Acquisition international August 2013 by AI Global Media

August 2013 /

IN THIS ISSUE/

42 PREPARING FOR EXIT: 50 56

Leading figures in business law, valuation, and private company services discuss how to prepare for exit. REDUCING M&A RISK THROUGH IMPROVED DUE DILIGENCE: Acquisition International speaks to a variety of experts and key players to learn more about this vital aspect of M&A. THE RISE OF THE INSURANCE LINKED SECURITIES MARKET : A.I. speaks to some of the leading players to learn more.

HERDEM & CO - FDI IN TURKEY

— Acquisition International speaks to Şafak Herdem, Managing Partner of HERDEM&Co, an Istanbul based law firm, to learn more about the firm and discuss his observations on Turkey’s approach to foreign direct investment.. / 8 www. ACQUISITION-INTL .com

Flipkart secures largest investment in Indian e-commerce — Sachin Bansal,

Co-founder and CEO of Flipkart, gives Acquisition International some insight into the company, its origins and the recent record-breaking investment into the company. / 10

Campion Insurance Acquisition of Aviva Direct Life & Pensions

— John McCarthy, the Chief Financial Officer for Campion Insurance, gives Acquisition International a detailed look at the company and discusses the recent acquisition of Aviva Direct Life & Pensions. / 9

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 attorneysat-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

CONTENTS:

August 2013

Editors Comment Welcome to the August issue of Acquisition International Magazine.

CONTENTS — August 2013

In this month’s lead cover story, we speak to Şafak Herdem, Managing Partner of HERDEM&Co, to discuss the firm and take a deep look at the foreign direct investment landscape in Turkey. Turn to page 8 to read more. John McCarthy, the Chief Financial Officer for Campion Insurance, discusses the company’s recent acquisition of Aviva Direct Life & Pensions in our second cover story on page 9. Finally, we speak to Sachin Bansal, Co-founder and CEO of Flipkart, to examine the recent record-breaking investment into the company on page 10. Our Regional Focus section highlights key issues in a variety of jurisdictions from around the world, with expert commentary from leading players. This month’s features discuss company formations in Paraguay, immigration issues in Australia, the captive insurance industry in Mexico and the Licensed Access Scheme in the UK, amongst others. In Joint Ventures and Strategic Alliances: An Attractive Alternative to M&A, we examine the increasing trend of corporations and investors are going beyond the traditional acquisition/ disposal model, using joint ventures and business alliances to further develop their business. The report begins on page 67 and features expert commentary from leading experts. Finally, we’re delighted to announce the launch of our new lifestyle section - PLAYhard. Each month we’ll bring you the cream of the crop in hotels, cars, luxury products and more. Turn to page 99 to read more. 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/

ON THE COVER – FLIPKART SECURES LARGEST INVESTMENT IN INDIAN E-COMMERCE /10

Sachin Bansal, Co-founder and CEO of Flipkart, gives Acquisition International some insight into the company, its origins and the recent record-breaking investment into the company. NEWS: /04

The Latest News Stories From Around The World.

DEALMAKER OF THE MONTH: /5

JLIF acquisition of Investors in the Community LP portfolio.

SECTOR TALK: /6 Powered by Zephyr/ Bureau van Dijk

Q2 REVIEW: /71 Acquisition International’s First Quarterly Review of 2013.

DEAL DIARY: /76 @acquisition-int

ACQUISITION INTERNATIONAL

Introduced by Zephyr/ Bureau van Dijk.

8/ 9/ 12/ 13/ 14/ 16/ 17/ 22/ 25/ 30/ 32/ 34/ 36/ 37/ 38/ 40/ 42/ 45/ 46/ 48/ 50/ 54/ 56/ 60/ 62/ 67/ 74/ 99/

Cover story - Herdem & Co Cover story - Campion Insurance 2013 Fund Awards - USVP 2013 Start Up Awards - CRA Timor Citizen Ship: Ocean Going Vessels & the Flags They Fly Bonaccord Ecosse Limited Regional Focus The New Rising Stars Foreign Direct Investment Partnering with Uganda - A Pipeline to Success? Pitfalls and Potential: Navigating Emerging Markets Bridging the Gap The Rise of Alternative, Sustainable Financing The Insurance Industry: Supporting Economic Development From Local Counsel to Lead - Boutique & Independent Law Firms Insolvency, Turnaround, and Restructuring Preparing for Exit Securing Third Party Litigation Funding Protecting Intellectual Property Assets The Importance of Regulatory Compliance Reducing M&A Risk through Improved Due Diligence The Importance of Anti-Corruption Due Diligence in Corporate Transactions The Rise of the Insurance Linked Securities Market Investing in the Gaming Industry - A Smart Move or a Risky Business Ship Registration Joint Ventures and Strategic Alliances: An Attractive Alternative to M&A Global Expertise Directory Play Hard

August 2013 /

NEWS:

from around the world

NEWS Appointments Adrian Williams – Partner, Corporate Insurance Team – DAC Beachcroft Andrew Hardman – Director, Commercial Development and Investment Team, Wragge & Co Brad Ackerman – Director, Consulting Team – Kinetic Partners Charlotte Hogg – Chief Operating Officer – Bank of England Daniel Rodríguez-Bravo – Partner - Rodríguez – Azuero Abogados Dr Chantale LaCasse – Chair, EEN Practice – NERA Economic Consulting Gary Thomas – Client Account Manager, Legal - InTechnology Gordan Shaw – Chief Operating Officer, Apex Group – Apex Fund Services Michael Hallowell – Counsel, Housing Development and Regeneration Team – Wragge & Co David Rowe – Finance Director – Berwin Leighton Paisner

The Quest for Value The factors driving investment decisions will be debated at Turnaround Management Association Europe’s distressed investing conference in London this September. ‘Finding Value, Creating Value’ takes place on Thursday, 19 September and will see leading European restructuring experts debate issues such as opportunities for investors and the likely impact of changing legislation. To help restructuring and turnaround professionals identify the best prospects for investment, the evening event will feature a panel session focusing on ‘The Quest for Value’. Alan Tilley, director of TMA Europe, said: “The panel will ask, where are the opportunities for investors both geographically and by industry sector, and are investors missing the boat in pursuing unrealistic ‘buy price’ and future performance expectations? “It will explore the drivers of investment decisions, the diverse sectors of interest, the sectors to avoid and the effect of changing legislation and creditor perspectives on decision-making.” The session will also explore why private equity and distressed investing funds have been holding back from deals, and whether this is this about to change. The panel is drawn from professionals operating in countries in recession, those emerging from recession, more stable economies and from Eastern Europe.

It will be moderated by Lars Westpfhal, who is head of the German restructuring/insolvency group of Freshfields Bruckhaus Deringer, and panellists include Carlos Gila of Oaktree Capital, Annerose Tashiro of Schultze and Braun, Barry Cahir of William Fry, Speranta Munteanu of KPMG and Neil Smyth of Taylor Wessing. The conference will also include a second panel session on ‘Creating Value and the Execution Risk’ as well as a keynote speech from award-winning author and journalist Gillian Tett, markets and finance commentator and an assistant editor of the Financial Times.

Morgan Stanley Investment Management Launches Global Premier Credit Fund Morgan Stanley Investment Management (MSIM) has launched the Morgan Stanley Investment Funds (MS INVF) Global Premier Credit Fund. The fund seeks to generate attractive risk-adjusted returns by investing in “Premier Credit,” the corporate debt issued by businesses characterized by dominant franchises or leading industry positions, low capital intensity and strong balance sheets. It is designed to help manage risk for investors against excessive business cycle shifts. Commenting on the launch, Christian Roth, Global Head of Credit for MSIM, said, “The lack of clarity on the outlook for the global economy continues to generate volatility in the financial markets. With global sovereign debt now under intense scrutiny from investors, we believe there is scope for a product with the potential to provide investors with modest relative returns over the business cycle while protecting them from market pressures and extreme downside moves.” To build the portfolio and identify Premier Credit, the portfolio managers leverage fundamental research from MSIM’s Global Fixed Income team. Additionally, the new

/ August 2013

fund employs proprietary quantitative tools to screen the credit universe and continually monitor high quality issuers, resulting in a strong platform from which to assess credit quality. Richard Ford, European Head of Credit for MSIM, continued, “The Global Premier Credit Fund aims to be an effective strategy to help investors wanting to diversify from government debt, by seeking higher yields through capturing the credit premium of the highest quality credits with limited volatility and default risk. For investors looking for a customised approach to corporate credit, this fund can be the principal allocation of a global credit portfolio, with a more opportunistic credit allocation to take advantage of market dislocations.” Paul Price, Head of International Distribution for MSIM, added, “The Global Premier Credit Fund complements MSIM’s Global Fixed Income product range and demonstrates a breadth of talent from a fixed income team that can respond to financial market conditions with products of significant interest to institutional and intermediary investors.”

ACQUISITION INTERNATIONAL

NEWS:

Dealmaker of the Month

DEALMAKER OF THE MONTH

THE DEALMAKER: Jonathan White, Partner THE FIRM: KPMG THE CLIENT: Investors in the Community Infrastructure Fund THE DEAL: JLIF acquisition of Investors in the Community LP portfolio

KPMG ran a competitive auction process targeting infrastructure funds, pension funds and new entrants to the market

ACQUISITION INTERNATIONAL

THE DETAILS: KPMG Corporate Finance, led by Jonathan White (Partner), acted as lead sell side advisor to Investors in the Community Infrastructure Fund (“IIC”) on the sale of their interests in eleven PFI/PPP projects. The portfolio comprises high quality, robust social infrastructure assets in the Education, Healthcare, Social Housing and Street Lighting sectors. The projects are all fully operational and supported by government-backed, inflation linked revenue streams.

JLIF, a FTSE 250 international PPP infrastructure investment company, agreed the acquisition of the portfolio for c. £123 million. The total consideration is consistent with the current valuations of similar projects in JLIF’s portfolio and will be satisfied either wholly in cash or partly in cash and partly by the issue of new ordinary shares in JLIF. Any cash element of consideration will be funded by JLIF’s existing bank facility.

KPMG has a long-standing relationship as adviser to the Fund since its inception in 2004, particularly through the provision of tax advisory services from Margaret Stephens. “KPMG ran a competitive auction process targeting infrastructure funds, pension funds and new entrants to the market,” said Mr White. “In particular the process was performed over a short timescale with KPMG supporting IIC throughout the process enabling management to continue to focus on their day to day management of the assets. Maintaining a healthy competitive process between bidders ensured IIC were able to maximise the value of the assets driving prices to new highs within the market”

Company: KPMG Name: Jonathan White Email: jonathan.rm.white@kpmg.co.uk Web: www.kpmg.co.uk Address: 6th Floor, 15 Canada Square, Canary Wharf, London, E14 5GL Telephone: +44 (0) 20 7311 8977

August 2013 /

SECTOR TALK:

Industrials The first half of 2013 was disappointing for the industrials sector, with both volume and value declining on H2 2012. A total of 7,249 transactions worth USD 288,149 million took place in the first six months of the year. Last year finished on a positive note for companies in the industrials sector as mergers and acquisitions (M&A) activity climbed from H1, according to data from Zephyr, the M&A database published by Bureau van Dijk. Following a 3 per cent decline by volume and 7 per cent by value from the previous six-month period, the second half of the year increased on both fronts, with 8,491 deals worth an aggregate USD 331,445 million recorded over the six months. This brought results more in line with the positive showing of H2 2011, when 8,774 deals valued at USD 326,510 million were announced, although still further improvement would be needed to reach this level. Unfortunately, this promising activity does not appear to have been sustained successfully â&#x20AC;&#x201C; in H1 2013 the lowest results were recorded for both volume and value of the period under review. However, the poor showing could simply be a consequence of the peaks and troughs being experienced by the market since H2 2011. Over this time period, the second half of each year has generally seen an improvement on the first, which gives those watching the markets and hoping for an upturn some cause for optimism over the coming months. In spite of weakened investment activity, there were a number of high value transactions between January and June. Indeed, the top two deals were relatively close in terms of value. Canadian pharmaceuticals maker Valeantâ&#x20AC;&#x2122;s acquisition of optical healthcare products manufacturer Bausch + Lomb Holdings from Warburg Pincus came out on top with a valuation of USD 8,700 million. Hot on its heels was the announced USD 8,569 million privatisation

of General Motors, which is expected to complete next year. The third and fourth highest valued transactions were also closely-matched. Dutch nitrogen fertiliser producer OCI made a USD 7,645 million approach for Egyptian construction business Orascom, and Chinese LCD maker BOE Technology announced plans to raise USD 7,494 million through a capital increase, subject to approval by its shareholders. In spite of these deals having high values, the low volume of out-andout blockbuster transactions may be to blame for the fact that values declined on H2 2012. Targets in the Far East and Central Asia and North America each accounted for just under a third of all investmentin the industrials sector in 2013 to date. Companies based in the former secured USD 96,439 million between January and July, while the latter brought in USD 93,189 million. This is perhaps unsurprising considering that three of the top four transactions mentioned previously had targets based in these regions. However, the Far East and Central Asia only had two deals in the top ten, suggesting a higher volume of deals made up for the lower considerations. This is confirmed by the fact that the region was targeted in 2,988 transactions, some way ahead of its nearest rival, Western Europe with 2,325. By contrast, North America placed third by volume, suggesting higher deal values, which is borne out by the fact that the top ten includes four deals with targets in the region. Western Europe also fared well by value, with USD 78,018 million worth of transactions recorded in the year to date, accounting for almost a quarter of all investment in the period.

Aggregate Value (mil USD) of Industrials Deals by Region: 2006 - 2013 YTD (as at 28 July 2013) Deal Yearly Value (Announced Date)

Number and Aggregate Value (mil USD) of Industrials Deals Globally: 2006 - 2013 YTD (as at 28 July 2013) Values Period

Number of deals

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 H2 2013

7,820 8,877 10,447 10,319 10,087 8,963 9,129 9,923 9,456 8,726 8,900 8,774 8,482 8,491 7,249 840

No. of deals with known values 4,630 5,533 6,861 7,086 6,698 6,197 6,332 6,966 6,472 6,118 6,243 6,031 5,773 5,778 4,844 527

Aggregate deal value (mil USD) 440,309 446,664 627,069 623,159 407,391 303,548 369,037 368,912 326,158 353,430 448,079 326,510 302,601 331,445 288,149 42,191

World region (target)

2006

2007

2008

2009

2010

2011

2012

2013

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

129,454 296,019 360,563 72,604 22,260 6,376 10,172 12,927

296,208 393,198 382,073 44,610 62,816 25,921 37,611 9,594

222,134 154,245 219,789 38,361 36,062 15,738 15,456 10,802

272,191 177,210 179,886 30,524 42,720 4,761 24,225 4,351

264,870 149,333 152,723 42,978 48,531 3,644 11,302 6,336

282,700 231,909 149,289 43,520 39,652 3,212 12,897 7,243

225,940 154,751 174,022 19,877 37,973 1,889 10,788 6,864

96,439 93,189 78,018 27,701 16,840 9,389 4,516 3,790

Breakdown of Industrials Deals by Region: 2006 - 2013 YTD (as at 28 July 2013) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013

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

14% 33% 40% 8% 2% 1% 1% 1%

24% 31% 30% 4% 5% 2% 3% 1%

31% 22% 31% 5% 5% 2% 2% 2%

37% 24% 24% 4% 6% 1% 3% 1%

39% 22% 22% 6% 7% 1% 2% 1%

37% 30% 19% 6% 5% 0% 2% 1%

36% 24% 28% 3% 6% 0% 2% 1%

29% 28% 24% 8% 5% 3% 2% 1%

/ August 2013

ACQUISITION INTERNATIONAL

SECTOR TALK:

Number and Aggregate Value (Mil USD) of Industrials Deals Globally by Deal Type: 2013 to date (as at 28 July 2013) Values Deal Type

Number of deals

Acquisition Minority stake Institutional buy-out Management buy-out MBI / MBO Management buy-in Demerger Merger

3,503 4,304 214 53 5 5 4 13

Number of deals with known values 1,477 3,819 65 13 1 1 0 0

Aggregate deal value (mil USD) 156,886 153,204 20,555 222 10 3 0 0

Breakdown of Industrials Deals Globally by Deal Type: 2013 to date (as at 28 July 2013) Deal Type

Number of deals

Aggregate deal value

Acquisition Minority stake Institutional buy-out Management buy-out MBI / MBO Management buy-in Demerger Merger

43% 53% 3% 1% 0% 0% 0% 0%

47% 46% 6% 0% 0% 0% 0% 0%

Number and Aggregate Value (mil USD) of Industrials Deals by Sector: 2013 YTD (as at 28 July 2013) Values Zephus classification (target) Industrial, Electric & Electronic Machinery Wholesaling Chemicals, Petroleum, Rubber & Plastic Transport Manufacturing Personal, Leisure & Business Services Property Services Metals & Metal Products Construction Computer, IT and Internet services Banking, Insurance & Financial Services Leather, Stone, Clay & Glass products Wood, Furniture & Paper Manufacturing Biotechnology, Pharmaceuticals and Life Sciences Mining & Extraction Retailing Miscellaneous Manufacturing Transport, Freight, Storage & Travel Services Public Administration, Education, Health Social Services Food & Tobacco Manufacturing Utilities

No. of deals 3,600 2,316 1,189 619 1,153 848 1,122 984 323 255 432 447 38 107 171 196 121 60 23 113

As has been witnessed across other industries in recent months, the vast majority of deals in the industrials sector in the first half of 2013 were spread across two deal types. Acquisitions accounted for USD 156,886 million of transactions, followed by minority stakes with USD 153,204 million. The story is the same between 2006 and the present day, where they represented investment of USD 2,953,152 million and USD 2,629,218 million, respectively. Institutional buyouts have also had a notable presence, with USD 417,246 million invested across 3,502 deals since 2006 and USD 20,555 million across 214 deals this year alone. One segment of the industrials sector has topped the bill in terms of investment, both within 2013 and from the beginning of 2006 to the present day. Industrial, electric and electronic machinery companies have been targeted in 3,600 deals worth USD 134,578 million in the year to date, which accounts for 25 per cent of total volume for the period and 21 per cent of value. From 2006 to 2013 there have been 60,618 transactions worth USD 2,322 billion targeting the segment. Other commonly targeted areas in 2013 include the wholesaling segment, which secured investment of USD 129,142 million across 2,316 deals. This came some way ahead of chemicals, petroleum, rubber and plastics, which brought in USD 62,011 million in 1,189 transactions. Others which have received notable investment so far this year include transport manufacturing (USD 49,716 million), personal, leisure and business services (USD 49,516 million) and property services (USD 37,133 million). To sum up, a disappointing result for the industrials sector in H1 2013 has poured cold water on any expectations that may have resulted from the increase seen in the second half of 2012. Nevertheless, it is worth noting that results for the last few years have highlighted a number of peaks and troughs, so there is hope that the latest decline is no more than a blip on the radar and the second half of 2013 will return to previous levels.

No. of deals with known values 2,572 1,740 741 415 735 646 682 536 241 229 287 273 30 82 112 129 81 37 18 81

Aggregate deal value (mil USD) 134,578 129,142 62,011 49,716 49,516 37,133 32,381 27,269 19,089 16,635 16,343 13,375 12,362 9,886 7,169 6,386 5,776 5,181 4,699 4,276

Breakdown of Number and Aggregate Value (mil USD) of Industrials Deals by Sector: 2013 YTD (as at 28 July 2013) Zephus classification (target)

Number of deals

Aggregate deal value (mil USD)

Industrial, Electric & Electronic Machinery Wholesaling Chemicals, Petroleum, Rubber & Plastic Transport Manufacturing Personal, Leisure & Business Services Property Services Metals & Metal Products Construction Computer, IT and Internet services Others

25% 16% 9% 4% 8% 6% 8% 7% 2% 15%

21% 20% 9% 8% 7% 6% 5% 4% 3% 17%

ACQUISITION INTERNATIONAL

August 2013 /

ON THE COVER:

Herdem & Co – FDI In Turkey

Herdem & Co – FDI In Turkey ------------------------------------------------------------------------

Acquisition International speaks to Şafak Herdem, Managing Partner of HERDEM&Co, an Istanbul based law firm, to learn more about the firm and discuss his observations on Turkey’s approach to foreign direct investment. -----------------------------------------------------------------------The firm HERDEM&Co engages in multi-jurisdictional transactions and represents corporate clients with a unique combination of lawyering and advisory skills. The firm provides legal and advisory services only in niche areas of law, which include: regulated markets; energy; corporate & commercial; foreign investment; banking & finance; aviation; healthcare & pharmaceutical; defence industry; real estate & construction; telecommunication and entertainment law. “In addition, we have established close relationships with reputable international law firms and business associations to make comparative examinations of and take part in sector dynamics,” said Mr Herdem. “As a part of our international practices and in consideration of the essential business relations between Turkey and some foreign companies, we set our internal practising groups on country basis aiming to promote and to develop multinational transactions particularly for Belgium, Germany, Hong Kong, Netherlands, Russia, Sweden, United Arab Emirates, United Kingdom and United States.” FDI in Turkey Mr. Herdem stated that foreign direct investments (FDI’s) date back to the Ottoman Empire in the region and continued with the establishment of the Turkish Republic. While the aggregate volume of foreign investment inflows totalled only US$14.6 billion during the 80-year period from the establishment of the Turkish Republic to 2003, this figure rose to US$123.7 billion during the last decade.

“According to many economists worldwide, Turkey now plays a significant role in the global economy and world trade, standing out as a promising emerging market alongside Brazil, Russia, India and China,” he continued. “This status is underpinned by its robust local market and young population. Despite the global economic crisis and the political and social issues that have afflicted neighbouring regions, Turkey exported more goods in 2012 than ever before.” Total exports valued at US$152.6 billion were supplied to 241 countries and regions worldwide, with most of the investors companies from the US. The US’s share of investment decisions in Turkey increased from 17.5% in 2007 to 28.4% in 2012. Sectors such as business services, ICT, chemicals, transport and logistics and DIP have attracted significant American attention. Among Turkey’s top 500 companies, 140 of them – or 28% - receive backing by international investors. In 2012, Turkey became the second most FDI attracting country in the region after Saudi Arabia. “Despite the negative impact of the slowdown in the global economy and the problems of the region where Turkey is a part of, the fact that Turkey is one of the fastest growing economies in the world has affected its M&A activities positively,” observed Mr Herdem.

in 2010, and $16955 million in 2011, with 2803 companies established in 2009, 3273 in 2010, and 4347 in 2011. As of the end of 2011, around 30,000 companies with foreign capital operate in Turkey. Countries in the European Union have been responsible for most FDI into Turkey for many years. Between 1954 and 2013, 16928 EU based companies were established in Turkey. Germany based companies are the biggest investors in Turkey with 5320 investments. United Kingdom and Netherlands based companies are also main investors, with 2493 companies from the UK and 2148 from the Netherlands. Otherwise, 7901 near and middle East based companies had been established in Turkey. The majority of FDI inflows to Turkey come from the EU, North America and the Gulf countries, as shown in the table below. In conclusion, Mr Herdem highlighted telecommunication, aviation, logistics and retail as the sectors with the greatest opportunities for investors.

“Turkey followed a similar trend as the rest of the world and other OECD countries and its inward FDI stocks increased steadily during the years. FDI stocks between the years of 1982 and 2007 rose from eight to 157 billion of US$, growing 14.1% on average. The boom in the inward FDI was accompanied by a surge in imports to Turkey.” Current FDI levels As a result of recently enacted regulations and given incentives for FDI, Turkey’s FDI levels are rising regularly. Accordingly, FDI inflow to Turkey was $6252 million in 2009, $6238 million

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 Source: Central Bank of the Republic of Turkey

Number of Companies with International Capital (Cumulative, in thousands)

Europe

2005

2006

2007

2008

2009

2010

2011

6,652

14,574

12,974

11,367

5,234

4,920

12,369

European Union

5,006

14,489

12,601

11,076

4,928

4,719

11,282

EFTA countries

262

202

281

196

324

Other European countries

1,605

111

763

Africa

North Africa

Other African countries

America

122

1,002

4,717

951

331

385

1,484

North America

114

969

4,223

891

312

378

1,423

Central America

South America

467

Asia

1,756

1,927

1,405

2,345

673

928

2,027

Near and Middle Eastern countries

1,678

1,910

608

2,184

361

473

1,522

Gulf Arabian countries

1,675

1,783

311

1,963

209

388

205

196

1,313

Other Near & Middle Eastern 2 countries

Source: Ministry of Economy

/ August 2013

Other Asian countries

797

161

312

455

505

Oceania and polar regions

108

Unclassified

Total

8,535

17,639

19,137

14,747

6,252

6,238

15,887

ACQUISITION INTERNATIONAL

ON THE COVER:

Campion Insurance Acquisition of Aviva Direct Life & Pensions

Campion Insurance Acquisition of Aviva Direct Life & Pensions ------------------------------------------------------------------------

John McCarthy, the Chief Financial Officer for Campion Insurance, gives Acquisition International a detailed look at the company and discusses the recent acquisition of Aviva Direct Life & Pensions. ------------------------------------------------------------------------

Campion Insurance was formed by Jim Campion in 1984 in Kilkenny, Ireland and grew to become the largest local insurance broker in both Kilkenny & Tipperary. The business began to develop strategic alliances and partnerships with other insurance brokers throughout Ireland and in 2008 negotiated the amalgamation and consolidation of these businesses into a single company creating what is now one of the largest insurance brokerages in the country. In 2013 Campion was ranked by an international agency, Finaccord, as the 6th largest Commercial Non Life broker in Ireland. The first four brokers ranked are all US multinational companies. Campion has also won the Deloitte Best Managed Companies Award for three consecutive years (20112013) in recognition of its business planning strategy and the creation of the Campion Business School for the development and professional education of our employees.

“Our primary aims are to develop this business organically and to grow it within a declining market but also to use strategic acquisitions to expand our presence in the Dublin market and to increase our market share in key product sectors, such as our Life & Pensions business,” said Mr McCarthy. “We have been able to distinguish ourselves from competitors in the broker market on the basis that we have the widest geographical presence in the country. We are also market leaders in a variety of commercial sectors including motor trade insurance, bus & coach insurance, vintage insurance, and insolvency insurance. We are also the largest independent farm insurance broker in the country. “In addition to this, Campion Insurance has been able to develop a reputation as a broker that is very successful in managing claims on behalf of its clients. We have also developed advanced management reporting systems and a technology infrastructure to streamline our internal processes and reporting systems which enable our managers to act and make decisions quickly and productively.” In July this year, Campion Insurance acquired part of Aviva Direct Life and Pensions as part of a three-year expansion plan that will see the company become an established nationwide insurance brand.

ACQUISITION INTERNATIONAL

Discussing the strategic reasoning behind the acquisition, Mr McCarthy explained that Campion has eleven regional offices, giving the company a very wide geographical presence. He noted that the company has life & pension advisers in each of these locations and as such this represents a considerable portion of the business.

“The life and pensions industry in this country has been changed by the recession and increased regulation during the past five years and while we have successfully grown our market share organically during this period we felt the timing was right for Campion Insurance to move beyond this and to use our scale to create a broader foothold in the Life & Pensions market,” elaborated Mr McCarthy. The addition of 8,000 customers and a dedicated team to support this customer base also allows Campion to expand its Life & Pensions business considerably and it provides the company with the opportunity to introduce these new customers to its wider product base. “Our industry is changing to a more regularised environment where holistic financial advice is becoming more of the norm,” observed Mr McCarthy. “Customers no longer want just a pension or life policy, they want a broker who can provide health, home & motor cover, and business insurance. This form of broker relationship creates real value for the customer both now and into the future.” The acquisition took six months to complete from initial discussions through to the actual transfer, and Mr McCarthy stated that there were no particular challenges. Campion places a lot of emphasis on planning and process structures and has great experience in the integration of acquisitions, so once the basic terms of this deal had been agreed it was a simple process to transact and close out. “We have a long standing relationship with Aviva as one of our leading suppliers and as such, there was a lot of respect and trust around the table which enabled our team to work smoothly and efficiently with the Aviva transaction team,” added Mr McCarthy. The acquisition gives Campion access to over 8,000 new customers and makes the company one of the largest Life & Pension brokers in Ireland. This places the company’s Life & Pensions business on a level footing with its General Insurance in terms of market share.

The acquisition has led to the expansion of Campion’s life & Pensions team, and the company has been able to recruit a number of leading advisers that bring additional skill sets and experience to its existing team. “We can provide access to a wider portfolio of products and services to our new customers,” enthused Mr McCarthy. “As a broker, Campion Insurance provides insurance products and solutions from over 100 different insurance companies.” In terms of measuring the success of the deal, Mr McCarthy believes that this can only be assessed based on happy and satisfied customers, a strong retention rate, and the successful introduction of these customers to Campion’s home, motor and business insurance.

“The mechanics of integrating the customers into our systems is straight forward but the real complexity will be in making personal contact with all of these clients and assigning a personal representative to each and every customer,” he explained. “Our business is based real people and their needs and it is our goal to ensure that we support every customer at a personal level.” Campion has already expanded its existing Life & Pensions team to manage this acquisition and has already created an economy of scale for its businesses, which improves its standing and credibility in the financial services market, and with insurance providers giving the company the opportunity to develop better products and improve pricing for its customers. “We would hope to complete further acquisitions in this space within the next 12 months where we feel the strategic and operational fit provides the right value for our business and our customers,” concluded Mr McCarthy.

Company: Campion Insurance Name: John McCarthy Email: jmccarthy@campionins.com Web Address: www.campioninsurance.ie Address: 2nd Floor Otter House, Modern Plant, Naas Road, Dublin 22, Ireland. Telephone: 00353 (0)86 0892120 / 00343 1 4033717

August 2013 /

ON THE COVER:

Flipkart secures largest investment in Indian e-commerce

Flipkart Secures Largest Investment in Indian E-Commerce -----------------------------------------------------------------------Sachin Bansal, Co-founder and CEO of Flipkart, gives Acquisition International some insight into the company, its origins and the recent record-breaking investment into the company. ------------------------------------------------------------------------

THE COMPANY

Flipkart was founded in 2007 as an online bookseller by Co-founders Sachin Bansal and Binny Bansal. While the original intention was to launch a shopping comparison site, early stage research revealed that there were no serious sites that were really meeting consumer needs in the market. “That was when we decided to launch Flipkart,” explained Sachin Bansal. “While books provided us with the easiest entry point given the ease of shipment and low price points, we knew that ultimately we wanted to become a comprehensive online shopping platform. Today, six years, later, we offer products across 17+ categories.” Flipkart has grown from a two-member company to a 6,000 strong team that looks after the largest e-commerce marketplace in India, clocking more than a million shipments a month. The company has 10 million registered users, sees more than a million daily visitors and is more than halfway towards its goal of reaching $1 billion in GMV by 2015.

However, through all of this, while we grow the company and invest in the entire e-commerce ecosystem in India, our focus remains the customer,” stated Mr Bansal. “Each and every feature and service that we launch, all our investments, are geared towards making online shopping a simpler, more reliable and delightful experience for the Indian consumer. FLIPKART AND E-COMMERCE IN INDIA Flipkart: • On target to achieve $1 billion GMV by 2015 • Registered users – 10 million • Daily visitors – more than 1 million • Number of people who visited Flipkart last year > the population of the top 10 cities in India • Peak items shipped - 4000 items shipped / hour • Technology has enabled a million shipments in a month • Sellers on the Flipkart marketplace - nearly 500 • Recent launches - PayZippy, an online payments solution for the online shopping industry • New categories entered (June 2012 – 2013) - Apparel, Footwear, Toys, Accessories, Sports and fitness and eBooks E-commerce in India: • By 2021 e-commerce will be a $76 billion market in India (Technopak study – E-tailing in India: Unlocking the Potential) • By 2021 40% of India will have access to the internet (Flipkart estimate). A large part of this will be fuelling online shopping

/ August 2013

DISTINGUISHING FEATURES

According to Mr Bansal, Flipkart’s main USP lies in its complete focus on customer delight. The company is known for having pioneered customer-friendly services like adopting last-mile deliveries to cut down on supplychain bottlenecks in India and offering cash-on-delivery to a large base of domestic customers who do not possess credit/debit cards or are not inclined to use cards for online transactions. Flipkart’s 30 day replacement policy, EMI options and product comparison tools have all set examples in the online shopping space in India. “And added to all this, is our belief in technology,” he continued. “We believe that technology powers all these experiences and invest heavily in it – be it for the frontend user experience, or greater automation of the supplychain system. Today, we are even building tools and solutions for the industry at large. Our recently launched online payments solution, PayZippy, is a prime example. It is a solution aimed at improving the online payments ecosystem as a whole – for merchants and customers alike.”

THE INVESTMENT

Flipkart has always maintained that India’s e-commerce market has huge potential, and Mr Bansal believes that the right kind of investment and infrastructure can really take it places. He noted that the company has been able to see bigger and better opportunities in the ecosystem in the last year, and investment is key in order to be fully able to explore these opportunities. “Large-scale investments like the one we have just secured means that we will be able to achieve our goals at a faster pace, thus scaling up much more rapidly than before,” explained Mr Bansal.

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ON THE COVER:

Flipkart secures largest investment in Indian e-commerce Sanchin & Binny Bansal / Flipcart Co-Founders

“It’s important that our existing investors have reinstated their faith in us by investing $200 million in the company – the largest amount to be ever raised by any Indian internet company. That they have invested in us before is an emphasis on the fact that we are all aligned to grow the company and expand our market leadership. “While raising funds from existing investors was not a conscious decision, it is extremely encouraging in itself.” This investment validates the belief that Flipkart’s investors have, not only in the company’s capabilities as a market leader – but also in the potential of e-commerce in India. “We are building a world-class organisation that has always led from the front, taking advantage of and even creating a plethora of opportunities for the e-commerce industry,” enthused Mr Bansal. This investment will take Flipkart to the next level: pioneering technology and supply-chain innovations that will change the face of online shopping, for the customer and players alike. “We will also be using this investment for training and development of talent – generating skill sets that will benefit the industry at large where resources with relevant experience are still hard to come by,” added Mr Bansal. Discussing the criteria for measuring the success of the investment and the company at large, Mr Bansal stated that Flipkart is not thinking short-term: while the company does have the goal of reaching $1 billion GMV by 2015, even that target was set a number of years ago. Flipkart, along with its investors and other stakeholders, is thinking long-term.

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While there are a lot of people who are shopping online in India today, we have just scratched the surface,” he explained. “India is the fastest growing internet market in the world with an internet penetration close to 10%. For a country with a population of 1.2 billion, that’s close to 110 million people who are accessing the internet in the country. That’s a number too big for any e-commerce company to ignore - we need to be able to reach out to the larger audience, convert the offline shoppers and make them aware of the numerous advantages of online shopping. “Our ultimate goal is to accelerate the adoption of e-commerce in the country while increasing our market share accordingly. That will be our yardstick for success.”

is just under a year old and we are investing a lot of resources towards building that category,” he concluded.

THE FUTURE FOR FLIPKART

Flipkart has grown in strength over the last six years; today it is a company that has defined e-commerce in India and remains the leader in this space. The company’s aim is to continuously improve the shopping experience for customers and provide sellers with a highly scalable platform upon which to do business. “We are constantly exploring ways and means of improving the online shopping experience for the customers,” said Mr Bansal. “Over the next few months we will be concentrating on a number of things. Mobile will be a large focus area. Increasing smartphone penetration, expansion of 3G services and more people accessing net on the go – all this will contribute to the rapid expansion of this channel in the coming year and we are working towards building our mobile experience. “We are also going to pay a lot of attention to the digital space. We believe that is the future. Our eBooks offering

Company: Flipkart Internet Pvt. Ltd. Name: Binny Bansal Name: Sanchin Bansal Web: www.flipkart.com Address: Bangalore, India

August 2013 /

2013 FUND AWARDS:

Innovative Venture Capitalist of the Year – US - U.S. Venture Partners

2013 Fund Awards: Innovative Venture Capitalist of the Year – US - U.S. Venture Partners

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Jacques Benkoski is a Partner with U.S. Venture Partners. -----------------------------------------------------------------------U.S. Venture Partners is a leading Silicon Valley venture capital firm, helping entrepreneurs build world-class companies since 1981. The firm focuses on early stage opportunities in sectors where the partners have the domain expertise, operating experience and network relationships to contribute to the success of an enterprise.

“We believe that our role is to help entrepreneurs build great companies in sectors where innovation leads to market disruption,” said Jacques Benkoski, PhD. “The returns get created naturally when significant value is built by the companies we invested in. Our experience and hands-on partnership with the entrepreneurs are unique and our CEOs are our best marketing weapon.” Mr Benkoski was thrilled to receive the award and see recognition for setting up and executing on a highly differentiated strategy to invest internationally and specifically in Israel. “The strategy has obviously been working well but it is great to see it recognised with this award,” he added. Discussing the challenging current conditions, Mr Benkoski stated that the firm’s strategy has always been very much independent of the environment. The firm focuses on the key sectors in IT and healthcare where disruptive innovation has and continues to take place. “Our investments are sector diversified but also time diversified and we invest in good as in bad times at the same pace as the value of the companies we help build is demonstrated many years after we invest and often in different environments,” he explained. In 2012, several of the firm’s portfolio companies experienced tremendous growth, which Mr Benkoski described as “very gratifying to participate in”. “We try to

/ August 2013

help with strategic directions, with executive hiring and with business development in addition to the board-level guidance and the day-to-day discussions with our CEOs. I also invested in three new companies, which I hope will do very well,” he enthused. Mr Benkoski believes that the end of the consolidation cycle has been reached, and the firms that have made it through are significantly more resilient and experienced. He noted that the trend is actually back to the fundamentals which he believes made the industry successful: hard core innovation that goes after large markets ripe for disruption.

“This bodes very well for us and firms like us that have always been focused on this approach. It requires rigor and patience but in the long run it is the way to create value for entrepreneurs, shareholders and society at large,” he observed. Commenting on the environment within the firm, Mr Benkoski stated that U.S. Venture Partners focuses very much on team culture. The firm’s decision process involves participation by all, even those who are not necessary versed in the field of the proposed investment.“Over thirty years of investment success has taught us that everyone actually contributes and having to explain to the wide distribution of investment professionals leads to better diligence and better decision-making,” he commented. Looking to the future, Mr Benkoski stated that the firm is continuing to go about its business in the same consistent way. It would be “another pleasant surprise” if this leads to another award next year.

“We think the next few years will demonstrate the importance of hard-core technology investing,” he predicted. “The IT industry has never faced such a multifaceted change – each component of the stack from the highest level of software all the way to the data-centre hardware components is simultaneously undergoing a revolution. We have been in this space and believe we uniquely understand it. The next three years will prove that more than ever.” While Mr Benkoski believes it would be “very presumptuous” to offer advice to the other nominees for the award, he would recommend that anybody in this business focuses on the long term and expects to be recognised sooner or later. “I really do believe that professionally, karma works,” he opined. In conclusion, Mr Benkoski stated that he is thrilled to receive the award: “I am very thankful and it just further motivates me to continue doing what I love to do.”

Company: U.S. Venture Partners Name: Jacques Benkoski Email: jbenko@usvp.com Web: www.usvp.com Address: 2735 Sand Hill Rd., Menlo Park, CA 94025 Telephone: +1 650 854 9080926 7761 Twitter: @JacBenko

ACQUISITION INTERNATIONAL

2013 START-UP ADVISORY AWARDS:

Start Up Tax Advisory Firm of the Year - East Timor - Sousa Dias Lawyers

2013 Start-Up Advisory Awards: Start Up Tax Advisory Firm of the Year - East Timor - Sousa Dias Lawyers Gardens by the Bay - Singapore. joyfull / Shutterstock.com

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Tiago Sousa Dias, Managing Partner of Sousa Dias Lawyers, discusses his background, his firm, and his pleasure at receiving the award. ------------------------------------------------------------------------

After having worked with the Portuguese Government and a Portuguese Bank as an in-house lawyer advising the board of Directors in regulatory matters, Mr Dias started his professional experience within private practice as a lawyer for two of the largest Portuguese Banks. Hired for the position of Managing Associate at CRA Timor, he continued to practice Business Law and Banking Law now in connection with the Asian region. Setting up his own law firm, Mr Dias opened a Representative Office in Singapore. It is the first Portuguese Law firm to have an office in Singapore, which he believes is possibly one of the most competitive markets in Asia. “After promoting my previous company to receiving the award “Start-up advisory law firm of the year” in East Timor from Acquisition INTL, after having received an award from Chambers & Partners as a leading lawyer in Business Law, and after having proven record of tax litigation for oil & gas companies in East Timor, I believe I am fit to engage any challenges that may come ahead” said Mr Dias. “It is a great pleasure to be recognised by Acquisition International and that gives me the strength to carry

ACQUISITION INTERNATIONAL

“It is a great pleasure to be recognised by Acquisition International and that gives me the strength to carry this project on. We are on the right path. This award resembles the voice of our clients by recognising our efforts in being the best. this project on. We are on the right path. This award resembles the voice of our clients by recognising our efforts in being the best. “I can say that I see and hear from our clients that we serve justice the proper way. I love this profession and this is the best recognition that I could have – knowing that we serve our clients the proper way.”

increasingly changing and projections for a three year period are difficult and most likely wrong. We like to think that we will have a sustained growth in key areas of our activity. If that growth determines the need for recruiting, we will of course do so,” he concluded.

