PORTFOLIO l CMA CGM and China Merchants Holdings (International) Company Limited (“CMHI”) are pleased to announce that on 25th January 2013, they have signed the Share Purchase Agreement regarding the sale of 49% equity interest in Terminal Link for € 400 million. Following some pre-closing reorganization, the transaction is expected to complete within the first half of 2013, subject to receipt of certain relevant external regulatory approvals. This significant transaction is the initial cornerstone of a mutually, highly beneficial strategic partnership between CMA CGM and CMHI in operating and developing container terminals on a global basis and extending their relationships as business partners while capitalizing on favorable global macro trends. Terminal Link, 100% subsidiary of the CMA CGM Group based in Marseilles, France, operates, develops and invests in a global network of 15 terminals located on the world’s key international shipping routes. ICF GHK assessed volume and revenue projections to support China Merchants’ investment in CMA CGM’s global Terminal Link portfolio. ICF GHK was also responsible for independent reviews of operational budgets and capital expenditure plans. The due diligence covered terminals in Asia, Europe, Africa and the US. ICF GHK were representing China Merchants, an existing client. ICF GHK has previously provided advice on the cruise sector and port development. ICF GHK’s team was led by Dr Jonathan Beard, Managing Director GHK (Hong Kong) Ltd, Vice President ICF, Global Lead Ports & Logistics Consultancy

Jonathan Beard

Email: jonathan.beard@icfi.com | jonathan.beard@ghkint.com Websites: icfi.com | ghkint.com

ICF GHK is the brand name of GHK (Hong Kong) Ltd and the other subsidiaries of GHK Holdings Ltd. In February 2012 GHK Holdings and its subsidiaries were acquired by ICF International.

CMA CGM AND CMHI AGREE THE SALE AND PURCHASE OF 49% OF TERMINAL LINK

COPEINCA l Copeinca ASA, the second largest fishing company in Peru, has responded to China Fishery Group Ltd’s (CFGL) unsolicited offer. China Fishery Group Ltd is offering $556 million for Copeinca ASA to capitalise on the company’s access to Peru’s fishing resources. An announcement made by Copeinca states that its board of directors considers CFGL’s announcement speculative and with the sole purpose of preserving the interest of CFGL, and considers CFGL’s announcement misleading for investors who wish to make informed investment decisions with regard to the Copeinca shares. As per earlier announcements, Copeinca’s board of directors is, together with its advisors, actively considering all options to maximise value for all of Copeinca’s shareholders. The key focus of these considerations is continuing discussions with parties potentially interested in making an offer for all of the shares in Copeinca, at better terms than, and within the timeframe set by, CFGL’s offer. The board of directors is pleased with the progress made in this regard and will revert with further updates and recommendations in due course.

‘‘

David Lim & Partners LLP (the “Firm”) involvement in this transaction was led by Ms. Aw Ee Tuan, who is a Partner of the Firm. They commented: The Firm’s relationship with the China Fishery Group Limited (the “Company”) is long standing, going as far back as 2005 when we acted as the Company’s counsels for its initial public offering on the SGX-ST. As may be expected in such transactions, the deal is and continues to be dynamic but through the experience of the partners of the Firm, we are always able to find commercially oriented legal solutions to any issues that arise.

‘‘ ‘‘

BETTERMARKS

‘‘

BA-HR was the legal adviser to China Fishery Group (“CFG”) in their acquisition of Copeinca ASA. They commented: Preparation and structure of the transaction has been lengthy and complex, partly as a result of a number of jurisdictions involved, CFG is listed in Singapore, CFGs parent company is publicly listed in Hong Kong and Copeinca has a secondary listing in Peru. The offer values Copeinca to approximately NOK 3.15 billion, and is a good example of BA-HR work in large international transactions in industries of particular interest for the Norwegian economy.

PERU’S COPEINCA RECIEVES ACQUISITION OFFER FROM CHINA FISHERY Legal Adviser to the Purchaser

Advisers of Neue Zürcher Zeitung (NZZ)

Commercial and Technical Due Diligence Provider Legal Adviser to the Vendor

Financial Adviser to the Vendor

Carnegie

80 / April 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world

Clover is the global leader in providing resellers, mass merchants and value-added specialty suppliers with total environmental solutions including the recycling and remanufacturing of consumable imaging supplies. Clover is the world’s largest collector and recycler of cell phones, inkjet and laser cartridges. Their innovative recycling programs offer partners an additional revenue stream while ensuring clients the industry’s most advanced and environmentally responsible recycling solutions. Board Advisors acted as the sole corporate finance advisors to the shareholders of Dematec GmbH. Friedrich Graf von Westphalen were appointed as legal advisors to the sellers.

‘‘

Stefan Gaiser, Lead Partner at Board Advisors, commented: Board Advisors represented the Seller, Dematec GmbH, Germany. We did not have a long standing relationship with the sellers. However, we are known in the industry as we had already advised the sellers of K+U, which were active in a similar market segment (recycling of toner for laser printers). The transaction went very smooth and we were able to close the deal within less than 4 months. This is a testimony for our international reach.

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www.boardadvisors.eu contact@boardadvisors.eu

The deal includes a 25 per cent ownership interest in ATL Logistics Centre Hong Kong (ATL) and an ownership interest in CSX World Terminals Hong Kong, located at Hong Kong’s Kwai Tsing Port. ATL is a 13 storey, ramp up logistics facility, constructed in five phases between 1984 and 1994. With a lettable area of 5.94m sq. ft (552,000 sq m), it is the world’s largest logistics building. The facility is currently 98 per cent leased to 60 customers. ICF GHK assessed volume and revenue projections, operational budgets and capital expenditure plans for Container Terminal 3 at Hong Kong Port. ICF GHK’s technical and market due diligence supported Goodman’s investment in DP World’s Container Terminal 3 (and ATL Logistics Facility) at Hong Kong Port. ICF GHK were representing Goodman Asia Limited. ICF GHK has provided consultancy services to Goodman on two previous occasions, specifically in relation to the Hong Kong and South China logistics market. ICF GHK’s team was led by Dr Jonathan Beard, Managing Director GHK (Hong Kong) Ltd, Vice President ICF, Global Lead Ports & Logistics Consultancy Jonathan Beard

Email: jonathan.beard@icfi.com | jonathan.beard@ghkint.com Websites: icfi.com | ghkint.com

ICF GHK is the brand name of GHK (Hong Kong) Ltd and the other subsidiaries of GHK Holdings Ltd. In February 2012 GHK Holdings and its subsidiaries were acquired by ICF International.

CLOVER ACQUIRES GERMAN BASED DEMATEC

GOODMAN BUYS DP WORLD’S HONG KONG ASSETS FOR A$450M

Clover Acquisition of Dematec

Commercial and Technical Due Diligence Provider

l Normet Group Oy has acquired the shares in Dynamic Rock Support AS in Norway. The acquisition broadens Normet’s offering for rock reinforcement with the new generation, energy absorbent D-Bolt system.

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Thor Egil Five, Chairman of Dynamic Rock Support AS, explains: DRS is a spin-out from the NTNU and was founded in 2008. It is always gratifying to see technology developed in a start-up company and then take the next step in contribution to industry and society. The company’s main focus is on providing reliable technology that ensures safety and gives cost savings for underground mines, particularly where challenging ground conditions involve squeezing or dynamic risk management. DRS has developed the D-Bolt which is a novel rock bolt specifically designed for efficient and reliable rock reinforcement in squeezing and burstprone strata. The patented technology was developed by Professor Charlie C. Li at NTNU. This acquisition is a good strategic fit to Normet as it broadens our offering to underground customers and reinforces our aim to be a total solution provider especially in ground support and rock reinforcement”, Tom Melbye, President of Normet Group, says, “With the D-Bolt system, together with our sprayed concrete, grouting and injection technologies and products, we can now help our customers to make underground mines and tunnels safer, even in difficult strata and high stresses and deformations. Since successful laboratory and field tests started in 2008, and the start of commercial sales in 2010, DRS has gained a strong market share of rock support business especially in Nordic region, Canada and Australia.