Discussing the culture within the firm, Mr Dias stated that the team is everything in law practice and that each and every member of the firm has a specific methodology of work and expertise. “I could not do it alone – none of us could,” he said. “Only combined, our efforts and knowledge are efficient.” Looking ahead, Mr Dias stated that the firm intends to keep its strategy in secrecy and its clients satisfied. “I believe we could have a substantial growth in the next 3 years. However, the concept of space and time are

Company: Sousa Dias Lawyers Name: Tiago Sousa Dias Email: tsd@sousadias.net Web: www.sousadias.net Address: One Raffles Quay, North Tower, Level 25, 048583, Singapore Telephone: +351 912438553 / +670 77977031 / + 65 6622 5819

August 2013 /

SECTOR SPOTLIGHT:

Citizen Ship: Ocean-Going Vessels and the Flags They Fly

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Neil Quartaro and John Benson are attorneys with Watson, Farley & Williams in New York. -----------------------------------------------------------------------While it may seem strange to the uninitiated, ships are considered to be persons under the law: a vessel can incur debts, it can be arrested, and it is considered a citizen of the country whose flag it flies. Many readers may be familiar with the practice whereby ships fly the flag of the country where they are registered, demonstrating to the world that a particular vessel is entered into the shipping registry of that country. Thus, when one sees a vessel flying the Union Jack, one is seeing a vessel entered into the shipping registry of the United Kingdom. There are two basic types of registry: closed and open. A closed registry is one that typically places great restrictions on the ownership and operation of a vessel, usually requiring that the vessel be built in that country, and that it be owned, operated and crewed by citizens of that country. In contrast, an open registry generally accepts vessels constructed anywhere and has no citizenship requirements for owners, operators or crew. Entering a vessel in a closed registry usually confers a right to carry passengers and cargo between two points in the subject country, while vessels entered in an open registry do not enjoy this right. Entering a vessel in an open registry is more common for shipowners intending to trade globally, as the voyages undertaken will be international rather than domestic. Because of the international nature of this type of business, open registries also tend to have comparatively low taxation regimes, and typically facilitate the efficient operation of ocean-going vessels in international commerce.

vessel construction capabilities and qualified crew in case of national emergency. A vessel must be Jones Act compliant in order to move passengers or cargo between two points in the U.S. In the post-WWII years however, the U.S. maritime industry has become less competitive relative to other countries. For example, a vessel constructed in the U.S. may cost up to three times that of a foreign-built vessel, and U.S. qualified crew typically demand salaries at least twice as high as foreign nationals. In addition, many closed registries, including the U.S., tax the earnings of a vessel, instead of levying a flat tax. Entering a closed registry may thus carry high entry costs, but in some cases it may offer outsized rewards. Those able to acquire to acquire U.S. flag product tankers, for example, may find themselves well positioned to transport refined products like gasoline as U.S. shale oil increasingly enters the oil supply chain.

This article is intended to familiarize the reader with some of the open and closed registries commonly used by ship owners, and to identify some of the reasons behind a decision to enter a vessel in one of these registries.

Liberia and the Marshall Islands: Popular Open Registries The vast majority of ocean-going ships in the world are entered in open registries, which usually have no restrictions on where a vessel is built, who crews her, or the citizenship of the vesselâ&#x20AC;&#x2122;s owners. Two of the most common open registries are run by Liberia and the Republic of the Marshall Islands. Interestingly, the maritime laws of Liberia and the Marshall Islands are based on U.S. maritime law, particularly the U.S. Ship Mortgage Act, a feature that makes these legal regimes both familiar and predictable to many in the industry. For transactional purposes, this means that major international banks and other sources of funding are very comfortable investing in ships entered in open registries and that certain U.S. maritime law firms are ideally suited to handle transactions involving issues of Liberian or Marshall Islands law, including issuing Liberian or Marshall Islands legal opinions in support of asset-based loans.

The United States Flag: A Closed Registry The United States is a typical example of a country that operates a closed registry. In order for a vessel to fly the U.S. flag, she must be built in the U.S., owned by Americans, and crewed by U.S. citizens (a very limited amount of nonU.S. content, ownership interest and crew is allowed). The legislation setting out these requirements, colloquially known as the Jones Act, was designed to preserve the U.S. merchant marine and to ensure that the U.S. retained

For those interested in trading a ship internationally, open registries such as the Liberian International Ship and Corporate Registry or the Marshall Islands Ship and Corporate Registry may be particularly appealing from an economic and regulatory point of view. This is in part because they often allow vessels to be constructed in places where labor and materials are comparatively less inexpensive and permit owners to select crews from the international labor force. In addition, open registries often

/ August 2013

have tax regimes that apply a yearly levy on ships based only on their size, a tax colloquially known as a tonnage tax. This tax regime usually carries much lower costs for a vessel owner than an income-based tax regime, which can be a key factor in deciding where to flag a ship. Unlike closed registries, where the laws of the flag state are typically enforced by that state, most open registries ensure the quality, safety and environmental standards of their registered fleets by working in conjunction with nongovernmental organizations and the enforcement arms of other countries that regularly inspect ocean going vessels calling in their ports to. If an unsafe condition is found, the inspecting authority can usually prevent the offending vessel from sailing, and the vessel owner usually has to involve an independent third party, called a class society, to certify that any deficiencies discovered have been properly rectified. Moreover, major open registries such as Liberia and the Marshall Islands are cautious in allowing ships to register, avoiding older vessels or those with questionable safety practices or records.

Company: Watson, Farley & Williams Web: www.wfw.com Address: 1133 Avenue of the Americas, 11th Floor, New York, N.Y. 11036 Name: Neil A. Quartaro Email: nquartaro@wfw.com Telephone: +1-212-922-2214 Name: John J. Benson Email: jbenson@wfw.com Telephone: +1-212-922-2235

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Turning Away Investment

2013

M&A AWARDS UK Life Science Law Firm of the Year

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Patricia Barclay, Founder of Bonaccord Ecosse Limited, explains the risks of accepting funds from the wrong investor and how turning down prospective funding can be the best decision. After a period when almost any investment was welcome such was the desperation of many a business for funds we are now seeing more of a sellers’ market. In part this is undoubtedly a symptom of improving economies and the wider availability of funds but it is equally a product of businesses becoming more investor savvy and more prepared to consider different business strategies if the “right” sort of funding is not available.

Where an investor requires a seat on the board this should also be carefully considered. Ideally your investor will add valuable expertise and contacts to the Board to the benefit of all but the company needs to consider whether the expertise on offer is relevant to the company at that stage of its development and how much time the investor’s representative is realistically going to be able to contribute. In very small companies personality and the ability to work as part of a team can also be significant factors. If the board member is to receive a fee this also needs to be factored in as recently we have seen unrealistically high investors’ fees for on going “monitoring” and the services of a non executive director – are you going to get true value for your money ( and equity)?

We have had several clients turn down prospective funding in recent months. It has not been because there is anything “wrong” with the prospective investors but more a question of fit. So why would you turn down a much needed investment on commercially attractive terms from experienced businessmen? Most frequently this will be because of different ideas as to the preferred strategy of the company or over how and when an exit is to be achieved. Everyone needs to be completely honest about their goals on these key points right from the beginning – if either party is fudging then the other should be very wary about what they are getting into. The ultimate exit will require very different business plans from the start and so it is in no one’s interest to avoid a clear discussion on the point or to assume it can be discussed later or that any disagreement will resolve over time. Such an approach is a recipe for later discord and we believe reduced returns.

We primarily work with science based companies where there is often a high development risk and so if prospective investors are not sectorial specialised funds or individual investors with industry knowledge there can be fears that the risk profile has not been truly understood. Recently new angel groups have sprung up that aim to broaden the investor base to the comfortably off rather than just the wealthy and they are doing a fantastic job in bringing in new investors and greatly expanding the sums available to young companies. However their priorities in the negotiations sometimes give rise to concerns that neither the managers nor by reflection at least some of the investors have always understood the nature of the risks in science based businesses. Now it is easy to say caveat emptor but if your investor - who will likely have been granted substantial rights as part of a subscription agreement does not really understand the risks then when something goes wrong

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/ August 2013

and the results are not as you had hoped then you can be faced with a very difficult situation. One option of course may be to try and educate your investor before you take the money but this is not something we have seen widely adopted. While the recovery in many countries remains fragile it may be a brave step to turn away a prospective investor but businesses must look to the long term and if they can should carefully consider what other options may be available to them before taking on the “wrong” investor. For further information or to talk to a lawyer in confidence and without obligation please contact enquiries@bonaccord.eu or telephone +44 131 202 6527

Company: Bonaccord Ecosse Limited Name: Patricia Barclay Email: patricia@bonaccord.eu Web: www.bonaccord.eu Address: 31 Merchiston Park, Edinburgh EH10 4PW Telephone: +44 (0) 131 202 6527

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Regional Focus

Regional Focus Acquisition International highlights key issues in a variety of jurisdictions from around the world, with expert commentary from leading players. Our expert panel includes professionals from leading firms such as Baker & McKenzie LLP, Barral M Jorge & Associates, MB Lawyers Pty Limited and 23 Essex Street Chambers. This month we discuss company formations in Paraguay, immigration issues in Australia, the captive insurance industry in Mexico and the Licensed Access Scheme in the UK, amongst others.

A Step by Step Guide to Forming Companies in Paraguay Those with money to invest have a world of choice within which to capitalise on an investment. Importantly, in order to maximise the return on such opportunities, investors have to not only understand the market but understand how to trade in that environment once the initial investment has been made. This requires expertise in the initial formation process and beyond. Acquisition International speaks to Berkemeyer Attorneys & Counselors to learn more about the company formations process in Paraguay. ------------------------------------------------------------------------

Lourdes Breuer is a Senior Partner and Head of the Corporate and Commercial Department at Berkemeyer Attorneys & Counselors. Magali Rodriguez –Alcalá is an Associate Attorney in the Corporate and Commercial Department. Established in 1951, Berkemeyer Attorneys & Counselors has since provided expert legal services to local and foreign clients, gaining a global reputation for quality, expertise and professionalism. The Paraguayan legal regime provides several options for companies to operate in the country. The decision of which legal vehicle to be used depends on the needs of the company and the kind of activities to be performed. Mrs. Breuer explained that Paraguayan Civil Laws regulate many types of businesses associations such as: Simple Partnerships, General Partnerships, Limited Partnerships, Limited Stock. However, the most common forms adopted are Stock Companies – Corporations (S.A) and Limited Liability Companies (SRL). “Paraguay is known for possessing flexible rules and regulations that foster business growth and expansion for both local and foreign investing actors basing its economic system in free trade, release of taxes on investments, free movement of capitals and the lowest tax burdens in the region,” she commented.

ACQUISITION INTERNATIONAL

She highlighted the following guarantees and incentives for investors: Equal treatment for national and foreign investors: Foreign investors may engage in business as individuals or partnerships and are entitled with the same rights as those foreseen for nationals. Right to own property: Both national and foreign investors may acquire properties in Paraguay, without any limitations other to those established in the Constitution and other Laws. Free market: • Freedom of production and commercialization of goods and services in general, •

•

Free system of prices, with the exception of those goods and services whose production and commercialization is regulated by Law; and,

“Furthermore, Paraguay counts with Law 60/90 – of Tax incentives, which establishes a fiscal incentives regime to promote economic development that allows both national and foreign investors to present investment projects and apply for the tax exemptions set for in the Tax Incentives Law,” added Mrs Breuer. The Maquila Regime Ms Rodriguez –Alcalá explained that the Maquila regime is characterised for subcontracting for the productive processing and re-export of goods & services produced in Paraguay, while the country benefits with the opening of company, hiring of national labour resources, investors have the following benefits: 1. 1% Single Tax levied over the added value through the operations in Paraguay; 2. Tax suspension over temporary import of Capital Goods, Raw Materials, Parts and Components.

Freedom in the importation and exportation of goods and services, with the exception of those prohibited by Law.

Free exchange system: The foreign exchange regime this allows the unlimited convertibility of local currency into foreign exchange and, coupled with the liberty of unlimited remittances of capital and dividends, debt services and royalties for the transfer of technology. Liberty to hire investment insurance in the country or abroad. Liberty to choose governing jurisdiction to settle arising disputes.

Company: Berkemeyer Attorneys & Counselors Name: Lourdes Breuer Email: Lourdes.Breuer@berke.com.py Web: www.berke.com.py Address: Benjamin Constant 835, Jacaranda Building, Asuncion – Paraguay Telephone: (+595 21) 446-706

August 2013 /

SECTOR SPOTLIGHT: Regional Focus

Exploring the Captive Insurance Industry in Mexico Generally speaking, the captive insurance industry is enjoying a period of growth as the number of regions, firms and individuals with captive ambitions has increased. It comes as no surprise that demand has increased; after all captive insurance companies provide a variety of financial and business benefits for many multinational enterprises wanting to insure risks. Acquisition International investigates the current industry issues and opportunities in Mexico, with commentary from the Rainmaker Group. ------------------------------------------------------------------------

Gabriel Holschneider Osuna is the President of The Rainmaker Group.

creative risk management and administration strategy that generate stronger and improved corporate results.”

-----------------------------------------------------------------------Prior to founding Rainmaker, Mr Osuna worked as a legal and financial consultant in private equity, commercial arbitration and international transactions designing corporate structures. He has been a member of the board of directors of: Seguros Atlas, Desarrolladora Sierra del Mar, Denos partner Limited and Fondo Mexicano para la Conservación.

The Rainmaker Group focuses on the Carribbean islands, especially Barbados and Bermuda. Vermont and Luxembourg all play relevant roles for the group. Commenting on the local laws and regulations within these focus jurisdictions, Mr Osuna highlighted the Barbados’ Insurance Act which became law in 1998.

“Our fresh, cut-through approach to the way insurance is packaged guarantees important savings while giving clients control over the risk-cost basis,” said Mr Osuna. “To accomplish this objective we provide services, that bring together the intellectual capital and infrastructure required to create tailored solutions that comply with the complex needs (regulatory, tax, legal, compliance, etc) of the global market place.” Discussing the phenomenal growth in the number of captive insurance companies, Mr Osuna stated that “technology has modified our world.” He noted that that instant communication and the multiple and accessible channels that facilitate it can bring direct access to global markets to a client. “Intermediation is less necessary as more direct connections are established,” he elaborated. “In addition, by using a

“In 2001, Protected (Segregated) Cell Company and Branch Office Legislation were added, providing a full complement of options, and reinforcing Barbados’ position as a leader among world captive insurance domiciles,” he observed. “This legislation give a solid regulatory framework that can be easily accepted by foreign regulators and auditors within international companies.” Captives have become a vital part of large companies’ risk management strategy, and Mr Osuna stated that they help clients to be in direct contact with Risk Markets, get better conditions and select the reinsurers that participate on their account. “The price can then be negotiated and credit risk can be mitigated,” he continued. “It helps then, to integrally administer the risk and have a deeper knowledge of the company’s risk profile. It also brings new business opportunities.”

Finally, Mr Osuna stated that the global economic crisis and the increasing regulation in terms of insurance have forced local insurance companies to have a higher requirement of capital. “Limited capacities and less exposure have made the insurance cost more expensive for many companies, which risk at the end, are allocated in reinsurance markets. The knowledge of this has supported the idea of having a direct contact to the reinsurance market, one of the main benefits of having a Captive Company,” he concluded.

Company: Rainmaker Group Name: Gabriel Holschneider Email: gho@rainmakergroup.org Web Address: www.rainmakergroup.org Address: Monte Libano 235 – 401, Mexico City, Mexico Telephone: +52 55 5202 1030

Corporate Immigration in Australia: Issues and Challenges in the Current Economy 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. MB Lawyers Pty Limited gives Acquisition International some insight into the key immigration issues in Australia. MB Lawyers in an Australian law firm exclusively practicing in Australian immigration law. The firm has two core practice areas: corporate immigration practice and personal immigration practice. Its corporate immigration practice is dedicated to servicing businesses and corporations with visa requirements to enable global mobility. The firm is headed by Marsha Bassily, a Solicitor and Registered Migration Agent in Australia. Marsha frequently provides CPD training to other migration agents and lawyers in the area of corporate visas – Subclass 457 and Employer Nominated Visas. Marsha specialises and is passionate about assisting Corporations and businesses as to advising and arranging work visas, visa choices, visa planning and monitoring/compliance. Marsha explains what sets MB Lawyers apart from the competition. “Our passion means we can provide experienced and accurate advice and services to companies. Or clients range from small business, Government bodies, and Fortune 500 Companies. “We understand that global immigration requires assistance with other facets of relocation and migration. We have reliable relationships with leading advisors in global and local tax, finance, health, relocation, recruitment, train-ing and settlement services. Understanding the whole pic-ture means our Clients access leading advice and assistance.”

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Marsha continues to explain how the firm assists clients with strategic and immigration solutions to help them achieve and maintain a competitive edge. “Immigration solutions also provide Companies the possibility to take their competiveness to the next level. Recruiting international talent allows business the opportunity to introduce global talent and international expertise to the mix of their skill set and services or products offered to the market.

seeking to exploit the program or favour international labour force over local labour. The changes will expand the powers of the Department to make further enquiry in applications which do not appear to be genuine or offer market rates salaries. The Government will also introduce legislation to allow the Australian Fair Work Ombudsmen, and independent statutory office created by the Fair Work Act 2009 to promote harmonious, productive and cooperative workplace relations and ensuring compliance with Commonwealth workplace laws, to review and monitor Companies.”

“We assist companies to ensure compliance with Migration Law. The legislation imposes obligations on Companies hiring foreign workers and severe sanctions arise for noncompliance. An extreme penalty is the bar on the ability to sponsor foreign worker for findings of breach. This can have devastating effects on a Company that relies on expatriates to complete a specific project or indeed, the overall success of the Company in terms of defining its competitiveness.” The Australian government has flagged changes to the Subclass 457 work visa program to take effect 1 July 2013, as Marsha explains. “The Government has asserted that these changes are aimed at strengthening the integrity of the work visa program by adding extra measures to the market rates and genuine position provisions. The changes are intended to discourage and regulate rogue employers

Company: MB LAWYERS Name: Marsha Bassily Email: mbassily@mbls.com.au Web: www.mbls.com.au Address: Level 10, 189 Kent Street, SYDNEY NSW 2000, Australia Telephone: +61 2 8999 8012

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SECTOR SPOTLIGHT: Regional Focus

ACQUISITION INTERNATIONAL

August 2013 /

SECTOR SPOTLIGHT: Regional Focus

DUMA Electrics

Established in 2000 DUMA Electrics Ltd provides industrial solutions in the field of control systems and electric energy management. DUMA Electrics is a services oriented company specialising in industrial automation and electric energy management. OUR VISION - To become a major player in the development of industry through implementation of industrial technology in Malawi and eventually extend our services to neighbouring countries in the near future. OUR GOAL - To provide professional industrial services in control, automation and electric energy management through quality products and services. MISSION STATEMENT - To bring to the Malawian Industrialists solutions in Industrial Control & Automation and Electric Energy Management especially during this time of Industrial revolution. Through our products’ suppliers world wide we want to remain better placed to provide information regarding new development in industrial technology in industrial control, power distribution and electric energy management.

www.dumaelectrics.com CONTACT T +507 396-5990 F +507 396-5991 Edificio Magel, Segundo Piso, Ave. Samuel Lewis, Urbanización Obarrio, Ciudad de Panamá, República de Panamá.

www.aal-law.com ARIAS, ABREGO, LÓPEZ & NORIEGA (AALN) Arias, Abrego, López & Noriega (AALN) is a firm established in Panama, dedicated to provide tailormade legal solutions, covering a wide range of services designed to build confidence, profits and success. The personalized treatment, vision, and commitment of our lawyers, are the added value that will generate a long-term relationship.

/ August 2013

+ OUR SERVICES - - - - - - -

International Law Corporate Law Tax Law Banking and Financial Law Immigration Law IP Law Civil, Commercial and International Litigation

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SECTOR SPOTLIGHT: Regional Focus

International Trade: Mitigating the Risks & Maximising the Opportunities of Trading Globally Trading internationally can open many new avenues for a business and allow access to a broader scope of clients. However, increasing trade volumes together with greater scrutiny of cross border flows and a focus on compliance with export controls and import regulations, the senior management of a business can find themselves faced with some rather complex and costly challenges. Acquisition International speaks to members of Barral M Jorge & Associates to examine the impact of international trade in Brazil. ------------------------------------------------------------------------

Welber Barral is the Managing Partner of Barral M Jorge & Associates, an independent consulting firm specialised in International Trade, Corporate Intelligence and Government Relations. Renata Vargas Amaral is a Partner at the firm. -----------------------------------------------------------------------According to Mr Barral, the main challenges of trading globally include the different standards, proliferation of private patterns as a consequence of global value chains, the proliferation of government regulations and legal security. “It is important to highlight that trade facilitation – how procedures and controls governing the movement of goods across national borders can be improved to reduce associated cost burdens and maximise efficiency while safeguarding legitimate regulatory objectives – is a major issue for the World Trade Organisation Bali Conference in December 2013,” he said. Ms Amaral highlighted the firm’s interdisciplinary team, which includes lawyers, economists, government relations experts and international relations experts. Most of the firm’s staff previously worked in the government and/or international organisations. Moreover, several members of the office have an international degree and a deep knowledge of the

international/multilateral trade instruments and regulations, such as the partners Welber Barral and Renata Amaral. “We can provide a wide range of services that are interconnected, from legal opinions to trade negotiations and market intelligence, trade remedies, international trade assistance, government relations, corporate affairs, market analysis, logistics and supply chain, business affairs and ex-tariff claims, among others,” she commented. “Also, as many of our clients are ‘foreigners’, we have already a deep expertise in knowing their concerns and finding solutions to move up to a higher level of trading globally.” Mr Barral described international trade as the firm’s “daily work”. Most of the team, including Mr Barral – former Secretary of International Trade during the Lula’s administration – and Miguel Jorge – former Minister of Development & Industry, came either from the Ministry of Development, Industry and Foreign Trade or from the Ministry of Foreign Affairs. “Our clients are both national and multinational companies, and out work involves trade negotiations and market intelligence, trade remedies cases (including cases at the WTO), international trade assistance, and lobbying in Brasilia,” he concluded.

Company: Barral M Jorge & Associates Web: www.barralmjorge.com.br Address: SAS, Quadra 3, Lote 3, Bloco C, Salas 616/620, Brasília – DF – Brasil, CEP: 70070-934 Telephone: +55 61 32232700 Name: Welber Barral Name: Renata Vargas Amaral Email: Renata.amaral@barralmjorge.com.br

Introducing the Licensed Access Scheme in the UK The licensed access scheme allows direct access to a barrister, recognising that there are significant areas of work in which the traditional solicitor referral approach may be unnecessary and simply increase the overall cost. By providing those with the knowledge and skill set the ability to be able to communicate direct with a barrister it saves the client money, the solicitor time and ensures that the Bar remains competitive. 23 Essex Street Chambers gives Acquisition International some insight into the scheme. -----------------------------------------------------------------------Rupert Pardoe is a Barrister at 23 Essex Street, London. -----------------------------------------------------------------------Mr Pardoe has been in private practice since 1985, specialising in defence of allegations of serious crime with emphasis on white collar crime. Mr Pardoe was awarded Acquisition International’s UK Fraud Lawyer of the Year 2012 and International UK Criminal Litigation Barrister of the Year 2013. He is authorised for licensed direct access work for five years. His recent experience includes regulatory and criminal investigations involving: • Film Tax Credit and VAT fraud; • Breach of export control over sale of military equipment to Southern Sudan; • Carousel/Missing Trade fraud; • High yield investment scheme fraud; • Offences arising out of insolvency and prohibition on acting in management of companies; • Insurance fraud arising out of road traffic accident claims; • Company fraudulent trading;

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Fraud arising out of alleged breach of property maintenance contract within the field of social housing.

He is listed in Chambers & Partners 2014 as a Leader at the Bar in two distinct fields of Criminal Law and Regulatory law and practice. In order to be granted direct access approved status, a barrister must undergo a training course and have certain procedures in place in order to deal with the additional demands of direct access work. Mr Pardoe accepts direct access instructions from those who feel they may face criminal proceedings at the pre charge stage. He also acts on a direct access basis for those involved in non-criminal proceedings brought by regulatory bodies. He does not believe that a client requires any particular skills in a direct access relationship over those where a solicitor is involved. He advises clients to evaluate a barrister’s expertise in the relevant field and their reputation, which must be balanced against the hourly rate charged.

“In the direct access cases I have undertaken I have seen no detriment and considerable financial advantage to the lay client,” observed Mr Pardoe. “If the barrister takes the view that the complexity of the case or issues is high then there is a duty to inform the client that they should instruct a solicitor as well. It is currently not possible to act in a contested criminal trial on a direct access basis.”

23es Chambers: 23 Essex Street Chambers Name: Rupert Pardoe Email: rupertpardoe@23es.com Web: www.23es.com Address: 23 Essex Street, London, WC2R 3AA Telephone: +44 (0) 207 413 4653

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SECTOR SPOTLIGHT: The New Rising Stars

The New Rising Stars For so long now the world’s leading entrepreneurs and business professionals have turned to the BRIC nations in order to take advantage of overseas growth, however with countries such as Brazil, Russia, India and China no longer necessarily providing the best investment opportunities, many are turning to the ‘rising stars’ of the emerging world, Acquisition International speaks to leading business, legal and financial professionals to discuss the benefits of investing in a new ‘rising star’ location, as opposed to the traditionally favoured BRIC nations, as well as examining the challenges that the countries faces as they become more established in the world of foreign investment.

Kenya ------------------------------------------------------------------------

Mohamed K Mazrui is the Managing Partner of M K Mazrui & Associates. ------------------------------------------------------------------------

M K Mazrui & Associates was founded in 2007 and provides Audit, Accountancy and Consultancy services. The firm currently employs 22 professional staff and serves over 200 clients spanning all sectors of the economy. Mr Mazrui stated that there is a general slowdown in business in Kenya, which he attributes to the contested general election and the events of the violent 2007 elections, which are still fresh in people’s minds. However, he noted that this is picking up now that the “elections dust” has settled. “Kenya’s development strategy, Vision 2030, which has laid out the development agenda to place the country alongside the developing nations by 2030 is already being implemented,” he observed. “Road infrastructure

/ August 2013

has greatly improved and other development plans, including the construction of a new port and railway line connecting the country to South Sudan, Rwanda and Ethiopia are underway. This provides an enabling business environment. “The recent discovery of big quantities of oil in Northern Kenya, as well as discovery of massive mineral deposits at the Coast, will improve the economic fortunes of the country and provide opportunities for business while creating employment for the locals.” Discussing the benefits of investing in Kenya as a new “Rising Star” location, as opposed to the traditionally favoured BRIC nations, Mr Mazrui highlighted the country’s implementation of a new constitution in 2010. He stated that this addressed all the shortcomings in political governance experienced in the past years, as well as laying out the bill of rights for all citizens. “This gives us hope of better governance which will naturally provide an enabling business environment,” he enthused.

“The new government has embarked on implementing the manifesto which they used in the election campaign. The manifesto promises to tackle critical sectors including infrastructure, economy, etc. The real effects will be felt in later years but the future for Kenya looks promising,” concluded Mr Mazrui.

Company: M K Mazrui & Associates Name: Mohamed K Mazrui Email: mkmazrui@mkmazrui-associates.com Address: P.O. Box 425 – 00202, Nairobi, Kenya Telephone: +254 722 412151

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SECTOR SPOTLIGHT: The New Rising Stars

Rwanda ------------------------------------------------------------------------

Isaac Mockey Bizumuremyi is the Managing Partner of Lex Chambers Ltd. -----------------------------------------------------------------------Rwanda ranks top in the East African and entire Great Lakes region for the ease of doing business in the country. Mr Bizumuremyi stated that it takes a maximum of 24 hours to register a company and to obtain a company incorporation certificate. Property registration, mortgage registration and bank loan applications are processed quickly, in no more than 2 weeks.

open up to 10pm at night and this enables longer hours of business transactions. It is a centre of supplies to Democratic Republic of Congo and Burundi which are two major consumer countries for Rwanda. “Tax incentives to investors are also another conducive factor of the business environment in Rwanda in addition to other investment incentives.” Mr Bizumuremyi stated that Rwanda is not yet industrial independent and has a high reliance on heavy and medium investment equipment, therefore it imports most of the machinery required in certain areas of investment.

He noted that legal reforms to improve the ease of doing business in the country has been underway since 2008 and is continuous.

“Being a landlocked country raises the cost of transport very high,” he observed. “Also, the global recession in the west reduced the number of foreign investors coming into Rwanda.”

“Security is guaranteed and governance levels with low levels of corruption are other favourable factors,” said Mr Bizumuremyi. “The country is striving to become an ICT regional hub which shall make business easy. Banks

A study of the construction of a cargo railway line linking the country with seaport countries in order to reduce the cost of transport is currently underway in Rwanda, with the aim of attracting more foreign investment.

Tanzania ------------------------------------------------------------------------

Dr Angela Thorns is a Partner at Mkono & Co. Advocates. -----------------------------------------------------------------------Mkono & Co. Advocates was founded in 1977 by Honourable Nimrod E. Mkono, MP. Over the years it has developed into a prominent corporate, commercial and financial practice in the East African region and is consistently ranked as the leading law firm in Tanzania by respective international publications.

According to Dr Thorns, Tanzania offers numerous opportunities and presents various challenges for investors. “Understanding the local cultural and business environment as well as the legal and regulatory system is crucial for investors to succeed in their incountry business ventures,” she explained. “Generally, government ministries and regulatory authorities are accessible to investors and open to business.”

Zambia ------------------------------------------------------------------------

Sean van der Maas is the Director of SATIB Insurance Brokers, Zambia. -----------------------------------------------------------------------As a specialist insurance brokerage with over 23 years of risk experience, we are ideally placed to provide expert advice on a diverse range of insurance covers. SATIB has worked hard at establishing relationships in the sub-Saharan continent; we have 11 offices in Southern Africa including Zambia, and insurance relationships covering key business areas to the north, as well as the Indian Ocean islands. SATIB has become recognized throughout Africa as a symbol of quality in risk transfer programmes, with A+ rated insurer security, prompt claims settlement and efficient, personal service. Zambia’s recent growth driven by expansion in agriculture, construction, manufacturing, transport and finance. Economic prospects for the future appear bright if growth is sustained. A few factors seem to be driving this.

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“Also a free tax zone has been allocated and a few investors have completed their industries in the free zone. The tax regime has been revised to allow SMEs to enjoy more tax flat rates in a given bracket of returns. This shall help SMEs to make huge savings for bigger investments,” concluded Mr Bizumuremyi.

Tanzania has been undergoing economic and structural reforms for several years, and Dr Thorns noted that the country is experiencing tangible results in specific sectors such as telecommunications and banking. In the latter, steady growth has been witnessed since the industry was liberalised, resulting in improved services and mobilisation of significant financial resources and competition. According to the latest figures published by the Bank of Tanzania, a total of 52 banks and financial institutions have been licensed to operate in Tanzania. “The introduction of public procurement and public private partnership laws and regulations in recent years is aimed to encourage foreign investors to consider Tanzania as a stable place for developing and expanding their business,” continued Dr Thorns. “A co-ordination unit was specifically set up to consider and coordinate all public private partnerships in Tanzania so as to facilitate such projects. Legislative changes are in the pipeline to make unsolicited public private partnership proposals more attractive to investors. “Tanzania’s rich agricultural, mineral and gas resources continue to be a major attraction to investors. Growth

Within the agricultural sector, the government’s input subsidy to smallholder farmers will continue whilst larger commercial farming is increasing. Growth in construction and transport will benefit from the government’s Link 8000 road infrastructure project, which looks to add to and improve existing road networks. Expansion in energy infrastructure will also be important to fuel further growth. The country is dependent on copper mining - 80% of foreign exchange earnings but only 6% of total revenues. Diversification from pure export of copper is widely viewed as essential to maintain growth and establishment of a copper processing and manufacturing industry could be key. Copper mining is expected to rebound in 2013, and is projected to reach 1.5 million tonnes by 2015. Tourism has been relatively flat due to the global economic crisis and hunting has been banned whilst government takes stock of its natural resource inventory in this sector. The retail sector is increasing to take advantage of growing middle class with an influx of major South African chains. Subsidies on maize and fuel were abolished in 2013 and will affect inflation figures. Minimum wage increased late in 2012 and will affect costs of production and employment levels for 2013

Company: Lex Chambers Ltd Name: Isaac M Bizumuremyi Email: Isaac@isaacchambers.net Web: www.isaacchambers.net Address: 52 KG 4 Street, Kimironko, Kigali. Box 6562 Kigali Telephone: +250 7883 00 983

projections have been boosted substantially following significant natural gas discoveries resulting in energy companies, oilfield service companies and associated support companies seeking new business opportunities in Tanzania,” she concluded.

Company: Mkono & Co. Advocates Name: Angela Thorns Email: angela.thorns@mkono.com Web: www.mkono.com Address: 8th Floor, EXIM tower, Ghana Avenue, P.O. Box 4369, Dar Es Salaam, Tanzania. Telephone: (+255 22) 2194200; 211 8789; 211 8790;

Growth rates and potential returns on capital still higher than in developed world and the more traditional BRIC nations as confirmed at the recent EEC. Africa is the second largest continent in the world, as far as the number of residents is concerned. It has the lowest urbanization rate, the highest natural growth and the lowest GDP per capita, but if offers the highest returns on investment.

Company: SATIB Insurance Brokers, Zambia Name: Sean van der Maas Email: svandermaas@satib.com Web: www.satib.com Telephone: +260 211 262327

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SECTOR SPOTLIGHT: The New Rising Stars

Sunrise in the Serengeti, Tanzania

OTHER EXPERTS IN THIS AREA Company: Kibuuka Law Chambers Name: Paul Kibuuka Email: info@kibuukalaw.com Web: www.kibuukalaw.com Address: Ground Floor, Kilwa House, 369 Toure Drive, Oysterbay, PO Box 38044 Telephone: +255 222 296101 Paul Kibuuka is the Founder & Managing Partner of Kibuuka Law Chambers. He is regularly consulted by entrepreneurs, business executives, and professionals from Tanzania, the East African region, and beyond on the legal aspects of the full range of business transactions.

Crest Attorneys Company: Crest Attorneys Name: Martin Matunda Email: rwelutz@yahoo.com Telephone: +255713662133

Headquartered in Dar es Salaam, on the shores of Eastern Africa off the Indian Ocean, Kibuuka Law Chambers is a highly specialized Tanzania-based East African corporate, commercial and financial law firm. Rapid changes in the Tanzanian and East African legal systems require organizations working in or with Tanzania and/or the East African region to seek legal services of the highest quality. Kibuuka Law Chambers is experienced in providing valuable assistance in our region’s business legal environment to cater to your needs and expectations. Our team of first-rate lawyers is ever ready to serve you with the best-in-class service and in the most courteous, professional and proactive manner that you could expect. At Kibuuka Law Chambers, we are committed to providing unparalleled services to you. Our many diverse connections with Government authorities and agencies in Tanzania and East Africa allow us to stay up-to-date with legal developments and changes that are likely to impact your business, project or investment activities.

Monika and her team of accountants at Amazon Associates are committed to the ongoing provision of relevant and value added services to the clients by ensuring that they carry out the assignment in an efficient and effective manner. Sharing their extensive experience and knowledge acquired over the years and recommending best practices of internal controls applied under the circumstances. Establishing a long standing “partnering” relationship with the clients and their management team at all levels while maintaining independence; Devoting personal attention, skill and care clients expect from us.

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Monika Kumar – Email: monikak@iconnect.zm Phone: +260 211 955 766618 / +260 211 975 766618 Amazon Associates Plot 6004 Sibweni Road Northmead P.O.Box 32001 LUSAKA +260 211 291089

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SECTOR SPOTLIGHT:

Foreign Direct Investment

Foreign Direct Investment In 2007 cross-border investment flows reached an unparalleled high of $2 trillion as global corporations made the most of strongly performing international markets. In the 5 years to follow the housing market collapsed, we’ve had an international banking crisis and we have experienced record levels of unemployment. This combination created severe economic contraction affecting all corners of the globe and had a massive impact on the global flow of Foreign Direct Investment. In the years since, patterns of FDI have been patchy to say the least and unsurprisingly investors remain wary, however according to both the 2012 A.T. Kearney FDI Confidence Index and the World Investment Report 2012 by the United Nations Conference on Trade and Development, flows of investment have shown signs of recovery. Government leaders across the board are keen to attract FDI, it can help to reign in fiscal deficit, provide employment and support economic growth. Acquisition International speaks to experts from around the world to discuss current levels of FDI and the opportunities within their jurisdictions. ------------------------------------------------------------------------

Ben Lowther is a Director at Newman Lowther & Associates (NLA). ------------------------------------------------------------------------

Mr Lowther co-founded NLA formally in 2006 in partnership with Jan Newman. The firm is focused on providing cross-border/domestic M&A advisory services to South African and international clients in respect of corporate transactions in South Africa and the surrounding region. NLA also has a strategic relationship with Nomura, the pre-eminent Asian-based investment bank, which allows it to services clients on a global basis. Commenting on growth dynamics in Sub-Saharan Africa since 2008, Mr Lowther noted that, while in aggregate growth in the region has been fairly strong, it has not been consistent across the various countries in the region. “However, where growth has been above average, this has predominately come as a result of relevant governments adopting more pro-investment policies (e.g. more relaxed labour markets, well-executed growth stimuli), together with predictable and well understood monetary and fiscal policies,” he elaborated.

“Political stability has played a role in providing the platform for such growth, but has not contributed to additional growth itself.” Commenting on the current business environment in South Africa and the region’s approach to foreign direct investment, Mr Lowther noted that there appears to be consistent encouragement for permanent sources of foreign direct investment, rather than portfolio flows. However, this encouragement is also uneven across countries and governments in Sub-Saharan Africa. “Consistency of policy framework and application can be lacking, and the manner in which government departments interpret growth objectives can be contradictory, impeding the very growth they are hoping to encourage,” he added. Mr Lowther predicts that South Africa will achieve only relatively meagre growth in 2013, as the effects of issues in the local mining industry are felt across the wider economy. “Consumers in South Africa also remain under pressure, which will dampen another key growth engine of the economy, so growth in 2013 is likely to remain fairly subdued.

“Future growth characteristics for South Africa are likely to remain dependent on the recovery of the global economy, as well as the government’s ability to stimulate growth internally (but without major policy shifts, this appears unlikely in the near term),” he concluded.