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We believe that Normet, which shares DRS’ focus on quality and improving the safety of underground workers is a very fitting host for DRS”, says Gisle Østereng, CEO of Dynamic Rock Support AS, “With the backing of Normet’s worldwide organization, the technology and expertise fostered by DRS will continue to impact mining and tunneling operators with world-class ground support and rock reinforcement products. Dynamic Rock Support AS will be part of Normet’s Rock Reinforcement Business Line, managed by Mike Rispin, Senior Vice President of Normet Group. Rispin explains: Focus will be maintained on bringing the innovative technology of the D-Bolt to our existing and new customers. Blended with our expertise in resin and cementitious based bolt grouts, and coupled with a proven track record in rock mass reinforcement via injection, we offer an unparalleled array of solution offerings.

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The transaction was closed February 2013.

l Goodman Group announced that its Goodman Hong Kong Logistics Fund (GHKLF) has acquired DP World’s interest in two Hong Kong facilities for A$450m.

DYNAMIC ROCK SUPPORT

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l Clover Inc has acquired Dematec GmbH, Germany, which is a leading manufacturer of alternativ Kyocera products for the laser printer industry. Through years of experience the company has amassed considerable know-how in the production of high-quality reasonably priced compatibles. Its production prevents cartridges either ending up as refuse or being disposed of by means of an expensive thermal process. Since September 2006 it has been operating the only existing patented crushing and stripping facility for defective and non-re-usable laser cartridges.

DP WORLD HONG KONG ASSETS

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DEMATEC

NORMET ACQUIRES DYNAMIC ROCK SUPPORT

Clover Holdings, Inc. USA

Has acquired Dematec GmbH, Germany

Financial Due Diligence Provider Virtual Data Room Provider

Sole Corporate Finance and M&A Advisor to the Shareholders of Dematec GmbH

Legal Advisors to the Shareholders of Dematec GmbH

Environmental Due Diligence Provider

February 2013

ACQUISITION INTERNATIONAL

April 2013 /

DEAL DIARY:

M&A from around the world FLYBRID AUTOMOTIVE

l Vaaka Partners has agreed to sell EMC Talotekniikka to Royal Imtech N.V. (IM-AE, technical services provider in and outside Europe). With 580 employees, EMC Talotekniikka realises over 100 million euros in annual revenue. The acquisition price is in line with Imtech’s previous acquisitions in Finland and will be paid in cash. EMC Talotekniikka is owned by funds managed by Vaaka Partners Ltd, Etera Mutual Pension Insurance Company, Finnish Industry Investment Ltd and the management team. The company was created in 2007 through a merger of four medium-sized technical services providers with 12 subsequent add-on acquisitions further strengthening the company’s geographical reach, competencies and service offering. Today EMC Talotekniikka is a top-5 player in the technical services market with national coverage through 11 branches. The company offers multi-disciplinary technical projects, including electrical services, plumbing, mechanical services (air, climate, air-conditioning), security and telecommunications, both in new-build and renovation. EMC Talotekniikka is one of the strongest players in the growing field of renovating technical and energy infrastructure in older apartment complexes, delivering dozens of large projects each year utilizing the company’s proprietary Silotek® prefabrication solutions. In addition the company has a substantial maintenance and technical services business as well as significant special competencies in project management, energy solutions and building automation.

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Together with the management team, Vaaka Partners has grown EMC Talotekniikka to a leading national player in the technical services and building systems markets which have been challenging for the construction industry in general. The company has succeeded excellently in its growth strategy: over 50 million euro of sales growth has been organic accelerated by a series of strategic add-ons. We are very pleased with the transaction and the fact that EMC Talotekniikka will be incorporated into a large international company, allowing strong further development. The market potential in Finland, EMC Talotekniikka’s specific strengths, Imtech’s financial security and continuity, and the available cross-selling potential constitute a solid base for EMC Talotekniikka’s continuing success. says partner Ilkka Pentikäinen of Vaaka Partners.

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EMC TALOTEKNIIKKA SOLD TO ROYAL IMTECH N.V. Virtual Data Room Provider

l Torotrak (LSE: TRK) has acquired a 20% stake in flywheel hybrid innovator Flybrid Automotive Ltd (formerly Flybrid Systems LLP) with an option to acquire the remaining shares before the end of the calendar year.

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Nicola McConville, Corporate Finance Partner and Head of Climate Change & Sustainability led the team at Blake Lapthorn. She commented: The role of Blake Lapthorn was to provide legal advice to the founders of Flybrid Automotive, Jon Hilton and Doug Cross, on the terms of the £3m investment being Nicola McConville made by Torotrak together with advice on the structure and terms of the option which Torotrak has to acquire the remainder of Flybrid by 20 December 2013. She continued: “There was a tight timetable in place as well the usual sensitivities when dealing with a listed counter party.

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EMC TALOTEKNIIKKA

Nicola also added: “This was one of those rare transactions where everybody, clients and advisors alike, pulled together to get the deal done. It was refreshing to work with clients and lawyers who had the depth of practice to be able to call upon specialist advice on areas such as tax when needed and where all involved adopted a constructive and practical approach to the various commercial, legal and financial matters in hand.

Adam Chase

Nick Owen

Strategic energy consultancy E4tech provided technical and market due diligence support to Torotrak, assessing Flybrid’s offering and comparing it with competing technologies. Nick Owen, Principal Consultant, led the work with the support of Director, Adam Chase. “E4tech was very pleased to offer its due diligence services in this fascinating area” commented Adam Chase. “Flybrid’s stage of development, the pace of market change and the nature of potential customers meant that the analysis had to be approached from several angles, but our findings were positive and we have received many compliments for our work” Nick Owen added. adam.chase@e4tech.com nick.owen@e4tech.com www.e4tech.com

TOROTRAK ACQUIRES 20% OF FLYBRID AUTOMOTIVE LTD Legal Adviser to the Vendor

GASBUDDY l Oil Price Information Service (OPIS) has acquired GasBuddy, the mobile app and website relied on by more than 26 million motorists to pinpoint the most comprehensive and accurate gasoline prices at service stations and convenience stores across the U.S. and Canada. “Through our combined resources, consumers will have the very best retail fuel prices, tools and information to save money at the pump,” said OPIS CEO Brian Crotty. “I look forward to working shoulder-to-shoulder with Dustin Coupal and Jason Toews, co-founders of GasBuddy, and their talented staff,” he added. “We are excited to gain access to OPIS’s enormous database of spot and wholesale gasoline prices and OPIS’ award-winning daily news wire,” said GasBuddy cofounder Jason Toews. “That access will further enhance GasBuddy’s ability to alert consumers to retail gasoline and diesel price changes in the marketplace.” AMR’s Energy Information team has successfully advised UCG / OPIS in its acquisition of GasBuddy. Jay Patel, Director at AMR’s London office and head of AMR’s B2B information practice, led AMR’s dedicated consultancy team. AMR worked closely with both UCG and OPIS to assess and test the sustainability of GasBuddy’s business model and strategic growth initiatives. AMR carried out in-depth customer interviews across its broad customer base within a tight timeline. AMR’s sector expertise and ability to earn target management buy-in was crucial to the efficient delivery of detailed and strategic assessment. AMR’s findings helped UCG and OPIS gain comfort in the robustness of GasBuddy’s business model and strategic plan, and have helped to underpin how best to drive the business forward. Jay Patel

Burnet, Duckworth & Palmer, LLP. provided general Canadian corporate commercial law, Canadian income and goods and services tax law and Canadian employment law advice for UCG/OPIS. The team leaders at Burnet, Duckworth & Palmer, LLP. were Colin Luke (corporate commercial) Denise McMullen (tax) and Bob Graham (employment) all of whom are partners at the firm.