Company: Newman Lowther & Associates (NLA) Name: Ben Lowther Email: ben.lowther@nla.za.com Web: www.nla.za.com Address: 1st floor, Kildare House, The Oval, 1 Oakdale Road, Newlands 7700, Cape Town Telephone: +27 21 673 7000

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Tin Ohnmar Tun heads The Law Chambers. -----------------------------------------------------------------------Myanmar is considered one of the last frontiers in Asia, where global investors find it exciting, intriguing and challenging. Being a country that is still using basic laws which are British Common law system, it will be quite familiar with western investors. Today, the only qualified marine lawyer in private practice for over 30 years heads the office, along with 12 associates, representing a mixture of overseas clients. The most attractive pull feature will be abundance of unskilled labors, low wages, and Myanmar hospitality. Foreigners should invest in businesses such as, manufacturing factories, hospitality, construction, hospitals, and agriculture; which would create jobs for locals. Oil and gas are the main attraction. There is so much room for investment in

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transport, communications, education, health care and shipping as well as port development. If more investors are prepared to train unskilled laborers, and promote further training to the skilled, opportunities to engage properly trained laborers are limitless. Only if the government is prepared to admit that there is a need for assistance from the international organizations as well as private investors, the changes and improvements will be slow and painful. We need genuine and direct investors. We need full cooperation from the key people in the industries, but what we are seeing now is the escalating costs on land lease, housing accommodations, and too many middlemen today. More private investors and individuals are involved assisting the government to make them understand the need for appropriate laws, regulations and systems we need, in order to attract the foreign investors with a legal system that will protect their rights as well as give them an opportunity to profit reasonably from their investments.

The Law Chambers Company: The Law Chambers Name: Tin Ohnmar Tun Email: law_chambers@seasiren.com.mm Web: www.thelawchambersmm.com Address: Room: 305/306, Building (A), Tetkatho Yeikmon Housing, No. 25 (D), New University Avenue Road, Bahan Township, Yangon, Myanmar Telephone: +95 1 557 990

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SECTOR SPOTLIGHT:

Foreign Direct Investment ------------------------------------------------------------------------

Ken Cheung is a Partner at Berwin Leighton Paisner. Dax Lim is an Associate at the firm. -----------------------------------------------------------------------Berwin Leighton Paisner LLP (BLP) is an international law firm with over 850 fee earners including more than 200 partners. BLP has developed a leading Myanmar practice with a team of dedicated lawyers and consultants. We have an active onthe-ground presence in Myanmar and are regularly in both Yangon and Naypyidaw. With a population of approximately 60 million, a young and hardworking labour force, rich in natural resources, blessed with a coastline and flanked by the world’s emerging powerhouses China and India, Myanmar presents a strategically attractive investment proposition. Foreign investment To facilitate much-needed foreign investment into the country, a new Foreign Investment Law was enacted on 2 November 2012 following a protracted passage through parliament (together with the implementing regulations issued on 31 January 2013, the “FIL”). The FIL replaces the

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Jamie Cummiskey is a Regional Director at Interactive Myanmar. ------------------------------------------------------------------------

Interactive Myanmar focuses on corporate and commercial law in Myanmar. Our services include assistance in negotiating and drafting agreements related to mining, oil and gas, and energy development projects; joint venture agreements and mixed use commercial and residential real estate developments. Interactive Myanmar is also experienced in setting up limited liability companies or representative offices under the Myanmar Companies Act, or assisting with setting up companies which are approved by the Myanmar Investment Commission and are therefore able to take advantage of a five year profit tax holiday amongst other benefits. James R. Cummiskey Jr. (Jamie) holds a Juris Doctorate from Tulane University School of Law– Louisiana, USA and is a member of the New York Bar

1988 foreign investment law, and the key investor-friendly improvements are: 1. no cap on investment for non-restricted sectors; 2. land leases of up to 50 years, which are extendable by two periods of 10 years; 3. tax benefits including a 5 year tax holiday, a right to carry forward losses after expiry of the tax-exempt period for up to 3 years and exemption from customs duties for machinery, equipment and raw materials; and 4. a guarantee from the Myanmar government that companies operating under the FIL will not be nationalised during the period (or extended period) of the relevant contract. Current socio-political environment Given that the suspension of some sanctions is only temporary and linked to continuing government reforms, the effect of the FIL should be considered in light of the current socio-political environment. Myanmar is undoubtedly at a crossroads in its economic development, and there are a number of opportunities for foreign investors. However, legal and governmental reforms will take time to implement; therefore investors should proceed with caution and obtain professional advice to properly navigate potential risks.

Association. He has over 10 years of legal experience in Southeast Asia, working in Thailand, Cambodia, Laos and Myanmar. Jamie joined Interactive Group as the firm’s Regional Director and leads the firm’s legal services sector with his experience accumulated in the region in respect of the commercial; corporate; international finance; joint venture; real estate and alternative dispute resolution sectors. Jamie has assisted global corporations, international development funds, financial institutions, publically listed companies, and private enterprises with foreign direct investment, cross border transactions and related activities. Jamie offers clients of Interactive Group the benefits of his practical application of his experience and leverage of network throughout the region. Myanmar is rich in natural resources, yet is also in need of infrastructure development, so apart from the well publicized opportunities in the oil and gas, mining, telecommunications and agricultural sectors, there are many additional industries that are in need

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Christopher R. Wall is a Partner at Pillsbury Winthrop Shaw Pittman LLP. Aaron R. Hutman is an Attorney with the firm.

•

What type of business are you considering? Are you investing in new infrastructure or assets on the ground, acquiring a local company to enter the market, dealing in goods/brands, providing services, or investing through a fund? This will impact how and whether you set up a legal entity in Myanmar. How exposed are you or your investors to legal requirements in other jurisdictions like the United States or EU? The United States has a complex sanctions regime still in place with investment reporting requirements, a number of sanctioned individuals, entities and banks, and remaining trade and anti-money laundering restrictions. In addition, anti-corruption laws in the United States and UK targeting activities abroad can be aggressively enforced. Myanmar presents

/ August 2013

of development within the country and we predict additional positive growth in Myanmar as foreign investors actively take up these additional opportunities such as office and mixed use developments and transportation, electricity and telecommunication infrastructure development.

Company: Interactive Myanmar Co. Ltd. Name: Jamie Cummiskey Email: jrc@interactivemyanmar.com Web Address: www.interactivemyanmar.com Address: No. 148/B Dhamma Zedi Road, Bahan Township, Yangon Telephone: +951 513 664

transparency and corruption challenges. Due diligence is critical to avoid legal and reputational risks. •

Will you need to protect intellectual property (IP) or deal with infringing local parties? Foreign trademarks, copyrights and other IP are not recognized under Myanmar law. While Myanmar’s parliament has initiatives pending to improve IP protections, the time frame remains uncertain and there are steps that companies can take now. Myanmar has a longestablished system for protecting local trademarks, which if properly deployed, can provide some strategic protection.

•

Where will you find advice inside and outside of Myanmar as you consider entering the market? Reputations are still being established among the professional community in-country and only a few local law firms or accounting/tax groups have credentials and experience. Often it is helpful to work with international counsel with experience on the ground together with local Myanmar counsel.

-----------------------------------------------------------------------Opportunities abound in the opening Myanmar market, but success requires careful planning to manage business and legal risks. Ask the following: •

Company: Berwin Leighton Paisner LLP Web: www.blplaw.com Name: Ken Cheung Email: ken.cheung@blplaw.com Telephone: +65 6571 6617 Name: Dax Lim Email: dax.lim@blplaw.com Telephone: +65 6571 6621

Sound planning will help distinguish the successful players in this exciting new market.

Company: Pillsbury Winthrop Shaw Pittman LLP Web: www.pillsburylaw.com/myanmarburma Telephone: +1 (202) 663-8000 Name: Christopher R. Wall Email: cwall@pillsburylaw.com Name: Aaron R. Hutman Email: aaron.hutman@pillsburylaw.com

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Foreign Direct Investment ------------------------------------------------------------------------

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Professor Z Sundström Ph.D, LL.D is the Managing Partner at Nordic Law Attorneys-at-Law LL.D.

Jonni Leporanta is Head of Transaction Advisory at Grant Thornton.

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According to Prof. Sundström, the positive impacts of foreign investment on the economy, technology and employment have been noted worldwide.

“As a result, there is intensified competition for foreign investment between nations at all levels of development - the industrial countries among themselves, the developing countries against one another and the industrial and developing countries against each other,” he commented. “In those terms Finland occupies a prime position for investments in Finland.” In terms of the greatest opportunities for investors, Prof. Sundström believes that the engineering and high technology industries once led by Nokia, are still of prime importance. Lucrative investment opportunities are also seen in the cleantech and green industry with lots of new innovations in energy efficiency. “In respect of investments, the Finnish Foreign Service endeavors to increase knowledge abroad about Finland as an attractive target of foreign direct investment (FDI),” continued Prof. Sundström. “The Foreign Service endeavors to enhance Finland’s international visibility among investors with a view to increasing the flow of foreign capital and direct investments in the country. A growing volume of business helps intensify the effectiveness of the economy and encourages the commercialization of innovations. “By expanding and developing the network of Bilateral Investment Agreements, the Finnish Foreign Service seeks to increase and support investments into Finland.” Prof. Sundström stated that, considering the intensified international competition, the Finnish Foreign Service supports the activities of the programme “Invest in Finland” which is the leading expert service organisation promoting foreign direct investment in Finland. “Through a network of diplomatic and consular missions abroad, the Finnish Foreign Service assists the programme “Invest in Finland” in identifying fields of business and target countries that would be of interest for Finland and in contacting clients abroad,” he concluded.

Company: Nordic Law Attorneys-at-Law Ltd. Name: Professor Z Sundström Ph.D, LL.D Email: Zacharias.sundstrom@nordiclaw.fi Web: www.nordiclaw.fi Address: Erottajankatu 5 a 7 00130 Helsinki Telephone: +358(0)96829340

ACQUISITION INTERNATIONAL

The Finland member firm of Grant Thornton provides Assurance, Tax and various Advisory services. The firm employs approximately 60 people in Finland, with locations in Helsinki, Tampere and Turku.

“We combine the international reach, depth and expertise of the large firms with the personal attention, value for money, focus and relationship approach of smaller firms,” said Mr Leporanta. He stated that Finland’s sound and stable legal, regulatory and political operating environment are key factors in the country’s attractiveness for foreign investment, and highlighted its strong expertise and focus on technical innovations, science and technology. He added that the state of government finances is fairly good in the global economic situation when looking at e.g. credit rating or government debt levels. According to Mr Leporanta, the greatest opportunities for investors currently lie in: Cleantech; Technology; Energy; IT/Game Industry; and Healthcare and “well-being”. Discussing the impact of the European crisis and how Finland plans to tackle the effects, Mr Leporanta noted that the country has good resources for research and innovations and stated that it will focus on maintaining a high level of education and governmental support to technical innovations. There will also be tax reforms, especially a decrease in the corporate income tax rate.

In order to maintain growth, Mr Leporanta stated that efforts are being made to create new competitive lines of business in order to create the new jobs needed to replace traditional industrial sectors that have been lost due to structural changes and globalisation. There will be increased co-operation between the private and public sector to create competitive services. The growth of small and medium sized businesses will be encouraged with the provision of access to finance, and there will be a focus on entrepreneurial support and education. Finally, solutions will be found on the labour market to create a healthy balance between the development of productivity and salary levels. In conclusion, Mr Leporanta offered his predictions for Finland in the next 12 months: “According to current forecasts GDP will probably decrease somewhat during 2013, especially industrial production. Uncertainty among consumers and worries about increasing unemployment is likely going to be reflected in private spending and investments. Development of exports will remain modest due to the Eurozone crisis and the wider global economic outlook.”

Company: Grant Thornton Name: Jonni Leporanta Email: jonni.leporanta@fi.gt.com Web: www.gtfinland.com Address: Paciuksenkatu 27, P.O. Box 18, FI-00271 Helsinki, Finland Telephone: +358 (0)9 5123 3386

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Andrew Cotton is a Partner at Hammarström Puhakka Partners. ------------------------------------------------------------------------

Mr Cotton described the current business environment in Finland as “cautiously optimistic”. He noted an upturn in deal activity in the past six months and the firm’s corporate lawyers are currently busy advising on a number of M&A, joint ventures and financing cases. HPP has worked on completed transactions in the technology, mobile, retail, entertainment and leisure, energy and infrastructure and renewable energy sectors in the past 12 months and expects these sectors in addition to life sciences, pharma and e-health to continue to provide work in the medium to long-term. “There has been a lot of activity from overseas corporates and investors looking at getting a foothold in or expanding their presence in Finland,” he commented. “In addition here has been a lot of investment activity into establishing R&D activities in Finland to take advantage of the excellent technical and research capabilities of Finnish companies and educational institutions. Huawei and Samsung have opened R&D centres here in the past 12 months and HPP was pleased to advise Samsung on the opening of its R&D facility.” Given Finland’s traditional reputation as a high tax jurisdiction, which previously was a primary concern for investors considering the country as an opportunity, Mr Cotton believes that the Government’s decision to cut corporation tax from 24% to 20% was clearly aimed at making Finland more attractive from a tax perspective. “It would now be slightly unfair to consider Finland a high tax jurisdiction,” he opined. “It has also invested a lot into promoting Finland as an investment opportunity. For

example, a program to build a brand for Finland has been on-going to give Finland an image when being considered as an investment opportunity. In addition, organisations like Finpro and Invest in Finland are working hard to promote investment opportunities in Finland to overseas investors and HPP has been very pleased to be involved in that process for a number of years.

“At least in the short term, there are a number of sizeable transactions/auction processes which are currently either ongoing or rumoured to be about to come to market which should keep the focus on opportunities in Finland,” he concluded.

Company: Hammarström Puhakka Partners, Attorneys Ltd Name: Andrew Cotton Email: andrew.cotton@hpplaw.fi Web: www.hpplaw.fi Address: Bulevardi 1 A, FI-00100 HELSINKI, Finland Telephone: +358 9 474 21

August 2013 /

SECTOR SPOTLIGHT:

Foreign Direct Investment ------------------------------------------------------------------------

Cameron Kotzé is a Tax Partner at EY Namibia. -----------------------------------------------------------------------The Namibian gross domestic product grew by 4% in 2012 and the expectation for 2013 is very similar. The consumer price index for 2012 was 6, 5% and is expected to remain around this level in 2013. The value of the Namibia Dollar compared to major foreign currencies may push the consumer price index closer to the double digit mark given that Namibia is a major importer of goods that are manufactured in other countries. Fuel prices have increased significantly since the beginning of the year which adds further pressure on the consumer price index. The Namibian Government will introduce legislation soon which taxes the export of natural resources (minerals, fish, game, oil and gas) which has not undergone sufficient beneficiation in Namibia. This legislation is aimed at entrepreneurs to set up processing plants in Namibia so that natural resources undergo a value-added process in Namibia to increase revenue for the fiscus and at the same create job opportunities in Namibia for Namibians to address the high unemployment of the country. The new tax will be known as the export levy. This tax is payable by the exporter of goods at the time the goods are exported and will not exceed 2%. This is in essence a turn over tax. There is an opportunity for entrepreneurs and investors to make use of this opportunity to invest in a business in Namibia which adds value to natural resources mined or harvested. To encourage investors, the Namibian government has attractive incentives such as the export

processing zone (EPZ) legislation and manufacturing incentives in the Income Tax Act. The EPZ legislation exempts the business from various taxes amongst others income tax on profits, customs and excise duties and transfer duties. Employees’ taxes are however payable on salaries paid to employees. In order for the authorities to award EPZ status, the business must manufacture goods and these goods must be exported to countries outside the Southern African Customs Union (South Africa, Botswana, Lesotho and Swaziland); industrial employment must be created by the business and Namibia’s export earnings must be increased as a result of the export of the goods.

Investors that want to seize the current opportunity to establish a production plant in Africa should look at Namibia again as the Government of the country is encouraging development in industries which can add value to natural resources obtained from the country before the goods are exported. Namibia has world class infrastructure, has a stable government and offers a very unique lifestyle for those who live in the country.

The manufacturing status incentives contained in the Income Tax Act are generous and has a significant reduction in the tax that is paid by a business that has this status. The most significant incentive is the 80% reduction in taxable income derived from the export of goods which are manufactured in Namibia. This reduces the effective income tax rate to 6, 6%. The incentives are probably as generous as they are to compensate investors for the fact that Namibia is generally far from consumer markets. It is very unfortunate that the Inland Revenue Directorate has turned the majority of applications down to date. The Directorate has the obligation to collect as much revenue as possible and this has resulted in many applications being turned down. The consequence of this is that investors have not flocked to Namibia to establish their production facilities in the country.

Company: EY Namibia Name: Cameron Kotzé Email: Cameron.Kotze@za.ey.com Web: za.ey.com Address: Cnr Otto Nitzsche and Maritz Streets, Windhoek, Namibia Telephone: +264 61 289 1100

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Kent Wong is a Partner and the Head of Banking & Finance and Capital Markets at VCI Legal. Albane Ferre is a Paralegal with the firm. -----------------------------------------------------------------------Attracting international investments is a major driver in fostering economic growth in Vietnam and the Government has made substantial moves to support FDI inflow into the country. Consequently, Vietnam remains an attractive destination for foreign investors, achieving, despite the global financial crisis, 5.6% growth from global FDI in Q 2, 2013, to reach US$ 5.7 billion in investment. Vietnam attracted 554 new investment projects in Q1 and Q2, 2013 mainly in manufacturing and processing (US$ 9.3 billion), real estate (US$ 420 million) and wholesale and retail (US$ 178 million). Asian countries remain the leading source of FDI with Japan and Singapore representing more than 70% of the total invested capital, followed by Russia with 9.7%. After decisively stabilizing the Vietnamese Dong, the Government’s key policies towards foreign investment has sustained FDI growth in the first half of 2013, including:

l The equitization of state-owned enterprises (“SOEs”) began in 2011 with the target of equitizing 573 SOEs by 2015. The key points in Decision 14/2011/QDTTg are: • Foreign investors are eligible to buy a limited amount of shares in an SOE; • Share acquisitions are limited to 3 strategic investors; • Strategic investors must hold their shareholdings for a minimum of 5 years l Banking system reform with the establishment of an asset management company in July 2013 to resolve US$ 470 million in bad debts and with a reduction of lending interest rates (Decree No. 53/2013/ND-CP). l Tax allowance set to reduce CIT from 25% to 22% from January 2014, followed by 20% CIT beginning from January 2016 (Law No. 32/2013/QH13). l Decision 1601/QD-TTg which approved the scheme which enhances FDI management in Vietnam. Nevertheless, there is still a long way to go. Vietnam’s legal framework remains a work in progress, with many hurdles for foreign investment. Vietnam’s corruption ranking of 123 out of 183 countries, as well as burdensome administrative procedures remain the main obstacles to foreign investment. VCI Legal may assist with the twists and turns that foreign investors face in investing in Vietnam. As a national full service law firm, we provide business and legal services in

corporate, finance, tax and litigation. Our lawyers have an in-depth understanding of the legal system and business environment in Vietnam, as well as international experience which give local insights that meet international expertise.

Company: VCI Legal Name: Kent Wong Email: kentwong@vci-legal.com Web: www.vci-legal.com Address: Suite #501, 5/F, Sailing Tower, 111A Pasteur Street, District 1, Ho Chi Minh City, Vietnam Telephone: +84 838 272 029

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Neeraj Bhagat is the Chief Advisor of Neeraj Bhagat & Company. ------------------------------------------------------------------------

Neeraj Bhagat & Company is a team of distinguished chartered accountants, corporate financial advisors and tax consultants in India. The firm was established in the year 1997 with the aim of providing a wide range of accounting and financial services to clients in India, USA and UK and aspires to be recognised as a quality service provider globally. India possesses richness and diversity of culture and climatic conditions and natural and mineral resources. A new spirit of economic freedom is stirring in India. Today, India is said to be the third largest economy (in terms of purchase power parity) in the world. A series of ambitions economic reforms have deregulated the economy and stimulated domestic and foreign investment. The liberalization program has unleashed

/ August 2013

the vast potential of Indian economy. India’s enduring institutions, which are rooted in the principles of democracy, ensure a transparent, predictable and secure environment for foreign investment. The existence of a free and vibrant press, an independent judiciary, a strong legal and accounting system and the use of English as the principal language of business and administration are some of the attractive features of the business environment. India possesses an abundance of qualified and skilled manpower, which makes it an ideal base for sourcing production, both for export and the huge domestic market. The private sector is the backbone of the economy, accounting for 75% of the GDP. The opening up of the economy, which has resulted in the entry of a large number of foreign companies, together with the increasingly global focus of domestic industry, has resulted in the dynamic growth and increased competitiveness of Indian firms. The role and importance

of the private sector in India’s economic development is rapidly increasing. Today, India is one of the most exciting emerging markets in the world.

Company: Neeraj Bhagat & Company Name: Neeraj Bhagat Email: neeraj@neerajbhagat.com Web: www.neerajbhagat.com Address: S-13, St. Soldier Tower, G-Block Commercial Centre, Vikas Puri, New Delhi 110018, India Telephone: +91 11 28544939

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Foreign Direct Investment ------------------------------------------------------------------------

Carlos E. Alfaro is the Managing Partner of AlfaroAbogados, an international corporate and finance law firm from Argentina with offices in Buenos Aires and New York. ------------------------------------------------------------------------

Mr Alfaro explained that Argentina has adopted a policy of substitution of imports and encouraging foreign and local investors to increase local manufacturing. “Establishing operations in Argentina will give a company access to the Mercosur region with practically no tariffs (Argentina, Brazil, Uruguay, Paraguay and now Venezuela), which makes Mercosur the fourth largest market in the world,” he commented. According to the report filed by the Economic Commission for Latin American and the Caribbean (Comisión Económica para América Latina y el Caribe -Cepal-) of May of 2013, Argentina’s foreign direct investment in 2012 reached its highest record in the last decade. The report states that in 2012, US$12.551 million were invested in Argentina. Mr Alfaro explained that this represents a 27% increase compared to 2011, which had also been a very good year for investments due to the inbound of U.S. $9.882 million. “In this way, Argentina is well located in the fifth largest regional investment destination behind Brazil, Chile (U.S. $ 30.323 million), Colombia (U.S. $15.823 million) and Mexico (U.S. $12.659 million),” he commented. The report highlights the Industrial & Commercial Bank of China’s (ICBC) purchase of 80% of Standard

“It is interesting to note that the sectorial composition of accumulated FDI in the country indicated that, by the end of 2011, the sector with the largest transnational corporations (in Argentina) was the oil tanker, with 20%, while another six% correspond to the mining field, 44% to the sector of industry and agriculture and 30% to the services sector,” he observed. Bank Argentina and Australia’s QBE Insurance Group’s acquisition of HSBC Insurance Company as major investments of 2012. It also highlights the increase of Brazilian capital in Argentine food and oil companies. “It is interesting to note that the sectorial composition of accumulated FDI in the country indicated that, by the end of 2011, the sector with the largest transnational corporations (in Argentina) was the oil tanker, with 20%, while another six% correspond to the mining field, 44% to the sector of industry and agriculture and 30% to the services sector,” he observed. “The level of foreign investment in Argentina has grown in a notorious and steady way during the last years. Investments not only increased in 2012 and 2011 but also in 2010. During this last year FDI increased 57.7% compared to 2009 (from U.S. $ 4.017 million jumped to U.S. $ 6.337 million). Though in 2008, right before the international crisis, Argentina registered a foreign investment of U.S. $9.726 million.” Looking ahead, Mr Alfaro believes that there are certain areas that will definitely attract FDI, such as energy, oil and gas and the automobile industry. He added that Argentina has the second largest reserve of shale in the

world and the government is promoting investments in this sector. “In the internal market Argentina is holding mid-term elections in October 2013. These elections are crucial to determine whether the present Government retains the majority in the Congress or not. With respect to abroad, the result of the law suit against Argentina by holdout debtors in New York may cause financial turbulence in the stock and bond market of Argentina affecting its financial capabilities,” he concluded.

Company: Alfaro-Abogados Name: Carlos E. Alfaro Email: cealfaro@alfarolaw.com Web: www.alfarolaw.com Address: Av. del Libertador 498, (C1001ABR) Buenos Aires, Argentina Telephone: +54 11 4393 3003

Attracting Sustainable FDI ------------------------------------------------------------------------

Ofotsu A. Tetteh-Kujorjie is a Cross-Border Counsel at Mkono & Co. Advocates in association with SNR Denton. ------------------------------------------------------------------------

Tanzania is the leading FDI destination in the East Africa region. The total FDI stock in Tanzania exceeded US$6 billion in the last decade. Mr Tetteh-Kujorjie stated that Tanzania has improved its overall legal framework for investment in recent years. He noted that the government is engaged in advertisement of its investment opportunities in the country and abroad. “In this regard, Tanzania has participated and hosted many international investment forums,” he commented. “These forums provide foreign investors with the opportunity to explore investment opportunities in the country and to meet with their potential domestic counterparts.” Mr Tetteh-Kujorjie noted that, importantly, Tanzania is a party to a number of bilateral and multilateral international treaties, including the Multilateral Investment Guarantee Agency (MIGA). “These arrangements guarantee the security of FDI against losses arising from armed conflict or international disorder and protection against nationalisation,” he observed. “Further, they ensure transfer of profit, dividends and capital.”

ACQUISITION INTERNATIONAL

According to Mr Tetteh-Kujorjie, attractive laws and a predictable investment climate have yielded increasing FDI and domestic investment in Tanzania. In 2008 the TIC registered a total of 871 projects, compared to 550 in 2005, an increase of 36%. However, the impact of global financial crisis led to the registration of 572 and 509 in 2009 and 2010 respectively. Overall the registered projects received a robust response stock inflow amounting to 4706 projects from 2005 to 2011. “The World Investment Report published in 2012 shows that Tanzania took the lead in attracting FDI in the East African region during the past year, attracting a record US$1.1 billion,” he elaborated. “The same report highlighted that between June 2011 and June 2012, Tanzania overtook Kenya, the region’s largest economy, indicating the high confidence among foreign investors in Tanzania and also indicated that for the past three years, Tanzania has attracted about 47% of all FDI inflows into the five East African countries.” With its peaceful traditions, strong macroeconomic policies, stable political climate and plentiful natural resources, Mr Tetteh-Kujorjie believes that Tanzania has much to offer foreign investors. He stated that the country has had considerable success in attracting FDI for the year 2012/13, and that the country’s gas reserves have the potential to bolster both the country’s electricity supplies and economic stability.

“While gas potential in Tanzania has largely been under-explored and proven reserves are still under exploited, recent extraction successes at Songo Songo Island and in the Mnazi Bay area point to a promising future in the hydrocarbon sector. Natural gas currently fuels the generation of 450 MW of electricity an operation that consumes 63 million standard cubic feet of gas a day and there are 19 gas to electricity plants in the country connected to the Dar es Salaam natural gas pipeline network. Average industrial consumption of natural gas is around eight million standard cubic feet a day,” he concluded.

Company: Mkono & Co. Advocates in association with SNR Denton Name: Ofotsu A. Tetteh-Kujorjie Email: ofotsu.tetteh-kujorjie@mkono.com Web: www.mkono.com Address: 8th Floor, Exim Tower, Ghana Avenue, P.O. Box 4369, Dar es Salaam, Tanzania Telephone: (+255 22) 211 8789/90/91; (+255 22) 211 4664

August 2013 /

SECTOR SPOTLIGHT:

Partnering with Uganda - A Pipeline to Success?

Partnering with Uganda - A Pipeline to Success? Uganda’s on-going business reforms make it an increasingly attractive place to conduct business and the recent discovery of commercially viable oil reserves is generating huge interest. Keen not to miss out on the action, international law firms are building networks and associations with local firms in the hope of creating one stop shops with the same level of knowledge and service from country to country; however as the pace of development increases so does the demand for local counsel. Where clients have previously defaulted to US & UK firms to lead transactions more and more are now turning to the domestic arena. Acquisition International speaks to some of Uganda’s leading legal and financial companies to discuss the country’s key full factors for foreign investors and the opportunities for local firms. ------------------------------------------------------------------------

Patrick Mweheire is the Head of Corporate and Investment Banking at Stanbic Bank Uganda Limited. ------------------------------------------------------------------------

Stanbic Bank Uganda Limited (“SBU”) is the largest commercial bank by assets in Uganda and boasts over 21% market share. SBU is a subsidiary of Stanbic Africa Holdings Limited (“SAHL”), which is, in turn whollyowned by Standard Bank Group (“SBG”), the largest African bank by assets (c. US$182bn in 2012) SBU has the largest national footprint with over 90 branches and 175 ATMs throughout Uganda, offering Retail, Business, Corporate and Investment Banking services. With a presence in all major financial centers around the globe, SBU provide expertise in all key sectors with a primary focus on: - Oil & Gas; - Power & Infrastructure; - Telecommunications & Media; and, - Mining & Metals. This extensive network and range of products allow SBU to provide unmatched efficient banking solutions.

SBU’s affiliation to SBG provides clients with access to relevant regional and international banking resources. A specific case in point is the creation of a gateway between Africa and China through the ICBC-SBG committed strategy to facilitate trade and FDI between china and the various African geographies.

global best practice in structuring, due diligence and documentation to all deals. In addition, dedicated client relationship managers provide a single point of entry into Stanbic Bank’s full financial services competencies.

OUR PRODUCTS AND SERVICES We offer a comprehensive range of products and services that include: Transactional Products & Services; Investment Banking; Global Markets; Real Estate & Principal investment management. In addition to the above, SBU offers the Oil & Gas sector a complete package of products and services. We provide clients with financial solutions at all stages of the value chain and use both local and Standard Bank Group balance sheets to avail the required level of funding. Our clients will gain access to international skills and resources where required. SBG maintains dedicated Oil and Gas desk operating out of London, bringing

Company: Stanbic Bank Uganda Limited Name: Patrick Mweheire, Head, Corporate and Investment Banking Email: mweheirep@stanbic.com Web: www.stanbic.com Address: 17 Hannington Road, Kampala, Uganda Telephone: +256 (0) 31 222 4646

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Faisal Mukasa is the Chief Executive Office and Founding Partner of Fides Legal Advocates. ------------------------------------------------------------------------

Discussing the current business environment in Uganda, Mr Mukasa stated that there has been an improvement due to the computerisation of departments such as the Uganda Bureau of Registration Services, Land Registration Department and the Immigration Department, among others. However, he noted that the failure to link the systems in these departments together leads to delays in registration services and access to other information. According to Mr Mukasa, the key pull factors for foreign investors are the favourable tax regime, which gives foreign investors preference in the form of tax breaks; the supply of cheap labour; and the prevailing peace. He highlighted oil exploration and mining as the sectors in which the greatest opportunities for investors lie, noting that these sectors, as well as Information and Communication Technology, are currently receiving the most investment. He added that there has been a shift from agriculture and agro based industries in recent years.

/ August 2013

“There has been a rise in investors coming to do business in Uganda; this has led to better infrastructure and improved accommodation in the form of hotels and real estate,” observed Mr Mukasa. Commenting on the advantages of turning to domestic firms within Uganda, rather than defaulting to US and UK firms to lead transactions, he noted that the cost of labour is cheaper in Uganda and there are many foreign trained Ugandans who have returned home to participate in its development. He also highlighted improved profits due to using the same currency, adding the foreign exchange transactions are not always profitable due to the changing rates. Demand for Fides Legal Advocates’ services has certainly increased recently, and the firm has participated in numerous sale and purchase of mining license

transactions and advised clients on joint ventures in situations where the foreign companies are desirous of working with Ugandan companies.

Company: Fides Legal Advocates Name: Faisal Mukasa Email: info@fideslegal.com; fmukasa@fideslegal.com Web: www.fides-legal.com/csr1/index.html Address: Fides Chambers, Plot 1-3 Coral Crescent, Off Lower Kololo Terrace, Kololo. P.O. Box 4907 Kampala Telephone: +256392858703; +256712401608

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Partnering with Uganda - A Pipeline to Success? ------------------------------------------------------------------------

David Mpanga is a Partner, Corporate and Finance/ Advisory services, at Kampala Associated Advocates (KAA). ------------------------------------------------------------------------

KAA is one of the leading firms in Uganda with nine partners and 25 other lawyers. “Through our association with Dentons (www. Dentons.com), we have access to a network of offices and associates in the US, Europe, Russia and Central Asia, the Middle East, Asia-Pacific and Africa,” said Mr Mpanga. “This network enables KAA combine local and international best practice with sound legal solutions, ensuring a cost-effective approach in multiple jurisdiction transactions.” The Dentons Africa association comprises law firms from Algeria, Burundi, Egypt, Ghana, Kenya, Libya, Mauritius, Nigeria, Rwanda, South Africa, Tanzania and Zambia.” Mr Mpanga highlighted Uganda’s fully liberalised economy, with a current growth rate of over 5%. He noted that the country’s law fully protects foreign investment and allows for repatriation of profits and capital. “The legal system and courts are investor friendly and there is a deliberate effort to promote and protect foreign investment as well as develop expeditious mechanisms for speedy resolution of commercial disputes,” he added. Discussing the impact of Uganda’s on-going business reforms, Mr Mpanga noted that there has been an increase in the number of foreign investors seeking investment opportunities. The country has also been marketed as a favourable destination for foreign investors thereby attracting more businesses. Demand for KAA’s services has increased, which Mr Mpanga attributes to the many foreign companies seeking business opportunities resulting from the growth in the economy. The firm has advised on several mergers and acquisitions, as well as new investments in the energy sector. In conclusion, Mr Mpanga offered the following prediction for Uganda in 2013:

“Substantial growth is expected, as international businesses focus on Uganda and East Africa and oil exploration starts. Law firms will deepen their relationship with international law firms.”

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Mumtaz Kassam and Co. Advocates was registered as a law firm in 1992. ------------------------------------------------------------------------

The firm has experienced Lawyers mainly with Ugandan and United Kingdom training backgrounds. For over twenty one years now, the Firm and its lead lawyers form one of the leading legal consultancies both for the private and public sector in Uganda. Since it started its operations, the Firm has offered legal services to Embassies, individuals, companies, public enterprises, transnational organizations, banks, non-governmental organizations, statutory bodies and institutions, local governments as well as urban authorities. Among the services offered to our Clientele are, providing Legal opinions in various areas of law, Floatation of Companies and Non Governmental Organizations, Searches on public registers, Immigration work, Registration of Business names, acting as Company Secretaries, establishment and restructuring of employment framework and conditions of service for organizations, conveyance and leases of land, machinery and movable property, framing various statutory instruments including employment contracts for both private and public bodies, Investment, Corporate and Institutional governance. We are also very active in litigation of all civil torts, Arbitration and Negotiation of Contracts. Our goal is to provide a comprehensive organized work plan for all our clients where we adopt a time driven quality service delivery approach. We are very mindful of the fact that some of the major problems dogging the legal system in Uganda are delays/red tape which is so firmly entrenched in the system. We have put in place strategies and a system for quality control and fast delivery of service, notwithstanding the bottlenecks that affect legal service delivery today. In handling Clients’ work we have put in place specific methods to ensure efficiency and satisfaction of our clients’ legal needs.

MUMTAZ KASSAM & CO. ADVOCATES Company: Kampala Associated Advocates Name: David Mpanga Email: dmpanga@kaa.co.ug Web Address: www.kaa.co.ug Address: 41 Nakasero Road, Kampala Telephone: +256 414 344 123

ACQUISITION INTERNATIONAL

Company: Mumtaz Kassam and Co. Advocates Email: mkassam@imul.com; mkassam@dmail.ug Address: Airways House, Plot 6 Colville Street, Kampala, Uganda Telephone: +256 41 4 344277

OTHER EXPERTS IN THIS AREA Omoding, Ojakol & Okallany Advocates Company: Omoding, Ojakol & Okallany Advocates Name: Richard Okallany Email: rokallany@yahoo.com Address: Plot 25 Reco House Nkurumah Road, Box 4109 Kampala, Uganda Telephone: +256414236403

Ahamya Associates & Advocates Company: Ahamya Associates & Advocates Name: Sam Ahamya Email: ahamya@yahoo.co.uk Address: Plot 8, Kataza Close, Bugolobi, P.O. Box 34440, Kampala Telephone: +256 778 041 582; +256 701 489 344 -----------------------------------------------------------------------

Sam Ahamya is the Managing Partner of Ahamya Associates & Advocates. Mr Ahamya is a Corporate and Commercial lawyer who has specialised in Taxation, Corporate Finance and Commercial litigation. -----------------------------------------------------------------------

Mr Ahamya holds a Bachelor of Laws (Hons) degree from Makerere University Kampala, a Post Graduate Diploma in legal Practice from the Law Development Centre, Kampala. He is a certified Chartered Company Secretary (ICSA). He has completed the LLM in Petroleum Taxation and Finance and is pursuing his Second Masters LLM in Mining Law and Policy at the Centre of Energy, Petroleum and Mineral Law and Policy, (CEPMLP), University of Dundee, UK. He was admitted to the Ugandan Bar in 2001 and is a member of the Uganda Law Society, a member of the East African Law Society and a member of the American International Petroleum Negotiators (AIPN).

August 2013 /

SECTOR SPOTLIGHT:

Pitfalls and Potential: Navigating Emerging Markets

Pitfalls and Potential: Navigating Emerging Markets The market outcomes of 2012 maintained confidence in the long-term economic progress of emerging economies. 2012 was a good year, spurred on by international stimulus projects, investments, M&A and funds looking to raise new capital. Whilst some are beginning to fear the ‘sudden stop’ of western investment, especially as stimulus plans reach the end of their lifespan; 2013 is actually predicted to deliver even more, particularly in the 3rd and 4th quarters. According to a survey by the EMPEA, threequarters of pension funds, asset managers and other sources of private equity funding are looking to increase their exposure to emerging markets in the next two years. Doing business, buying, selling and raising funds in these economies is not without its complications but with broad exposure to emerging markets being necessary for sustained real returns on capital. Acquisition International speaks to leading experts to discuss the pitfalls and potential of investing in various markets.

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Enrique A. Diaz is a Senior Partner at Goodrich, Riquelme y Asociados. ------------------------------------------------------------------------

According to Mr Diaz, Mexico has established itself as a destination for foreign investment in recent decades through the implementation of economic liberalisation plans set out in the early nineties. He noted that significant trade and investment barriers have been eliminated through the implementation of more flexible laws aimed at attracting foreign capital by allowing foreign access to various economic activities that were previously reserved for Mexicans. “Moreover, Mexico has concluded several trade agreements such as NAFTA and a treaty with the European Union, allowing Mexico to expand its market for goods and services,” he elaborated. “The governmental authority responsible for implementing and monitoring regulations on foreign investment is the National Commission for Foreign Investment (CNIE), which is a branch of the Ministry of Economy. The CNIE keeps statistical information on foreign investment through the National Registry for Foreign Investment (RNIE).” Foreign investment in Mexico is subject to certain limitations depending on the type of activity. Mr Diaz explained that the most politically sensitive economic activities are reserved to the State (oil, electricity, nuclear energy, postal services, production of banknotes and coinage, and airport control, among others). Certain activities are reserved for Mexicans, while other activities allow foreign investment up to a certain percentage. Foreign investment is the participation by foreign investors in the capital stock of Mexican companies,

/ August 2013

regardless of the percentage. Mr Diaz noted that the Constitution requires foreigners who intend to engage in business in Mexico to be considered as Mexican nationals, and therefore waive their right to seek protection from their government.

countries and the IMF, allowing them to reflect upon mechanisms to forewarn or prevent sudden similar occurrences in an ever growing, interdependent global economy.

“There are several ways to invest in Mexico, with the most common being the formation of a Mexican corporation, although it is also common to make investments through joint ventures, distribution agreements, franchises, or directly by opening a branch of the company,” he observed. North America has become an attractive place for foreign companies to manufacture and export, which Mr Diaz attributes to the devaluation of the Dollar and Peso against other currencies, such as the Euro. He stated that the Mexican cities of Monterrey and Queretaro offer competitive advantages such as privileged locations in the main structure of NAFTA, world class education institutions, infrastructure, business environment, NAFTA time zone and high-life quality in a low cost region. “The country has enjoyed economic stability during the last decade, offering low risks to investors, with low inflation rates, healthy public finances and a disciplined tax and monetary policy,” he commented. “By participating in the world community through the WTO, OECD, APEC and other international organisations, the world has recognised Mexico’s commitment to free market reform and its integration into the global economic system. Mexico’s economic crisis experience of the 90’s has awakened the G-7

“Currently, Mexico is rated by Moody’s Investors’ services as “Investment Grade,” which is the highest investment ranking a country can achieve. Thus, Mexico is more accessible to foreign capital and financial investment than any other emerging country,” he concluded.