OPIS ACQUIRES GASBUDDY Commercial and Strategic Due Diligence Provider to the Purchaser

Legal Adviser to the Vendor Canadian Legal Adviser to the Purchaser Legal Adviser to the Purchaser Tax Adviser

Legal Advisers to the Debt Provider Financial Due Diligence Provider

Risk & Insurance Due Diligence Provider Tax Adviser

Tax Adviser

Management Team Due Diligence Provider

ACQUISITION INTERNATIONAL

April 2013 /

DEAL DIARY:

M&A from around the world

l Axiata Group Berhad (“Axiata”) today announced the strategic merger of Hello Axiata Company Limited (“Hello”) and Latelz Company Limited (“Latelz”) which operates under its main Smart Mobile (“Smart”) brand name. The cash consideration for the merger will be approximately USD155 million, subject to adjustments for the actual net debt and working capital positions as of the date of completion. Upon completion, Axiata will hold a 90% stake in the combined entity and emerge as one of the largest operators in Cambodia in terms of subscribers and revenue. After experiencing intense competition over the past three years with 9 mobile players in a country with a population of approximately 15 million, the Cambodian market is primed for consolidation. Axiata is leading the Cambodian market consolidation, which is likely to evolve into a 3-5 player market. Unique subscriber penetration in Cambodia is currently below 40% with an expected double digit growth of around 10% over the next 3 years. As such, the headroom for growth is now and with this merger, Axiata will have a head start with a significantly strengthened entity and clear market leadership.

E.Vanderbruggen

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Edwin Vanderbruggen and Clint O’Connell, both partners at VDB Loi commented: We acted for Latelz on this deal. They are our long standing client. In 2010, Edwin Vanderbruggen represented Telia Sonera on the sale of its subsidiary Applifone to Latelz. Having worked with on opposite sides on that deal, Latelz afterwards became a client of Edwin.

They continued: “The tax issues associated with doing a merger in Cambodia, which has hardly ever been done, were a central challenge in the structure. The interpretation and application of Clint O’Connell the tax laws is at times unclear. We assisted the client in working with authorities to resolve the uncertainties within the existing legal framework, while integrating the implications into the legal structure in an efficient manner.

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AXIATA ESTABLISHES MARKET LEADERSHIP POSITION IN CAMBODIA WITH THE MERGER OF “HELLO” AND “SMART”

INTERACTIVE AVENUES INDIA

IPH GROUP

l IPG Mediabrands, the media holding company within Interpublic Group (NYSE: IPG), today announced the acquisition of Interactive Avenues, India’s largest independent full service digital agency. With close to 200 employees across offices in Mumbai, Delhi and Bangalore focusing exclusively on digital marketing and technology, the acquisition of Interactive Avenues’ renowned media, creative and digital production units cements IPG Mediabrands’ position as a leading digital buying unit in the rapidly expanding Indian market, as well as the second largest media holding company. After the launch of Reprise Media in India in 2011, this new move continues IPG Mediabrands’ strong commitment to implementing industry leading digital services across all of its agencies and will allow it to accelerate its timetable for the launch of its new Cadreon offering.

l PAI Partners has signed an agreement to acquire IPH Group, a European industrial supplies distribution business, from Investcorp for an undisclosed amount.

Interactive Avenues will become an important strategic part of IPG Mediabrands’ Mediabrands Audience Platform (MAP), the constellation of data driven digital services and technologies that focus on search, display, mobile, social, video, applications and e-commerce. MAP improves insights and results for clients by helping agencies find, buy and engage their most valuable audiences in real time. Investec acted as exclusive adviser to Interactive Avenues (“IA”), India’s leading full service digital advertising agency, on its sale to Interpublic Group Inc (“IPG”). Investec launched and ran the auction process for IA, advising management founders, angel investor Anupam Mittal and majority shareholder Westbridge Private Equity, on competing options and buyout structures from a number of global advertising agencies. The valuation agreed to by both IPG and IA underscored Interactive Avenues’ premier positioning in the fast growing Indian digital advertising market. The Investec team consisted of Devin Kohli, Nanda Menon and Muhammad Salahuddin devin.kohli@investec.co.uk www.investec.com

IPG MEDIABRANDS ACQUIRES INTERACTIVE AVENUES IN INDIA Financial Adviser to the Management Team

Advisers

The business services sector is a core area of investment focus and expertise for PAI. The firm’s previous investments in this sector include SPIE, Kiloutou, Kwik-Fit, FTE Automotive and Xella. GE Capital France led by Francois Terrade and Thierry Martet, provided a working capital financing to IPH Group which has been implemented at closing of the acquisition by PAI Partners.

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Thierry Martet - Director Structured Finance - commented: We have really enjoyed working with IPH management team during the last months to set up an innovative structure “Titrifact” which is a mix between a private securitization and a receivables financing. We have been able to commit ourselves over a long period, to hold 100% of the financing and to implement it in a tight timetable. It is also an interesting transaction where our solution has been customized to be married with a large unitranche used by PAI for the acquisition financing. We believe this combination will be replicated more often in the future.

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HELLO AXIATA AND LATELZ MERGER

Gide Loyrette Nouel was advising the IPH group in connection with its new securitization program of trade receivables with GE, as it did in 2006 with respect to its previous securitization program with CIC. Gide was advising the parent IPH Gilles Saint Marc SAS, the centralising entity Orefi Participations as well as the 20 French originators. Gide team was led by partner Gilles Saint Marc and associate Clémence Charpentier. In addition to the negotiation of the terms of the securitization program with GE and the coordination of the corporate formalities of 20 originators, Gide has to deal with the compatibility of the securitization program with the acquisition financing, both in terms of rights and priority in the absence of formal intercreditor.

PAI PARTNERS SIGNS AGREEMENT TO ACQUIRE IPH GROUP Debt- Legal Adviser to IPH

Legal Adviser to the Management Team

Legal Adviser to the Equity Provider

Debt Provider

Legal Adviser to the Equity Provider

84 / April 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world JAMES SUTHERLAND & CO l H&H Group has announced the purchase of Newcastle -based Auctioneers, James Sutherland & Co Ltd. The business specialises in valuing and selling machinery, vehicles and stock by auction on behalf of Liquidators, Administrators and Bailiffs across the North of England. James Sutherland & Co Ltd specialises in online sales, and further extends the range of services and marketing methods employed by this progressive company. This acquisition adds to the H&H Group portfolio of companies, establishing it as one of the foremost auctioneering businesses in the North of England and the South of Scotland. Showing extraordinary vision and growth, even in difficult market conditions, the H&H portfolio includes auctioneering, chartered surveying, estate agency, insurance, financial services and printing. Brian Richardson, Chief Executive of H&H explains the reason for this latest purchase, “The business fits well with our existing auction businesses which include Livestock, Motor Auctions and Auction Rooms. It offers us potential to grow further and fits with our strategy of growing our businesses. Paul Roberts, the previous owner, will stay on as a consultant and Martin Cassidy, who is the General Manager, will continue running the Newcastle office and the business will be overseen by Graeme Hall, Director responsible for specialist auctions who is based in Carlisle.” “In recent years James Sutherland & Co has developed its business to embrace modern technology. They have a very strong online presence and are very involved in internet auctions - this is one specific area we are looking to develop across the Group in the future. We also see great potential to extend the customer base across to the west of the country”. Paul Roberts who is himself a Fellow of the National Association of Valuers & Auctioneers commented, “We are a small but successful business, and have recently developed our online auction facility. I feel that H&H with their pedigree and experience will provide the opportunity for the business to grow in the future. The company will continue to operate from Newcastle with the same team of staff and I will remain involved with the business so for our customers it is very much business as usual.” Dodd & Co. lead by Martin Ward acted as Corporate Finance and Taxation advisers to the H&H Group, a company whom they have worked with for many years.