Company: Goodrich, Riquelme y Asociados Name: Enrique A. Diaz, Esq. Email: ediaz@goodrichriquelme.com Web: www.goodrichriquelme.com Address: Paseo de la Reforma 265, M2, Col. Cuauhtémoc, 06500 México, D.F. Telephone: +52 55 5525 1422

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SECTOR SPOTLIGHT:

Pitfalls and Potential: Navigating Emerging Markets

Navigating Vietnam’s Bond Markets ------------------------------------------------------------------------

Kent Wong is a Partner and the Head of Banking & Finance and Capital Markets at VCI Legal, a leading national law firm in Vietnam. ------------------------------------------------------------------------

Vietnam’s bond markets comprise Treasury bonds and bills, government guaranteed bonds, municipal bonds (issued by provincial People’s Committees), State Bank of Vietnam bills, and corporate bonds. The first three types of bonds are usually called Government bonds which are defined and regulated by Decree No. 01/2011/ ND-CP and comprise more than 90% of Vietnam’s outstanding total bond value. Among Government bonds, government-guaranteed bonds, regulated by Circular No. 34/2012/TT-BTC, are issued by Vietnam Development Bank, Vietnam Bank for Social Policies and other SOEs assigned to mobilize capital for the Government’s socio-economic investment projects under the direction of the Prime Minister. Due payment by the issuers is committed by the Government to investors. Meanwhile, the Law on Securities 2006 and Decree No. 52/2006/ND-CP (replaced by Decree No. 90/2011/ ND-CP, with guidance from Circular 211/2012/TTBTC), provide an important legal framework for SOEs and private enterprises to issue corporate bonds. Nonetheless, Vietnam’s corporate bond market, although still thin, has grown rapidly since 2007. Government Bonds Currently, Vietnam’s Government bonds are issued and distributed only by underwritings and biddings, then listed and traded on the Hanoi Stock Exchange (HNX). Although the total value of outstanding Government bonds is around 14% of GDP, which is relatively small compared to neighboring ASEAN economies, there are more than 500 bond issues with various maturity, terms and sizes. Moreover, Government bonds which are underwritten and issued are mostly still held by large commercial domestic banks, without further distribution to the secondary market. Presently, Vietnam’s four largest State-Owned (or former State-owned) banks hold up to 65% of the total value of Government bonds. Since these large banks often hold government bonds for long term investment, reserve requirements and for liquidity purposes, they tend to hold these bonds until maturity. As a result, the liquidity of Vietnam’s secondary market of Government bonds has remained low. Nevertheless, in the first half of 2013, an impressive increase in the Government bonds market saw the total value of bonds issued in 6 months equal the total of whole of 2012. In the secondary market, the average value of Government bonds traded in each session increased to 1,900 billion VND (doubled from 2012). The total value of foreign investors’ transactions contributed 80% of the total transaction value, an equivalent of 100,000 billion VND. Corporate Bonds Until 2006, corporate bond issuances in Vietnam were rare and only limited to large financial institutions because the legal framework, Decree No. 120/CP that governs and regulates equities and bonds issuance of SOEs was strict. However, after the Law on Enterprises and the Law on Securities became effective in 2006 (and Decree No. 52/2006/ND-CP on corporate bonds issuance), corporate bond issuances became more active and increased rapidly. Post-2006, corporate bond issuances in Vietnam are not limited to SOEs, including

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State-owned commercial banks, but also extended to foreign and private companies that often offer interest rate premiums. Recently, a few corporate bond issuances were successful, including: SAFI Logistics JSC with capital of 20 billion VND acquired from their 1-year term bonds issued at 9% per annum; and Hoang Anh Gia Lai JSC with an issue of 73.3 million shares to exchange international bonds of Credit Suisse (Hong Kong). Meanwhile, because of the need to raise capital to meet required capital adequacy ratio and minimum capital levels by financial regulators, convertible bonds issued by commercial banks have also been growing. However, most corporate bonds in Vietnam are issued as private placement. Under current regulations, issuers do not need to register and obtain approval before the actual issuance and are only required to report to the Ministry of Finance within 15 days. Intermediaries in the primary market of corporate bonds have been significantly extended, not only to securities firms, but also to commercial banks, especially foreign financial institutions. Although Vietnam’s corporate bond market is promising and growing fast, the market scale is thin and faces many challenging issues for further sustainable development. First, most issuances are in the form of private placement, while there is a lack of regulations and support mechanisms which require information disclosure and transparency. Consequently, it is difficult for potential investors to obtain reasonable information about the corporate bond market in general, or regarding the size, maturity and yield of any specific issue.

Secondly, there are still no domestic credit companies in Vietnam, which means that most corporate bonds are unrated and their liquidity is low. Like Government bonds, issued corporate bonds are usually held onto by investors who bought into the primary market until maturity. Thirdly, corporate bond issuances have also been significantly affected by recent macroeconomic turbulence and tightening of monetary policy. However, in the latest revised strategy for the development of Vietnam’s capital markets 2011-2020 (Decision No. 252/QD-TTg), the Government actively promotes international financial cooperation, which may help solve some of Vietnam’s challenging issues.

Company: VCI Legal Name: Kent Wong Email: kentwong@vci-legal.com Web: www.vci-legal.com Address: Suite 501, Sailing Tower, 111A Pasteur Street, District 1, Ho Chi Minh City, Vietnam Telephone: +84 838 272 029

August 2013 /

SECTOR SPOTLIGHT: Bridging the Gap

Bridging the Gap Bridging finance has grown in popularity in the business world; helping to free up capital at times when it is needed, commercial bridging loans can now be used for a variety of business purposes. According to the ASTL, bridging and short term loans written in Q1 2013 were up 1.4% compared to the same quarter the previous year; there was also an increase of over 4.6% in total loan books. Benson Hersch, CEO of the ASTL stated that “the figures reveal the on-going need for bridging finance has not decreased”. He also said that despite pressure by the government and promises by mainstream banks to lend more, short term loans are filling the gaps in many instances. Acquisition International discusses the benefits of bridging finance with leading firms in the commercial finance industry.

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Stacey Schacter is the CEO of Vion Receivable Investments. ------------------------------------------------------------------------

VION Receivable Investments is an international provider of receivable investment services to businesses managing consumer and commercial receivables.

“In a nutshell, Vion helps companies leverage current and future, performing, underperforming, and charged-off receivables to meet their financial needs,” said Mr. Schacter. “Unlike traditional lenders Vion takes an innovative outlook on any given transaction.” Discussing the increasing popularity of bridging finance, Mr. Schacter suggested the image of the scales of justice, with speed on one tray and cost on the other. She explained that companies often can’t wait for the rather drawn out process of moving from one type of financing

/ August 2013

to the next, especially in an acquisition context (whether real estate or other asset), which can take 120 days or more.

Looking ahead, Mr. Schacter anticipates that the need for businesses to raise capital will increase as the world economies continue their anaemic recovery.

“Today’s world is fast paced and opportunities once missed cannot be regained,” he commented. “Bridge financing, while expensive, serves the greater purpose of giving companies cash when they need it most, allowing longer term growth. It is sometimes mistakenly used by ailing companies, but this is foolhardy. Bridge loans should be used for unusual circumstances where the asset being acquired can truly absorb the higher (11%+) rates charged by most lenders. There also MUST be an exit strategy from the loan in the form of permanent financing or sale.

“Lenders’ more conservative approach may require stacks of funding instead of one lender with A, B and even C pieces to get a transaction complete,” he concluded.

“That leads to the next benefit: payoff terms are normally generous and can be based on the cash flow from the company or asset rather than set principal and interest payments. This alleviates cash flow imbalances in the company by better matching available cash with payment terms.”

Company: Vion Receivable Investments Name: Stacey Schacter Email: sschacter@vioninv.com Web: www.vioninv.com Address: 400 Interstate North Parkway, Suite 800, Atlanta, GA. 30339 Telephone: +1 678-823-6181

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SECTOR SPOTLIGHT: Bridging the Gap

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Keith Aldridge is the Managing Director of Capital Bridging Finance Limited (aka Capital Bridging) a City based short term funder. ------------------------------------------------------------------------

Capital Bridging is an award winning lender with a proven track record of providing solutions to the diverse funding needs of its growing number of clients who rely on a lender partner to sustain their business growth. Capital Bridging specialises in providing bridging loans to master brokers who have a thorough knowledge of what is often seen as a complex market. We know what brokers want because we ask them every day how we can improve our proposition and those who share our appetite for future growth are not slow in telling us how we can improve.

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Our policy of ensuring all decision makers are available to brokers almost 24/7, has established Capital Bridging as a lender of choice amongst the majority of the industries major brokers. Our aim is to generate repeat and referral business and this is being achieved because we agree the funding solution and ensure a smooth exit. The market is ever changing and we are helping to drive that change with our support for all our partner stakeholders. If growth is to be sustained education and communication has to be at the heart of your business model. At Capital Bridging we have ambitious plans and know that we cannot achieve them without the right partners. There are many new entrants into the market so the competition is hotting up but Capital Bridging is confident that we will continue to be that provider of choice.

We don’t have a product range; we find solutions across our range of first and second charge residential and commercial investment properties in England, Wales and increasingly Scotland. The sector is growing on the back of an increased confidence that short term lending is no longer the funding of last resort. We are getting our message across and so have every reason to believe that the recent growth in the sector will be sustained.

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Ravi Nath, Esq. is a Partner at RNC legal/Rajinder Narain & Co., India. ------------------------------------------------------------------------

Ravi NATH has 24 years of experience in Aviation Laws particularly Aircraft equipment and facility financing,(including bridge finance),regulatory, Repossessions, enforcements and other litigation. He was the Chair of the Aviation Committee of the International Bar Association, and is the Editor/ Author of various Books on Aviation Laws. He regularly advises major Aircraft manufacturers, Lessors, Banks and Financial Institutions including Boeing, Airbus, Embraer, Bombardier, Citibank, ABN, Standard Chartered, Deutsche Bank, BNP Paribas, GECAS, ILFC, Aircastle, Airlease and Aercap. His practice includes Government regulations, companies, cross-border financing and securitization. During the last ten years he has advised on transaction in excess of US $ 15 billion. The Legal 500 stated thus:

“Ravi Nath’s esteemed reputation as an aviation expert puts clear blue water between Rajinder Narain & Co. and its rivals…”

He is frequently an invited speaker at conferences and serves on the Legal Advisory Panel of the Aviation Working Group.

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Christian Kumar, Managing Partner of Capital Kinetics LLP, discusses the resurgence and popularity of bridging finance. -----------------------------------------------------------------------“Bridge lending is getting more affordable” notes Mr. Kumar, (who mainly attributes bridging finance’s increasing popularity to the reduced pricing). He continues, “...challenger banks such as Shawbrook (a lender Capital Kinetics packages for) have rates starting at 0.69% per month – a huge reduction from the ‘heady days’ of 2.0% per month or more.”

“There has also been a growing arbitrage between what a property’s true value can be and what the property can be acquired for,” he explained. “We have a number of clients who will look for dilapidated, probate and foreclosed properties. They take a short term [bridging] loan to purchase, give their acquisition a lick of paint, new kitchen &bathroom and manifest a return of 20-30% on their purchase.” Capital Kinetics research shows that exit strategies have become more important in property transactions in the past 5 years as a contraction of buyers in the market has meant there is less liquidity. Their analysts believe this contraction in buyers is also uncovering the real value in the market as buyers and sellers are doing deals more diligently.

Company: Capital Bridging Finance Limited Name: Keith Aldridge Email: enquiries@cbfl.co.uk Web: www.cbfl.co.uk Telephone: +44 (0) 203 3013121

The Bar Association of India conferred its highest honour on him and was invited along with India’s Finance Minister, Mr. P. Chidambaram and President Bar Association of India to co-author a book on legal aspects of Business in India. He is a Partner at one of India’s oldest legal firm. Two of the firm’s partners were Chief Justices of High Court and one served as President of High Court Bar. Mr. Nath was the President of Inter Pacific Bar Association in 2004. Education: B.Com.(Hons.), LL.B., Intl. & Comp. Laws (King’s College London) PIL (Harvard). Work experience at: Sinclair Roche & Temperley, London. Personal: Lives in New Delhi along with wife and two children.

Company: RNC legal/Rajinder Narain & Co. Name: Ravi Nath, Esq. Partner Email: ravi.nath@rnclegal.com Web: www.rnclegal.com Address: Maulseri House, 7, Kapashera Estate, New Delhi - 110 0037, India Telephone: +91 11 4122 5000

New Rules “Today the rules have changed,” he continued. “Whilst short term lenders work on the basis of Loan to Value, the exits are based on Loan to Income (of the asset). This is also known as Debt Service Cover Ration. As the DSCR has increased since the credit crunch and loans take longer to complete there is an increasing risk that a bridge with rolled up interest might choke the underlying asset if an exit plan has not been established.” Mr Kumar and his team have noted increased pressure on pricing, especially in London and South East England, where there have been a large number of new lenders that have launched ‘fishing in the same pond for similar assets’. The inflow of lenders is turning bridging into a price-led commodity product, almost removing the previously specialist perception of the service. The Future “Further out the market is ripe and ready: better deals, better margins for lenders and more opportunities for investors,” he observed. “I foresee lenders moving further afield looking to attract a better ROI.Capital Kinetics are also working with peer to peer lending and Private Bridger’s who are entering the market.. The firm is offering an administrative service managing loans and lending for high net worth clients looking for strong return on cash whilst having the security of an asset backed investment,” And their model is working, Capital Kinetics have thrived through one of the most difficult recessions in property history, and have sights set on future growth.

Company: Capital Kinetics LLP trading as Money Cubed Finance Name: Christian Kumar, Managing Partner Email: christian@moneycubed.com Web: www.moneycubed.com Address: Exchange House | 494 Midsummer Blvd | Milton Keynes MK9 2EA Telephone: 0845 680 0760

August 2013 /

SECTOR SPOTLIGHT:

The Rise of Alternative, Sustainable Financing

The Rise of Alternative, Sustainable Financing Following on from the recent economic crisis, the financing landscape continues to undergo massive transformational change. The debt crisis proved that along with traditional financial risk, we must give equal consideration to environmental and social impacts in order to ensure that lending is managed sustainably, beyond this; it has also paved the way for a number of alternative financiers to enter the market. With banks and governments (i.e. traditional lenders) still suffering under severe economic pressure, projects worldwide are increasingly looking to the alternative sector to finance the continued demand for growth. Through the provision of capital, finance providers are in an extremely strong position to influence the impact of large projects and business decisions. Acquisition International speaks to Simon Leadbetter, Publisher at Blue & Green Tomorrow, to discuss the rise of alternative methods of funding and the challenges that face these institutions.

Blue & Green Tomorrow is an online magazine that writes about businesses that balance the needs of the planet, its people and prosperity. We aim to provide our high networth readers with the insight they need to make informed choices. We focus on how to invest sustainably, travel responsibly, spend ethically and use cleaner sources of energy. Returns on traditional equities have been poor, meaning there is capital looking for alternatives. At the same, a tightening of bank lending, venture funding and IPOs means an active search by companies for alternative financing. Tax efficient schemes such as EIS/VCT are growing in popularity but are not understood outside sophisticated investors and companies. For investors, these scheme provide a tax efficient alternative to pensions in diversifying portfolios, but their liquidity and risk profile needs to be understood. They are probably more of a supplement than an alternative for investors. For companies, they represent a useful alternative, however start-up companies often lack the knowledge and capacity to secure this type of funding. We see huge scope for peer-to-peer or crowdfunding and lending. In creative areas, platforms such as Kickstarter provide an opportunity for a project to secure funding and cost-covering pre-orders. Ongoing enterprises can

/ August 2013

seek equity funding from multiple small investors through platforms such as Crowdcube, an FCA regulated platform. Abundance Generation offers a debenture-based crowdfunding model for energy generation. The mutual benefit is that founder ownership remains concentrated and investor risk spread. Credibility remains the biggest challenge to alternative finance as these institutions and approaches will often lack the brand recognition and understanding of more traditional institutions and approaches. Routes to market are also a limiting factor, meaning the scope for more rapid expansion of this important sector are curtailed. Confusion over sector definitions means the online growth of these products will be messy. Sustainability will be key in all emerging and future markets. Leapfrog technology and system approaches mean these markets can secure a sustainable advantage over developed and established markets that will be increasingly hindered by incumbent technology and legacy systems. Markets that develop as resource efficient, clean energy, digital, with distributed operations and smart use of big data, will profit rapidly. The failure of equity markets means there is private capital looking for investment opportunities. Tax efficient schemes that support equity funding, government insurance for

lending in addition to digitally connected and informed investors/companies are seeking alternative financing, all bode well for the sector. We are not at a tipping point yet. Incumbent institutions and financing still have the upper hand, but a reversal of fortunes could happen at any time. At B&GT we see the clear need for alternative and sustainable alternatives to traditional financing. We are going through a period of rapid transition economically, socially and environmentally and we need greater systemic resilience, which will probably come from greater financing innovation.

Company: Blue & Green Tomorrow Name: Simon Leadbetter Email: blueandgreencommunications@gmail.com Web: www.blueandgreentomorrow.com Address: 11 Steep Hill, Lincoln, LN2 1LT, UK

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SECTOR SPOTLIGHT:

The Insurance Industry: Supporting Economic Development

The Insurance Industry: Supporting Economic Development The African economy is paving the way for the rest of the world as it’s currently at an economic boom. In the latest annual outlook for the continent, the OECD forecast 4.8% growth in GPD for the year ahead and further increasing to 5.3% in 2014. Much of this anticipated growth is due to the African insurance industry which has previously supported economic development across Africa and will continue to strengthen its economic growth over the coming years. In a recent conference organised by the AIO (African Insurance Organisation), Chairman Mr Abdel Raouf Kotb stated “Africa is becoming the continent of the future and the world is carefully following and actively participating in the development of Africa and many have identified our continent as the main source of future growth, opportunities and profitability”. Acquisition International examines the current business climate across Africa. ------------------------------------------------------------------------

Adetola Adegbayi is Executive Director - General Business at Leadway Assurance Company Limited. ------------------------------------------------------------------------

Leadway is one of Nigeria’s foremost insurance companies, with a reputation for service efficiency and customers’ reliability. The company was established in 1970 by Sir Hassan O. Odukale (beatae memoriae). Ms Adegbayi described Africa as “an emerging continent with so much to offer”. She noted that its business environment is faced with some complexity; however she believes it is a supportive environment, to which she attributes the growing interest in investing in Africa. “In Nigeria specifically, there are a lot of challenges entrepreneurs and investors face in doing business but despite these challenges, Nigeria is listed among the fastest growing economies of the world,” she observed Ms Adegbayi stated “Insurance cannot exist without a growing economy, so at the end of the day, it is in terms of the hierarchy of needs or the order of things that insurance would be considered. It is only when the people within the country are progressing and there is high level of employment along with a high level of disposable income that we will experience a boom in the insurance sector. if the economy itself is experiencing a slowdown then it disconnects the insurance industry because it’s a question of demand and supply, if there is no demand for insurance then we are not going to grow”.

are investing in Africa and the insurance industry will be ever ready to provide a stronger liquidity for the African economies. We are positive that the sector will continue to grow especially with ongoing recovery of the economy. We anticipate new businesses in the oil and gas sector, and the other products like motor, fire and group insurance will continue to lead the way.”

“We realize that Africa is becoming the continent of the future and the world is carefully following and actively participating in the development of Africa and many have identified our continent as the main source of future growth, opportunities and profitability.,” she enthused. “Based on this, the African Insurance Organization was established in 1972 by 50 African countries with 287 members and associate international members from 5 countries. The AIO’s primary objective is to promote inter-African co-operation and development of a healthy insurance and reinsurance industry in Africa.” The insurance industry witnessed significant growth within the last few years with the emergence of the local content act 2010. People had been directly insuring their risks abroad, but all of a sudden local content became a driving force out of the oil industry and aviators had to comply with the Insurance Act which provides that risk must be retained in Nigeria. “Activities in the sector have noticeably increased; with enhanced public awareness of the sector and its operations, rapid expansion and strategic business acquisitions, improved visibility and strict supervisory regulation,” added Ms Adegbayi.

She concluded: “More and more businesses say there has been a change in the way Africa is governed and this is why they

Company: Leadway Assurance Company Limited Name: Adetola Adegbayi Email: a-adegbayi@leadway.com Web: www.leadway.com Address: Corporate Office: 121/123 Funso Williams Avenue, Iponri Lagos, Telephone: +234 (01) 2700700

Company: The United Insurance Company SC Name: Meseret Bezabih Abebe Email: united.insurance@ethionet.et Web: www.unitedinsurancesc.com Address: Kirkos Subcity Woreda 06, Alpaulo Building, Debrezeit Road, Ethiopia Telephone: +251 4655656 The United Insurance Company SC, better known as < UNIC-ETHIOPIA >, was established by 87 Ethiopians (individuals and enterprises) in November 1994 with an authorized capital of Br 25 million and an initial paid up capital of Br 8.073 million. Following the merger with Lion Insurance Company SC in 2002, < UNIC-ETHIOPIA >, is currently owned by more than 318 shareholders. As a result of the merger and the decision of the Seven Extra-Ordinary General Meeting of shareholders, the Company’s authorized capital rose to Br 250 million. The paid up Capital is now more than Br 91 million. UNIC-ETHIOPIA > aims to be the best insurance company in Ethiopia, most professional, most commercial, and most responsible. The company’s mission is to provide complete insurance cover at economic rates, honest, prompt, and courteous claims services, to fully satisfy all its constituencies: Customers, Shareholders, Employees, Society and the Environment. Seventeen years in the business of providing first class insurance services, our Company presently boasts of some prestigious accounts in its portfolio. This portfolio includes such diverse and prestigious accounts as: African Union; AMCE – IVECO; China Road and Bridge Corporation (CRBC); CIDA; and Concern Ethiopia.

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August 2013 /

SECTOR SPOTLIGHT:

From Local Counsel to Lead – Boutique & Independent Law Firms

From Local Counsel to Lead – Boutique & Independent Law Firms Many investors and multinationals are shifting their focus away from historical business hubs and traditional investment opportunities, with a view to cashing in on emerging markets and opportunities. Rather than defaulting to the larger US and UK advisory firms to lead such transactions, they are increasingly relying on expertise in the domestic arena. Boutique/independent law firms can often provide specialist local knowledge, lower costs and faster turnaround times. Heavy-weight law firms have traditionally formed alliances with foreign firms in the hope of creating one-stop-shops that provide the same level of service from country to country. The savvier boutique/independent law firms are ramping up their own networking efforts, creating a framework of cross-border and international affiliations in the hope it will give them a competitive edge over internationals for high end value work and its associated rewards. Acquisition International speaks to leading independent and boutique legal experts to discuss the advantages they can offer.

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Olufemi Lijadu is a Partner in the Law Firm of Ajumogobia & Okeke. -----------------------------------------------------------------------In Mr Lijadu’s opinion, the greatest advantage of independent/boutique law firms over larger advisory firms is the individualised service they are able to provide to their clients, which helps to foster a longer lasting and mutually beneficial relationship between the firm and its clients based on qualitative service.

Mr Lijadu stated that the current economic conditions have led to law firms focusing on developing business in new regions, particularly in emerging markets.

“A lot of clients are now investing in regions like Asia and Africa and require legal representation in these areas,” he observed. “Depending on local professional practice regulations, international law firms either liaise with local law firms in those regions or set up a local subsidiary to take care of their clients’ needs”.

/ August 2013

“Also many law firms are shifting from the traditional practice areas like capital markets, oil and gas to new practice areas such as energy, particularly renewable energy, mining and telecommunications. This is due to a shift in investment trends and the need for law firms to move with the times.”

“It may be difficult to predict with great precision the rate of growth for boutique/independent law firms for H2 2013, but the prospects are very good in my view. The ability of law firms to form flexible alliances with other law firms in different jurisdictions will be a key distinguishing factor for success,” he concluded.

A new area of interest for boutique and independent law firms in Nigeria is the power sector. With the proposed privatisation of the Nigerian power sector, a number of briefs are coming from investors in this new sector.

“There is also sustainability in this area because once the privatisation has been concluded the companies that takeover these assets will require legal representation and continued financing while carrying on business,” added Mr Lijadu.

Company: Ajumogobia & Okeke Name: Olufemi Lijadu Email:olijadu@ajumogobiaokeke.com Web: www.ajumogobiaokeke.com Address: Sterling Towers (2nd Floor) 20 Marina, Lagos, Nigeria Telephone: +2342719368-9; +2344622686

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SECTOR SPOTLIGHT:

From Local Counsel to Lead – Boutique & Independent Law Firms ------------------------------------------------------------------------

Jacqueline M. Valdespino is the lead lawyer owner of Valdespino and Associates, PA. ------------------------------------------------------------------------

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Miguel Dos Santos Pereira and Pedro Rascão are Lawyer‘s with Rascão, Santos Pereira & Associados, Sociedade de Advogados, R.L. (RSPA). -----------------------------------------------------------------------It is a sign of the times. The global economic crisis itself has fostered a deep reflection which promises to change the current paradigm for a new model of law practice which is exclusively centered on particular skills and expertise, required by a very specific type of clients, as an alternative to the well-known heavyweight law firms whose volume of work was no longer assuring the clients the desired diligence. The time of the know-it-all-but-actually-clueless lawyers has passed and, as a law firm, we feel obliged to guide our activity’s performance according to this principle, for such, we are constantly investing within our own fields of specialization. Rascão, Santos Pereira & Associados, Sociedade de Advogados, R.L. (RSPA) works exclusively in litigation and dispute resolution. In addition to the Partners, our team is comprised by five lawyers and five trainee lawyers who are duly prepared to act with accurately, timely and effectively in every single stage of judicial proceedings or arbitration with absolute independence. At RSPA we excel not only for courtroom experience as also for an enlightened, rigorous and proper legal advice. The end

result of each case entrusted to us is somehow the reflection of its associates’ commitment, allegiance and high level of technical expertise. Within the litigation and dispute resolution, our practice areas include criminal law, administrative offences, administrative process (in its non-contentious stage) and litigation, tax law, medical and biotechnological law and arbitration.

Company: Rascão, Santos Pereira & Associados, Sociedade de Advogados, R.L. (RSPA) Name: Miguel Dos Santos Pereira Email: mp@rspa.pt Web: www.rspa.pt Address: Edifício Premium – Infante Santo, Rua Cova da Moura, nº 2, 1º Dto, 1350-117 Lisboa – Portugal

Ms Valdespino is Board Certified in Family and Matrimonial Law and is a Fellow of the American Academy of Matrimonial Lawyers. Board Certified Lawyers must take a written test and fulfill extensive requirements to maintain their Certification in Family and Matrimonial Law. Ms Valdespino became a Fellow of the Academy in 2002 and was the youngest Cuban American admitted. Selection as a member of the Academy of Matrimonial Lawyers requires both a written an oral exam as well as proof of an extensive trial practice. Ms Valdespino is a member of the INBLF, giving her access to its worldwide network of practitioners. She is fluent in Spanish and Italian, having lived in Italy for two years, and has extensive contacts in Colombia. Ms Valdespino speaks extensively on issues of Family and Matrimonial Law, both locally and internationally.

“The internet and social media have thrust the boutique and independent firms into a global market,” observed Ms Valdespino. She opines that more specialised firms are doing better as they have fewer overheads and need fewer resources to keep current. However, to do so she believes that these firms need to reach out to a more global audience. “I believe in education and educating both other lawyers and the public regarding trends in the law,” she explained. “With a global society comes an increased global need for lawyers versed in the international aspects of a global family and matrimonial practice. Relocation when there are children, parental kidnapping, and enforceability of prenuptial agreements in multiple jurisdictions...the list goes on...” require a specialized Family and Matrimonial lawyer with a global perspective and the resources to meet the demands of the international client. In conclusion, Ms Valdespino predicts that boutique and independent law firms will thrive over the rest of 2013 as they provide a personalized and tailored product/service.

Company: Valdespino & Associates, PA Name: Jacqueline M. Valdespino, Esquire Email: Jacquie @valdespinopa.com; legalservice@valdespinopa.com Web: www.valdespinopa.com Address: 2641 Abaco Ave Miami, FL 33133, USA Telephone: +1 9305 4421200

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August 2013 /

SECTOR SPOTLIGHT:

Insolvency, Turnaround, and Restructuring

Insolvency, Turnaround, and Restructuring In an unstable global economy, the risk of corporate insolvency remains high. Whether a company is faced with full-on insolvency proceedings or the challenge of restructuring; company owners, directors, stakeholders and creditors are all faced with difficult decisions to make concerning highly contentious matters. Insolvency can affect a business in many ways, be it indirectly through trading partners or directly facing the risk themselves; this makes them susceptible to a wide range of disputes, involving a wide range of people. Disputes can arise in the context of both threatened insolvency and after insolvency proceedings have begun but either way, having the right team of experts on hand to bring about a resolution is key. Acquisition International speaks to a selection of the world’s leading insolvency and restructuring specialists to examine the key issues.

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Juraj Alexander is Counsel in Dentons’ Prague office. ------------------------------------------------------------------------

We, at the DENTONS Prague office try always to come with innovative restructuring solutions and have achieved several successes recently. We assisted bank creditors in a recently completed reorganization of MSV Metal Studénka, a.s., a major supplier of railway components. The creditors took over the initiative from a passive debtor. The creditors installed crisis management and prepared a reorganization plan providing for a debt-toequity swap and numerous other restructuring measures. A year after the filing of the creditors’ insolvency petition, the company emerged from the reorganization, stabilized and with a new capital structure. Subsequently, we assisted with a successful sale of the stabilized company to an investor chosen in a professionally driven tender. In another case, we assisted AE&E CZ, a Czech

/ August 2013

subsidiary of a failed Austrian green energy undertaking, in devising and carrying out of a prepackaged bankruptcy sale of its business, the first of such kind in the Czech Republic. The company provided deliveries of high-recovery steam generators, extremely complicated and very expensive devices, into power plants. None of the contracts for such deliveries could survive a protracted insolvency. We therefore assisted the management and its economic advisors in looking for an investor ready to take over the company’s business without the liabilities. With an investor on board, we prepared an insolvency petition which enabled a sale to be approved within 21 days and consummated within 41 days. Thanks to the extremely short period of insolvency, the investor managed to reach agreements with most of the customers and, thanks to legal discontinuity, continue the work on the projects without the respective liability. While both these cases involved an exceptional lack of conflict and only very weak adverse interests,

they provide useful examples of how restructuring solutions can be devised to preserve value and save jobs.

Company: Dentons Europe CS LLP Name: Juraj Alexander Email: juraj.alexander@dentons.com Web: www.dentons.com Address: Platnéřská 4, 110 00 Praha 1, Czech Republic Telephone: +420 236 082 213

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SECTOR SPOTLIGHT:

Insolvency, Turnaround, and Restructuring ------------------------------------------------------------------------

David Bryan is a Founding Partner of Bryan, Mansell &Tilley LLP. ------------------------------------------------------------------------

Bryan, Mansell &Tilley LLP is a turnaround boutique which doesn’t undertake formal insolvency work. “Free of any conflicts we have been undertaking cross-border turnarounds on a pan-European and transatlantic basis since 1997,” said Mr Bryan. “All our people are ex C-suite execs rather than from an advisory background and most speak another language. We operate in the mid-market with clients revenues between €10m and €1.5bn.” According to Mr Bryan, corporate insolvencies remain subdued in the UK, with interest rates low and banks not triggering insolvency events. He stated that this is partly because banks have their own balance sheet issues and also because they realise that insolvency is value destructive and a last resort these days. “Many companies are still under extreme pressure but the statistics for Zombie companies seem to vary,” he observed. “Measurement is difficult. Many struggle on with little or no investment and management becoming increasingly fatigued. When the recovery kicks in some will simply not make it either through loss of competitiveness or the inability to fund increased working capital requirements and increased interest rates.” When structuring a turnaround solution, Bryan, Mansell &Tilley LLP starts from the point of view that a live company is worth more than a dead one.

“We have no incentive to see a business go into insolvency and will leave no stone unturned in seeking a solution that delivers value for all stakeholders and a better result than insolvency,” elaborated Mr Bryan. “We also roll our sleeves up and help implement the solution. Not all businesses can be turned round but we have had many successes where others thought the situation beyond salvation and have won two awards in recent years, details of which are on our website.” Mr Bryan concluded with his predictions for 2013/14:

“Recovery will be slow and we expect the market to remain broadly subdued. There will likely be picks ups in some jurisdictions and business sectors.”

Company: Bryan, Mansell & Tilley LLP Name: David Bryan Email: dbryan@bmandt.eu Web: www.bmandt.eu Address: 23 Austin Friars, London, EC2N 2QP Telephone: +44 (0) 20 3178 4902

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Tony Wayne is the President of IronHorse LLC. ------------------------------------------------------------------------

IronHorse LLC provides complex restructuring/ turnaround consulting, forensic and valuation services, litigation support, CFO Services, and due diligence to lower middle-market, small market clients as well as law firms, commercial lenders, and private equity firms. The firm’s work centres around a six-state region: Nebraska, Iowa, Kansas, Missouri, Oklahoma and Arkansas. “The IronHorse advantage is speed/responsiveness, highly personalised service to entrepreneurial business owners, and a highly focused industry concentration,” said Mr Wayne. “Our organisation is lean, highly credentialed, and highly flexible.” Mr Wayne stated that the rate of corporate insolvency in the firm’s geographical focus has slowed considerable in the past 12 months; however he noted that the firm continues to have a decent volume of smaller receiverships. He added that Chapter 11 filings are extremely soft, and most banks appear to have workedout, rewritten troubled credits.

“$1.6 trillion in CRE debt is timed to come due over the next 12-15 months, and we expect an increase in restructuring volume as a result,” he commented. “Also, many commercial credits are highly vulnerable to a slowdown, and a rise in interest rates.”

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Discussing the firm’s approach to structuring a turnaround solution, Mr Wayne stated that it demands a “perfect storm” of a viable core business, a cooperative lender and a receptive client. “We can then get the business refocused, restructured and rationalised around a profitable core,” he explained. “The key is cooperation, transparency and communication.” In Mr Wayne’s experience, the most common reasons for dispute when creating turnaround solutions and going through insolvency proceedings are: unreasonable, unrealistic demands from the lender; mistrust; poor communication; and lack of transparency. The firm has some experience in mediation to resolve these disputes; however Mr Wayne stated that it is usually not very effective. In conclusion, Mr Wayne predicts continued slow conditions, a very competitive environment and pressure on fees for 2013/14.

Company: IronHorse LLC Name: Tony Wayne Email: twayne@ihorsellc.com Web Address: www.ihorsellc.com Address: 6709 W.119th St., Suite 443, Overland Park, KS 66209 Telephone: (913) 851-0027

Litigation in Brazil – The Difficulties & Alternatives -----------------------------------------------------------------------Octávio Aronis is the Senior Partner at Aronis Advogados. -----------------------------------------------------------------------As an attorney with a law firm in São Paulo, Brazil, simply speaking, navigating the Brazilian legal process can be difficult and time-consuming. I always carefully explain to all of my clients that due to the costly bureaucratic legal process, commercial litigation should only be pursued when all other alternatives have failed. For example, obtaining a judgment through a lawsuit can generally take between five to ten years. That said, Brazil has established an excellent regulatory and monitoring agency called the Conselho Nacional de Justiça. This agency has been effective in prosecuting unethical and corrupt judges, and has worked to monitor court procedures to ensure that litigation processes are not unduly delayed, including reducing the number of cases eligible for presentment to the Supreme Court. However, there is still a considerable problem in using conciliation, mediation, arbitration and other methods to expedite the resolution of many cases. There is also a lack of control in the number of frivolous lawsuits filed, with approximately 63.5 million pending lawsuits awaiting judgment. Furthermore, there is a lack of regulation over which trial judgments can be appealed, which has led to excessive appellate filings. Another important element to be considered before entering into litigation is the costs. Due to the length of time, there are usually costs incurred during several steps, and since there is no guarantee of monies being ultimately collected, litigation is generally not recommended on commercial claims less than USD $50,000. In addition to legal fees, there are general costs that must be considered, particularly with foreign claimants, whereby all pertinent documents must be translated into Portuguese by an official translator, and subsequently certified by the local Brazilian Consulate. Further contributing to the inherent difficulties in pursuing litigation in Brazil, Brazilian law states that foreign claimants must provide a legal bond, between 10 – 20% of the claim value, prior to the commencement of a lawsuit. This bond must be available for execution in the event that the plaintiff does not prevail in the lawsuit and is found liable for the defendant’s legal fees. I often receive inquiries from overseas companies that are already involved in litigation in Brazil and suddenly realize they have paid fees equivalent to almost 50% (or more) of the original claim value. As the slow bureaucratic process requires significant legal work, a rigorous investigation should be performed of a defendant’s assets, operational status, as well as the long-term financial viability to pay a claim, prior to commencing with a lawsuit. Generally speaking, it is considered reasonable to pay legal fees either completely on a contingency basis or as a combination of a handling fee and a success fee based upon the amount collected. Including a contingent fee element motivates Brazilian attorneys to resolve legal matters swiftly and encourages the avoidance of an unnecessary or lengthy legal process.

Company: Aronis Advogados Name: Octávio Aronis Email: octavio@aronisadvogados.com.br Web: www.aronisadvogados.com.br Address: Rua Afonso Braz, 579, 12º andar - conj. 125, 04511-011 - Vila Nova Conceição São Paulo - SP - Brasil Telephone: +5511 - 3053 3036

August 2013 /

SECTOR SPOTLIGHT: Preparing for Exit

Preparing for Exit Most business owners are at some point faced with the challenge of selling their company. A business is often the product of many years; even decades of hard work and the sale is often one of the largest financial transactions that the owner will ever undertake. Whatever the reason for exit; be it a straightforward sale, going public or generational succession, it is essential to make a solid exit plan. For owners and investors, the most crucial element of the sale process is the valuation and getting the right price is crucial. Determining a company’s worth is a difficult task; value can be based on much more than just earnings and assets. Acquisition International speaks to leading figures in business law, valuation, and private company services to discuss how to prepare for exit. -----------------------------------------------------------------------Alfonso Luis Penela Quintanilla is CEO and Chairman of the Board at Corporación Mexicana de Valuación, S. A. de C. V. -----------------------------------------------------------------------Corporación Mexicana de Valuación is the leader in appraisal and real estate valuation business in Mexico. Our services follow the strictest industry standards and we are committed to provide legal certainty and reliability in the appraisal process. Our company is backed by cuttingedge technology infrastructure, operated by highly trained appraisers engaged in a process of continuous improvement to ensure the accuracy and consistency of our services. Entrepreneurs who start a business with a good idea, particularly those of specialized services are forced to sell all or part of the company when the administrative complexity raises above his/her management skills and also there are cases of small and medium enterprises for sale by retirement of the founders. These coupled with the appetite of institutional investors willing to invest diversifying or consolidating markets offer exit opportunities for entrepreneurs. In Mexico and around the world the most convenient and common way to exit a business is the sale of the company to an investor interested in the particular industry or going public via an Initial Public Offering (IPO) in the stock market.

-----------------------------------------------------------------------Brendan O’Mahony is the Managing Partner, Transaction Advisory Services, at EY. Paweł Bukowiński is a Senior Manager, Transaction Advisory Services. ------------------------------------------------------------------------

According to EY study of 2012 European exits, last year’s reduction in exit numbers has added to the pressing problem of the exit overhang. The study covers Europeanbased business owned by PE, with enterprise value (EV) of more than EUR 150m at the time of PE investment, or “entry”. There are currently 777 businesses in the PE portfolio with 61 exits in 2012. Based on exit rate in 2012, it would take 13 years (or until 2025) to exit these companies. Consequently we expect a greater number of exits and more intense competition than was seen historically, and to get a deal done will require even more skill in planning and execution than usual. Within Divestment Advisory Services in EY we consider divestiture as a process demanding excellence from beginning to end. Even before formally tagged for sale or up to 12 months before formal sale process begins , a

/ August 2013

The most common mistakes in a succession process or a sale are: • Waiting too long to start planning and defining the strategy: planning should begin at least two years before starting the succesion process. Even if it is not provided for the succession in the medium term, this event should always be considered, if it occurres any unexpected change in circumstances. • Bad timing for sale; The optimum sale (not always possible), should occur when the the business is growing and the recent history shows a positive trend with projected growth years. It should be noted that most likely the current owners (seller) will be required to manage the company in a transitional stage. • Not making the company an attractive target; action must be undertaken to ensure that the company is attractive to potential investors, as those initiatives that help for example to retain key customers and employees. • Lack of understanding of the key drivers that generate value. It is advisable to hire an expert to issue a valuation of the company by identifying the main drivers of value for the company and shareholders. This may be years before the sale, and updated each year with the idea to see if it is acting on these generators of value. • Focus only on the income statement, the balance sheet, and in particular the working capital and debt levels are an important source of value creation.

• •

Inadequate fiscal policy, a good business needs to have a discipline tax strategy. Not getting the right help, the contribution to the process by expert consultants in the transition process, will generate far more value than the cost of the service. In addition, they usually charge based on the success of the transaction.

Company: Corporación Mexicana de Valuación, S. A. de C. V. Name: Alfonso Luis Penela Quintanilla Email: apenela@avaluos.com.mx Web: www.avaluos.com.mx Address: Maria de la Luz Bringas No. 28 Col. Actipan, Delegacion Benito Juarez, Mexico, D.F, CP 03230 Telephone: +52 (55) 5661 15 00

business must be viewed from a buyer’s perspective. To shape a realistic divestiture campaign, sellers need to understand the likely buyers and their needs and concerns. Developing an appropriate transaction strategy including exit readiness study minimizes closing risk and reflects market realities which is critical to preserving value for the seller. To make a case for value to the buyer and to enhance the strategic value of the sale, the seller must thoroughly understand the business being sold. EY helps to bring a buyer’s mindset to the room and anticipate buyers’ questions, address tough lenders’ standards and eliminate surprises that could impact value or jeopardize a deal. EY can help the seller of an entire company or a carvedout business by managing the entire process – planning, preparing and executing across the numerous work streams and stages of the transaction. The actions in this process are key to value preservation in what will clearly be a more competitive market, given the portfolio overhang.

Company: EY Web: www.ey.com/pl Name: Brendan O’Mahony Email: brendan.o’mahony@pl.ey.com Telephone: +48 22 557 6685 Name: Paweł Bukowiński Email: pawel.bukowinski@pl.ey.com Telephone: +48 22 557 6663

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SECTOR SPOTLIGHT: Preparing for Exit

-----------------------------------------------------------------------Kayoko Mitsui is the Managing Director and 100% stock holder of International Appraisals Incorporated (IAI). ------------------------------------------------------------------------

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IAI was established in 1995 and is specialised in narrative appraisals for large sized investment properties; e.g. . Logistics facilities, Hotels, Nursing homes, Offices, Shopping centres and Apartments. Their work area covers all over the country from Hokkaido through Okinawa. Clients they work for are financial institutions, investment funds, J-REITS, S-REITS and other major players in the real estate industry. The firm offers bilingual valuation services.

Business exit planning is the process of considering the options that are available to an owner and creating a plan that best controls how and when the owner exits from the business. There are several options that may be appropriate for the owner to consider, but they typically fall into the following two categories:

Ms Mitsui stated that the firm has recently witnessed or read about many business owners selling their companies.

“Since we see such articles more often compared to the past, the number of deals is increasing,” she commented. “I imagine that it was caused by change in business practices. M&A is getting more common in the society.” The main options for exiting a business, according to Ms Mitsui, are: M&A: listing in the stock market; MBO; and inheritance by successors. She noted that the key consideration when planning an exit strategy is the valuation of the company’s value, including the company’s reputation that they are providing quality appraisals , human resources with high level appraisal skills that can provide services to meet with demands of clients, and networks in the industry which are used for development of marketing strategies and industry analysis .

Richard Strautman is the President of Picus Enterprises, LLC . ------------------------------------------------------------------------

1. Transfer the ownership to family members or employees. In this case, a business transition plan should be created that clearly defines who will succeed in owning and managing the business, what timeline will be established for this transfer and what actions have to be planned and executed. 2. Sell the company to an outside 3rd party. Selling a private company to a 3rd party should typically involve independent experts in business brokerage and/ or investment banking. Be aware of taking an unsolicited offer from a third party without having created an auction type of environment in which multiple buyers are encouraged to compete to purchase your company. A business valuation on your company should be secured from a qualified business valuation expert. Once you have determined the approximate value of your business, look for strategic buyers who would be willing to pay even more for your business. Also consider the many different ways in which a sale can be structured in the definitive agreement. Some of these will get you all your cash up front. Others approaches use defined payments over time or based

on specific performance. These add risk to your getting paid and potentially reduce the amount of cash that you will receive. Consider the tax consequences of each of the above business exit planning options. Different business exit planning approaches may have different tax consequences that will reduce your ultimate net sales proceeds. Get help from outside professionals. Business exit planning can be quite complex and will likely involve important accounting, tax, legal, business valuation, financial planning, and estate planning issues. Get help from experts in these areas and from a qualified exit planning professional. If the business exit planning strategy is to sell the business, get help from business brokers or exit planners in finding and negotiating with potential buyers.

Company: Picus Enterprises LLC Name: Richard Strautman Email: rstrautman@picusenterprises.com Web: www.picus.co Telephone: +1 516 467 4322

Ms Mitsui beleives that the most common mistake is forecasting only on physical assets, and that owners and investors can ensure that a company’s worth is accurately valued by seeking the opinions of reliable third parties for a fair valuation. The main factors that should be taken into consideration during the valuation process, aside from earnings and assets, are the company’s reputation, human resources and networks in the industry. Ms Mitsui believes that a well-planned exit using an experienced team of advisers will allow both parties to achieve maximum benefit. In conclusion, she anticipates an increase in the number of such deals in 2013/14.

IAI Company: International Appraisals Incorporated Name: Kayoko Mitsui Email: k-mitsui@i-a-i.co.jp Web: www.i-a-i.co.jp Address: 21st floor, Shiodome Shibarikyu Building., 1-2-3 Kaigan, Minato-ku, Tokyo 1050022, Japan Telephone: +81 3 5403 6540

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Craig West is a Partner at Succession Plus. ------------------------------------------------------------------------

eight and nine times earnings – substantially increasing the owners wealth.

About Succession Plus Succession Plus is entirely focused on assisting business owners to design and implement a strategy to maximise the value of their business and achieve a successful exit.

Our solution is based on a thorough review and assessment, accompanied by a detailed project plan and timeline to maximise value using our Unique 12 step exit planning process.

We have spent the last seven years working with business owners to assist them in selling, listing, implementing an employee share plan, passing on the business to family members or simply making the business easier/less stressful and lower risk for them to manage. Our Outcomes Industry Research the average sales approximately two below $6m in value businesses.

from Bizexchange shows that price for SME’s in Australia is times earnings for businesses and around three times for larger

Succession Plus have a sales average of 4.6 times earnings over the last five years and have sold several businesses at

Company: Succession Plus Name: Craig West Email: CWest@successionplus.com.au Web: www.successionplus.com.au Address: Level 3, 50 York Street, SYDNEY NSW 2000, Australia Telephone: +61 1300 665473

August 2013 /

Crusader Life Insurance Limited

Crusader Life Insurance Limited is a specialist life insurance company and a subsidiary of Crusader (Nigeria) Plc formerly Crusader Insurance (Nigeria) Plc; a Company which started insurance business in Nigeria in 1956 as a specialist life insurance company and as the foreign office of Crusader Insurance Company Limited, Reigate, United Kingdom. Crusader became a Nigerian Company in 1970 and quoted on the floor of the Nigerian Stock Exchange in 1989 while its shares were listed in 1990. The company remained a specialist life insurance company until 1995 when it started transacting general insurance business. Following the consolidation in the insurance industry in Nigeria in 2007, Crusader Insurance (Nigeria) Plc opted for a holding structure and thus relinquished its Insurance license, and its name was changed to Crusader [Nigeria] Plc, pursuant to the approval of its Shareholders at the Court Ordered meeting of the Company for the Scheme of Arrangement held on April 30th 2007, sanctioned by the Court on 23rd November 2007. The Scheme approved the transfer of the life assets and liabilities of Crusader [Nigeria] PLC to Crusader Life Insurance Limited which had been previously duly registered and licensed the same year to transact that class of business. Crusader Life Insurance Limited, with over five decades continuous experience in the life insurance business is one of the foremost and trusted underwriting outfits in the Nigeria Insurance Industry with her array of experienced managers and a Board comprised of individuals with proven track records in their various professions. Corporate Headquarters: Crusader House, 16A, Commercial Avenue, Sabo, Yaba, Lagos. Phone: +234 - 277 4000 -9 , 070027872337 P. O. Box 2101, Lagos. info@crusaderplcng.com

www.crusaderplcng.com

SECTOR SPOTLIGHT:

Securing Third Party Litigation Funding

Securing Third Party Litigation Funding SMEs that are confronted with potential commercial litigation claims against larger corporations have traditionally faced difficult financial decisions. The prospect of incurring substantial litigation costs can, for the budget-conscious, deter even the most worthy claims. Third party litigation funding has emerged as an ever more viable alternative to traditional funding through internal cash flows. This method of funding is supported by outside investors, typically a hedge fund or special purpose litigation fund which seeks out commercial litigants who have substantial claims, but who are unable to make the financial investment required. Acquisition International speaks to a number of case handling experts to shed some light on this on how third party litigation funding works. ------------------------------------------------------------------------

Nick Rowles-Davies is consultant to Vannin Capital. He is admitted as a Solicitor in England and Wales, and in the British Virgin Islands -----------------------------------------------------------------------Third party litigation funding is now a staple component of the UK legal system – and it is growing. It helps level the playing field in David v Goliath court battles and gives corporates attractive options to negate financial exposure posed by litigation. The Jackson Reforms, which came into effect in April and put an end to recoverability for success fees, will only push the acceptance of funding even further. But those seeking funding and legal practitioners continue to have a dilemma as funders fall into two categories: Those funders who have the funds available – and those who say they do, but sadly, don’t. Vannin Capital - the world’s largest private equity-backed litigation funder and the most active funder in the UK - has the available funds. We are a highly skilled, knowledgeable and flexible specialist litigation funding provider which assists businesses, insolvency practitioners and law firms by offering a funding solution to the costs of running a case and providing financial certainty in an inherently uncertain area. Our funding solutions eliminate the risk of litigation

and unlock the possibilities for claimant and lawyers to help achieve a successful outcome to a claim the potential in which would not otherwise be realised. The company was founded in 2010, and is a funder member of the Association of Litigation Funders.

Last year, we funded a significant proportion of all funded cases, these included a number in our specialist areas of International Arbitration and Professional Negligence. The funding market is going to expand and we look forward to being a major part of that growth Vannin Capital is: • Quick and Agile – Our legal experience means, unlike other funders, the people you are talking to are also the people making the decisions. We evaluate cases and complete due diligence faster than other lenders – and do not tie claimants down into lengthy exclusivity periods.

•

Secure – Our funding comes from Private Equity, not an investment fund structure– and is not drawn from pension funds and other investment areas as in other cases. We are funding from a solid base.

The funding market is going to expand. It will become more of a part of the fabric of the legal system in the UK. Vannin Capital, as a major funder in the UK, looks forward to being part of that growth.

Company: Vannin Capital Name: Nick Rowles-Davies Email: info@litigationfunding.com Web: www.litigationfunding.com Address: 2nd Floor Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG Telephone: +44(0)1624 615111

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Richard Fields is the Chairman & CEO of Juridica Capital Management. ------------------------------------------------------------------------

Juridica was established on 21 December 2007 as a limited liability, closed-ended investment company registered in Guernsey. It has over US$200 million of assets under management. It was the pioneer in alternative litigation financing and the first closed-end fund of its kind ever listed on AIM, a market operated by the London Stock Exchange (AIM: JIL.L). Juridica Investments is a leading provider of strategic capital to the business community and the legal markets for corporate claims. It invests directly and indirectly in a diversified portfolio of corporate claims in litigation and arbitration. Juridica is one of the premier sources of value-added and direct financing for large business claims in the United States and one of the leading sources in the United Kingdom. The company’s clients are Fortune 1000 companies, FT Global 500 companies, inventors, major universities,

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and the leading law firms that represent them. The company only accepts cases that have already been carefully vetted and undertaken by leading lawyers.

“Juridica works to make the legal system work better for business claims,” said Mr Fields. “It does not invest in speculative claims or claims that do not demonstrate economic value and clear merits. Juridica invests only in business claims, and does not invest in class actions, personal injury, product liability, or mass tort claims. “Our goal is to provide business clients with financial choices that reduce risk and assist in maximising claim value. By maintaining an impeccable winning record,

continuing to provide high dividends, and delivering unparalleled customer service, Juridica has established itself as a market leader,” he concluded.

Company: Juridica Capital Management Name: Richard Fields Email: info@juridicacapital.com Web: www.juridica.co.uk Address: 65 E. 55th St., 23rd Floor New York, NY 10022 Telephone: +1 917 388 3055

August 2013 /

SECTOR SPOTLIGHT:

Protecting Intellectual Property Assets

Protecting Intellectual Property Assets Intellectual property is increasingly viewed as an asset from which to extract maximum value. Businesses are wise to recognise the value of their IP and take steps in ensuring such assets are protected accordingly. Patents, trademarks, design work, domain names, written work etc. can form a vital part to a business and such products and processes need to be safeguarded to ensure that potential disputes can be avoided where possible. From time to time is in inevitable that disputes relating to intellectual property will arise. Pre-empting an attack is the name of the game but where this is not possible a robust response to an infringement is the next best thing. Acquisition International speaks to leading experts to discuss the exploitation and management of IP to maximise profit and create competitive advantage. ------------------------------------------------------------------------

Mohamed Idwan (‘Kiki’) Ganie is the Managing Partner of Lubis Ganie Surowidjojo (LGS). ------------------------------------------------------------------------

Dr Ganie graduated from the Faculty of Law of the University of Indonesia and holds a PhD in Law from the University of Hamburg. Dr Ganie is a Chairman of the Association of Indonesian Anti-Trust Lawyers, a member of the Regional Panel of the Singapore International Arbitration Centre (SIAC), and a fellow (FSIarb) of the Singapore Institute of Arbitrators. Dr Ganie has more than 30 years of legal experience, and specializes in commercial transactions and commercial litigation, including alternative dispute resolution and has acted as an expert in a number court and arbitration proceedings. His expertise covers general corporate/ company law, banking law, finance, bankruptcy and restructuring, mining, investment, acquisitions, infrastructure projects/project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance.

LGS was founded in 1985 by Timbul Thomas Lubis, Dr Ganie and Arief Tarunakarya Surowidjojo. Since then, LGS has grown into the largest corporate transactions and corporate litigation firm in Indonesia. LGS has also obtained Lloyd’s Register Quality Assurance certifications of ISO 9001:2008 for Quality Management systems and ISO 14001:2004 for Environmental Management systems to ensure the quality of all aspects of the firm’s operations and services. “We have experience representing a diverse range of clients, including domestic and multinational corporations, public and private companies, Government instrumentalities and State Owned Enterprises,” said Dr Ganie. “One of our unique selling points is the combination of our long-standing commercial law practice and our premier litigation department that has extensive experience in dealing with commercial disputes in the context of arbitration and alternative dispute resolution as well as litigation in the Indonesian courts. This allows our corporate transaction departments to

benefit from such litigation experience, and from their own compliance work, to ensure that any transactions handled by the firm are carried out with a view to the potential for future disputes and any existing risks,” he concluded.

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

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Michal Pospíšil, Ph.D. is an Attorney at Law and Member of the Supervisory Board of PATENTSERVIS Praha, a.s. ------------------------------------------------------------------------

The words “Patent and Trademark Agency“ give a true picture of line of our business, i.e. providing of services with respect to Patents, Trademarks, Utility Models, Industrial Designs, Copyrights, Licencing and Technology Transfers, Litigation. Covering the whole scope of IP rights we represent domestic and foreign clients in proceeding regarding registration of IP rights as well as their maintenance, in contradictory proceedings with PTO and with the Courts. Our typical clients are either domestic Czech companies or our partner foreign Patent and Attorney at Law Offices seeking protection for their client´s industrial property rights in the Czech. Patent Attorney has to be familiar not only in industrial property law but he also has to have

/ August 2013

knowledge of commercial law, in other words he has to be fluent in all fields of law which are closely connected with his work. The services of Patent Attorney do not represent simply the help with filing of certain industrial right as it is important from the same beginning to discuss with clients their business plans and accordingly to choice the best way of protection. And the last but not the least, he has to be able to protect and strongly enforce client´s rights in contradictory proceedings before PTO or Court. High-quality and well-considered industrial property strategy can prevent disputes concerning infringement of rights or author´s disputes. Our effort is to cooperate with our clients in industrial property proceeding in the way as described above and also in watching filed/published industrial rights of competitors to be fully informed of possible future problems. Unfortunately, as we know from our practice, the prevention is very often underrated and clients are seeking for help at the moment when

their rights are attacked by competitors and the defence is very complicated namely as consequence of undervalue of registration of industrial rights.

Company: PATENTSERVIS Praha, a.s. Name: Michal Pospíšil, Ph.D. E-mail: patmag@patentservis.com Web Address: www.patentservis.com Address: Na Podkovce 281/10, 147 00 Prague 4, Czech Republic Telephone: +420 261 090 011

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Protecting Intellectual Property Assets ------------------------------------------------------------------------

Omer Soomro is a Partner at RIAALAW. ------------------------------------------------------------------------

Mr Soomro stated that the key requirement of an IP adviser is having up-to-date knowledge with respect to intellectual property laws.

RIAALAW is the largest and most reputed law firm in Pakistan. The firm currently conducts its practice in Pakistan from its offices in Karachi, Islamabad, Lahore and Peshawar. The firm also has an office in Kabul and affiliated offices in London and Beijing. The firm is the exclusive member firm in Pakistan for Lex Mundi, the world’s leading network of independent law firms.

“An IP adviser’s role is important as he advises clients on legal issues relating to ownership and protection of IP rights,” he explained. “IP rights are a valuable asset for any business because they provide the foundation upon which innovation is shared and consumer trust is reinforced.”

The firm has extensive experience in the fields of project finance, corporate advisory, mergers and acquisitions, banking and finance, infrastructure development projects, tax, competition, media, insurance, cyber laws and intellectual property, trade remedy laws, litigation and arbitration.

“We support businesses by advising clients with respect to IP rights. For instance, with respect to trade marks, we handle trademark availability searches and opinions, register and file trade mark applications with the Trade Mark Registry, maintain trademark registrations, and enforce and defend our clients’ trademark rights,” concluded Mr Soomro.

“Our team adheres to high professional standards and a strict moral code which is the key to our success and reason for maintenance of loyal clients through the years,” said Mr Soomro. The firm specialises in the provision of legal services in matters pertaining to patents, designs, trademarks, copyrights, licensing and franchising. The firm also provides litigation services relating to intellectual property rights infringement.

Company: RIAALAW Name: Omer Soomro Email: osoomro@riaalaw.com Web: www.riaalaw.com Address: D-67/1, Block 4, Clifton, Karachi, Pakistan Telephone: +92 21 35865198

Butterworths prize for the best legal article in 2000. Ron is a member of the Standing Advisory Committee for IP established under the Copyright Act to advise the Minister of Trade and Industry, a position he has held for 13 years. He is assisted by a team of highly experienced non-attorney professionals who attend to the high administrative workload of an IP practice and by three young lawyers.

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Ron Wheeldon is the Founder of Ron Wheeldon Attorneys.

-----------------------------------------------------------------------Edward M. Livingston is the President of THE LIVINGSTON FIRM, a law firm headquartered in Naples, Florida, which specialises in intellectual property law. ------------------------------------------------------------------------

Mr Livingston stated that THE LIVINGSTON FIRM distinguishes itself from its competition by having a business law background in addition to its extensive experience in intellectual property matters. According to Mr Livingston, the key requirements of an IP adviser are the ability to look at the big picture and having experience in defining, establishing, protecting and enforcing intellectual property (IP) rights.

“IP rights, particularly patents and trademarks, define a company and provide a significant competitive advantage over other companies, thereby comprising a substantial portion of a firm’s value, far exceeding the value of its hard assets,” he observed. Mr Livingston explained that businesses which fail to protect the IP can lose their IP rights altogether. “For instance, the failure to promptly apply for patent protection on an invention, especially before publicly disclosing or offering an invention for sale, can result in loss of patent rights,” he explained. “Similarly, the failure to protect and police a trademark can result in loss of a trademark.” When an infringement is detected, THE LIVINGSTON FIRM assists in finding a suitable resolution by performing due diligence, including an infringement analysis, to determine whether there indeed is an infringement and the strength of the patent rights. The firm then discusses options for litigation with the client, such as licensing or acquisition, designing around and so forth.

Ron holds a Bachelor of Law (Hons) degree from the University of Rhodesia (formerly a college of the University of London) obtained in 1976. Commencing trade mark practice in South Africa in 1982, he is expert on many of the IP Laws of the African continent and hugely experienced.

“If litigation is the only option then, based on our experience, we can explore various ways of resolving the matter during litigation, such as re-examination by the patent office, mediation, arbitration and so forth,” he added.

The firm deals with all aspects of trade mark and copyright work in Africa and further afield. Ron’s interest in the jurisprudence of IP law is balanced by keeping a practical perspective through appearing frequently in the courts in litigious matters ranging from domain name disputes, through counterfeiting issues to conventional infringement and trade mark registrability issues.

In conclusion, Mr Livingston offered the following advice: “Entrepreneurs and businesses of all sizes with any new idea or venture should meet first with intellectual property lawyers to determine what their intellectual property rights are and how such can be protected”.

-----------------------------------------------------------------------This is a boutique firm with a strong emphasis on intellectual property (“IP”) founded in 2005 by Ron Wheeldon. After 25 years spent in a large firm environment, Ron decided that a small, focused group in the Bohemian surroundings of the aptly named Greenside would be a decidedly more pleasant existence and permit him to spend more time doing IP work himself and a lot less time commuting and managing people. Ron has a passion for IP and has been involved in committee work for the International Trade Mark Association (INTA) since 1993, at one time chairing the Public Education Committee of the Brand Names Education Foundation (BNEF) which is related to INTA. Ron writes frequently for numerous publications and won, in South Africa, the

ACQUISITION INTERNATIONAL

Company: Ron Wheeldon Attorneys Address: Private Bag X10, Greenside 2034, South Africa Email: ron@brands-man.com Web: www.brands-man.com Telephone: +27 11 646 66 66 Fax: +2786 605 6415

Company: THE LIVINGSTON FIRM Name: Edward M. Livingston Email: eml@thelivingstonfirm.com Web: www.thelivingstonfirm.com Address: 963 Trail Terrace Drive, Naples, Florida 34103, USA Telephone: +1 239-262-8502 (Local Tel.); +1 800-548-4332 (Toll Free)

August 2013 /

SECTOR SPOTLIGHT:

The Importance of Regulatory Compliance

The Importance of Regulatory Compliance Understanding the constantly changing business landscape and developing the systems to achieve group compliance is a much bigger challenge than it was just a few years ago. As the number of rules has increased, regulatory compliance has become more prominent across many organisations and industry sectors. The stakes are now higher too, with the global slowdown, customers, investors and regulators are far less tolerant than they once were. Management teams need to ensure their staff, policies and procedures all comply with legal and regulatory requirements and industry best practice. All organisations that come under the control of a regulator need to ensure they are familiar with the regulatory requirements relevant to them to avoid actual or perceived non-compliance and detect potential violations. Acquisition International examines the key issues with commentary from leading experts. ------------------------------------------------------------------------

Rafael Dickson Morales is the founding and Managing Partner of Dickson Morales – Abogados | Consultores (DMAC). -----------------------------------------------------------------------DMAC is a proactive law firm committed in providing effective and timely innovative solutions, which prevents our clients’ legal and strategic risk. “DMAC engage in a close relationship of trust and understanding with the client’s needs as if they were oun , to provide them adequate and innovative solutions in the shortest time possible, allowing them to remain competitive in a global market in constant development and thereby add real value,” said Mr Dickson. Understanding the constantly changing business landscape and developing the systems to achieve group compliance is a much bigger challenge than it was just a few years ago. Mr Dickson noted that, depending on the sector or market, the overall tendency is to comply with the regulations. “DMAC profound study to understand the constant change of regulations and regulatory proposals that affect its client’s business, provide us the knowledge to assist all

/ August 2013 2013 48 / August

aspects of meeting the ongoing legislative and regulatory obligations that may apply to our clients,” he commented. “We inform them even before the regulation is in full effect”.

The service philosophy of DMAC and its values represent a fundamental part of our mystic of excellence in service. The client’s needs are always our top priority.”

“The most common consequence of non-compliance, are fines. In some cases, non-compliance can result in mandatory closure of operations, or even imprisonment of the directors. The indirect costs are often more significant.” In order to ensure that DMAC team is kept up to date with current regulatory requirements, the firm monitors the basic regulators and regulatory proposals in Dominican Republic, legislative branch and administrative regulators such as banking, taxes, telecommunications, advertising, tourism, consumer protection regulations, amongst others. “We guide our clients to achieve results,” continued Mr Dickson. “We develop a close relationship of trust and understanding of our clients’ needs as if they were our own. “DMAC examine and analyze their clients’ legal and strategic needs, for the big picture and strategic issues of the business and economic goals of its clients. DMAC focuses in the principal’s matters of the business operation.

Company: Dickson Morales – Abogados | Consultores (DMAC) Name: Rafael Dickson Morales Email: rdickson@dicksonmorales.com Web: www.dicksonmorales.com Address: Ave. Sarasota No. 39 Sarasota Center, 2nd Floor, Suite 210, Santo Domingo, Dominican Republic Telephone: +849 809 547 1602

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Importance of Regulatory Compliance ------------------------------------------------------------------------

AnnMarie Croswell is a Director, Regulatory and Compliance, at Kinetic Partners’ Hong Kong office. ------------------------------------------------------------------------

and certainly reputational damage which may result in the inability to retain current investors or attract new investors.

As a leading global professional services firm, Kinetic Partners aims to ensure that clients are kept up to date with the current regulatory requirements. Kinetic Partners makes sure that it is in close contact with the various regulators and industry bodies; maintains good relationships with industry leaders and global leading law firms; and attends relevant seminars.

“We provide an outsourced solution tailored to each client’s needs,” said Ms Croswell. “Depending on the size, complexity and in-house compliance resources of the client, we design a comprehensive regulatory manual and program inclusive of a client’s regulatory obligations from a global perspective.

“In addition, we conduct internal research and training for global team members to work closely together and, support our various offices to communicate relevant regulatory updates and changes,” continued Ms Croswell. Ms Croswell explained that, depending on the jurisdiction and the nature of any potential breach, non-compliance with regulation could result in, for example, civil fines or criminal penalties, sanctions, being barred from the industry, revocation of licenses

“Alongside the manual we develop an on-going compliance monitoring program and can assist clients by making certain requisite regulatory filings, developing compliance policies and procedures, testing those policies and procedures, providing training for staff, conducting periodic onsite reviews, providing periodic regulatory updates as well as ad hoc on-call compliance advice. We work with clients in helping them understand their current obligations and the obligations they may face as their business or the relevant regulatory frameworks change.”

“Through on-going communication and dialogue with our clients, including periodic face-to-face meetings, we ensure that we understand their businesses, and we can therefore spot issues and advise on relevant regulatory matters as proactively as possible,” she concluded.

Company: Kinetic Partners (Hong Kong) Limited Name: AnnMarie Croswell Email: annmarie.croswell@kinetic-partners.com Web: www.kinetic-partners.com Address: Unit 4103, 41/F. Tower 2, Lippo Centre, 89 Queensway, Hong Kong Telephone: +852 3470 9003

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Simone Proctor is a Senior Associate in the Cayman Islands office of Solomon Harris Attorneys at Law, and a member of the Chartered Institute of Securities and Investment.

We have seen an increase in operational due diligence enquiries on regulatory controls, enforcement actions, and compliance in the recent past.

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We ensure that our clients operate within the guidelines issued by CIMA on the prevention and detection of money laundering and terrorist financing in the Cayman Islands. As the revised FATF 40 recommendations are implemented, and a risk-based approach to compliance is introduced, we anticipate an increased focus on at the national level. We also work on the principal that achieving regulatory compliance for a Cayman Islands company means, adherence to local laws and applicable financial services regulation and, increasingly, because of Cayman’s international co-operation efforts, it also encompasses compliance with laws, regulations and standards imposed extra-territorially, by other jurisdictions and regional bodies.

The Cayman Islands Monetary Authority (“CIMA”) is responsible for the supervision and regulation of financial services in the Cayman Islands. As a part of its on-going supervision of registrants, CIMA monitors compliance with the anti-money laundering regulations, policies, procedures and statements of guidance, it issues. Solomon Harris Attorneys work closely with CIMA on every aspect of our client’s financial services and regulatory and compliance needs, and recognises the local and international drive to adapt to higher regulatory standards. On a global scale, we have seen more convergence of regulatory standards across jurisdictions and significant increases in enforcement actions for breach. Investors, in particular institutional investors, are demanding higher systems and controls, and other measures.

ACQUISITION INTERNATIONAL

For many of our clients, ensuring compliance means dealing with multiplicity of jurisdictions, regulators, local laws and regulations. Our client work involves providing know-how and legal guidance to clients on legal and

regulatory requirements applicable to businesses in the Cayman Islands. Identification of regulatory risk is key and Solomon Harris will work with clients to identify, then to establish measures to control such risks.

CAYMAN ISLANDS ATTORNEYS -AT - LAW

Name: Simone Proctor Title: Senior Associate Email: sproctor@solomonharris.com Web: www.solomonharris.com Address: 3rd Floor FirstCaribbean House, PO Box 1990, Grand Cayman KY1-1104, Cayman Islands Phone: +1 345 949 0488 Fax: + 1 345 949 0364

August August 2013 2013 //

SECTOR SPOTLIGHT:

Reducing M&A Risk through Improved Due Diligence

Reducing M&A Risk through Improved Due Diligence Creating value through acquisitions has proven to be a perilous strategy. Often, the seller knows more about the business and its markets than the buyer. This asymmetrical knowledge can cause the buyer to overpay and result in the destruction of large amounts of share-holder value. Getting a complete and accurate view of the financial, operational and cultural characteristics of an acquisition target isn’t easy, extensive due diligence is essential in minimising risk, in avoiding delays in getting the deal through to completion and in ensuring that the a fair purchase price is paid. In an ever-evolving and certainly challenging climate it is now more important than ever that complete and comprehensive due diligence is carried out in every corporate transaction. Acquisition International speaks to a variety of experts and key players to learn more about this vital aspect of M&A.

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Arthur van der Wees is the Managing Partner of Arthur’s Legal B.V., Amsterdam. ------------------------------------------------------------------------

Preparation equals success & protection. Each ambitious business and company is quite busy with moving forward and conquering its market and the world. Meanwhile, managing numerous information flows and documentation flows in order to well-establish and secure the grounds already covered and conquered is generally not a business focus. ‘In order to help our global corporate clients with these challenges, and to assist with structuring and building their businesses and keeping them lean, we have assisted, structured and protected information flows and helped business manage documents worldwide, and at all levels. Besides internal structuring of methodologies and processes, we have set up and manage repositories of clients, as Prep (Pre-DD) Rooms, Due Diligence Rooms and Post-DD (PMI) Rooms.’, said Arthur van der Wees, attorney and managing partner of Arthur’s Legal, a boutique law firm, founded in 2001, with its headquarters in Amsterdam. Arthur’s Legal has an international practice, mainly focusing on national and international companies in the markets of Private Equity (PE) & Venture Capital (VC), M&A, High Tech, IT, Cloud Computing, (Petro) Chemical, Pharma & Bio Tech, Healthcare, Clean Tech and Energy. Generally, it represents its clients as counsel, external (add-on to) legal department and/or attorney at law. When it comes to due diligence, Arthur’s Legal has a proactive and precautionary approach, strategically

/ August 2013

‘Preparing could be for a refinancing, PE/VC financing round, preparing for acquire or merge with other businesses, that big exit, either by trade sale, buy-out or IPO, but also for Post Merger Integration (PMI) purposes’, Van der Wees continues. tailored per client, in order for their businesses to prepare for long view goals, while keeping short view routines manageable with the newest technology, such as customized document generation and workflow management by Zapplied Legal, a Salesforce platform SaaS application. ‘Preparing could be for a refinancing, PE/VC financing round, preparing for acquire or merge with other businesses, that big exit, either by trade sale, buy-out or IPO, but also for Post Merger Integration (PMI) purposes’, Van der Wees continues. ‘Whether we assist on a EUR 10 million investment round, a EUR 100 million buy-out or a EUR 1 billion refinancing, we like being involved well in advance in order to prepare the company. Keeping lean, also concerning documentation is key in order to know where to find what, to be prepared better than the other contracting party. It is surprising how much time and money (including discussions about purchase price, warranties and company valuation) a company saves when being well prepared. But it is even more amazing that so little businesses are really ready for investments, refinancing, M&A or PMI.’ Therefore, Arthur’s Legal helps prepare any client for these important business phases and transactions. One of the secrets is using secure online data rooms, right

from the incorporation of a business, and keeping it upto-date as it were your CRM or financial systems. ‘We help setting up these data rooms, train dedicated staff of the company to cost-efficiently keep it up to date, and monitor it continuously. This way, when being lead counsel in an investment round or M&A deal, we can find any document or information within one minute. Time is precious in these transactions, and furthermore the other party doing due diligence is very impressed about the speed and accuracy of information provision, which lead to more comfort and less discussions. Van der Wees explains.’ The great thing about this, is that these projects to prepare well are quite cheap, and a great investment for any company’.

Company: Arthur’s Legal B.V., Amsterdam Name: Arthur van der Wees Email: vanderwees@arthurslegal.com Web: www.arthurslegal.com Telephone: +31 20 – 305 49 50

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Reducing M&A Risk through Improved Due Diligence ------------------------------------------------------------------------

Peter Jamin is a Senior Project Manager at ARCADIS Deutschland GmbH. -----------------------------------------------------------------------ARCADIS is an international company that provides consultancy, design, engineering and management services in the fields of Infrastructure, Water, Environment and Buildings. “ARCADIS’ strengths are integrated services and a broad geographical spread,” said Mr Jamin. “With over 22,000 employees around the globe and diversified services (buildings, environment, water, infrastructure) ARCADIS can support its clients globally and locally. “ARCADIS uniquely provides all services from a single source: TDD, EDD, ESA Compliance, Phase II, III and IV on a Pan European or Global basis enabling a consistent quality approach for clients.” According to Mr Jamin, the lack of adequate due diligence can result in capital expenditure risks being underestimated or missed completely. He stated that the construction and technical standards are highly complex and often a specialist opinion is required. “It is unrealistic to expect that all risks can be covered during a quick inspection especially when the Technical Team has a so-called ‘guided tour’ and is not given full access and the necessary time to form a robust view,” he commented. “However this is very often the case and can be considered market practice.” Arcadis EC Harris is a market leader when it comes to cross-border transactions. Mr Jamin noted that a consistent approach that respects local legislation is critical when it comes to Technical and Environmental Due Diligence. It is also essential that the technical and environmental risks are judged in a consistent manner with the appropriate level of weighting and correct understanding of priorities. “In addition different levels of Technical and Construction issues exist in a cross border situation but in the long term there will be a convergence of standards,” he continued. “For example many Global Clients will have a Global Sustainability Charter which may be higher in some countries than local standards. A local approach to Due Diligence may result in

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Phil Johnson is the Deputy Director for South East Asia, Corporate Investigations, at Control Risks. ------------------------------------------------------------------------

Established as a crisis resolution business in 1975, Control Risks now has 33 offices around the world and provides advisory services to its clients relating to integrity, political and security risk issues, wherever they may be faced. Mr Johnson stated that the firm’s due diligence specialisation might best be described as integrity due diligence; “using human intelligence and our own institutional knowledge to help our clients understand more about the track records, reputation and probity of those entities and individuals that are the subject of M&A activity”. Inadequate due diligence can lead to poor investment decisions, which, according to Mr Johnson, may lead to a catastrophic destruction of value, be that with the collapse of a portfolio company, a disastrous merger, or exposure to malpractice in a wider sense.

“Most of these cases occur when investors have made an inappropriate decision about the depth of due diligence that is required,” he observed. “Particularly in the case of emerging markets and crossborder deals, understanding what you can expect to find (and trust) as a matter of public record – and

ACQUISITION INTERNATIONAL

incorrect assessment of long term risks.” Arcadis expects transaction volumes to remain high in the CORE market over the next 12 months. Therefore, the firm anticipates that demand for Technical Due Diligence Services will also remain on a high level. “Especially as CORE investors are increasingly risk averse in the area of compliance with fire protection regulations, building contaminants and operational health and safety,” he elaborated. “As the management of the owning entity may be personally liable for any breach of regulations, the depths of due diligence has generally increased in these areas. “We are also seeing that the OPPORTUNISTIC dealflow is picking up. This typically involves larger portfolios with high CAPEX requirements in need of repositioning. As most of these assets are generally more than 25 years old, the analysis of potential building contaminants play an important role in an adequate risk assessment. Furthermore, structural issues need to be evaluated in order to assess the opportunity for future increase of rental areas. “As speed of transaction remains an important success factor for the investors, having an integrated Due Diligence Service Provider (building fabric, MEP, Environment, Fire Protection, Structural) is a key success factor in closing deals,” he concluded.

Company: ARCADIS Deutschland GmbH Name: Peter Jamin Email: p.jamin@arcadis.de Web Address: www.arcadis.de Address: Europaplatz 3, 64293 Darmstadt Telephone: +49 6151 388 423

A journey of 1000 miles begins with a single step of due diligence -----------------------------------------------------------------------Sumchit Anand is the Managing Director of Acquisory India Consulting Private Limited and leads the M&A advisory practice. -----------------------------------------------------------------------The phenomenal characteristic of M&A is its notable presence in both boom and recession. During boom, growth dynamics increase M&A activities, while in recession consolidation and restructuring spurs continuity. In an uncertain economy, one has to be extra cautious as stressed companies have ways of masking poor financials and negative trends. While, as per Warren Buffet, during upbeat or optimistic times, extra caution is needed as rising valuation and cross border deals brings forth new unknowns.

During the recent recession, Cross Border transactions, especially into BRIC nations, have been a growth model for many companies looking to create synergy and control decreasing domestic sales. Cross Border deal executions are complex and have to factor in various differences between acquirer and target such as cultural, regulations & compliances, accounting standards, taxes, local practices, anti-corruption laws and country risks. A proactive approach has to be taken to manage M&A risks through a focused strategy and a thorough due diligence. At Acquisory, we integrate seamlessly with Client’s M&A Team i.e. business, finance, legal, fiscal, HR, and IT teams to keep ourselves focused on synergies in business and the overall environment in which the business operates to arrive at a viable merger option and a realistic valuation. We focus on not only identifying comprehensive transaction risks and concern areas (value destroyers) but also the potential upsides (value enhancers) and categorize acquisition risks in the following buckets (along with examples of risks)::

so how much farther you need to go to gain sufficient clarity – is crucial. That could be the difference between uncovering the kernel of information that forces a rethink, a restructuring, or walking away – or not.” In the next 12 to 24 months, Control Risks anticipates a reasonable buoyant appetite for M&A, particularly in emerging markets where lower valuations will make local assets more attractive to foreign buyers. “Key challenges when investing in these markets will be to understand macro political, regulatory and legal issues, together with obtaining a detailed understanding of local partners and their potential liabilities, whether financial or reputational,” he concluded.

Company: Control Risks Name: Phil Johnson Email: phil.johnson@controlrisks.com Web: www.controlrisks.com Address: 331 North Bridge Road, #04-01/04 Odeon Towers, Singapore 188720 Telephone: +65 6227 2038

M&A transactions are amongst the most complex activities a business undertakes. A hastened and ineffective due diligence could lead to unseen liabilities, hidden business issues, reduced financial attractiveness, damage buyer’s reputation by misjudging target’s customer relationship, misaligned capital structure or disproportionate risk sharing etc. and therefore effective diligence is an art and needs to be planned and executed with right skill.