M E WATERHOUSE LTD l Oakes Millers Ltd, the Cheshire based animal feed specialist, has completed the acquisition of M E Waterhouse Ltd for an undisclosed sum, with support from Barclays Corporate Banking in Manchester. A new term loan was arranged by Barclays Relationship Director Shaun Cross to assist Oakes Millers Ltd with the acquisition of a long established mill operation based in Malpas, Cheshire. This is in addition to current term debt and working capital facilities provided to the Oakes Millers group of companies. Oakes Millers Ltd currently manufactures and distributes a range of animal feeds from three mills in Cheshire as well as a bulk processing site at Prees in Shropshire. The Group also manufactures a range of organic feeds and has a number of retail outlets across South Cheshire. John Lea, Chairman of Oakes Millers Ltd, commented: “This acquisition will enable us to expand our production capacity and bring increased manufacturing flexibility to the Oakes Millers Group in line with the significant increase in sales volumes we have experienced in recent years. Bringing this asset into the Oakes Millers business will provide the Group with the opportunity to further develop our product range to meet the changing demands of our customer base.” The team at Harold Sharp were asked by Oakes Millers Limited to perform Financial Due Diligence on the target: M E Waterhouse Limited. The team was led by Christopher Wrighton (partner) and managed by Karen Dent (Senior Manager). C. Wrighton

METRASENS l Octopus today announced that it has made a further investment into Metrasens, the award-winning technology company that manufactures detection products for a number of security and healthcare markets across the world. Octopus first invested into the company in 2009. Headquartered in Great Malvern in the UK, and with offices in Lisle, Illinois, USA, Metrasens has designed the most portable full body scan system available worldwide. This is being used in prisons, police operations, police custody suites, embassies, hotels and other commercial venues that require highly-sensitive, quickly deployable and portable detection solutions. Metrasens has also developed a product for use in the healthcare market. Through its Ferroguard® brand of MRI safety systems, Metrasens is able to protect patients, staff and equipment in MRI suites across the world. Luke Hakes, a Principal on the Ventures team at Octopus, said: “Metrasens has an impressive team behind it that is taking the business from strength to strength as it continues to increase its global footprint. The opportunity for it to build on its existing market share is significant and we look forward to continuing to work with the team to support the business through this next stage of development.” Octopus is joined in this latest round of funding by C5 Partners, a new investment company focused on the safety and security technologies sector. Commenting on the successful fundraising, Dr Simon Goodyear, founder and CEO of Metrasens, said: “This is a very exciting stage in the growth of Metrasens, the investment from C5 and Octopus will enable us to accelerate our ambitious plans for growth.” Nbi Human Consulting Limited, London, were retained by the investors to provide management diligence on the Metrasens top team.

The assignment involved working closely with the management of Oakes Millers Limited to ensure the work was performed within the timescale required.

The nbi team was led by Dr Robert Irving, an experienced corporate psychologist. He provided investors with a developmental perspective on the Metrasens top team as to their capacity to scale the business and achieve investors’ targets. Detailed information on the team’s leadership and risk profiles was provided to the investors; both the team and the investors received detailed feedback on the steps the team would need to take to meet investors’ objectives.

caw@haroldsharp.co.uk www.haroldsharp.co.uk

NBI’s search capabilities are also being used to expand the Metrasens senior management team following the investment by Octopus and C5.

Harold Sharp have acted for Oakes Millers Limited for over 40 years and during this period have developed a detailed knowledge of the animal feeds market.

H&H ACQUIRES NEWCASTLE INTERNET AUCTIONEERS

BARCLAYS PROVIDES FUNDING FOR ANIMAL FEED ACQUISITION

OCTOPUS ANNOUNCES FURTHER INVESTMENT INTO METRASENS

Advisers

Financial Adviser to the Purchaser & Financial Due Diligence Provider

Management Team Due Diligence Provider

Legal Adviser to the Equity Provider Legal Adviser to the Purchaser

Commercial Due Diligence Provider

ERG Partners ACQUISITION INTERNATIONAL

April 2013 /

DEAL DIARY:

M&A from around the world NANOCHEM l Biofutures International Plc, which is listed on Alternative Investment Market of the London Stock Exchange, is taking over Platinum Nanochem Sdn Bhd in an all-share deal valued at £80.8mil (RM391.50mil).

POND5

P.R. SINGLETON LIMITED

l Pond5 Inc. and Pixmac s.r.o. announced today that they have reached a definitive agreement under which Pond5 will acquire the assets of Pixmac, a leading stock imagery network based in the Czech Republic.

l The Board of IGas Energy plc is pleased to announce the completed acquisition of P.R. Singleton Limited (“PR Singleton”) from Providence Resources P.l.c (“Providence”) following fulfilment of the conditions precedent and approval from the Department of Energy and Climate Change (DECC ).

Solomon Packer and Jeanne Goulet led the team at Marks Paneth & Shron LLP (MP&S). They are both Senior Tax Practice Consultants.

Biofutures is acquiring all the shares of Platinum Nanochem which uses nanotechnology to make speciality chemicals and materials from renewable sources from several shareholders and Asia BioEnergy Technologies Bhd (ABT), an ACE Market company. ABT said yesterday that Biofutures was acquiring the entire issued share capital of Platinum Nanochem, comprising 73.48 million shares; 4.0 million redeemable convertible cumulative preference shares of 10 sen each and 15 million redeemable convertible cumulative preference shares of RM1 for £80.81mil to satisfied by 1.154 billion new Biofutures shares. Biofutures reported a net loss of £13.93mil for the year ended Dec 31, 2011 with net assets of £21.38mil. Platinum Nanochem recorded net loss of RM32.02mil for the year ended Dec 31, 2011 with net assets of RM1.438mil. Upon completion of the share-sale agreement, Platinum Nanochem will be a unit of Biofutures. ABT holds 1.14 million Platinum Nanochem shares of RM1 each or 1.56% stake. Once the deal is completed, ABT shall own 14.27 million Biofuture shares or 1.08% of the enlarged share capital, valued at £999,107 (RM4.84mil).

Solomon Packer

They commented: “We were representing Pond5. We assisted in the formation of the acquisition structure. We began serving them in 2012.”

They continued: “Pond5 wanted a firm who could put together a global team to assist them in setting up a foundation for their growing international business. The challenges involved creating and coordinating a worldwide team to bring the necessary expertise to bear on the tax and accounting matters at hand. Working with international atJeanne Goulet torneys and other member firms of our global Morison International network, Solomon and Jeanne selected a global team that fully achieved Pond5’s goals. In addition, Solomon and Jeanne designed a structure that benefitted all stakeholders and resulted in a more competitive business model than the model that had previously existed. “Marks Paneth & Shron LLP (MP&S) is the 32nd largest professional services firm in the United States. We offer a wide range of accounting, auditing, tax, consulting, restructuring, bankruptcy and advisory services as well as litigation and corporate financial advisory services to domestic and international clients. MP&S also has a strong track record supporting emerging growth companies, entrepreneurs, business owners and investors as they navigate the business life cycle. “The firm, whose origins date back to 1907, has a long history of providing attentive and responsive client service. Our services are provided by industry-focused, experienced practitioners. The most important element of our culture is our unrelenting client focus. We recognize that our success depends entirely on how well we serve our clients, and nothing takes precedence over our commitment to meet each client’s continuing need for effective, insightful, responsive and professional service.”

Andrew Austin, CEO of IGas Energy, commented:

“The acquisition of P.R. Singleton Limited plays an important role in further consolidating our position as a leading onshore oil and gas company across Britain, giving us a material increase in reserves and production.” Macquarie Bank Ltd. provided $30m in acquisition finance towards the purchase of Singleton. The loan was advanced as part of an expansion of Macquarie’s existing $150m Senior Secured Loan facility with IGas. The Facility has now been expanded to $225m, of which approximately $139m is currently drawn. Macquarie has had a relationship with IGas since 2009 when it participated in a private placement of shares in the Company. Macquarie has remained a shareholder since this time, and closed its first loan to IGas in December 2011 to fund the acquisition of Star Energy from Petronas International. C. Coulter

The Macquarie Bank Ltd. team was led by Christian Coulter, Managing Director, Metals & Energy Capital.

christian.coulter@macquarie.com

www.markspaneth.com

BIOFUTURES BUYS PLATINUM NANOCHEM

POND5 ACQUIRES PIXMAC AND EXPANDS INTERNATIONAL PRESENCE

Legal Adviser to the Purchaser Advisers

COMPLETION OF P.R. SINGLETON LIMITED ACQUISITION Debt Providers

Financial Adviser to the Purchaser

Legal Adviser to the Equity Provider

Financial Due Diligence Provider

Legal Adviser to the Purchaser

Management Team Due Diligence Provider Legal Advisors to Macquarie as Debt Provider Commercial Due Diligence Provider

86 / April 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world REBUY

l Shire plc announces that it has acquired Premacure AB, a privately held biotechnology company. Ernst & Young (“EY”) represented Shire Pharmaceuticals (“Shire”) in the acquisition of Premacure AB. EY have a long-standing working relationship with Shire. The EY team was led by Antoine van Horen, Partner in the Swedish Transaction Tax Practice, assisted by Christian Carneborn, Senior. Stephen Hales and A. van Horen Louise Tinenti, Partner and Assistant Director respectively coordinated the work from the UK.

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Mr van Horen commented: Transactions involving development companies are generally complex and we assisted Shire by providing for a commercial and tax efficient solution with the respect to foreseeable future events. We are convinced that Shire and Premacure AB have found a strong modus operandi for successful future cooperation. antoine.van.horen@se.ey.com

Hjalmarsson & Partners Corporate Finance was engaged by Premacure Holding to assist the company in the search for a partner for further development and commercialization of Premacure’s drug product Premiplex®, either through an out-licensing or through a divestiture.

Hjalmarsson & Partners acted as exclusive financial adviser in the process, taking the overall project responsibility, including inter alia structuring and negotiating the transaction. The divestiture of Premacure was led by a team consisting of the three partners Jonas Lindgren, Karl Wassgren and Johan Öberg. Lead by partner, Patricia Melick, and associate, Ann Matthews, Wiggin and Dana LLP represented Premacure Holding AB in the sale to Shire plc. They commented: We have been working with Premacure AB and its parent company, Premacure Holding AB, on Patricia Melick its license and development strategy and goal to secure a partner with the resources and desire to further develop and commercialize Premiplex® . It is a pleasure to have worked with such a strong scientific and management team to help them achieve their objectives.

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www.wiggin.com | pmelick@wiggin.com

SHIRE ACQUIRES PREMACURE AB

l Iris Capital and reBuy reCommerce GmbH announce an expansion round for reBuy, led by Iris Capital. The equity investment will allow reBuy to grow its highly successful re-commerce business (give a second life to goods through new distribution channels) of entertainment products ranging from mobile devices, Apple products, tablets and video consoles to books, video games, DVDs and CDs. As investor, Iris Capital joins a group of German private and venture capital investors, among them Hasso Plattner Ventures, DuMont Venture, Mountain Cleantech and Klaus Wecken. Created in 2004 and originally named trade-a-game, reBuy is today the leading player in the German re-commerce market for entertainment products. Since several years reBuy has generated exponential growth. The company provides a platform for the trading of pre-owned goods and devices in multiple categories. Categories are mobile devices, Apple products, tablets and video consoles to books, video games, DVDs and CDs. reBuy sources the products from individuals who can sell their products for a fixed price to rebuy and from business partners (overstock, store samples, returned goods, trade-in devices etc.). reBuy refurbishes all products and sells them through a multichannel distribution network back into the market. Lawrence Leuschner, co-Chief Executive Officer of reBuy, commented: “We are excited to welcome Iris Capital to our investor group. The investment allows us to pursue with full speed our expansion strategy. This is a very rich market, which offers immense opportunities for reBuy. The financing and Iris’ knowledge of logistics and e-commerce operations will help the company expanding on a much larger scale” Erkan Kilicaslan, Partner at Iris Capital, explained: “There are several companies that buy and sell used goods. However, reBuy’s growth over the last years, the exceptional quality of its management team and an extremely well set up logistics operation have convinced us that reBuy will build out its leading position and become the winner in the re-commerce market. We, as Iris Capital, want to contribute and be part of this success story.” Gerhard Wacker, Partner, lead the team at Venture Capital representing reBuy and all Current Shareholders. They have had a strong relationship for several years with reBuy, Wecken & Cie. and DuMont Venture. www.roedl.de | gerhard.wacker@roedl.de

IRIS CAPITAL LEADS EXPANSION ROUND FOR GERMAN REBUY, LEADER IN RE-COMMERCE FOR ENTERTAINMENT PRODUCTS

Advisers

ROSENGAARDCENTRET l The ECE European Prime Shopping Centre Fund acquired Rosengårdcentret in Odense (Funen), the second largest shopping center in Denmark, from private investors. The Ernst & Young Tax team, lead by Transaction Tax Partner Morten B Dalsgaard, provided detailed support to ECE focusing mainly on tax due diligence and tax structuring services. The project, stretching over several months, provided us with a unique insight in the ECE business model, which provided Ernst & Young with a fantastic opportunity to assist ECE in designing a tailor made acquisition structure fitting for one of the largest real estate transactions ever conducted in Denmark. The direct and excellent communication between ECE and Ernst & Young throughout the entire project was key in achieving the desired objectives. The financial team was led by Executive Director Lasse Fredborg. CEO Per Nyborg Thomsen (pn@icp.dk) and Director Jens Chr. Petersen (jcp@icp.dk), lead the team at ICP Denmark A/S (www.icp.dk).

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PREMACURE

They commented: ICP has been working with ECE in the past looking at the possibilities in Denmark. It has been our job to do the valuation of Rosengardcentret regarding the market situation, the potential consumption, competition situation, the existing and potential tenants, rent potential, asset management potential and development potential. It has been a very exiting job working together with highly skilled and very nice persons from ECE. Emcon A/S acted as technical advisor to ECE European Prime Shopping Centre during the transaction of Rosengaardcentret. Emcon’s team consisted of specialists within architecture, statics, HVAC, fire prevention and environment. Emcon’s team was led by Client Consultant Carsten H. Helvind, MSc, EBA. Leading the team at Kromann Reumert was Flemming Horn Andersen, Partner (Real Estate). They were representing The ECE European Prime Shopping Centre Fund. As it was ECE’s first transaction in Denmark it was KR’s first relationship with them. www.kromannreumert.com The team from Corporate & Institutional Mortgage Finance at Realkredit Danmark was Mette Nordmann Jøker, Relationship Manager and Thomas Enemark Asmussen, Assistant Relationship Manager. Realkredit Danmark has provided debt (mortgage) financing in the transaction. This is the first transaction were Realkredit Danmark has financed a ECE European Prime Shopping Centre Fund acquisition.

ECE FUND TO ACQUIRE ROSENGÅRDCENTRET IN ODENSE Advisers

Legal Adviser

Legal Due Diligence and Contracts

Realkredit Danmark A/S Financial Due Diligence

88 / April 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world ROYAL COPENHAGEN

SARCODE BIOSCIENCE

l Axcel has sold Royal Copenhagen to the Finnish listed company Fiskars, which was founded in 1649. Axcel acquired Royal Copenhagen in 2001, as an integrated part of the Royal Scandinavia Group. Royal Copenhagen, one of Denmark’s oldest companies, is the Scandinavian brand leader in hand-painted porcelain and ranks among the leading brands in Japan.

l Shire P.L.C. will buy SARcode Bioscience Inc., which is developing a treatment for dry eyes, in a deal worth at least $160 million.

Under Axcel’s ownership the company has undergone an extensive transformation and now stands as a Danish design icon – one with 237 years of history behind it. The successful transformation can be attributed both to strengthening the operational platform, and rationalising and renewing the product portfolio. Thanks to this, in 2011 Royal Copenhagen achieved its best results for more than a decade, with 2012 expected to be even better.