Company: Acquisory India Consulting Private Limited Name: Sumchit Anand Email: sumchit.anand@acquisory.com Web Address: www.acquisory.com Address: D-109, Defence Colony, New Delhi - 110024 Office Phone: +91 11 4644 3000

August 2013 /

SECTOR SPOTLIGHT:

Reducing M&A Risk through Improved Due Diligence ------------------------------------------------------------------------

Lars Meyer is a Director working in Transaction Services for KPMG in Turkey. ------------------------------------------------------------------------

KPMG Turkey was founded in 1982 and is one of the oldest international audit, tax and advisory firms in Turkey. The firm’s Transaction and Restructuring practice was founded in 2006. According to Mr Meyer, small to medium sized companies form the core of M&A transactions in Turkey. He noted that it is not uncommon for companies in this segment to have a financial control environment that is usually not as developed as in comparable companies in more developed countries. “Together with other market specific features, such as the Turkish GAAP which is largely a cash accounting principle, a lack of audit requirement for most companies and the existence of out of book transactions, cloud the view of earnings levels of Turkish businesses and therefore require more careful diligence,” he observed.

“The implications are that reported numbers often provide little or no comfort and investors are unable to form a clear view of key drivers of the business and are at risk of hidden liabilities including tax risks. Foreign investors are often not prepared for this and sometimes walk away from a good opportunity.” As a result, KPMG in Turkey offers its clients a phased due diligence approach, split into distinct work streams but managed as one seamless advisory offering: A: Helping prepare reliable base numbers (including carve-outs if there are unwanted assets) - this provides a starting point for valuation and eventually due diligence; B: Translating the numbers into a format the firm’s clients understand – often this will involve an IFRS or US GAAP conversion; C: Top-up due diligence – a focused piece of work, homing in on the key questions the firm’s clients demand an answer to: around value drivers, pricing and valuation, and SPA considerations.

“We do this by bringing together a multitude of skill sets across our advisory business to help our clients complete successful transactions,” concluded Mr Meyer.

Company: KPMG / Akis Bagimsiz Denetim ve Serbest Muhasebeci Mali Musavirlik A.S. Name: Lars Meyer Email: larsmeyer@kpmg.com Web Address: www.kpmg.com/tr/en Address: Rüzgarlı Bahçe Mah,. Kavak Sok. No:29, Kavacık-Beykoz 34805, İstanbul, Turkey Telephone: +90 (216) 681 9000 – ext. 9058

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Mr Rahul Nag is the Director of Octavia Life Ltd. ------------------------------------------------------------------------

Commercial Due Diligence is about understanding risk and in being aware of potential issues with the market, customers or competitors. It is also about justifying and confirming management’s sales forecasts. However, we add two extra elements. Working both internally and with external partners, we can provide a cultural due diligence assessment as well as innovation consulting. As a trade buyer, the culture, structure and channel strategy is at least as important as the sales and profit forecasts. As a private equity investor, you have to be sure there is at least a chance of growth and returns as well as focusing on risks. The absolute key is to really understand customers’ needs by using tools from innovation to allow you to find and service unmet customer needs – the heart of all dramatic growth.

We typically tend to work with medium sized investors, upto £100m in outlay but we can work on bigger deals. The focus is mostly on B2B sectors but we are looking to increase our exposure in the media and entertainment fields.

We use a very detailed and structured plan in order to achieve a thorough understanding of the market in a short space of time. For example, we will start with traditional desk research analysis of published market research as well as trade press and associations etc before moving on to the key part of Commercial Due Diligence – which is primary research in the market. This is both the most difficult section of the work as well as the most important.

From these sources, we will build a picture of the market – its current size, growth and trends as well as analysing management forecast sales by key customer or segment as appropriate to advise you of potential risk and upside opportunities.

Company: Octavia Life Ltd Name: Mr. Rahul Nag Email: info@octavialife.com Web Address: www.octavialife.com Address:24 Page Court, Page Street, London NW7 2DY Telephone: +44 (0) 208 346 2169

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Peter S. Baty is a senior leader of Sanborn, Head & Associates’ Acquisitions & Divestitures practice. -----------------------------------------------------------------------Sanborn, Head & Associates has been providing strategic environmental advisory and engineering services to its clients for over 20 years. Mr Baty stated that the risks associated with inadequate environmental due diligence will range significantly depending upon the specific variables of the acquisition – for example: the type of industry, the age and location of facilities, stock vs. asset deal, etc. “One common pitfall that we frequently encounter is that smaller facilities within a target portfolio will often receive far less diligence than larger ones, if they receive any at all,” observed Mr Baty. “While this might seem like common sense, our experience has shown that during normal business operations, smaller facilities have a tendency to ‘slip through the cracks’, often receiving less support and attention from corporate than the larger facilities. This lack of oversight can contribute to sloppy environmental or safety management practices, which ultimately can result in significant long-term liabilities.

/ August 2013

The take-home message is: don’t overlook the smaller facilities just because of their size.” In Mr Baty’s experience, private equity firms and strategics tend to have differing tolerances for environmental risk when acquiring a business; primarily because their longterm plans for the business are usually quite different.

“Down the road, this disparity can pose unanticipated challenges for a private equity firm when they look to sell that same business to a strategic buyer due to potentially increased scrutiny during due diligence. We advise our clients to consider conducting environmental due diligence to not only satisfy their own risk profile, but also

in consideration of the risk profiles of those businesses that they might target as premium buyers when the time comes to sell,” he concluded.

Company: Sanborn, Head & Associates, Inc. Name: Peter S. Baty Email: pbaty@sanbornhead.com Web: www.sanbornhead.com Address: 1 Technology Park Dr., Westford, MA 01886, USA Telephone: +1 978-577-1020

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Importance of Anti-Corruption Due Diligence in Corporate Transactions

The Importance of Anti-Corruption Due Diligence in Corporate Transactions Anti-corruption and anti-bribery issues continue to present significant risks in acquisition and investment transactions as regulators across the globe continue robust enforcement in this area, a trend which is expected to continue. In such an environment, international organisations, particularly those operating in high-risk countries and industry sectors, must ensure that their anti-bribery and corruption compliance programs are comprehensive and effective. Indeed, failure to identify a significant corruption risk at a target company not only opens the possibility of regulatory risks, it can undermine the core value of the transaction. It is therefore of the upmost importance that management teams seeking to embark on a corporation transaction seek the advice and expertise of those with the experience and regulatory knowledge of all applicable regions to ensure the purchaser is not at risk. Acquisition International speaks to a panel of experts to discuss the key issues.

Robust due-diligence must root out potential for corruption ------------------------------------------------------------------------

Eve Giles is a Partner at Kingsley Napley. ------------------------------------------------------------------------

The new Director of the Serious Fraud Office (SFO), David Green QC, has set out his ambition to take on ‘cases that undermine UK plc in general and the City of London in particular – big frauds, big bribery and corruption’. He will need a rigorous strategy, substantial funding and resources. But crucially, he needs a successful prosecution under the Bribery Act and, even better, a corporate conviction. Companies of all sizes cannot afford to relax. The SFO will want to actively enforce section 7 of the Bribery Act 2002 and prosecute a corporate body for failure to maintain adequate procedures to prevent bribery. It will also seek to target individual company directors (and potentially the corporate) under the Act. By now, most corporate entities will have antibribery policies and training programmes in place. Of critical importance is the due diligence procedures recommended under Principle 4 of the MOJ’s guidance in respect of persons performing services on their behalf, an area of weakness for many companies.

/ August 2013

This presents a significant risk for those involved in corporate transactions. Corporates with robust due diligence procedures who turn down work in specific jurisdictions could be potential whistleblowers to the SFO in respect of their competitors’ less diligent approaches. An investigation by the SFO (and others such as the US Department of Justice), can inflict significant reputational damage on a company and the individuals involved. It is important to note that corporations and any individuals implicated may fall foul of due diligence testing many years after the investigation has ended.

activities. It is also vital to ensure, before any issues arise, that the level of (and exclusions to) cover under the Directors & Officers insurance policy is re-negotiated if necessary to help mitigate potential litigation costs. No corporation will want to boost the SFO’s confidence by providing a first corporate ‘scalp’. The fact that Mr Green has shifted the balance of power back to the SFO means that corporations cannot afford to relax, particularly in relation to transactions and operations in high-risk countries.

Expensive, time consuming and large scale process testing and training may not be attractive, but it must be weighed against the cost of an investigation should something go wrong. If a corporate body suspects wrongdoing, it is important to decide whether the investigation should be undertaken in-house or if it is necessary to obtain external legal advice. In cases of suspected fraud or corruption, a corporate should seek expert external legal advice immediately to ensure the scope of the investigation is properly managed, personnel are protected and to segregate the investigation from on-going business

Company: Kingsley Napley Name: Eve Giles. Email: egiles@kingsleynapley.co.uk Web: www.kingsleynapley.co.uk Address: Knights Quarter, 14 St John’s Lane, London, EC1M 4AJ, UK Telephone: +44 (0)20 7814 1200

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Importance of Anti-Corruption Due Diligence in Corporate Transactions

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Greg Wolski is a partner and the leader of Ernst & Young LLP’s Transaction Forensics team within its Fraud Investigation and Dispute Services practice. Virginia Adams is a partner on the Transaction Forensics team. ------------------------------------------------------------------------

Anti-corruption and anti-bribery issues present significant risks in acquisition and investment transactions as regulators across the globe continue robust enforcement in this area, a trend that is expected to continue. Both the US Department of Justice and Securities and Exchange Commission, for example, continue to demonstrate their shared commitment to fighting corruption in this context through their continued vigorous enforcement of the Foreign Corrupt Practices Act (FCPA) as well as their November 2012 joint release of A Resource Guide to the U.S. Foreign Corrupt Practices Act (the Guide). The Guide underscores the expectation that pre-acquisition FCPA due diligence should be conducted on deals, and highlights how appropriate FCPA due diligence and post-acquisition compliance efforts can contribute to the government’s decision not to prosecute a successor company for a pre-acquisition violation. When issues surface as the result of an acquisition, the Guide indicates that the government will evaluate whether the acquiring company conducted pre-acquisition FCPA due diligence as part of its assessment of the acquirer’s commitment to compliance and whether the acquiring company promptly integrated the acquired company into its compliance program, including implementing policies, training and audits. Further, there appear to be many similarities between the Guide and the minimum

standards laid out by the UK Ministry of Justice in the 2010 UK Bribery Act guidance, including proportionate procedures, top-level commitment, risk assessment, due diligence, communication and monitoring. There are three primary sources of corruption risk that acquirers face. First, reputational risks could result in damage to the brand, or difficulty obtaining funding for future investments, and there may be personal, civil and criminal exposure for executives with oversight responsibilities as well as board members. Second, financial risks could impact the value of the acquired company based on the loss of revenues, customers and suppliers, which were generated from or associated with bribery or corruption, as well as significant expenses associated with conducting internal investigations, responding to regulatory inquiries and paying fines. Finally, there may be operational risks, which may include delays in closing the contemplated transaction as a result of last minute identification of potential issues or successor liability arising from pre-acquisition violative activity. Some acquirers approach transactions assuming that any issue can be fixed post-closing and take more of a checkthe-box approach to pre-acquisition anti-corruption due diligence. Such an approach may result not only in failing to appropriately assess anticorruption risks based on the information that they have been provided, but also may put the acquirer in the uncomfortable position of potentially engaging in criminal behavior itself. Just digging a little deeper or talking to the right

target employees often results in the identification of information that could have a potentially significant detrimental effect or impact on deal value. The views expressed herein are those of the authors and do not necessarily reflect the views of Ernst & Young LLP.

Company: Ernst & Young LLP Web: www.ey.com Name: Greg Wolski Email: gregory.wolski@ey.com Telephone: +1 312 879 3383 Name: Virginia Adams Email: virginia.adams@ey.com Telephone: +1 212 773 7475

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Zafar I. Anjum is the Group Chief Executive Officer of Corporate Research and Investigations LLC.

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Major U.S., U.K. and European corporations rely on offshore screening companies that can provide the localized research required to properly vet foreign business partners in the Middle East. Such companies have access to the hard-copy records that aren’t found on the Web, and have the ability to locate local sources that can aid in the investigation. Armed with a familiarity of the terrain, an understanding of the culture, and an ability to acquire information, these homeland-base screening operations can easily uncover hard-to-obtain facts that can play a vital role in the business decisionmaking process.

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Business or government officials who regularly accept or require bribes; Third-party sources (suppliers, distributors, etc.) who regularly pay bribes to officials; Unscrupulous individuals who may be part owners of the businesses with whom you associate; Minority business owners who may also be government officials or have connections with such; Questionable individuals who may have recommended a third-party partner; Individuals who require payments in cash for services provided; Individuals who may not be experienced in providing the products or services you require; Individuals who request commissions that exceed normal commission levels; or Organizations or third-party sources those are not familiar with FCPA and other anti-corruption laws.

And while foreign investigative companies know their terrain, they’re also highly educated in the local laws that govern business transactions (which could jeopardize your operation) as well as the anti-corruption laws that govern U.S., UK and EU-based businesses. This dual knowledge ensures complete compliance with FCPA regulations, UK Bribery Act laws, anti-money laundering laws and other anti-corruption regulations to which companies must adhere.

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The true value of retaining a foreign based investigative firm is that they can uncover information that may not necessarily be on the public record. Such information can include potential involvement with:

Used as part of a comprehensive risk management program, a thorough and professional offshore screening operation that provides due diligence, “business integrity checks” will provide the measurable

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While association with such organizations or individuals may be termed as “business as usual” to many operations, such associations obviously conflict with FCPA regulations, EU laws and UK Anti-Bribery rules, and erode public confidence in the parties involved.

insight to reduce business, legal and reputation risks when seeking partnerships in unfamiliar international markets. With the required capability to properly assess the background, integrity and character of those individuals and organizations with which global companies seek to affiliate, such offshore investigative companies can help organizations remain compliant with domestic and international regulations while maintaining high standards of business ethics and behavior.

Company: Corporate Research and Investigations LLC Name: Zafar I. Anjum, CFE, CIS, MICA, Int. Dip. (Fin. Crime), MBCI Email: zanjum@crigroup.com Web: www.crigroup.com Address: 904, Liberty House, DIFC PO Box 111794, Dubai, UAE Telephone: +971 4 3589884

August 2013 /

SECTOR SPOTLIGHT:

The Rise of the Insurance Linked Securities Market

The Rise of the Insurance Linked Securities Market Insurance Linked Securities (ILS) provide a range of attractive opportunities for investors largely because they represent a unique asset class, which is uncorrelated to financial markets and general economic conditions. With the combination of tepid global growth, volatile markets and historically low interest rates investors are desperately searching for a way to generate meaningful returns and more and more are turning to insurance and reinsurance linked investments as a potential solution. However, it is of the upmost importance that market participants understand the benefits and the drawbacks of insurance-linked securities. Despite its attractiveness, this asset class comes with its own challenges. Matching fund liquidity to the investment cycle of the underlying ILS portfolio is difficult and traditional fund mechanisms for restricting liquidity, such as lock-up periods and gates, generally do not work well in the ILS fund context. Acquisition International speaks some of the leading players to learn more.

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Dr Will Gardner is the Managing Director of COMBUS Pty Ltd, a new Australian consulting firm specialising in helping insurance companies quantify and manage their large scale risk to natural and man-made disasters. The clients of COMBUS consist of insurers, reinsurers, corporations, government agencies, catastrophe modelling firms, reinsurance brokers and insurance industry consultants. -----------------------------------------------------------------------Insurance Linked Securities (ILS) are yet to take off in Australia and New Zealand as they have elsewhere, although there is no shortage of companies with their capital at risk from regional disasters such as cyclones, earthquakes, floods, hail storms and bushfires. Compared to international counterparts, especially in the United States and Europe, local companies have traditionally been spoiled by a relative abundance of reinsurer capital, meaning that reinsurance pricing has made ILS uneconomic. Things are changing though, partly due to the lamentation of Black Swan events in recent years and partly due to regulatory change. The large industry loss events in the last five years, including the Christchurch earthquakes, the Queensland floods,

/ August 2013

storms in major cities and state-wide fires, led to temporarily increased reinsurance rates which are already now reverting back toward pre-event levels. More importantly though these recent large losses, and a spate of medium sized earnings-impact events, have led boards and management to question the level of uncertainty around what are reasonably well respected commercial catastrophe model outputs.

insurerâ&#x20AC;&#x2122;s regulatory capital position thereby reducing the financial advantage reinsurance has over an ILS. To date, this part of the world is yet to fully embrace the concept, but it is only a matter of time until the circumstances lead to some of the larger local insurers adapting this approach and then opportunities for other players in the insurance industry will emerge.

The recent Australian Prudential Regulatory Authority (APRA) changes to capital requirements due to concentration risk have reduced the vertical requirement from 1-in-250 to 1-in-200, while expanding the definition to include an allowance for multiple smaller events. Even so, the need for confidence around capital adequacy and earnings stability leaves the door open for opportunistic purchase of additional security in the form of a complementary ILS. Complicating matters is the fact that the recent changes specify a whole of portfolio approach as opposed to a vertical requirement based on a single region or peril. For insurers with a majority of exposure in a single territory the new requirements may seem inadequate, thus companies could be looking to obtain additional cover to provide more conservative capital protection and satisfy rating agencies. Such a purchase above the 1-in-200 would not impact an

Company: COMBUS Pty Limited Name: Dr Will Gardner Email: will@combus.net Web Address: www.combus.net Address: PO Box 860, Moss Vale NSW 2577, AUSTRALIA Telephone: +61 2 4868 2451

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Rise of the Insurance Linked Securities Market ------------------------------------------------------------------------

John Larkin is a Partner at William Fry and Head of the Insurance Department. ------------------------------------------------------------------------

William Fry is one of the largest law firms in Ireland with a substantial corporate, commercial and financial services practice including considerable experience in the ILS field. Mr Larkin commented: “William Fry distinguishes itself from its competitors by focusing on its clients’ success through service excellence”. According to Mr Larkin, Ireland is undoubtedly the most popular EU jurisdiction for ILS structures. He attributes this to the country’s legal, regulatory and tax laws which specifically accommodate ILS structures, adding that its onshore, “non-tax-haven” status provides an important differentiating factor from most other ILS jurisdictions. “However, the flow of ILS deals through Ireland is low when compared with the deal flow through Bermuda and the Cayman Islands,” he observed. “One of the reasons for this is that as an EU jurisdiction Ireland must comply with the requirements of the EU Reinsurance Directive and this can prolong the Central Bank of Ireland (“CBI”) approval process. However, the recent prompt approval of the SCOR sponsored Atlas VII SPRV demonstrates CBI’s commitment to this sector. Further encouragement can also be taken from the recently published CBI Consultation Paper (CP67)

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on process improvements and service standards in connection with authorisations. In that paper the CBI notes that its approval processes will seek to recognise ‘the competitive pressures of getting to market in a timely manner’. The proposed new authorisation framework will adopt a risk-based approach so that low risk structures such as SPRVs will be capable of being authorised on a delegated authority basis.” Discussing the impact of Solvency II on the ILS market, Mr Larkin noted that Article 211 of the directive requires all EU member states to allow the establishment of SPRV’s in accordance with Commission guidance. He expects this to help increase the volume of SPRV activity in Europe. “Solvency II is expected to give a boost to the ILS market in other ways,” he elaborated. “It recognises that financial instruments such as ILS and other derivative structures are effective risk-mitigation techniques and eligible for regulatory capital credit. The Directive defines ‘risk-mitigation techniques’ as meaning ‘all techniques which enable insurance and reinsurance undertakings to transfer part or all of the risks to another party’; this will clearly include ILS structures. Moreover, it seems that, within given parameters, the distinction between derivative based SPV structures and reinsurance based SPRV structures will become much less relevant under Solvency II provided there is real transfer of risk and provided the insurer can demonstrate that it understands

the nature and limitations of the risk mitigation techniques that it is using.” Mr Larkin concluded by highlighting two noteworthy developments in relation to ILS structures, the first of which is the growing acceptance of indemnity based triggers among the investor community. “While this will require greater disclosure of loss data in offering documentation, it is encouraging that the investor community is becoming more accepting of these types of triggers. Dodd-Frank regulations in the US have created some uncertainty with regard to the regulatory treatment of swaps so it is likely that more deals will be structured as reinsurance transactions as opposed to a derivative-based swap deals.”

Company: William Fry Name: John Larkin Email: john.larkin@williamfry.ie Web: www.williamfry.ie Address: Fitzwilton House, Wilton Place, Dublin 2, Ireland Telephone: +353 1 6395 224

August 2013 /

SECTOR SPOTLIGHT:

The Rise of the Insurance Linked Securities Market to expand their scope of coverage, consider structures beyond cat bonds and mold their solutions to changing regulations. Accordingly, the structuring, analysis and implementation of appropriate ILS solutions can be challenging, and insurers should consider them in relation to other available solutions (e.g., reinsurance or the use of captives); ascertain their potential impact on capital, financial results and taxes; and keep in mind the time it takes to close a transaction. PwC is here to help.

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Rich de Haan is a Principal at PwC. ------------------------------------------------------------------------

The insurance linked securities (ILS) market continues to be an important source of insurance risk and capital management solutions. U.S. insurers continue to look for innovative and cost efficient ways to manage their risk exposure and capital levels, and ILS solutions have become an important tool for both direct insurers and reinsurers. In addition, the asset class has attracted investors because of its historical better than average returns, the prospect of investing in largely uncorrelated securities, and the relative returns available in the current low interest rate environment. ILS solutions are rapidly evolving and some are quite complex. Investors and insurers are increasingly willing

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Philip Paschalides and Derek Stenson are members of Walkers’ Corporate and Finance Group and are both based in the firm’s Cayman Islands office. -----------------------------------------------------------------------Insurance linked securities (ILS) is the general term given to financial instruments which transfer insurance catastrophe risk to the capital markets. ILS is the manifestation of convergence in insurance and capital markets and with over US$5.1 billion cat bond and ILS issuance year-to-date as of July 1st, the overall ILS market is certainly on the rise. Q3 issuance alone has already topped US$1 billion, and risk-capital outstanding is set to touch US$19 billion by early 2014 (a new all-time high). There are a number of reasons for this steady rise but, in particular, global economic losses due to natural disasters continue to rise (Aon Benfield have reported this figure to be US$85 billion for the first half of 2013), insurers and reinsurers want to hedge their exposure to these losses and demand from investors seeking to acquire securities which offer diversification away from credit based asset classes as well as competitive yields continues to rise, so much so that there are well publicised reports of ILS managers having to turn away capital. Also on the rise is a distinct convergence between the investment funds and insurance industries with some hedge funds having formed their own reinsurers to write property catastrophe risk and the natural environment for this evolutionary step is, of course, the Cayman Islands. As the leading domicile for hedge funds, and with an insurance regulatory environment which is progressive and forward thinking, where else could Greenlight Re and Southport Re have domiciled but the Cayman Islands? Walkers has an experienced multi-disciplinary team of lawyers specialising in insurance and ILS matters. We pride ourselves on providing clients with market leading legal, regulatory, licensing and taxation advice for the

/ August 2013

As the leading provider of professional services to insurance companies (including 38 of the 40 insurers in the Fortune 500), PwC has extensive knowledge of the issues, trends and challenges that insurers face, including insurance linked securities. We serve insurers with multi-disciplinary teams of actuaries, accountants, tax professionals, regulatory compliance specialists, and technology and strategic consultants. We provide clients practical insight into managing and mitigating risk, and help them determine a thoughtful path forward for their business and operations.

VIF monetisation of life insurance portfolios – a re-emerging trend in Europe

-----------------------------------------------------------------------Scott Mitchell is a Principal in Milliman’s London office. Luca Inserra is a Principal & Managing Director, Spain & Portugal. -----------------------------------------------------------------------In the past 12-18 months, the European life insurance industry has seen an increased interest in various forms of capital solutions. In particular, ‘VIF monetisation’ transactions are a re-emerging trend. While recent activity has focused on the Spanish and Portuguese bancassurance sector, driven by pressures from the banking crisis in those markets, activity is also apparent in other European markets for a number of other reasons. Since 2012, the completed (publicised) transactions are: l July 2012: Santander / Deutsche Bank / Abbey Life (€ 490m @ 100%) l November 2012: La Caixa / Berkshire Hathaway (€ 600m @ 100%) l March 2013: BBVA / SCOR (€ 630m @ 90%) l June 2013: Banco Espirito Santo (BES) / NewRe* (40 bps increase to BES’ Core Tier 1 ratio @ 100%) The preferred arrangement for all of these deals has been via a reinsurance structure, which can be quicker and less onerous to implement than either an Insurance Linked Securitisation (ILS) or a full portfolio sale.

Company: PricewaterhouseCoopers LLC Name: Richard de Haan Email: richard.dehaan@us.pwc.com Web Address: www.pwc.com/insurance Address: 300 Madison Avenue, New York, 10017 Telephone: +1.646.471.6491

establishment, structuring and on-going operation of all forms of insurance vehicles. Increasing convergence by the industry with the capital markets and funds worlds is reflected in the composition of our team, which draws some of its membership from our market-leading structured products and capital markets practice as well as from our premier investment funds group. Bringing together insurance and reinsurance lawyers with capital markets and fund specialists means that Walkers’ multi-disciplinary team is ideally placed to support the exciting changes ahead in the insurance and ILS sectors.

Company: WALKERS Web: www.walkersglobal.com Name: Philip Paschalides Email: philip.paschalides@walkersglobal.com Telephone: +1 345 814 4675 Name: Derek Stenson Email: derek.stenson@walkersglobal.com Telephone: +1 345 914 4221

Understanding the objectives of all parties to the transaction is critical to a successful outcome – each of the above transactions differed significantly in terms of objectives and structure. Areas of focus will include P&L implications, capital impact, risk transfer, liquidity and/or tax implications. It is also important to involve auditors and regulators throughout the process to ensure structures are compliant and objectives are met. Milliman, one of the world’s largest independent and actuarial consulting firms, is a leading global advisor on ILS and insurance M&A transactions. Milliman has advised on approximately 100 global ILS deals since 2001, totalling approximately US$ 47 billion of financing and an average deal size of US$ 510 million. Milliman’s clients include the world’s leading insurance companies, reinsurers, banks and private equity firms. Milliman has been at the forefront of recent developments on European VIF monetisation deals, acting as advisor to BES and BBVA on the monetizations of their risk portfolios in Portugal and Spain respectively. Milliman also advised a number of investors on the other transactions listed above, as well as a number of non-completed deals. * NewRe is part of the Munich Re group

Company: Milliman Web: www.milliman.com Name: Scott Mitchell Email: scott.mitchell@milliman.com Telephone: +44 20 7847 1604 Address: 11 Old Jewry, London EC2R 8DU, UK Name: Luca Inserra Email: luca.inserra@milliman.com Telephone: +34 91 598 4077 Address: Paseo de la Castellana, 91 P. 14, 28046 Madrid, Spain

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Rise of the Insurance Linked Securities Market

The Cat Bond Market in Canada

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Robert McDowell and Koker Christensen are Partners at Fasken Martineau DuMoulin LLP. ------------------------------------------------------------------------

The Canadian cat bond market is still in its infancy. While there have been a number of transactions that included Canadian risks, including Blue Danube I and II and Tramline Re II (all of which included Canadian earthquake risks together with various non-Canadian risks), Canadian insurers have yet to embrace cat bonds as a means of transferring risk. Consistent with the state of the cat bond market in Canada, Canada does not yet have a regulatory regime that specifically addresses insurance linked securities (ILS), including cat bonds. However, there is growing interest in the Canadian market regarding ILS, particularly cat bonds, and many think it is only a matter of time before this market - and a corresponding regulatory regime - develops in Canada. Earthquake risk A key catastrophic risk in Canada is earthquake risk, and some think this could be a driver for the development of a Canadian cat bond market. In this context, it is noteworthy that in February 2013 the Office of the Superintendent of Financial Institutions (OSFI) , Canada’s federal insurance regulator, released an updated version of Guideline B-9 - Earthquake Exposure Sound Practices. In terms of alternative risk transfer, Guideline B-9 states that “Insurers can enter into innovative financing transactions designed to hedge their risk for a catastrophic event.” The Guideline also states that “Prior approval from OSFI is required before these instruments can be recognized as a financial resource under the [Minimum Capital Test] Guidelines.” It is noteworthy that a prior draft of the Earthquake Guideline set out minimum conditions that companies seeking OSFI’s approval would be required to meet, including that the capital instrument is an appropriate substitute for the usual financial resources available to meet gross probable maximum loss and that under

ACQUISITION INTERNATIONAL

standby arrangements capital will be forthcoming immediately after a catastrophic earthquake with no preconditions that prevent or delay the infusion of capital. What OSFI’s conditions for granting approval of a proposed cat bond arrangement would be remains to be seen, but we suggest that the conditions referred to in the prior draft of the Guideline and the key elements of regulatory regimes in other jurisdictions described below offer a good indication. Credit for unregistered reinsurance and effective risk transfer While there is no specific Canadian regulatory regime for cat bonds, there is existing insurance law and regulation in Canada that would apply if a Canadian regulated insurer or reinsurer were to sponsor a cat bond. In particular, there is a well-developed regime regarding when a cedant will receive capital and reserve credit for “unregistered” reinsurance (i.e., reinsurance with a reinsurer that is not licensed in Canada). Techniques for obtaining credit include funds withheld reinsurance, having assets of the reinsurer pledged in favour of the cedant pursuant to a reinsurance security agreement in accordance with OSFI’s requirements and having a letter of credit issued in favour of the cedant. The credit for unregistered reinsurance regime is relevant given that a typical cat bond structure will involve a sponsoring company entering into a reinsurance or other financial agreement with an offshore special purpose vehicle (SPV). Another key issue in considering whether a Canadian cedant would receive credit in connection with a cat bond arrangement is the degree of basis risk to the cedant. If the trigger in the reinsurance or other financial agreement is something other than an indemnity trigger, the cedant is exposed to basis risk (i.e., the risk that the payout under the agreement will not match the cedant’s actual losses).

Key elements of the regulation of cat bonds outside Canada In considering how OSFI might approach the regulation of cat bonds, it is informative to examine the approaches to the regulation of insurance securitizations outside Canada. Based on a review of the ILS regulatory regimes in the U.S., Europe and the U.K., the key elements of the regulation of cat bonds are: the SPV must be fully funded; the SPV’s assets must be held in trust; the SPV must be bankruptcy remote; investors should have no recourse to the sponsor; the claim of investors on the assets of the SPV is to be subordinated to the claim of the sponsor; the SPV should be subject to prudent person investment principles; and the contract between the sponsor and the SPV must involve effective risk transfer for the sponsor to receive capital and reserve credit for the reinsurance.

Company: Fasken Martineau DuMoulin LLP Web: www.fasken.com Address: 333 Bay Street, Suite 2400, Toronto, Ontario M5H 2T6, Canada Name: Robert W. McDowell Email: rmcdowell@fasken.com Telephone: +1 416 865 4408 Name: Koker Christensen Email: kchristensen@fasken.com Telephone: +1 416 868 3495

August 2013 /

SECTOR SPOTLIGHT:

Investing in the Gaming Industry – A Smart Move or a Risky Business

Investing in the Gaming Industry – A Smart Move or a Risky Business M&A for gaming companies broke a new record last year, rising to $4 billion and showing an 18% increase from the previous year. In 2013 so far, mobile games have dominated the sector, making up more than 80% of the game industry investments in Q1. More and more investors are now starting to realise that the gaming industry is a promising global growth industry offering a wealth of opportunities. There is however still very little information available about investment opportunities in the gaming industry, as a result such businesses rarely make it into the portfolios of investors. Acquisition International speaks to some of the leading players to offer their expert advice to those working in or looking to invest in the gaming industry

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Luís Mesquita de Melo is a Partner at MdME | Lawyers | Private Notary. ------------------------------------------------------------------------

MdME is a Macau leading full service law firm, which has built a strong reputation in Asia for providing its Clients with high-quality and practical legal advice, following international standards of responsiveness and efficiency. Mr de Melo stated that the gaming market in Macau is maturing with strong growth indicators. “The more interesting trend in the gaming industry in Macau has been a shift from the growing trends in the VIP segment, which have slowed down, and the increase of the mass market weight in the total Macau gross gaming revenue,” he observed. “The VIP segment has accounted for 75% of the Macau total gross gaming revenue in past years and now accounts for around 68%.” Mr de Melo believes that all indicators point to a continuing growing trend of the overall market associated with the increase in relevance of the mass market.

/ August 2013

“This, in our opinion, reflects the diversification of the economy (as a result of the existence of more non-gaming assets and offers) which is showing signs of a slow change from a hardcore high stakes gaming industry to a more family and entertainment friendly industry in line with the positioning of Macau as an international entertainment city that sees beyond the risks of a gaming-only based economy,” he explained. “We don’t anticipate many changes in the current status although we think that the composition of the gaming gross revenue will see an increase of the mass market proportion, the junkets will continue to pursue

funding opportunities (in order to access liquidity to be able to provide credit for gaming to their clients), there will be more investment funds and other financial institutions looking into investment opportunities in the Macau gaming market. We don’t see any material changes happening at the legal and regulatory levels,” concluded Mr de Melo.

Company: MdME | Lawyers | Private Notary Name: Luís Mesquita de Melo Email: lmm@mdme.com.mo Web: www.mdme.com.mo Address: Alameda Dr. Carlos D’Assumpção, 180, Edf. Tong Nam Ah, 16° R-T, Macau Telephone: +853 2833 3332

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SECTOR SPOTLIGHT:

Investing in the Gaming Industry – A Smart Move or a Risky Business ------------------------------------------------------------------------

Povl Nick Bronstein is an Attorney-at-Law and Partner at the Danish law firm PUBLICURE. ------------------------------------------------------------------------

PUBLICURE is a highly specialised law firm dealing with all matters relating to the public sector, including EUlaw (public procurement, state aid etc.) and gambling law. Mr Bronstein describes the gaming industry as “everevolving” and says that, of any industries, the gambling industry is driven to renew itself often due to (i) the fast paced and ever-changing world of gaming together with the intensifying competition on one side and (ii) the high level of (different and changing) regulation throughout every single jurisdiction.

“These factors make the gambling industry very dynamic, and success is not only obtained through a successful business strategy, although this is of course a significant part, as the strategy also needs to take account of current and potential future regulation,” he explains. Several recent changes in regulation have affected the industry. Mr Bronstein mentions that a liberalisation of the entire gambling market in Denmark has been executed by the government, giving gambling operators other than Danske Spil A/S the possibility of obtaining a license.

“This gambling legislation is, however, not to everyone’s satisfaction and for instance a land based casino operator filed a complaint to the EU-Commission due to the different levies on online and land based casinos with a claim that the difference constituted illegal state aid,” he elaborates. “The Commission ruled that said difference did indeed constitute state aid, but that it was not illegal. The land based casino in question has afterwards brought the case before the ECJ. The outcome of the case might very well impact the legislation – and thereby also all licensed gambling operators in Denmark – if the ECJ rules in favour of the complainant. So, investing in the gambling industry is a smart move, but it is not without risk,” Mr Bronstein concludes.

Company: PUBLICURE Law Firm P/S Name: Povl Nick Bronstein Email: pnb@publicure.dk Web: www.publicure.dk Address: Islands Brygge 26, DK-2300 Denmark Telephone: +45 2015 0519

Five Reasons Casinos Fail -----------------------------------------------------------------------Alan Tantleff is a respected turnaround and restructuring professional who leads FTI Consulting’s Lodging and Gaming Practice from his New York office. ------------------------------------------------------------------------

The truth is that a more than a small percentage of casinos fail, but not from a bad run at baccarat. Supply Considerations: “Build it and they will come” was the Vegas mantra as a wave of new casinos caused travelers to flock to bigger and better mousetraps. Legalized gambling and new supply in Pennsylvania relegated New Jersey to the US’ third largest gaming destination, forcing a number of Atlantic City casinos to restructure - notably the Tropicana, Hilton and AC’s first casino, Resorts. Licensing, Government Bureaucracy and Red Tape: Licensing has always been a “wildcard” for casino developers. Hilton Hotels Corporation, one of the world’s largest hotel companies, was denied a gaming license by the New Jersey Casino Control Commission for alleged ties to organized crime, forcing Hilton to offload its $300M casino to Donald Trump. Over-leverage: Wall Street has a love-hate relationship with gaming. Following a leveraged buyout with partner GoldmanSachs, Atlantis Bahamas Casino owner Kerzner was forced to hand the keys to lenders when the $2.5B loan could not be refinanced. Cost Overruns and Construction Delays: Constructing a massive, technologically advanced mega-casino is fraught with risk – even for experienced developers. Credit Suisse estimates that Wynn has exceeded its construction budgets on its last six casinos by 22%, including 32.2% on Encore. Greektown Casino (Michigan) filed bankruptcy following “delays and cost overruns associated with its…facility.” Evolving Consumer Preferences: Las Vegas has seen people-movers, food courts and the Forum Shoppes. However, some innovation is too pioneering. The Las Vegas Hilton’s Star Trek Experience closed for a failure to attract gaming customers - the former home of Liberace and Elvis Presley filed bankruptcy in 2011. Hooters Casino declared bankruptcy as the iconic scantily clad waitresses clashed with the casino floors’ bread and butter – female slot players. Revel’s (Atlantic City) innovative non-smoking policy was hailed by many, but is widely credited with forcing the $2.5B casino into bankruptcy ten months after opening. In gaming, there are always winners and losers. The views expressed herein are those of the author and do not necessarily reflect the views of FTI Consulting, Inc. and its other professionals. © FTI Consulting, Inc. 2013. All rights reserved.

Company: FTI Consulting Name: Alan Tantleff Email: alan.tantleff@fticonsulting.com Web: www.fticonsulting.com

ACQUISITION INTERNATIONAL

August 2013 /

SECTOR SPOTLIGHT: Ship Registration

Ship Registration International law stipulates that every merchant ship has to be registered in a specific country; registration gives the ship a nationality and allows it to travel internationally. Each ship is bound to the law of its flag state, which makes selecting a flag a complex process; there seems to be an ever increasing number of flags available and the best choice is becoming increasingly difficult for owners to make. The best choice often takes into account a number of factors; namely: cost, eligibility, tax benefits, local maritime infrastructure, political considerations and requirements regarding crew and safety. Acquisition International examines the benefits of registration under a number of flag states and wider shipping issues with commentary from leading experts.

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Funke Agbor is a Partner at Adepetun Caxton-Martins Agbor & Segun. ------------------------------------------------------------------------

Adepetun Caxton-Martins Agbor &Segun (ACAS) is a leading full service commercial law firm in Nigeria with offices in Lagos, Port Harcourt and Abuja. Funke Agbor leads the firm’s shipping and dispute resolution teams and appears before all the superior courts. She is a member of the Nigerian Bar Association; the International Bar Association; the Nigerian Maritime Law Association (National branch of the Comité Maritime International); Chartered Institute of Arbitrators; and Maritime Arbitrators Association of Nigeria. According to Ms Agbor, the key benefit for Nigerian registered vessels is the ability to trade and operate freely within Nigeria’s coastal and inland waters. She highlighted the most significant regulation requirements in Nigeria: the three basic requirements of the Cabotage Act which stipulates that all vessels operating within Nigerian coastal and inland waters must be wholly owned and crewed by Nigerian citizens and built in Nigeria.

“The most significant inspection requirements are those relating to the requirements as to safety and compliance with vessel registration in Nigeria,” she explained.

/ August 2013

“Examples of such regulations guiding these inspections are those contained in the Merchant Shipping Act2007. For example, the International Convention for the Safety of Life at Sea, 1974 (SOLAS); the Protocol Relating to the International Convention for the Safety of Life at Sea,1988 and Annexes I to V thereto, the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 and its Protocol of 1990, the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation, 1988 and the Protocol thereto and the International Convention on Salvage, 1989 to mention a few.” With the recent drive towards indigenisation of the coastal and inland trade in Nigeria, ACAS anticipates an increase in Nigerian registered vessels and a much tougher waiver regime. Ms Agbor noted that the Nigerian Maritime Administration and Safety Agency (NIMASA) is currently putting structures and mechanisms in place for the purpose of enhancing and modernising ship registration in Nigeria. She stated that, in this regard, the creation of the office of the deputy registrars of ship as well as the establishment of ship registration desks in other states in Nigeria demonstrate the agency’s efforts to keep up with the changing trend in modern international maritime operations.

“The ship registration service in Nigeria is being advanced to make the process seamless for vessel owners. Preliminary modernisation programmes, procedures, processes and

measures undertaken by NIMASA are geared towards a system which ensures the electronic uploading of over 3,200 vessels of different categories as well as relevant data being integrated to the web link of the agency. Vessel registration details are transferred electronically on a daily basis to the database for the purpose of updating the available web information. “The implementation of the policies discussed above would undoubtedly improve the process of the ship registration in Nigeria,” she concluded.

Company: Adepetun Caxton-Martins Agbor & Segun Name: Funke Agbor Email: fagbor@acas-law.com Web: www.acas-law.com Address: 9th Floor, St. Nicholas House, Catholic Mission Street Lagos, Nigeria Telephone:+234 1 4622094, +234 1 4613143 (DL)

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Ship Registration

The Bahamas is internationally known as a pivotal port in the shipping industry. Indeed, the 30 year-old Bahamas Maritime Authority, through its membership in the International Maritime Organisation, has overseen the Bahamas Ship Registry’s blossom into one of the most advantageous and popular flag states for ship registration.

• • •

Provisional Certificate of Registry Set of Ship Statutory Publications Continuous Synopsis Record (CSR)

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Fee of $300.00 each Oil Pollution CLC for non-Bahamas registered ships Bunker CLC for non-Bahamas registered ships

The Bahamas Maritime Authority has offices situate in New Providence, London, Hong Kong (and soon opening in Greece and Tokyo) from which applications for ship registration can be made. The Authority also provides an On-line Registration Information System, which makes the registration process for ship owners (both Bahamian and foreign), convenient and accessible worldwide.

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Fee of $400.00 each LRIT Comformance Test Report (CTR)

A ship-owner seeking to register a ship under the Bahamas’ flag must complete and submit an Application to Register (Form R102) to the Registrar, which requires the general details of the owner and the vessel. Most notably, however, both local and foreign ship owners may take advantage of the registration and tax concessions associated with incorporating a shipping company and/ or registering a ship in The Bahamas. These concessions include: low cost company incorporation for shipping companies; free ship registration; no Capital Gains Tax; and no Income Tax. Whilst registration is free, there are minimal charges for certain certificates and licences, which include: • • • • • •

Fee of $150.00 each Compliance (DMLC) - Part 1 Oil Pollution CLC Bunker CLC Radio Communication License Declaration of Maritime Labour Ship’s Carving and Marking Note

For any other compulsory document which does not carry specific fee, the fee is $150.00 as stated under Information Bulletin 81.

services; all in an effort not only to ensure that The Bahamas remains a economically competitive flag ship state, but also a flag state which adheres to international best standards and practices in ship safety and efficiency. Shipping and Maritime matters are primarily handled by the Firm’s Principal, Mr. Raynard Rigby and Miss Shannelle Smith, Senior Associate, who holds a Master of Laws Degree in International and Commercial Law with designation as a World Trade Specialist. The scope of shipping matters handled by the Firm includes the ship finance and acquisition, ship registration and arrest of ships.

Indeed, a required application is the Safe Manning Document (Form R106), which highlights the kind of manning unit required to efficiently run a ship. All ship employees must successfully complete training in ship operations, use of fire-fighting, emergency and life-saving equipment, watertight closing arrangements and other appropriate training methods and become properly qualified, certified and medically fit to ‘man’ the ship in question. In addition, before being permanently registered, a ship must undergo an initial inspection within the first 6 months of having received its provisional registration. Subsequent inspections are carried out on an annual basis and are required at least 3 months before and after the “anniversary date” of the ship’s registration. Currently, the Bahamas Maritime Authority is undertaking a public consultation to ascertain input from persons experienced within the shipping industry to review registration requirements with a view to improving the registration process and connected

Company: BAYCOURT CHAMBERS Name: Raynard S. Rigby Name: Shannelle Smith Email: info@baycourtlaw.com Web: www.baycourtlaw.com Address: Suite 3.1, Frederick House, Frederick Street, Nassau, The Bahamas Telephone: +242 323 8030

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Danny Chua is a Senior Partner in Joseph Tan Jude Benny LLP. ------------------------------------------------------------------------

Benefits of registration in Singapore

With over 65 million gross tons on its register of more than 4,000 vessels, the Singapore Registry of Ships (“SRS”) is the largest ship registry in Asia and ranked among the top ten largest ship registries in the world. Shipowners around the world recognise the benefits they stand to gain by registering their vessels under the Singapore flag. These include: (1) Adoption of international standards on ship safety and marine pollution prevention; (2) The SRS’s strong safety and Port State Control record; (3) Experienced and responsible administration by the SRS, which is recognised as a non Flag of Convenience registry by the International Transport Workers’ Federation; (4) Exemption of profits derived from the operation of Singapore-flagged vessels from income tax; (5) No restrictions on crew nationality, (6) Recognition of foreign certificates of competency for foreign officers/engineers serving on board Singapore-flagged vessels; and (7) No restriction on trading areas. Pre-requisites for registration Prior to registration, a shipowner should ensure that

ACQUISITION INTERNATIONAL

the age of the vessel should be less than 17 years from the year the keel was laid. The shipowner must also seek the SRS’s prior approval of the vessel name, and obtain an official number and call sign number / signal letter. Principal documents required for registration A shipowner will need to submit an Application form, which must be signed by a director of the company or an appointed agent and notarised by a Notary Public. The SRS requires evidence of ownership – a Builder’s Certificate in the case of a newbuilding or a Bill of Sale for an existing vessel. A shipowner registering an existing vessel will also need to produce evidence that the vessel is free from registered encumbrances and submit the deletion certificate of the vessel’s previous register.

approval date will enjoy an 80% discount over the initial registration fee. The annual tonnage tax also costs S$0.20 per NT, subject to a minimum of S$100 (500 NT) and a maximum of S$10,000 (50,000 NT). About the author Danny Chua is a Senior Partner in Joseph Tan Jude Benny LLP. He has over 30 years of experience in Shipping & Admiralty practice, both in shipping transactional work and in shipping disputes in charterparties, casualties at sea, Offshore Oil & Gas, bunker disputes and contamination of liquid cargo.

The vessel’s class certificate and tonnage certificate must be submitted (interim certificates will suffice for newbuildings), as well as all relevant and applicable statutory certificates. Cost of registration The registration fee of a vessel is calculated as S$2.50 per net ton (“NT”), subject to a minimum of S$1,250 (500 NT) and a maximum of S$50,000 (20,000 NT). Under the SRS’ Block Transfer Scheme, shipowners who register more than 1 vessel with the Singapore registry within a period of 12 months from the first

Company: Joseph Tan Jude Benny LLP Name: Danny Chua Email: dannychua@jtjb.com Web: www.jtjb.com Address: 6 Shenton Way Tower 2 #23-08 Singapore 068809 Telephone: +65 6224 1381

August 2013 /

SECTOR SPOTLIGHT: Ship Registration

Virgin Islands Shipping Registry – The Red Ensign Group Virgin Island Property & Yacht magazine and Saba ©

island time can choose from Sir Richard Branson’s Necker Island, Oil Nut Bay, and Biras Creek Resort, which are only accessible by boat. The Aga Khan and Victor International’s Yacht Club Costa Smerelda, the Caribbean sister to the esteemed yacht club in Sardinia, is also newly opened offering dockage for mega yachts and a beautifully located club and restaurant in which to relax and enjoy some social time.

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Joanna Vass & Ronan Kuczaj from SHRM Trustees (BVI) Limited discuss the Virgin Islands Shipping Registry (“VISR”) and the recent addition of the prestigious Gorda Sound port to the British Virgin Islands Register. ------------------------------------------------------------------------

The last two years have been busy for the Virgin Islands Shipping Registry (“VISR”) which offers the globally respected Red Ensign flag to vessel owners who choose to fly the BVI flag. Whilst service providers such as SHRM have been looking to encourage yacht owners to register in the BVI and assist with the growth of the local Registry, the VISR has been hard at work to promote the Territory on the world wide stage. In addition to attending the Monaco and Fort Lauderdale boat shows, the BVI also hosted this year’s Red Ensign Group Conference 2013. A series of events was held all over the British Virgin Islands to showcase the BVI’s beautiful vistas and well equipped marinas such as those at Scrub Island, Nanny Cay, Road Harbour, Soper’s Hole, Jost Van Dyke, Peter Island, Leverick Bay and the new prestigious Yacht Club Costa Smerelda (YCCS) in Virgin Gorda. The other members of The Red Ensign Group (the United Kingdom, the Crown Dependencies of the Isle of Man, Jersey, Guernsey, and the UK Overseas Territories of Cayman Islands, Falkland Islands, Gibraltar, Montserrat, St Helena and the Turks & Caicos Islands) were treated to the world class features of the unique BVI brand. SHRM is pleased to report that as a result of VISR’s most recent Red Ensign audit, the United Kingdom Maritime and Coastguard Agency has agreed to grant the BVI full category one status. This will enable the VISR to register ships of any tonnage and type, opening up a wealth of opportunity to grow and compete with the major shipping registries around the world. A further widely heralded decision by VISR to open up two further registries last year, has greatly increased the availability of vessel names in the jurisdiction. In addition to Road Harbour vessel owners coming to the BVI also have the option of registering their vessels at White Bay, Jost Van Dyke or Gorda Sound, Virgin Gorda. The latter, is set to be “the future hot spot” for mega/ super yachts searching for paradise with seclusion. The area of Gorda Sound is not only a protected and beautiful anchorage, but offers a selection of unique high-end destinations for the discerning traveller. Those who want to enjoy some

/ August 2013

For the more energetic and competitive, the Port now hosts a number of the region’s most prominent regattas, which include the TransAtlatlantic Superyacht and Maxi Regatta sailing from Tenerife to Virgin Gorda in November, and the spring regattas - BVI Sportboat Regatta (Melges 32), the Rolex Caribbean Swan Cup, and the Superyacht Regatta which is gaining momentum since its inaugural run in 2011. All of these now play a permanent and celebrated feature of the global regatta timetable. Combined with the most sailable waters in the world, Gorda Sound is set to be a rising star in the choice for global ship registrations.

registration services for this increasingly prestigious arena. SHRM is a provider of corporate, fund, trust and shipping registration services, and has offices in the British Virgin Islands, Luxembourg, Hong Kong, New Zealand and Singapore. SHRM Trustees (BVI) Limited works closely with VISR to provide our clients with a prompt, professional and seamless service, offering a complete one-stop solution for incorporation of your company and vessel registration. SHRM can assist with important on island logistics such as arranging surveys, accommodation and communications for those visiting the BVI as well as assisting with legalisation of documents, bank account opening and carving and marking. We have Russian, Spanish and French speaking staff on hand who are ready to assist. The BVI is renowned as the world’s premier offshore jurisdiction, and at SHRM we pride ourselves on offering our clients a dedicated and personal service. Yacht Shots ©

The following additional benefits are to be gained by registering a vessel in the British Virgin Islands: • The Bearer of the Red Ensign is entitled to British Diplomatic/Consular support and Royal Naval protection; •

Ownership of the vessel is permitted through a British Virgin Islands Business Company, which allows for a simple transfer of ownership should the vessel be sold in the future and can complement the estate planning and asset-protection needs of clients;

•

SHRM, working with the VISR is able to provide a prompt turnaround and response to all application requests and other client queries;

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The official currency of the BVI is the US Dollar and pricing is quoted in this currency;

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The BVI, as part of the Red Ensign Group offers a registration which receives worldwide recognition;

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Discounted rates for BVI cruising permits;

•

The British Virgin Islands provides a solid foundation for corporate ownership and shipping registration through a developed and stable political, legal, corporate and social environment. The BVI is one of the leading offshore financial centres and therefore offers a plethora of related legal, financial and corporate services to assist small and large structures alike. In turn this is supported by good communication links allowing for instant telecommunications and swift courier connections.

SHRM is delighted to be based in the BVI working with VISR, and we are excited to be able to offer full ship

Company: SHRM Trustees (BVI) Limited Name: Joanna Vass & Ronan Kuczaj Emails: joanna.vass@shrmbvi.com ronan.kuczaj@shrmbvi.com Tel: +1 284 494 8445 Web: www.shrmbvi.com

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Ship Registration

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Captain Patrick Michael DeCharles II is the Executive Vice President of Vanuatu Maritime Services Ltd. ------------------------------------------------------------------------

Vanuatu Maritime Services Ltd (VMSL) is a privately held Vanuatu company operating under contract with the government of Vanuatu as the maritime administrator. VMSL-NY operates the central registry office and handles all the details of vessel registration, mortgage recordation, seafarer documentation and all other matters relating to safety and proper vessel inspection. VMSL’s distinguishing features include: • Very competitive prices • Personnel are available 24/7 • High standards & unparalleled services • No restriction on crew nationality • Wide geographical range of Deputy Commissioners and Special Agents • Vanuatu is on the “White List” • VMSL is certified ISO 9001-2008 • On USCG QUAL SHIP 21 List Captain DeCharles II outlined the required documentation for ship registration in Vanuatu: 1. Form A1 - Application for Official Number, Call Sign, etc. 2. Form A3 - Preliminary Report of Ship’s Officers. 3. Form A10 - Application for Ship’s Radio Station License. 4. Form A20 - Request for waiver of Vanuatu Age requirement (for vessels 20 yrs or over). 5. Form A21 - Request for waiver of Vanuatu ownership requirement (for non-Vanuatu company). 6. Corporate authority, from the registering owner, to register vessel in Vanuatu, in one of following

forms: Power of Attorney, Corporate Resolutions, Secretary’s Certificate, or Minutes of the Board of Directors. 7. Current registry’s consent to transfer to Vanuatu and / or deletion certificate. 8. Proof from current registry that vessel is free & clear from mortgages, encumbrances, liens, etc. 9. Proof of ownership: Bill of Sale; Transcript of registry; and/or Certificate of Documentation. For new buildings, a Builder’s Certificate is acceptable. 10. Proof of Seaworthiness. Confirmation of Class, dated no earlier than 10 days prior to registration. 11. Vessels that are not classed or 20 years +: a General Condition Survey must be conducted by an independent surveyor and the survey report (complete with photos) is to be submitted to our office for review prior to registration in Vanuatu. 12. Certificate of Good Standing for a non-Vanuatu company. 13. Copies of applicable current statutory certificates, i.e., ITC69, Load Line, IOPP, Cargo Ship Safety, ISM and ISPS. 14. Confirmation by vessel’s Radio Accounting Authority stating that the vessel’s communications charges are covered under contract. 15. Payment of registration fees in US Dollars. The most significant regulation and inspection requirements in Vanuatu are the Statutory Surveys and Inspections conducted by Class, as well as Vanuatu’s Annual Safety Inspection. “Vanuatu conducts an annual inspection not to harass vessel owners, but to ensure the vessel is prepared for any PSC inspection that may occur,” explained Captain DeCharles II.

Discussing the impact of problems in the wider economy, he stated that VMSL is not aware that international economic problems have affected registrations with Vanuatu. However, he noted that there are other nonrelated economy issues that may influence owners from re-flagging with any particular open registry.

Captain DeCharles II concluded with a prediction for the rest of 2013: “VMSL will steadily grow the number of vessels it has on its list”.

Company: Vanuatu Maritime Services, Ltd. Name: Captain Patrick Michael DeCharles, II Email: email@vanuatuships.com Web Address: www.vanuatumaritimeships.com Address: 39 Broadway, Suite 2020, New York, NY 10006 Telephone: +1 (212) 425 9600

FALL & Co Law Offices Villa 5031 Liberté 4 PO Box 17295 Dakar-Liberté DAKAR (Senegal)

Tel: + (221) 33 864 05 78 Email: fall_aboubacar@yahoo.fr + (221) 77 184 65 45

The firm was established in 1990 and is composed of 7 lawyers and 3 paralegals. The firm is member of a wide range of professional networks both in the African continent and outside, including the Pan African Lawyers Union (PALU),the Africa Business & Legal Expertise (ABLE), the IBA, ABA section of international law, the Comité Maritime International (CMI) etc…. We provide full legal services across the continent in general and in West Africa in particular. Dr. Aboubacar FALL is the senior partner. FALL &Co’s areas of specialization/expertise include the following: Energy, Mining, Oil & Gas, Maritime, Construction, Project Finance, Debt Renegotiation & Financial Law, Intellectual Property, ICT Law, International Trade & Business, International Commercial Arbitration, OHADA Law, ICT Transportation Law (including air and land Procurement, Environmental Law & Policy, Governance (including Legal & Judicial Reform, Public Participation, Fighting Corruption, Stolen Asset Recovery etc…) ,Investment, Infrastructure, Construction, etc….

ACQUISITION INTERNATIONAL

August 2013 /

SECTOR SPOTLIGHT:

Joint Ventures and Strategic Alliances

Joint Ventures and Strategic Alliances Joint ventures and strategic alliances provide a desirable way for many individuals and businesses to expand, enter new markets and to achieve their business development objectives. The globalisation of business models and the dramatic change in the way that businesses operate in today’s economy have resulted in a shift in M&A strategy. Increasingly, corporations and investors are going beyond the traditional acquisition/disposal model, using Joint Ventures (JVs) and business alliances to further develop their business. There are certainly lots of commercial advantages in entering into joint ventures; new product/development opportunities, entrance into new markets, cost sharing, mitigation of risk etc. However it is now more important than ever to ensure that the venture is managed and monitored closely. Failure to identify and consider the variety of risks in these arrangements can impact the success of the JV and the value of the overall enterprise.

Acquisition International examines the advantages and challenges of JVs and strategic alliances with expert commentary from leading firms. ------------------------------------------------------------------------

Dr Marc van Grondelle, Head of the Global Joint Ventures Practice, KPMG LLP (UK). ------------------------------------------------------------------------

KPMG is the only Big Four accounting, tax and advisory firm which has a dedicated Joint Ventures Practice.

“Our specialist team operates globally and advises clients exclusively on joint ventures, strategic alliances and partnerships at all stages, from creation through to exit,” said Dr van Grondelle. He believes that companies require a different mind-set when executing and managing joint ventures. “Instead of the typical more ‘competitive’-style M&A thinking, successful JVs should focus on a longer term ‘co-operative’ relationship of mutual and balanced

ACQUISITION INTERNATIONAL

benefit,” he commented. “Partners and their advisers cannot think in terms of ‘I win, you lose’, but rather what is the minimum I can accept to get in the game, and how can I best navigate to a sustainable ‘win win’ situation.” When selecting the most appropriate structure for a joint venture, Dr van Grondelle advises against pre-judging or closing down any options. He believes that the more you know, the better you will be equipped to decide what structure will best meet your goals. He continues, “Don’t leave the detail until later. Bottom things out and consider practical details about the operating model and accountabilities, before signing the Memorandum of Understanding (MoU).” He noted that this advice is especially relevant for the exit strategy; deal teams’ inevitable optimism often causes them to forget about things like remedies for specific breaches and how to extract maximum value when things don’t go to plan.

In conclusion, Dr van Grondelle anticipates increasing activity in this area over the next 12 months. “In particular, we believe that in some of the biggest markets, companies need to accept and, therefore, become far more adept at managing minority shareholdings.”

Company: KPMG LLP (UK) Name: Dr Marc van Grondelle Email: jointventures@kpmg.co.uk Web: www.kpmg.com/uk/jointventures Address: 15 Canada Square, Canary Wharf, London E14 5GL Telephone: +44 (0) 20 7311 1000

August 2013 /

SECTOR SPOTLIGHT:

Joint Ventures and Strategic Alliances

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Nigel Smith is a Partner - Transaction Services at PwC. ------------------------------------------------------------------------

In today’s market, JVs and business alliances are becoming more and more prevalent. The transactions being contemplated are complex, difficult to execute, and hard to sustain, whatever their form. Due to the longterm nature of many of these arrangements, execution risk on a JV or business alliance is more critical than ever to the success of the overall enterprise. Despite their complexities, companies have a variety of motives underlying their use of JVs and business alliances: Entry point for high growth markets The increasing difficulty of achieving a rapid, relevant and meaningful presence in high-growth markets, coupled with escalating execution risk and regulatory/ operational issues facing today’s organizations, has led to a dramatic increase in the utilization of JVs and business alliances. These structures are seen as a way to achieve an impactful point of entry into strategically important markets, however, a number of unforeseen challenges often emerge. Finding the “right partner” and establishing mutual trust is the first step, especially when an emerging market is involved. This involves a careful assessment of counterparty risk as well as clarification and understanding of the strategic motives of each of the participants. Another critical step to be addressed pre-signing involves establishing a framework for management appointments, stakeholder monitoring, oversight and exit - as it provides stakeholders with the means to redirect or turnaround an alliance that may have strayed from the strategic objectives and to exit if appropriate.

/ August 2013

Cost sharing on big-ticket IP development, R&D or marketing efforts The desire to share the up-front cash investment for development or exploitation of new intellectual property with a partner(s) via a co-financing arrangement, or maybe to spread the up-front risks in developing new products and/or business models is a common motive for creation of a JV or business alliance. These transactions are typically product, market or project specific, as a result they are complex and require significant up-front negotiation and investment of management time to complete. Oftentimes, the more negotiation and deliberation that is thrashed out by the parties prior to signing a JV, the more successful the venture – as the stakeholders have been forced to confront potential challenges and obstacles before they actually arise. Divestment of sub-scale and non-core businesses Earnings pressure without top-line growth has put the spotlight on restructuring, cost-cutting and portfolio realignment. Such initiatives are often achieved via JVs or some form of business alliance. More commonly, JVs and business alliances are being utilized as a means of achieving a step divestment of a non-core business or function, or to combine a sub-scale business with a supplier or competitor in order to achieve a desired scale and potential for future profitability that benefits all parties. In addition, these arrangements are being utilized to achieve a divestment where a value gap exists through the retention of a minority interest, or inclusion of seller financing. However, such structures may not provide an immediate or high infusion of cash and they can complicate deconsolidation accounting.

Alternative sources of opportunities and funding Corporations have also looked to partner with financiers such as private equity funds, hedge funds and sovereign wealth funds to co-invest in their strategic targets and as a means to access potential opportunities such as Public Private Partnerships (PPP’s) and government led initiatives. These arrangements are often extremely complex structures with put and call options and decision triggers that can result in a divergence of ownership interests around factors such as business strategy, the venture’s life-cycle and other exit motives. The partners need to ensure these scenarios are thoroughly evaluated and fully contemplated at the negotiation and implementation stage in the JV or business alliance. A thorough understanding of the strategy, goals and objectives of the JV from the outset, coupled with a strong sense of trust, robust governance frameworks and on-going stakeholder communications form the bedrock for successful JVs.

Company: PwC Name: Nigel Smith Email: nigel.smith@us.pwc.com Web Address: www.pwc.com Address: 300 Madison Avenue, New York, NY 10017 USA Telephone: +1 646 471 2651

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Joint Ventures and Strategic Alliances ------------------------------------------------------------------------

Praveen Radhakrishnan is an Associate at Finvista Advisors Private Limited. ------------------------------------------------------------------------

Business ecosystems have become so highly interconnected and inter-dependent that it is impossible for businesses to grow all alone. A study by the Association of Strategic Alliance Professionals shows that the number of strategic alliances globally has been growing exponentially since mid-90s.Fostering relationships and alliances are therefore an imperative in the networked world. These relationships take shape as Strategic Alliances or Joint Ventures (JVs) to help in achieving clear cut business goals such as - accessing newer markets, technology or resources, increasing market penetration, optimizing and lowering costs of delivery, or overcoming any regulatory obstacles. In our opinion, Strategic Alliances and JVs are a part of a continuum of relationships between two entities as given in the heat map (Figure 1). The design of a Strategic Alliance or a JV is governed by the following factors – business goal and criticality, degree of commitment by the two parties, ownership of key resources, ability to monitor the relationship, the regulatory environment and the tenure of such an association. As can be seen from Figure 1, a simple business contract governed association requiring minimal commitment from the partners falls at one end of the spectrum, whereas a JV at the other end needs strong commitment from both partners to chart a success story. Joint Venture By the term JV, we mean a new legal entity/relationship formed between two partners to accomplish a business objective, generally, and M&A is a common exit route for the partners. Thus JVs can be considered as a realoption with M&A as an exit route.

are that of being a good market and that India is also a low cost manufacturing hub. Maruti’s JV with Suzuki is a successful one where in Suzuki had brought in technology expertise. The venture has been ongoing for more than 3 decades, which is way more than the typical duration for a JV of 4-5 years. There have been other successful JVs like Brakes India Limited. The Retail sector has also witnessed good JV deal traction. In the retail industry, it is imperative to have a local partner who understands Indian consumer psyche and buying patterns, which is different from global patterns. Bharti-Walmart JV was born out of regulatory requirements and Bharti’s experience in Indian consumer market.

India angle As per VCC Edge database, in the past 7 years there have been more than 55 JV deals between Indian companies and foreign partners. About 15% of these deals have been in the Automotive/Auto Components sector. An analysis of these deals reveals that the key factors influencing the JV formation are market knowledge / presence, technology know-how, resource availability, regulatory regime and cost arbitrage opportunities.

The IT sector has also witnessed alliances of varied forms. India has well qualified human resource base to provide lower cost IT/ITeS services. In IT sector, apart from JVs there have been instances of other types of mutually beneficial alliances such as Outsourced Development Centers (ODC) for foreign customers within Indian offices, delivering projects in a Build, Operate, Transfer (BOT) mode etc. These alliances can be considered as quasi-JV structures, and are governed by contractual obligations, typically having lesser restrictions than formal JVs set up as distinct legal entities are subjected to.

The Indian automotive sector has witnessed multiple successful JVs. The two reasons for India’s attractiveness

Finvista Expertise From our experience, key in success of JVs is cultural

alignment and trust. Mutual respect and understanding of each other’s business practices helps in a successful Joint Venture alliance. Finvista is a boutique Strategy and M&A Advisory firm based out of Hyderabad, India. We have a good track record in helping customers form Joint Ventures and executing cross-border M&A. With a wealth of experience in corporate finance, Finvista has helped customers with corporate development activities across sectors of IT&ITeS, Engineering Services, Manufacturing, Pharmaceuticals, Media and Education. www.finvista.com

Company: Finvista Advisors Private Limited Name: Praveen Radhakrishnan Email: praveen_radhakrishnan@finvista.com Web: www.finvista.com Address: Raghuma Towers, Madhapur, Hyderabad, 500 075 India

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Rinaldi e Associati is a niche firm based in Milan, Rome and Bologna, devoted to business law and focused on assistance to foreign investors in Italy and Italian companies investing abroad. -----------------------------------------------------------------------The team, led by Egidio Rinaldi and Andrea Lazzaretti, partner responsible for the IP&IT department, has developed a specific experience both in the M&A sector and in the creation and management of JV structures. “The joint venture is an extremely flexible legal instrument, which needs to be customised each time so as to reflect correctly the different (legal and business) positions of the partners” said Mr Lazzaretti. “Due to its flexibility, the joint venture has proved to be very effective in the integration of different businesses, in entering into new markets or pursuing goals otherwise unachievable for small-medium companies. However, the success of a joint venture is often the beginning of its end” added Mr Rinaldi. “In our experience, this is the moment when the partners start to perceive the joint venture more as a constraint than an opportunity and start looking beyond”.

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Messrs Rinaldi and Lazzaretti agree on that the only way of minimising the risk that the ending of the JV negatively affects the extra value created over the years is to pay a particular care in drafting the exit clauses, the enforceability of which is very challenging in a multinational environment. “In the end, the joint venture more than a real alternative to M&A is often conceived as (or results in) a first step towards the merger of different businesses” held Mr Lazzaretti “a sort of commercial and cultural test for a deeper integration to be achieved once the test is successful”. The feeling of both Messr Rinaldi and Lazzaretti is that the creation of a JV by generating synergies acts like a spark for new business opportunities stemming from the original project and often destined to stand on their own feet (or better on the feet of one of the partners). All of this requires that legal advisors work shoulder to shoulder with the JV partners to support them not only in the negotiation of the agreement but also in the management of the daily activities of the new structure that is and must be something other than the compound of the single partners.

Name: Egidio Rinaldi Name: Andrea Lazzaretti Milan Address: Via Conservatorio, 15 Telephone: +39 02 76008860 Fax: +39 02 76006944 Rome Address: Largo di Torre Argentina, 11 Telephone: +39 06 6878867 Fax: +39 06 6879158 Bologna Address: Via Vascelli, 8 Telephone: +39 051 6448342 Fax: +39 051 7456889

August 2013 /

ARSS LEGAL ADVOCATES & ATTORNEYS

ARSS LEGAL, Advocates and Attorneys, established by a group of Advocates and Chartered Accountants. Our team of professionals through their unrelenting quest for excellence has established their presence in the field of legal practices. We are a full service multi-jurisdictional Indian Law Firm with special expertise in our area of practices. Our dedication to client interest means that we strive for legal excellence as well as an appreciation of the commercial environment. We combine a personal approach with high professional standards and aim to provide a comprehensive legal service to our clients. We provide a full range of legal services and handle all legal aspects of business and finance.

63 RADHA BAZAR STREET, 3RD FLOOR, ROOM NO. 17 & 18, KOLKATA â&#x20AC;&#x201C; 700 001 PHONE : + 91 33 22101824 / 91 33 30222906 FAX : + 91 33 30222824 Email: amitsaraogi@arsslegal.com

www.arsslegal.com

OTHER OFFICES: BANGALORE - DELHI - MUMBAI

SECTOR SPOTLIGHT: 2013 Q2 Review

2013 Q2 Review 2012 turned out to be a be a tumultuous year, overwhelmed with the European debt crisis and a slowdown of growth in emerging markets, and US deal value decreasing 4% from 2011. 2013. However some signs of recovery were seen within the first quarter, M&A deal value reached $690.3bn in Q1 2013 – up 18% compared with the same period in 2012. It seems that the global economy is finally heading back towards a growth path, according to the latest forecasts from the OECD, with the current economic environment remaining relatively resilient in the second quarter and with the growth rate of the world economy set to hold steady at 2.6%. Acquisition International speaks to leading advisors from around the world to discuss their experiences and opinions of 2013 Q2.

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Christopher Young is a Partner at Minter Ellison Rudd Watts. ------------------------------------------------------------------------

New Zealand is increasingly being talked about by international investors and companies looking to expand. We’ve weathered the GFC better than most, aided by the fact some of our major trading partners (Australia and China) have also weathered the storm reasonably well – so far, although Australian growth is slowing New Zealand’s GDP, currently 2.4%, is expanding. Risky to say, but the recessionary period seems to have passed in New Zealand with indicators starting to show good sustainable growth. China’s growth has slowed to a healthy 7% and New Zealand’s rate of trading growth to China has skyrocketed (in March we exported 50% more to China than we did a year ago). Fortunately for New Zealand, the banking system was preserved through the conservative prudentially regulated Australian banking system. The current National Party led government is intending to sell down their stakes in SOE’s and first on the list are national power companies.

ACQUISITION INTERNATIONAL

These recent floats have signalled a welcome come back of New Zealand’s capital markets, with the NZX finally having some exciting new companies with strong track records that investors can seriously consider. Our firm is very active in this area and we are experiencing renewed activity around M&A, investment funds and capital markets.

in construction (relative to its growing population) between 2007-2012, and Christchurch because of the earthquakes, and •

New Zealand’s capital markets are springing back into life.

IP is often an important asset both strategically and in a value context in corporate transactions and our team is involved in a wide range of transactions. Current headline issues in New Zealand: •

the rebuild of Christchurch after it was devastated by two earthquakes in 2010 and 2011,

•

the interest by Chinese investors in New Zealand opportunities (particularly in the housing and agricultural sectors),

•

Auckland and Christchurch are both experiencing housing shortages - Auckland through a shortfall

Company: Minter Ellison Rudd Watts Name: Christopher Young Email: christopher.young@minterellison.co.nz Web: www.minterellison.co.nz Address: Lumley Centre, 88 Shortland St, Auckland 1010 Telephone: +64 9 353 9910

August 2013 /

SECTOR SPOTLIGHT: 2013 Q2 Review

Detail of metal lattice work on Webb Bridge, Melbourne, Australia.

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Robert Toth is a Partner and Accredited Business Law Specialist, and head of the Franchise, Licensing and Distribution Group, at Wisewould Mahony Lawyers, Melbourne. ------------------------------------------------------------------------

Mergers and acquisitions in Australia are at an 8 year low in the first quarter of 2013. This is mainly due to a fall in resources deals. There was US $9.43 billion of announced merger and acquisition activity in the first 3 months of the year, down from US $20.03 billion in the previous corresponding quarter (Bloomberg). The area of most activity was financial services and the small resource sector where mergers and acquisitions. The larger mergers and acquisitions that have dominated the mining sector have been RIO Tinto, BHP and Hancock Prospecting. In the Asia Pacific region (excluding Japan) merger and acquisition activity in the first quarter was US $79.1 billion, the lowest since 2009. Private equity still remains a key player for Australian merger and acquisitions. Share market listings are also down. SME Market Activity has slowly picked up in the SME merger and acquisition market. In the last quarter we have been actively involved in the acquisition of a number of Australian entities by overseas public companies in the engineering, IT and scientific sectors. Each of the overseas public companies targeted businesses with specialised know how and state of the art development. The owners had highly specialized skills and knowledge in their sector. The local companies were targeted by the larger corporations as a means of entering the Australian market and also to secure high level skill and expertise relevant to their business, or as an adjunct to it. In Australia, the ACCC has issued draft merger review process guidelines for public comment which incorporates new pre assessment phases and longer merger review time lines all of which are likely to impact on the time line to effect an acquisition.

/ August 2013

As with any acquisition, companies need to be cautious and conduct their due diligence and ensure they have specialised local advisors on the ground to provide advice. The intent of the changes is to improve transparency and efficiency of the ACCC in the formal merger review process.

Growth in the non-resources parts of the economy is expected to grow with solid growth in household consumption, the recovering housing sector and modest recovery in business investment.

The ACCCâ&#x20AC;&#x2122;s indicative time lines have increased from 6 to 12 weeks for each phase, however this reflects more realistic time lines as to when a merger may be completed.

Australia has seen recent interest rate cuts leading to increased consumer confidence and an improved global financial market.

In addition, ASIC (Australian Securities and Investment Commission) has also released 4 new regulatory guides on take overs which consolidate and update 17 former regulatory guides.

Australia remains an attractive market for overseas investors and companies on many levels when our economy is viewed against that of other developed economies still recovering from crisis.

The above regulatory changes are not likely to significantly impact on the growth of merger acquisitions in Australia.

As with any acquisition, companies need to be cautious and conduct their due diligence and ensure they have specialised local advisors on the ground to provide advice.

The issues that will effect growth in the short term, will be the Federal Election which is due later this year. Merger and acquisition growth is expected to remain slow and steady over the next 12 months. The outlook for the Australian economy is favourable for solid growth, low unemployment and contained inflation. GDP growth is forecast to be close to trend at 2 Âž% in 2013/2014 and 3% in 2014/2015. The Australian economy is expected to outperform most other advanced economies over the forecast period. The Australian economy is now more than 13% larger than in late 2007 and expected to be around 22% larger than in late 2007 which is well above that expected in the US, Japan and the euro economies. External demand from Asia for resources like iron or coal and liquid natural gas (LNG) will remain strong and demand for resources in the emerging Asia market will open up new export opportunities outside the resources sector.

Wisewould Mahony Lawyers have a team of specialists in the areas of taxation, company structuring, employment law, franchising, licensing and corporate advisory to assist overseas clients to establish their business operations in Australia.

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 9612 9729

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SECTOR SPOTLIGHT: 2013 Q2 Review

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James M Pearson is the CEO of Pacific Risk Advisors Ltd. -----------------------------------------------------------------------Pacific Risk Advisors Ltd (PRA) is a management consultancy specialising in environmental, social, governance (ESG) and sustainability risk management (SRM) for the Asia Pacific business and investment community. PRA was founded by James Pearson in 2005 following over 18 years of experience in international risk consultancies. Mr. Pearson has observed over the recent years there has been a significantly increasing trend in the range of concerns to both environmental and livelihood issues where commercial activity is involved. As a result, supply chain issues, food quality, public health, industrial expansion locations and many more concerns are all raising the profile of environmental and sustainable risks to be faced by businesses and communities today.

“We have seen a change of emphasis in investments to more infrastructure and food / agricultural based activities, away from the basic manufacturing and production sectors.” This reflects where growth is currently seen to be heading, as populations increase and the need for improved efficiencies in transport and logistics is recognised. With regard to the overall attitude and trend of the market, Mr. Pearson pointed out that there are still significant volumes of money available and Foreign Direct Investment (FDI) towards Asia is still in the uptrend. With increasing concerns to environmental risks and the need for FDI to include these risks in investment decisions, there is an overall positive attitude to the market.

With the increasing trends in PE transactions, it is believed that the ESG focus will migrate to providing longer term value to the investment rather than just identification of investment risk issues. GDP is growing at a slower but steady pace in the more established sectors. Mr. Pearson pointed out that there will still be pockets of faster growth in new and emerging markets which will come with higher environmental and social risks and political uncertainties. These pockets of growth will need to reflect societies’ changing expectations in terms of livelihood and longevity. Therefore, sectors that manage to harness and influence these issues will see the best growth. “At Pacific Risk Advisors, we benchmark potential and existing investments against environmental and social indicators such as the IFC and ADB Performance Standards. We see significant potential in this area as funds and companies are increasingly looking for means to track environmental and social (E&S) issues in order to monitor performance in this area. This benchmarking allows them to stay with or ahead of the curve in terms of E&S risk management.”

Company: Pacific Risk Advisors Ltd Name: James M Pearson Email: james.pearson@pacificriskadvisors.com Web: www.pacificriskadvisors.com Address: 20F Central Tower, 28 Queen’s Road, Central, Hong Kong Telephone: +852 8199 0535

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Ken Hamner is the Managing Member of The Entrepreneur Law Center. ------------------------------------------------------------------------

The Entrepreneur Law Center is a boutique law firm offering a broad range of legal and advisory services to emerging enterprises, entrepreneurs, large and small businesses, and individuals. The firm focuses on outsourced CFO and General Counsel services, mergers and acquisitions, pre-acquisition due diligence, forensic accounting and fraud investigation, and services to entrepreneurs and investors related to venture capital, private equity and angel investment. Named 2013 Business Planning Law Firm of the Year by Acquisition International Magazine, the firm’s clients stretch from North America to South America, Asia, Africa and Europe. The Entrepreneur Law Center provides a multidisciplinary approach to client service as a result of the varied experience of its Managing Member, Ken Hamner, who has experienced a career track atypical of most attorneys. Having started his career over 20 years ago in the financial services practice at Arthur Andersen and Ernst & Young’s consulting practice, Ken later served as a CFO of an early stage international venture before becoming an attorney. In the following years, he has served as CFO and General Counsel to two international steel trading firms, the managing partner of a full-service model law firm, and for the past five years has run his own boutique law firm. Ken holds a JD and MBA from Florida State University, a Master of Accounting in Forensic Accounting from Florida Atlantic University, and BS degrees in both Finance and Accounting from George Mason University. Being a Chartered Merger & Acquisition Professional with the Middle Market Investment Banking Association, a Certified Merger & Acquisition Advisor, a Master Analyst in Financial

ACQUISITION INTERNATIONAL

Forensics, a Certified Business Intermediary, a Certified Due Diligence Professional, and a Certified Fraud Examiner are simply not skill sets commonly found in even the largest law firms. The firm’s clients range from large multinationals to seedling start-ups.

“Primarily what we do is to develop and execute strategy for our clients,” Ken said. Whether it is performing due diligence to support a merger, structuring an acquisition, helping develop relationships between companies, or assisting with post-merger integration, the multi-disciplinary focus of the firm enables it to offer a much broader perspective than a traditional law firm can offer.