About 25 million people in the United States are thought to suffer from dry eye disease, of which 9 million are candidates for prescription drug treatment, Shire said.

Mads Ryder, CEO of Royal Copenhagen, believes the strategy has succeeded under Axcel’s ownership: “Since 2009 we’ve significantly pruned our product range, improved our supply chain and concentrated sales efforts on fewer markets. The improved sales performance is therefore a result of marked growth in sales of our current range and the prioritised markets, and we’re very happy with this. Overall, we have seen double digit growth within our core range in our two key markets Denmark and Japan as well as strong growth in Korea, Taiwan, Germany and Norway. As part of Fiskars we expect to be able to strengthen our position in new markets,” finishes Mads Ryder, who has headed up Royal Copenhagen since 2009.

AXCEL SELLS ROYAL COPENHAGEN TO FISKARS FOR EUR 66 MILLION

SARcode, based in Brisbane, Calif., is privately held. American depositary receipts of Shire closed down 0.1 percent or 9 cents to $90.61 in trading Monday. Shire, with global headquarters in Dublin, Ireland, said that terms of the agreement call for additional payments should SARcode’s lead product attain certain milestones. The transaction is scheduled to close during the second quarter.

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William J. Chudd, partner, led the Davis Polk team on the transaction. He commented: We represented Shire on the transaction, with whom Davis Polk has a longstanding relationship. William J. Chudd

We have now worked on a number of transactions involving contingent payments for Shire, including the SARcode transaction, and what we have learned is that every deal is different – what is acceptable in one transaction will not necessarily translate to another. The key is to determine what is important to both the buyer and the target shareholders, and to work to try to develop a milestone structure that appropriately allocates both the risks and rewards of the drug candidate’s development/commercialization.

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“Royal Copenhagen has undergone significant change in recent years, and now enjoys bigger and completely different market opportunities than just a few years ago,” says Nikolaj Vejlsgaard, who has been the partner responsible for the investment in Royal Copenhagen at Axcel. “The operational basis is now much stronger and, at the same time, the Royal Copenhagen brand has achieved much sharper positioning. This has led to a substantial improvement in earnings for the company, which now is at the very top of the industry, despite pressure on the market as a whole because of the financial crisis. Taking this new position as its starting point, and with its global presence and long experience within the industry including ownership of strong brands such as Iittala, Raadvad and Rörstrand Fiskars will be a good match for Royal Copenhagen and able to support the ongoing strategy of international expansion,” concludes Nikolaj Vejlsgaard.

The pharmaceutical company, which has its U.S. headquarters in Wayne, said the acquisition will give it control of a compound called Lifitegrast, which is currently in late-stage clinical trials.

SHIRE BUYS SARCODE BIOSCIENCE FOR AT LEAST $160 MILLION

l Bertram Capital announced today its acquisition of Webex, Inc. a leading manufacturer of precision engineered rolls and specialized systems for web handling and converting applications. Based in Neenah, WI, Webex marks Bertram’s second platform investment and third transaction in the plastic processing and web handling equipment industry. In addition to the equity investment in Webex, Bertram also provided subordinated debt to finance the acquisition, which closed on December 24, 2012. “Webex is the leading supplier of rolls and specialized machinery modules for a broad range of web handling and converting processes with a strong brand presence supported by unparalleled engineering and manufacturing capabilities,” said Kevin Yamashita, Partner at Bertram Capital. “The company’s compelling value proposition is evidenced by its deep and long-standing customer relationships across broad end markets and applications. We look forward to building upon the strong foundation Webex has established and further enhancing it’s leadership position in the marketplace.” Webex designs and manufactures custom rolls, machinery and components for a highly diverse set of customers and manufacturing sectors including: flexible packaging, paper, consumer products, food and beverage, aerospace, pharmaceutical and health care, alternative energy, and general industrial. The company operates four manufacturing facilities located in Wisconsin and Massachusetts. “I’m pleased to announce our continued investment in the plastic processing and web handling equipment industry through the acquisition of Webex,” noted Jeff Drazan, Managing Partner of Bertram Capital. “This partnership will help position the company for accelerated growth through both organic and acquisition focused initiatives, enabling Webex to continue providing best in class products and service to its growing customer base.” The Bertram Capital team was introduced to Webex through a sale process run by Livingstone Partners, a leading independent, international investment banking firm focused on M&A, capital raising and special situations transactions with values up to $500 million. “We are grateful to Steve Miles and Karl Freimuth at Livingstone for bringing an exceptional investment opportunity to our attention,” noted Kevin Yamashita. “Webex exemplifies the type of market-leading industrial manufacturing company we seek to invest in at Bertram. Livingstone ran a fair and competitive sale process and we are fortunate to have been successful in acquiring such a high quality business.”

BERTRAM CAPITAL COMPLETES ACQUISITION OF WEBEX, INC. Virtual Data Room Provider

Virtual Data Room Provider

Vendor Due Diligence Provider & Tax Adviser

WEBEX

Advisers

Financial Due Diligence Provider & Tax Adviser

Risk & Insurance Due Diligence Provider & Management Team Due Diligence Provider

Financial Advisor Legal Adviser to the Purchaser Environmental Due Diligence Provider

Legal Adviser to the Vendor

ACQUISITION INTERNATIONAL

April 2013 /

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We certainly are very proud of this culmination for our year. It remains though, that the most important award to us is our clients’ satisfaction, and we shall strive to keep providing them with the best tailor-made services.

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- Rami Smayra, Attorney at Law at Smayra Law Office

Dubai has transformed itself into a broadly diversified economy based on international trade, banking, tourism, real estate and manufacturing. To attract international business it has invested heavily in its transport, telecommunications, energy and industrial infrastructure. - John Hanafin, CEO of Sovereign Middle East

INTERNATIONAL START-UP ADVISORY AWARDS 2013

FOREWORD Welcome to the Acquisition International 2013 International Start-Up Advisory Awards 2012 was an undoubtedly an exciting and challenging year for all businesses, and none more so than new startups. Figures revealed by StartUp Britain indicate that it was a record breaking year for Britain, with start-up businesses up by almost 10%. Research by the national enterprise campaign showed that 484,224 businesses were started, compared to 440,600 in 2011. In the US however, the rate of business launches dropped slightly in 2012 compared with 2011, according to a report released by the Ewing Marion Kauffman Foundation. There were 514,000 new business owners per month in 2012 compared with 543,000 the previous year -- or about 29,000 fewer start-ups launching each month. No matter the economic climate, the region or the sector, it is essential for start-ups to seek the right advisors to provide them with the expertise they require. The Acquisition International Start-Up Advisory Awards celebrate excellence within the advisory profession. These prestigious international awards recognise the advisory firms, teams and rising stars of tomorrow for their contribution to client service and for their experience and skills across key practice areas and sectors. In recognition and celebration of these individuals and organisations, Acquisition International is delighted to present our Start-Up Advisory Awards winners. Our awards recognise leaders in their respective fields and, crucially, are nominated by their clients, their professional relationships and their peers. The winnersâ&#x20AC;&#x2122; ingenuity and hard work have distinguished them from their competitors and proven them worthy of recognition. Read on to find out who made the cut and what it takes to be an Acquisition International award winner.

INTERNATIONAL START-UP ADVISORY AWARDS 2013 Winners List

And the winners Albania ERG Managerial Australia Norton Rose Austria Rechtsanwaltskanzlei Likar Bangladesh Doulah & Doulah Advocates Belarus Revera Consulting Group Belgium Federal Public Service Finance Bolivia Bufete Aguirre Soc. Civ. Corporative Law Bolivia Consultores Asociados Ferrere Abogados Brazil Gouvêa Vieira Advogados KLA-Koury Lopes Advogados Bulgaria Boyanov & Co. Legalex Chile Albagli Zaliasnik Abogados Urenda, Rencoret, Orrego y Dörr Colombia Cavelier Abogados Daniel Rothstein Parra, Rodríguez & Cavelier S.A.S. Congo (Democratic Rep) YAV & ASSOCIATES MULAMBA and ASSOCIATES Law Firm Costa Rica ACZALAW ACZALAW Ignacio Beirute Croatia Divjak, Topić & Bahtijarević

Albanian Business Support Services Firm of the Year Australian Insolvency Law Firm of the Year - Supporting Start Ups Austrian Company Law Firm of the Year - Supporting Start Ups Start Up Legal Advisory Firm of the Year - Bangladesh Start Up Investor Protection Advisory Firm of the Year - Belarus Belgian Start Up Credit Advisory Firm of the Year Bolivian Company Formations Law Firm of the Year Bolivian Company Formations Law Firm of the Year Bolivian Cross Border Incorporation Law Firm of the Year Brazilian Start Up Employment Law Firm of the Year Brazilian Start Up Administrative Law Firm of the Year Bulgarian Start Up Legal Advisory Firm of the Year Bulgarian Start Up Land and Building Law Firm of the Year Chillean Land & Building Law Firm of the Year Chilean Start Up Labour Law Firm of the Year Columbian Start Up Public Law Firm of the Year Columbian Start Up Tax Advisory Firm of the Year Columbian Start Up Legal Advisory Firm of the Year Start Up Incorporation Firm of the Year - Democratic Republic of Congo Start Up Legal Advisory Firm of the Year Costa Rican Start Up Contract Enforcement Law Firm of the Year Costa Rican Start Up Intellectual Property Advisory Firm of the Year Costa Rican Company Formations Firm of the Year Croatian Land and Building Law Firm of the Year

Cyprus Papacharalambous & Angelides LLC Czech Republic GÜRLICH &Co. Advokátní kancelář Squire Sanders East Timor CRA Timor Estonia PwC Estonia Germany PricewaterhouseCoopers Legal AG (Hamburg) Greece Harry Stamelos Law Office and Partners Guinea-Bissau MC&A - Sociedade de Advogados, RL Hong Kong Deacons Hungary Cseri & Partners Law Firm Iceland CATO Lögmenn India Global Jurix Neeraj Bhagat & Co. Nishith Desai Associates Rajkishore Associates SAPCLE Technologies FZE Seth Associates Singhi Chugh & Kumar

Cypriot Start Up Administration Law Firm of the Year Start Up Civil Codes Advisory Firm of the Year- Czech Republic Start Up Legal Advisory Firm of the Year - Czech Republic Start Up Tax Advisory Firm of the Year Easr Timor Estonian Start Up Tax Advisory Firm of the Year German Start Up Legal Advisory Firm of the Year Greek Start Up Legal Advisory Firm of the Year Start Up Trade Law Firm of the Year - Guinea-Bissau Company Formation Firm of the Year - Hong Kong Hungarian Labour Law Firm of the Year - Start Up Icelandic Insolvency Law Firm of the Year Indian Start Up Tax Advisory Firm of the Year Overall Company Formation Firm of the Year - Start Up Overall Company Formation Firm of the Year - Start Up Indian Start Up Tax Advisory Firm of the Year Indian Company Formation Firm of the Year Indian Trade Law Firm of the Year - Supporting Start Ups Most Trusted Company Formation Firm of the Year - India

Isle of Man Mann Benham Advocates Limited

Start Up Legal Advisory Firm of the Year

Israel Heskia-Hacmun Law Firm

Israeli Collateral Law Firm of the Year

Italy Colonnelli de Gasperis Studio Legale Giambrone Law Giambrone Law Nunziante Magrone Japan Davis & Takahashi

Italian Start Up Advisory Firm of the Year Italian Cross Border Litigation Law Firm of the Year Italian Cross Border Trade Law Firm of the Year Italian Company Law Firm of the Year Japanese Cross Border Finance Firm of the Year - Start Up

INTERNATIONAL START-UP ADVISORY AWARDS 2013 Winners List

are ... Lebanon Law Office of A. Abboud & Associates Smayra Law Office Smayra Law Office Macedonia Cakmakova Advocates Madagascar KPMG Malta Dr Kris Borg & Associates – Advocates Fenech & Fenech Advocates Fenech & Fenech Advocates Mauritania Cheikhany Jules Law Office Mexico JATA – J.A. Treviño Abogados Miranda & Estavillo, S.C. PwC Mexico Morocco Juristructures LLP Juristructures LLP NERO Boutique Law Firm Nepal KTO Inc. KTO Inc. Nicaragua Alvarado y Asociados G. Jose Bendaña Guerrero Nigeria Abike Chambers Legal Practitioners & Consultants CRC Credit Bureau Limited Punuka Attorneys & Solicitors Stillwaters Law Firm Stillwaters Law Firm Pakistan Law Firm Irfan M. Halepota Poland DLA Piper Wiater sp.k.

Most Trusted Lebanese Law Firm of the Year - Start Up Start Up Legal Advisory Firm of the Year - Lebanon Most Trusted Lebanese Law Firm of the Year - Start Up Macedonian Foreign Investment Law Firm of the Year - Supporting Start Ups Madagascan Start Up Advisory Firm of the Year Maltese Start Up Legal Advisory Firm of the Year Maltese Start Up Tax Advisory Firm of the Year Maltese Company Formations Firm of the Year Start Up Legal Advisory Firm of the Year - Mauritania Mexican Contract Law Firm of the Year - Start Up Mexican Company Formations Firm of the Year Mexican Start Up Legal & Tax Advisory Firm of the Year Moroccan Start Up Legal Advisory Firm of the Year Moroccan Company Formation Firm of the Year Moroccan Labour Law Firm of the Year - Start Up Nepalese Company Formations Firm of the Year Nepalese Start Up Tax Advisory Firm of the Year Labour Law Firm of the Year - Nicaragua Land And Building Law Firm of the Year - Nicaragua Nigerian Start Up Advisory Chambers of the Year Nigerian Start Up Credit Advisory Firm of the Year Start Up Regulation Advisory Firm of the Year - Nigeria Nigerian Contract Enforcement Firm of the Year Start Up Intellectual Property Law Firm of the Year – Nigeria Pakistani Start Up Legal Advisory Firm of the Year Start Up Incorporation Advisory Firm of the Year - Poland

Portugal Abrantes Advogados Luis Miguel Amaral - Advogados / Lawyers Luis Miguel Amaral - Advogados / Lawyers Raposo Bernardo Raposo Bernardo Slovenia Schoenherr

Sri Lanka Julius & Creasy Julius & Creasy SJMS Associates Switzeland Dubler Rechtsanwälte / Attorneys At Law Taiwan Eiger Law Eiger Law LCS & Partners Tanzania LEXGLOBE LLP Tanzania The Netherlands RuudTusveld Tonga Fungateiki Law Office Turkey Bezen & Partners Destek Patent Inc. UAE Sovereign Corporate Services JLT UK Adbell International Limited Ukraine ILF Integrites Lavrynovych & Partners USA Bierce & Kenerson, P.C. Duty, P.L. Morrison Cohen LLP The Cornell Group, Inc. Zimbabwe Mawere & Sibanda Legal Practitioners

Portuguese Start Up Legal Advisory Firm of the Year Portuguese Civil Law Firm of the Year Portuguese Company Formations Firm of the Year Portuguese Securities Law Firm of the Year - Start Up Portuguese Trade Law Firm of the Year - Start Up Slovenian Start Up Regulation Law Firm of the Year

Sri Lankan Foreign Direct Investment Advisory Firm of the Year Sri Lankan Business Advisory Firm of the Year Sri Lankan Business Advisory Firm of the Year Swiss Start Up Legal Advisory Firm of the Year Taiwanese Property Registration Law Firm of the Year Taiwanese Labour Law Firm of the Year - Supporting Start Ups Start Up Legal Advisory Firm of the Year - Taiwan Company Formations Firm of the Year - Tanzania Dutch Customs & Global Trade Firm of the Year Start Up Legal Advisory Firm of the Year Turkish Trade Law Firm of the Year - Supporting Start Ups Turkish Start Up Legal Advisory Firm of the Year UAE Company Formations Firm of the Year Start Up Tax Advisory Firm of the Year - UK Securities Law Firm of the Year - Ukraine Most Trusted Law Firm Supporting Start Ups in the Ukraine US Law Firm of the Year - Supporting Start Ups US entrepreneurial Strategy Firm of the Year US Securities Law Firm of the Year US Contract Enforcement Law Firm of the Year Start Up Legal Advisory Firm of the Year - Zimbabwe

Professionalism

Flexibility

Credibility

Personal Approach WELCOME TO ATTORNEY-AT-LAW OFFICE GĂ&#x153;RLICH & Co.

www.akrg.cz

INTERNATIONAL START-UP ADVISORY AWARDS 2013

UAE Company Formations Firm of the Year

Sovereign Corporate Service JLT

Sergii Figurnyi / Shutterstock.com -----------------------------------------------------------------------John Hanafin is the CEO of Sovereign Middle East. ------------------------------------------------------------------------

Sovereign Corporate Services JLT has been licensed in Dubai since 1998 and is now one of the largest corporate services providers operating in the Middle East. We are a registered agent for the free zones of Dubai, including Ras Al Khaimah (RAK) and Jebel Ali and have further expanded our presence in the Gulf States by opening offices in Bahrain and Abu Dhabi. The Sovereign Groupâ&#x20AC;&#x2122;s core business is setting up and managing companies, trusts and other compliant structures to meet the specific personal or business needs of its clients. Typically these would include tax planning, wealth management, succession planning, foreign property ownership and facilitating crossborder business. Dubai has transformed itself into a broadly diversified economy based on international trade, banking, tourism, real estate and manufacturing. To attract international business it has invested heavily in its transport, telecommunications, energy and industrial infrastructure. It has seven industrial areas, one business park and three specialised free zones, two world class seaports, and a major international airport and cargo village. There are no income or capital taxes in Dubai, except for oil and domestic banking, and no withholding tax. Companies in Dubai can obtain further significant

advantages from the absence of foreign exchange controls, trade barriers or quotas. The UAE has a number of double tax treaties with high-tax countries, giving investors an extensive choice of markets for a diverse portfolio of goods and services. The UAE Dirham (AED), which is fully convertible, is pegged to the US dollar.

A free zone company will typically operate under one, or more, of four licence categories: commercial, general trading, industrial or service. Free zone registrations do not require a local sponsor but companies that wish to sell goods or services within the UAE must pay 5% duty and appoint a local service agent. Overseas sales are free of any duty.

Dubaiâ&#x20AC;&#x2122;s historically high real estate costs have undergone a correction and are currently competitive. The asset boom and the vast increase in private and institutional wealth in the region have created a huge demand for specialist financial services.

The first Sovereign office opened in Gibraltar in 1987 and the Group now has offices in over 25 international finance centres worldwide. Through our subsidiaries we also provide a full range of ancillary wealth management services covering asset management, accountancy, insurance, marine, aviation, and international pension schemes and transfers.

A limited liability company (LLC) is the most common vehicle in Dubai and Abu Dhabi, and is recommended where the purpose is to make retail sales within the region. It should be noted that 100% foreign ownership of such an entity is not permitted in the UAE except for non-trading branches and representative offices of foreign companies and provided that a local agent is appointed. Free Zone registration is an alternative option. This will also enable 100% foreign ownership and is often more cost effective. The UAE now boasts many free zones including: the Jebel Ali Free Zone (which was the first); Dubai International Airport Free Zone; Dubai Internet City; Dubai Media City; Sharjah Airport International Free Zone; Ajman Free Zone; and the Ras Al Kaimah Free Trade Zone.

Company: Sovereign Corporate Services JLT Name: John Hanafin Email: jhanafin@sovereigngroup.com Web: www.sovereigngroup.com Address: Suite 801, Reef Tower, Jumeirah Lake Towers, Dubai, United Arab Emirates Telephone: +971 4 448 6010 Fax: +971 4 448 6011

Rajkishore Associates is a full service law firm specializing in corporate law and procedures of the Indian Legal System and businesses. As a professional law firm, the firm assists clients entering the Indian market, advising them on the most efficient market entry strategy and tax efficient structure. The firm specializes in Joint ventures, Foreign Collaborations, Technology transfers, Trademark, Copyright & Designs, Mergers and Acquisitions, Information Technology, Capital Market Transactions, Project Finance, Real Estate and Intellectual Property Laws. The firm renders specialized advice on all aspects of company law and provides day-to-day corporate compliance services.

www.rajkishoreassociates.com

Indian Start Up Tax Advisory Firm of the Year

INTERNATIONAL START-UP ADVISORY AWARDS 2013

Start Up Legal Advisory Firm of the Year - Lebanon

Smayra Law Office -----------------------------------------------------------------------Rami Smayra is an Attorney at Law at Smayra Law Office. ------------------------------------------------------------------------

Smayra Law Office is a Lebanese law firm founded in 1970. The firm has in-depth expertise in banking, commercial, corporate, finance, natural resources, real estate, and tax law. “Our knowledge of the law and the industries we serve, our sensibility to local and international considerations, our pragmatism, and our individualised counselling have earned us a reputation for crafting innovative solutions, as well as thriving in complex transactions and intricate disputes,” said Mr Smayra. He describes 2012 as a great year for the firm, noting that it worked on a number of inspiring and challenging projects. He added that receiving the award is the “cherry on the cake”. “We certainly are very proud of this culmination for our year. It remains though, that the most important award to us is our clients’ satisfaction, and we shall strive to keep providing them with the best tailor-made services.” Mr Smayra stated that working with start-ups is frequently a very rewarding experience. One of the firm’s highlights of 2012 relates to receiving feedback about the market’s positive reaction to a product developed by one of the start-ups it advised, and then “sensing the overwhelming joy of the people involved”. “I once read that challenging times are the best times to start a business, and in fact, despite the difficult political

and economic conjuncture in Lebanon, we witnessed a surge in promising start-ups during 2012.” “It is still work in progress, but I am particularly impressed with an electronic development relating to payment processing, which I hope will meet its fullest potential,” added Mr Smayra. While there are no specific emerging trends that Mr Smayra can highlight, he noted that Lebanon has a large talent pool in the IT sector, and he highly encourages their incubation, support and promotion. “We have had the opportunity to work with brilliant, creative and motivated talent creating cuttingedge projects,” he continued. “As a result, we believe that spending time with the people involved and understanding the start-up’s field are key to advising. This requires a high degree of skill, polyvalence, patience, prudence, foresight and intricate counselling. In fact, advising start-ups is rarely confined to a particular area of law and requires the involvement of a complementary team specialised in different areas of the law. As such, as a firm, we firmly believe that teamwork is crucial to advising start-ups and we continuously foster this belief.” In order to ensure 2013 is another successful year, the firm is constantly solidifying its knowledge of the industries it serves and learning about new ones. “Also, start-up advisory is only one part of our expertise, and we employ all our resources to ensure the same level of skill, knowledge, diligence and care in each of our practices,” added Mr Smayra.

Looking ahead, given the recent regional developments, as well as the discovery of gas fields off the shores of Lebanon, Mr Smayra noted that a substantial growth in opportunities is expected in Lebanon. “As a result, we are developing our practices to cater to those opportunities. In doing so, we focus on maintaining an organic growth that allows us to continue providing our clients with the same level of individualised services we currently provide.” He concluded: “First and foremost, I would like to thank Acquisition International Magazine for the great magazine they publish. I would also like to thank them for this award and for highlighting a little known market that has a big potential, especially in the quality of its brain power that, for a long time, has had a considerable influence on the MENA region.”

Company: Smayra Law Office Name: Rami Smayra Email: rami.smayra@smayralaw.com Web: www.smayralaw.com Address: Hamra, Makdessi Str., Arab Bank Bldg., Beirut, Lebanon Telephone: +961-1-350771