LEADING Q2 ADVISERS

Company: AFSCHRIFT LAW FIRM Name: Thierry AFSCHRIFT - Managing partner Email: avocats@afschrift.com Web: www.afschrift.com Address: Avenue Louise 208 1050 Brussels - Belgium Telephone: + 32 2 646 46 36

Company: ConnorsLaw, LLP Name: Kevin L. Connors Email: KConnors@connorslawllp.com Web: www.connorslawllp.com Address: 140 S. Village Ave Suite 120, Exton, PA 19341, USA Telephone: + 1 610 524 2100 x 112

Company: Desai & Diwanji Name: Vishwang Desai Email: vydesai@desaidiwanji.com Address: Lentin Chambers, Dalal Street, Mumbai-400001 Telephone: +91-22-22651682

NITEREKA Déo Name: NITEREKA Déo Email: niterekadeo@gmail.com Address: Bujumbura-Burundi Telephone: +257 79 748 672 or +257 75 748 672

Company: The Entrepreneur Law Center, P.L. Name: Ken Hamner Email: khamner@entrepreneurlawctr.com Web: www.entrepreneurlawctr.com Address: 250 North Orange Avenue, Suite 1200, Orlando, Florida 32801, USA Telephone: +1 407 601 4980

August 2013 /

SECTOR SPOTLIGHT:

Global Expertise Directory

Global Expertise Directory Acquisition International profiles the leading players around the world in a variety of sectors.

AL-ZUBI LAW OFFICE

Company: NELISA MALI ATTORNEYS Name: Nelisa Mali Email: nelisam@maliattorneys.co.za Web: www.maliattorneys.co.za Address: Mezzanine Floor,Unit B, 5 Bauhinia Street, Cambridge Park | Techno Park, Highveld, South Africa Telephone:+27 012 940 0272 NELISA MALI ATTORNEYS (NMA) was established in 2006, as a sole proprietor and a niche tax and commercial law firm. The firm was established following Mrs Nelisa Mali’s vision to develop specialized skills and become one of the internationally recognised women lawyer in tax and commercial law practice. Due to experienced growth of the law firm, NMA became incorporated in 2011. Our objective is to provide best legal solutions, with focus on corporate law advisory, commercial law and tax law. Due to the consequences of worldwide economic recession most countries are experiencing budget deficits. Consequently, some countries are in the process of redressing the deficits by increasing their revenues. Some countries including South Africa solely rely on collection of taxes for their revenue. The South African government is daily working towards improving its commitment to revenue collection and fiscal international co-operation. Tax law and tax practice change and progress rapidly on a perpetual basis, globally. Our mission is inspired by this global rapid development of Taxation Policies and Tax Administration. Considering that South Africa is a gateway to Africa and has bilateral investment treaties with various jurisdictions worldwide; NMA offers legal and corporate law services at an international level in this regard.

/ August 2013

Company: Afghanistan International Bank Name: Khalil Sediq Email: khalil.sediq@aib.af Web: www.aib.af Telephone: +93(0) 20 2550255 Afghanistan International Bank is a leading commercial Bank in Afghanistan. AIB was founded in 2004 at the instigation of three Afghani groups and supported by Asian Development Bank. AIB has 31 branches (Three planned to open in 2013, bringing the total to 34) giving it presence in all main business areas covering, north-south-east-west of the country. AIB has a customer base of over 89,880. AIB’s business units comprises of Corporate, Retail, E-Banking (POS, ATM, Mobile Banking, Internet Banking) and Treasury services. The Bank offers a variety of products and services under the Retail Banking such as Current Accounts, Saving Accounts, Term Deposits, Payroll Services, International Maestro Debit Cards, MasterCard WebSurfer Cards, MasterCard Credit Card, Payment Services and Internet Banking Services. AIB also pays special attention to its corporate customers through its Corporate Banking Services, which comprises of an array of customized banking solutions tailor-made according to the needs of its corporate customers in Afghanistan. These services include Cash Management, Trade Finance, Loans, Foreign Exchange and Treasury services. AIB’s strategy is to build a sustainable foundation based on prudent growth and risk management, while adhering to the highest level of corporate governance.

Company: Al-Zubi Law Office Name: Haytham L. Al-Zu’bi Email: info@alzubilaw.com Web: www.alzubilaw.com Address: P.O.Box 1039, Al Masayef Faramand Com. Center Floor 2, Ramallah, Palestine Telephone: +97022957755 Al-Zubi Law Office is a highly regarded, leading law firm based in Palestine with two offices in Ramallah and Nablus cities of the West Bank. Established in 1963 by the pronounced advocate Lutfi Al-Zubi, our firm is one of the leading law firms in Palestine today. Since its foundation, Al-Zubi Law Office has been advising and representing leading national, regional and international corporations with interest in Palestine both in transactional work and before courts and arbitration lawsuits. The practice has steadily grown its operations across Palestine and the region to become a top prominent law firm in the country. Our unequalled understanding of the prevailing legal environment in all economic sectors, coupled with deep market knowledge and insights, ensures that our clients receive world-class advisory, regulatory and litigation services. A diverse team of experienced lawyers, based in two offices in Ramallah and Nablus, provide deep local knowledge of Palestine and distinctive exposure to issues of international commercial law, as well as reliable professional links with the leading regional law and the top circles of international law firms.

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Global Expertise Directory

Company: Colliers International Name: Neil Gregory-Eaves Email: neil.gregory-eaves@colliers.com Web: www.colliers.com Address: 3 Pl. Pilsudskiego, Warsaw, Poland Telephone: +48223317804

Company: Aviva Investors Global Services Limited Email: Phil.ellis@avivainvestors.com Web: http://www.avivainvestors.com Address: No 1 Poultry, London, EC2R 8EJ Telephone: + 44 207 809 6870

Colliers International is a global real estate company offering comprehensive services to investors, property owners and tenants around the world. Our services include brokerage and agency sales and leasing, landlord representation and tenant representation, corporate solutions, investment services, project management, property marketing, real estate management services, and valuation and advisory services.

Case Study: Aviva Investors is a global asset manager operating across 15 countries, with assets under management of over £287 billion. Aviva Investors Real Estate Multi Manager (REMM) has been providing indirect real estate solutions to clients since 1997, since when we have grown our assets under management to over £5 billion. We believe that a broad macro-economic view, wide-ranging real estate expertise, and a rigorous due diligence process undertaken by locally-based investment teams, provide the highest opportunity to achieve superior investment returns.

Our professionals in 522 offices worldwide are united by Colliers’ spirit of enterprise- we take initiative, think creatively, collaborate to achieve and use our expertise to innovate. Our 12,300 employees embrace a culture of service excellence. We strive to deliver the best service experience in both the business results we achieve and through personal attention to exceed our clients’ expectations. Colliers in Poland is one of the top real estate advisory companies on the local commercial real estate market, the company employs over 190 people in five offices located in Warsaw, Krakow, Poznan, Wroclaw, and Szczecin. Colliers International is active on the Polish market since 1997. Most real estate firms are either loosely associated networks, or tightly controlled around a corporate structure. Our experts are backed by the global depth of resources of Colliers International, and also empowered by the local market knowledge and flexibility to respond to the changing needs of their region.

Company: Matheson Email: dublin@matheson.com Web: www.matheson.com Address: 70 Sir John Rogerson’s Quay, Dublin 2, Ireland Telephone: +353 1 232 2000 The primary focus of Matheson is to serve the Irish legal needs of international companies and financial institutions doing business in and through Ireland. Our clients include 27 of the world’s 50 largest banks and more than half of the Fortune 100 companies. We are headquartered in Dublin and also have offices in London, New York and Palo Alto. More than 600 people work across our four offices, including 75 partners and tax principals and over 350 legal and tax professionals. Our strength in depth is spread across more than 20 distinct practice areas, including asset management and investment funds, aviation and asset finance, banking and financial services, commercial litigation and dispute resolution, corporate, healthcare, insolvency and corporate restructuring, insurance, intellectual property, international business, structured finance and tax. This broad spread of expertise and legal know-how allows us to provide best-inclass advice to clients on all facets of the law. We are committed to having a strong presence where our clients are located. We were the first European law firm to establish a presence in Silicon Valley (in 1996), and together with our office in New York, we are proud to have the market-leading Irish presence in the US. In London, meanwhile, we have the largest operation of any Irish law firm.

ACQUISITION INTERNATIONAL

Our 22-strong REMM investment team has average industry experience of 12 years and delivers an on-theground presence in the Americas, Europe and Asia. We provide solutions to government and corporate pension schemes, and financial institutions, through pooled funds and segregated accounts, with both absolute and relative return targets. We offer single country, regional and global investment strategies, as well as thematic approaches, including emerging markets, recapitalisations and opportunistic investing.

Company: KPMG Advisory Services Name: Ajibola Olomola Email: ajibola.olomola@ng.kpmg.com Web: www.kpmg.com/ng Address: KPMG Tower, Bishop Aboyade Cole Street, Victoria Island , PMB 40014, Falomo, Lagos, Nigeria Telephone: +234 1 271 8955 KPMG Professional Services and KPMG Advisory Services are the KPMG member firm in Nigeria. The partners and people have been operating in Nigeria since 1978, providing multidisciplinary professional services to both local and international organisations within the Nigerian business community. Our vision is to build and sustain our reputation as the best firm to work with by ensuring our people, our clients and our communities achieve their full potential. At KPMG, we are committed to working with our clients tocut through complexities of the business world– finding solutions and adding value. Our combination of international and local market knowledge and perspective give us an edge in the professional services industry in Nigeria. This combination enables the Nigerian practice to add real value by developing strategies that give the firm’s clients a distinct edge over their competitors. As one of the leading providers of professional services, KPMG knows that the success and growth of the firm also depends on the success and growth of the Nigerian economy. Hence, it champions progressive change and makes the future happen for its clients, people and the community, thereby enabling Nigeria’s success. The firm is involved in the formulation of economic policies for Nigeria through the Nigerian Economic Summit Group.

Company: Ogier Name: Michael Little Email: michael.little@ogier.com Web: www.ogier.com Address: Jersey, Ogier House, The Esplanade, St Helier, Jersey JE4 9WG, United Kingdom Telephone: +44 1534 504374

Company: Stillwaters Law Firm Name: Francis Nwokedi Email: info@stillwaterslaw.com Web: www.stillwaterslaw.com Address: 2nd Floor, 11, Awolowo Road, Ikoyi, P. O. Box 56161, Ikoyi 101008, Lagos, Nigeria Telephone: +234 (0) 1 897 4455

Ogier is one of the world’s leading providers of international legal and trust, fund and company administration services. The group has a presence in 11 jurisdictions around the world, namely Bahrain, the British Virgin Islands (BVI), the Cayman Islands, Dublin, Guernsey, Hong Kong, Jersey, London, Luxembourg, Shanghai and Tokyo. Today, we employ over 850 professional and support staff.

STILLWATERS is located in the cities of Lagos and Abuja (the Federal Capital Territory) in Nigeria. Established in 1991, the firm specialises in intellectual property law, corporate and commercial law, tax, and litigation.

We advise on BVI, Cayman, Guernsey, Jersey and Luxembourg law and provide administration services through our network of offices across the globe. Corporate and finance law and administration services form the core of our business, principally in the areas of banking, corporate and commercial, investment funds, private wealth, real estate investment and structured finance. At the same time we are a full-service firm, with strong practices in the areas of performance and reward management, employment law, litigation and property. Being a leader in our field, we have long-established relationships with many of the world’s leading international financial institutions, professional advisors and regulatory bodies; we are instructed by 23 of the top 25 global law firms and act for 21 of the top 25 global banks.

As a firm, it is our belief that many aspects of today’s legal landscape require a keen understanding as well as knowledge of the law; accordingly, we offer solutions to the often complex arrays of regulations and requirements that confront the business client in Nigeria thereby creating conducive legal environments for our clients to achieve their goals. We provide quality legal services on a cost effective basis, and over the years we have acquired considerable experience and an enviable reputation in our areas of specialisation. Our clients include foreign multinationals, public quoted companies, private companies, financial institutions, government institutions, embassies, industrial and medium size businesses and individuals. Today, the enviable reputation that we have acquired in our areas of specialisation has grown far beyond any reasonable expectation and so much of it can be attributed to our general principle of applying a keen understanding as well as knowledge of the law to the issues we attend to.

August 2013 /

DEAL DIARY:

M&A from around the world

Deal Diary: Acquisition International’s round up of recent M&A activity in the real estate sector, with data from Zephyr, published by Bureau van Dijk The first half of 2013 has seen mergers and acquisitions (M&A) activity in the real estate sector come close to replicating the positive result recorded in H2 2012. In the opening six months of this year there was total investment of USD 51,192 million spread across 1,518 deals, according to Zephyr, the M&A database published by Bureau van Dijk. Although this does represent a drop in both volume and value, the decline was less significant, as results reached a level similar to those recorded at the end of 2012.

Number and Aggregate Value (mil USD) of Real Estate Sector Deals Globally: 2006 - 2013 YTD (as at 30 July 2013) Values Deal half yearly value (Announced date) 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 H2 2013

No. No. of of deals with deals known values 1,314 794 1,481 930 1,653 1,093 1,720 1,179 1,715 1,135 1,610 1,106 1,773 1,219 1,971 1,323 1,838 1,176 1,618 1,000 1,573 891 1,742 927 1,477 829 1,668 894 1,518 861 235 117

Aggregate deal value (mil USD) 65,797 94,398 162,961 123,142 84,745 58,303 61,654 90,718 56,499 51,075 53,928 44,786 42,838 52,968 51,192 5,912

The real estate sector finished 2012 on a positive note, with increases recorded for both volume and value. In total there were 1,668 transactions worth USD 52,968 million, representing a 13 per cent increase by volume and 24 per cent by value on H1 2012. This also represented the industry’s highest level of investment since the first six months of 2011, although it remains a long way off the USD 162,961 million posted in the opening half of 2007, prior to the onset of the global financial crisis which resulted in the sector reaching its nadir in H1 2012, when just USD 42,838 million was invested. Nevertheless, the fact that the first half of 2013 has resulted in a relatively small decline could give those watching the markets some hope that the situation is beginning to stabilise. However, this is not the first time in recent years that two consecutive six month periods have recorded similar investment levels. On the contrary, such an occurrence has been relatively common. Firstly, H2 2010 and H1 2011 saw USD 51,075 million and USD 53,928 million, respectively. This was followed by H2 2011 and H1 2012 when USD 44,786 million and USD 42,838 million were recorded. Thus the fact that the two most recent results are comparable does not necessarily signify a stable future. Fluctuation has remained, but has simply occurred on a yearly basis, as opposed to every six months. The highest ranked real estate deal in 2013 to date by value involves a USD 1,814 million merger between Abu Dhabibased property developers Aldar Properties and Sorouh Real Estate. This was followed by a secondary offering by broker Realogy Holdings in which it raised USD 1,771 million. In third place was a USD 1,343 million public takeover approach by Iida Group Holdings for Japanese home builder Hajime Construction. Of the real estate sector deals which have taken place in 2013 to date, the majority had targets in Western Europe and the

Far East and Central Asia. In total, the former accounted for 639 transactions worth USD 10,720 million, while the latter had 543 with an aggregate value of USD 26,360 million. These represented 19 per cent and 46 per cent of all investment in the sector for the year to date, respectively. By volume, they were followed by Eastern Europe, which was targeted in 317 deals, although it placed seventh by value with just USD 1,126 million, suggesting that valuations in the region were low. By contrast, North America ranked third by value, notching up investment of USD 8,328 million across just 82 transactions. The Far East and Central Asia’s impressive showing by aggregate value is perhaps unsurprising given that of the top 10 deals for the period, six have targets in the region. Minority stake deals were the highest valued transactions recorded in the opening six months of 2013, with dealmaking of USD 28,746 million spread across 729 deals. Acquisitions placed second with USD 27,113 million, although they came top by volume with 1,000. These two also led the field from 2006 to the present day, albeit with their positions reversed; acquisitions topped the rankings with USD 541,761 million across 12,179 transactions, while minority stakes followed with USD 530,669 million across 12,263 deals. In 2013 to date, third place has been occupied by institutional buyouts, which came some way behind with USD 1,248 million invested across just nine transactions. To sum up, although the opening six months of 2013 show a decline on the second half of 2012, the drop is fairly minimal when compared to other recent results. This could signify a levelling off of the considerable fluctuation witnessed in recent years. However, it is worth noting that two consecutive periods have posted similar results in the past, before dropping off or rocketing in various cases. Therefore, it may be best to reserve judgement as the second half of 2013 will provide a better indication of where the market is heading.

Aggregate Value (mil USD) of Real Estate Sector Deals by Region: 2006 - 2013 YTD (as at 30 July 2013) Deal yearly value (Announced date) World region (target) Far East and Central Asia Western Europe North America South and Central America Middle East Oceania Eastern Europe Africa

2006 26,997 92,685 20,261 6,555 4,970 3,603 3,459 1,534

2007 63,798 129,203 22,228 14,441 4,693 11,382 36,419 3,821

2008 41,486 47,707 8,677 12,433 4,249 2,785 16,365 5,552

2009 66,031 43,306 12,757 13,315 2,072 7,455 5,545 1,272

2010 44,871 32,386 12,402 10,723 1,606 2,772 2,206 705

2011 41,926 29,637 3,912 12,986 4,221 1,415 3,012 644

2012 33,250 37,403 8,500 11,246 478 1,867 3,443 155

2013 26,360 10,720 8,328 6,751 1,972 1,484 1,126 66

Breakdown of Real Estate Sector Deals by Region: 2006 - 2013 YTD (as at 30 July 2013) World region (target) Far East and Central Asia Western Europe North America South and Central America Middle East Oceania Eastern Europe Africa

/ August 2013

2006 17% 58% 13% 4% 3% 2% 2% 1%

2007 22% 45% 8% 5% 2% 4% 13% 1%

2008 30% 34% 6% 9% 3% 2% 12% 4%

2009 43% 28% 9% 9% 1% 5% 4% 1%

2010 41% 30% 12% 10% 1% 3% 2% 1%

2011 44% 30% 4% 13% 4% 1% 3% 1%

2012 35% 38% 9% 12% 0% 2% 4% 0%

2013 46% 19% 15% 12% 3% 3% 2% 0%

ACQUISITION INTERNATIONAL

DEAL DIARY:

DEAL INDEX CONSUMER

M&A from around the world

INDUSTRIAL

FREDERICKS DAIRIES

APOLLO

2THELOO

IBERCHEM

LEDUN PECHEURS D’ISLANDE

KILIAN GMBH & CO. KG

SK SALES

ORÈGE IPO

VALIDUS

STENI

WBACK GROUP

WIDEROE REAL ESTATE

ENERGY & RESOURCES

BRINDERSON

INVESTORS IN THE COMMUNITY LP PORTFOLIO

CALABRIA

CAN FIRST

CHI.NA.CO S.R.L.

HILL STREET SHOPPING CENTRE

DIF INFASTRUCTURE III

LANDMARK VILLA TRE VILLE

POWERCO NZ HOLDINGS LTD

PRIME ENERGY

AVANTA

FINANCIAL SERVICES

DOMSJÖ FABRIKER

HOLLARD & ETANA

LAMBERT CONTRACTS

INVEST INDIA MICRO PENSION

LEXIA LEARNING

ONLINE RESOURCES CORPORATION

OAG

CREDIT SUISSE EUROPEAN ETF BUSINESS

TELEOSS CONSULTING

HELLENIC POSTBANK

PACIFIC AND ORIENT INSURANCE

CALLUS

HEALTHCARE

CAPTIFY MEDIA

FORTIS - HOAN MY

GORENJE

OKAIROS

GROUP CAP VERT FINANCE

ONCURE HOLDINGS

OPTIVO

PARTNERSHIP ASSURANCE GROUP IPO

PANOPTICON SOFTWARE

PROTHERA

POST MODERN GROUP

SHELBORNE SENIOR LIVING

XRADIA

ACQUISITION INTERNATIONAL

SUPPORT SERVICES

TMT

August 2013 /

DEAL DIARY:

Consumer Deals

CONSUMER

Consumer Deal Of The Month FREDERICKS DAIRIES l R&R Ice Cream has acquired the Lancashire family-owned ice cream maker Fredericks Dairies in a £49M deal. The Fredericks acquisition will further enhance R&R’s branded offering with the addition of brands such as Cadbury, Del Monte and Vimto. Fredericks Dairies not only has some excellent licenced brands such as Cadbury but it also holds the UK licence for Mondelez and this reinforces the commitment between Mondelez International and R&R. Fredericks is the number 3 manufacturer in the UK ice cream market. The acquisitions has been approved by regulatory authorities and gained full consent from existing bondholders. R&R Ice Cream - originally Richmond Ice Cream founded in 1985 by James Lambert, the current Chairman and a group of farmers, started out as a North Yorkshire-based own label ice cream manufacturer. In the early years it had five employees and turnover of approximately £250,000. In 1998 the business merged with Treats Group plc - a Leeds based ice lolly manufacturer - followed by the acquisitions of ABF’s ice cream business in 2000 and of Nestlé Ice Cream’s UK business in 2001 leading the consolidation of the UK ice cream industry. The Nestlé acquisition allows the company to manufacture, distribute and market top brands such as Fab, Mr Men, Smarties, Rolo and Rowntrees Fruit Pastilles. In 2006, following the Oaktree managed funds’ acquisition of the company; Richmond was merged with German ice cream manufacturer Roncadin GmbH to form R&R Ice Cream with the goal of leading the consolidation of the European ice cream market. The expansion programme accelerated with Kelly’s of Cornwall added to the portfolio in 2008 and the French business Rolland joining in 2010. This has been followed by the purchase of Pilpa in France, the German ice cream company Durigon and Italy’s largest own label ice cream manufacturer Eskigel.

Consumer Deal Of The Month FREDERICKS DAIRIES £50MILLION SALE TO R&R ICE CREAM LIMITED

2THELOO l Avedon Capital Partners (‘Avedon’) has acquired a stake in international toilet store operator 2theloo. Avedon will provide expertise and capital to accelerate the current international expansion. 2theloo opened its first toilet store in 2011 in the Kalverstraat in Amsterdam. Currently 2theloo has around 100 stores in 8 countries. The international growth plan envisages the opening of 2,500 stores worldwide within the next 3 to 5 years. The toilet stores are located in city centres, Shell gas stations, train stations and shopping malls. Besides implementing the concept on these locations 2theloo will develop and expand their private label toiletry related offering for their own stores as well as for third parties. This will support their ambition of becoming the worldwide market leader in toilet solutions. 2theloo is a toilet concept that differentiates itself through unique toilet designs and retail offering with accompanying hygienic products. The company was founded in 2011 by Eric Treurniet (CEO) and Almar Holtz (COO) and has shown an impressive growth ever since. The 2theloo toilet stores can be found in city centres, shopping malls and gas and train stations in the Netherlands, Spain, Poland, Israel, Hungary, Austria, Germany and Belgium. In the coming months new locations will be opened in South Africa, Portugal, France, the United States, Russia, Czech Republic and Slovakia. Frank Verbeek, Managing Partner, led the Elstar Participaties B.V team representing the Founders and main shareholders on the deal. Mr Verbeek assisted the Founders and main shareholder from the very first start. He commented: The client is managing a very dynamic market with many opportunities and various business models that are not easy to catch in just one model. The dynamics made that the revenue and EBIT(DA) estimates were changing several times which created a situation that both the investor as the managers dealt with very professionally. I assisted in creating mutual understanding. A new global brand is born: 2theloo. Frank Verbeek

frank.verbeek@elstarbv.nl

AVEDON CAPITAL PARTNERS FACILITATES

GROWTH 2THELOO DRVACCELERATED Corporate Finance

LEDUN PECHEURS D’ISLANDE l Delabli SAS, a French subsidiary of Labeyrie Fine Foods Group, has acquired Ledun Pecheurs d’Islande, a specialised fish business. Ledun Pêcheurs d’Islande SAS provides fish processing and marketing services including salting, smoking, and fish conservation. The company was incorporated in 2000 and is based in Fecamp, France. DELABLI S.A.S. provides seafood processing. The company was incorporated in 1986 and is based in Paris, France. DELABLI S.A.S. operates as a subsidiary of Labeyrie SAS, itself a subsidiary of Labeyrie Fine Foods PLC. Labeyrie Fine Foods is a leading European Group in the agro-food sector. The firm has been creating a broad range of delectable products for nearly 70 years. Through its flagship brands, Blini, Delpierre, Labeyrie and Lyons Seafoods, Labeyrie Fine Foods is a leader on its different markets. At the same time, by supplying the private labels of major supermarkets, the Group stands out as a partner of choice for the retail sector. Labeyrie Fine Foods’ structure, organised around six Business Units, allows the company to bring together entrepreneurial initiatives and Group synergies. Each independent Business Unit, with its own individual identity and knowhow, takes part in Labeyrie Fine Foods’ strategy in order to meet established goals. With the benefits of shared support functions (accounting, treasury, legal, IT, purchasing strategies, on-the-ground sales force, etc.), each Business Unit represents a building block in Labeyrie Fine Foods’ structure, contributing to the Group’s success. At the head of each Business Unit, a Managing Director leads a management team with a comprehensive scope of action (marketing, industrial policies, sales, management). These teams are driven by their entrepreneurial spirit, in-depth knowledge of their markets and a perpetual drive for results. Landwell & Associes represented Delabli SAS on the transaction, led by Catherin Olive, Partner, and Stéphane Catays (Director). The firm has a long and strong relationship with Labeyrie Fine Foods, having already represented it for the acquisition of the frozen activities of Brossard in 2010.

DELABLI (LABEYRIE FINE FOODS) ACQUIRED THE SAURISSERIE BUSINESS OF LEDUN PECHEURS D’ISLANDE

Financial Adviser to the Sellers

Legal Adviser to the Sellers

Tax & Legal Adviser to the Acquirer Legal Adviser to the Buyer

Frank Verbeek; Managing Partner. Advisor to the 2theloo - founders. Advising on the selection of possible investors as well as the preferred deal structure Advising on process and project management

Tax Advisers to the Sellers

/ August 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

Consumer Deals

l SIG has acquired SK Sales, a supplier of specialist air handling products. “SK Sales is an exciting business and provides us with a platform for further branch expansion,” commented Paul Gordon, SIG Distribution Managing Director. SK also has a strong customer service ethic so they are an excellent fit for our organisation. SIG has a major presence in mainland Europe in the air management category and this acquisition strengthens our overall market position. Alan Taylor and Jason Kemp, SK Sales joint managing directors, will continue to lead SK Sales as part of SIG. They commented: We have always had a strong commitment to our colleagues at SK and feel there is now significant opportunity for them to realise their ambitions. As part of SIG we see tremendous potential for branch network expansion and product ranges. Stephen Reed, Corporate Finance Director at Price Bailey, led the Price Bailey advisory team which represented the vendors of SK Sales in their recent acquisition by SIG plc. Alan Taylor and Jason Kemp are longstanding clients of Price Bailey Stephen Reed partner John Warren, and as such, naturally looked to the firm’s corporate finance team for assistance with the sale. Mr Reed commented: During the pre-acquisition Due Diligence process, the Vendors and Price Bailey worked hard to ensure that SIG were comfortable with existing management information and stock control systems across the Company’s 16 branches which was a challenge. It has been particularly satisfying for the Vendors to find a buyer that fits so well with the existing business and future strategy, and the nature of the deal ensures that the outgoing shareholders will retain a close working relationship with SIG as part of the enlarged management team taking the SK Sales brand forward. www.pricebailey.co.uk/services/corporate-finance

SIG ACQUIRES SK SALES

VALIDUS l FSN and Norway Group have announced that FSN Capital intends to acquire 60% and Norgesgruppen 40% of all shares in Validus AS. The Validus Group comprises the Nordic region’s leading companies and brands in the fields of health food, duty free goods and beauty care. As Validus AS in turn owns 51.62 percent of shares in Bringwell the transaction, if completed, involves an indirect change of control of Bringwell. This may lead to an obligation for FSN Capital to commence a mandatory offer to all shareholders of Bringwell, according to the Swedish Corporate Governance rules concerning public offers for the acquisition of shares in Swedish limited company whose shares are traded on certain MTFs. The transaction, which is conditioned by a number of conditions, is expected to be completed in late August. SN Capital is a leading Nordic private equity investment company focused on the middle-market segment. Originally established in 2000, FSN Capital seeks to make control investments in Nordic companies with significant potential to become international leaders. Lockton Companies AS was engaged by FSN Capital Partners to perform an insurance due diligence regarding the potential acquisition of Validus Group. Lockton has only been established in Norway since August 2011 but the associates of Lockton has a long standing working relationship with FSN. Representing Lockton in this transaction was: Cato Aamodt, Managing Director; and- Nina Haug, Senior Vice President. Lockton in Norway is a specialist broker with a few focus areas - services for private equity and corporate acquisition being one of these.

WBACK GROUP l Halder has acquired Wback Group through a management buy-out. Wback Group, located in Bönen/Germany, is a leading producer of hamburger and hot dog buns for the fast food, food retailing and food industry segments. The transaction completes management and ownership succession for the firm’s founders. In parallel to new majority owner Halder, management will become a shareholder. The parties involved have entered a binding sales agreement for the firm’s shares. In 2004, Wback was established in Bönen (North RhineWestphalia) by Peter Wendeln. The new firm started serving clients in 2005 after completing a greenfield investment for its production facility. In 2008 capacity was doubled by opening a second new plant in Leipheim (Bavaria). Wback produces two million high quality buns per day. Revenues had surpassed € 30 million in 2012, the average headcount was 131 for the year. ERM GmbH directly worked for Halder on the deal. Mr Christopher Kiermayr and Alexander Witschas as Project Manager led the Environmental, Social and Governance Due Diligence. Mr. Kiermayr is a Partner within ERM’s Central Europe’s Transaction Services (TS) team. Mr Witschas is a consultant within ERM TS practice and was supported by Mr Florian Dirner (ERM). Mr Witschas commented: As we have a long working relationship with Halder and have supported them successfully in their outstanding transaction history. Halder approached us to assess the environmental, social and governance performance of Wback Group. A. Witschas

“The big challenge is that every transaction project has its own characteristics. During this transaction, we had to familiarize ourselves with food industry specific ESG topics. As ERM is a global company with more than 4,500 employees across the world, we had and used access to our experts worldwide who had extensive knowledge of industry. www.erm.com Christopher.Kiermayr@erm.com

FSN CAPITAL ACQUIRES VALIDUS

HALDER ACQUISITION OF WBACK GROUP

Insurance Due Diligence Provider to the Purchaser

Environmental Adviser

Financial Adviser to the Vendor

Financial Adviser to the Purchaser Legal Adviser to the Purchaser Legal Adviser

M&A Advisor to the Vendor

Insurance Adviser

Legal Adviser to the Vendor Tax & Financial Adviser

Legal Adviser to the Vendor

ACQUISITION INTERNATIONAL

August 2013 /

CONSUMER

SK SALES

DEAL DIARY:

Energy & Resources Deals

ENERGY & RESOURCES

BRINDERSON

CALABRIA

CHI.NA.CO S.R.L.

l Aegion Corporation (Nasdaq Global Select Market: AEGNhas executed a definitive agreement to acquire the equity shares of Brinderson, L.P. and related entities for a purchase price of $150 million.

l Quercus Renewable Energy Fund, compartment of Quecus Assets Selection, a company specialising in infrastructure investments with a focus in renewable energy, has completed through the For BEI Joint Venture, the acquisition of the 24MW photovoltaic plant, ‘Calabria Solar’ from Talesun Solar Switzerland AG (“Talesun”), a Swiss subsidiary of Zonghli Talesun Solar Co Ltd, the leading Chinese solar panel manufacturer. Calabria Solar is one of the ten largest solar plants in Italy and the operation’s value amounts to €52.5 million.

l A2A has accepted an offer from BKW for the acquisition of the fully ow ned subsidiary Chi.Na.Co S.r.l., owner of five small hydro run-of-river plants, with total installed capacity of approximately 8 MW.

Brinderson is a leading integrated service provider of maintenance, construction, engineering and turnaround activities for the upstream and downstream oil and gas markets. Primarily focused on serving large oil and gas customers in California, Brinderson’s competitive advantages include its industry-leading safety record, a strong reputation for reliability and quality and comprehensive solutions needed for major refinery maintenance, repairs and retrofits. These core competencies position Brinderson to meet the growing demand for non-discretionary operating and maintenance expenditures. Through long-term contracts and nearly 40 master service agreements, Brinderson derives approximately 75% of its revenues from recurring activities. For the twelve months ended March 31, 2013, Brinderson’s revenues totalled approximately $231 million and adjusted EBITDA was $23.8 million. J. Joseph Burgess, Aegion’s President and Chief Executive Officer commented, We are pleased Brinderson is joining Aegion’s Energy & Mining platform, opening for us a new end market for the maintenance of upstream and downstream energy facilities. Aegion plans to compete across a broader portion of the energy value chain with an $800 to $900 million Energy & Mining platform dedicated to preserving and rehabilitating critical pipeline assets, as well as maintaining the facilities used for processing and refining oil and gas products. Following the acquisition, Aegion’s Energy & Mining revenues from recurring operating and maintenance activities are expected to exceed 50%, compared to 45% prior to the acquisition. This transaction marks the beginning of a strategic effort to expand our capabilities in this important sector of the United States energy market. AEGION CORPORATION AGREES TO ACQUIRE BRINDERSON, L.P. Virtual Data Room Provider

ForVEI is a joint venture comprising Quercus Renewable Energy, VEI Capital, CDC Infrastructure, Foresight Solar VCT and Adenium Solar Energy. ForVEI operates in the Private Equity as well as in the infrastructure and energy sectors. Despite the continuing economic challenges across Europe in the past 24 months (2011-2012), Italy has continued to be one of the most effective markets in the world in solar energy with an additional 13GW of PV plants connected to the grid according to the GS (Italian Power Controller). This is equal to the amount of PV energy connected in Germany over the same period. Italy now has a total of 17GW of installed PV power making it the second largest country for installed capacity worldwide. EOS Consulting SpA performed the technical due diligence analysis in favour of the Banks, which EOS has been having for years a solid professional relationship with in the project finance sector. The team was led by Eng. Emanuele Riccobene, Business Energy Unit team leader, and eng. Alessandro Chiusolo, senior consultant. They commented: A lot of challenging issues were obviously present in such deal so important. We faced and took care of them working in team and assisting the Banks to allocate any technical risk properly, so to finally target a satisfactory closing of the deal. www.eosroma.com ericcobene@eosroma.com

FORVEI PURCHASES 24MW ITALIAN

SOLAR PLANT CALABRIA DRV Corporate Finance Legal Adviser to the Purchaser

The offer price is 38 million euro, with possible additional 1.6 million subject to certain conditions by the end of next year. The plants in 2012 generated 37GWh with revenues of 4 million euro and Ebitda of 3.1 million euro. The transaction will be completed by July 5, 2013, once the necessary documentation is completed. A2A, supported by Banca IMI in the competitive sale process, has selected BKW’s offer not only on the basis of value but also taking into account as a priority the continuity of plant operations, considering the concerned geographical area. BKW is a leading international energy group with more than 3000 employees and has been directly present in Italy for more than 13 years. With this transaction, A2A further proceeds with its strategy of rationalization of the industrial portfolio and debt reduction, in line with the Economic and Financial Plan 2013-2015. A2A is the multiutility born on 1st January 2008 as a result of the merger between AEM SpA Milan and ASM SpA Brescia with the contribution of Amsa and Ecodeco, the two environmental companies acquired by the Group. At present, A2A is: one of the main players in the environmental sector in Italy with approximately 3 million tons of waste treated; in 1st place between the former Italian public utilities companies in terms of clients and turnover; in 1st place in Italy in the district heating sector; in 2nd place in Italy in terms of installed electric capacity and volumes of sales; and in 3rd place in Italy in terms of gas sold. A2A SELLS FIVE SMALL

RUN-OF-RIVER PLANTS DRV Corporate Finance

Financial Adviser to the Purchaser

Legal Adviser to the Purchaser Risk & Insurance Due Diligence Provider

Technical Adviser

Financial Adviser to the Vendor Environmental Due Diligence Provider

Legal Advisers to the Debt Providers Virtual Data Room Provider Tax Adviser

/ August 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

Energy & Resources Deals POWERCO NZ HOLDINGS LTD

l Financial close has been reached on the acquisition of 100% of the Springhill and Islip solar PV projects in the UK from a consortium of private investors, led by Peter Davies, CEO of the solar energy project development and O&M group, Axiom Energy Group Limited.

l AMP Capital has entered into an agreement to acquire 42 per cent of New Zealand’s second largest electricity and gas distribution company, Powerco NZ Holdings Limited, from Brookfield Infrastructure for NZ$525 million which represents an enterprise value of approximately NZ$1 billion.

The Springhill project is located near Moreton-in-Marsh, Gloucestershire and the Islip project is located near Kettering, Northamptonshire. The projects each have an installed capacity of 5MW and were commissioned in July 2011. They benefit from a 25 year feed-in-tariff mandated by the UK Government that is escalated with RPI, and have been financed with separate non-recourse debt finance facilities provided by RBS. Stepnell Limited , the UK construction group, provided sub-debt to the projects, which was acquired by DIF Infrastructure III.

This investment has been made on behalf of a number of AMP Capital clients and managed funds, including a significant investment by the AMP Capital Infrastructure Equity Fund (IEF) and the AMP Capital Core Infrastructure Fund (CIF).

The DIF Infrastructure III fund has already acquired a number of solar PV projects in France and is looking to acquire additional solar PV projects that benefit from feedin-tariffs in Canada, the UK and France. DIF is a fully independent dedicated fund management company managing funds of in total € 1.6bn. DIF invests in infrastructure assets that generate long term stable cash flows, including PPP/PFI and renewable energy assets in Europe and North America. DIF has offices in Amsterdam, Frankfurt, London, Paris, Luxembourg and Toronto. Pinsent Masons acted as lead legal advisers to DIF on the due diligence and acquisition of the projects. The team was led by Richard Murphy (Head of the Energy & Natural Resources Team at Pinsents in Ireland). Mr Murphy commented: The transaction involved a multi-disciplinary team at Pinsents advising DiF on the transaction which showcased our sector strengths as one integrated energy team across the UK and Ireland. Richard Murphy www.pinsentmasons.com Richard.murphy@pinsentmasons.com

AMP Capital Global Head of Infrastructure Scott Davies said: AMP Capital brings a wealth of global expertise in the regulated utility sector and we are very pleased with this investment. “We are an experienced asset manager of critical infrastructure assets and have a long term strategy to manage and improve the assets under our management. We see significant opportunity for further growth in the business, with Powerco supplying key population growth regions in New Zealand. “The strength of the Powerco business and the New Zealand economy makes this an attractive investment for our managed funds and clients. This transaction offers them exposure to a geographically diversified quality asset in the core regulated utility sector. Stuart Shepherd, Director at the Sapere Research Group, led the Sapere team advising AMP Capital on the deal. The firm has a long standing working relationship with the lead on this project, Michael Cummings. Mr Shepherd commented: A key Stuart Shepherd challenge in valuing Powerco was to forecast the way in which the economic regulator is likely to set prices in the future for electricity and gas network services. This issue is a particular challenge in the New Zealand context at present as a new regulatory regime is still being bedded down by the regulator. We were able to use our experience in operating in the New Zealand regulatory environment for over a decade to advise on the paths the regulator is likely to take and their implications for value. http://www.srgexpert.com/ourPeople.html

DIF INFRASTRUCTURE III ACQUIRES TWO UK SOLAR PV PROJECTS

AMP CAPITAL ACQUIRES

POWERCO NZ HOLDINGS LTD DRV Corporate Finance

PRIME ENERGY l International energy consultancy Xodus Group has acquired the business of Dubai based Prime Energy as part of a major expansion drive in the Eastern Hemisphere. Chadbourne & Parke LLP represented Prime Energy Consult Limited on the deal, led by Simon B. Schmidt, Partner in the firm’s Dubai office. Chadbourne lawyers have relationships with the shareholders of Primer Energy Consult Limited which go back many years. Simon Schmidt

Mr Schmidt commented: This deal was negotiated over a long period of time and it was important to ensure that the principals of Prime Energy were not distracted from the ongoing growth and development of the business during this time. To this end the client and Chadbourne greatly appreciated the involvement of consulting firm, Isthmus Partners FZC, as advisor and consultant to Prime Energy during the entirety of this process. Javier Cervino, a partner in Isthmus Partners, had full knowledge of the Prime Energy’s business and was able to provide information and assistance in a timely and effective manner. “This was an important transaction for Xodus Group’s expansion in the region and also indicates the increasing importance of Dubai as a super-regional hub for the oil and gas industry. Isthmus Partners represented Prime Energy on the deal, led by Javier Cervino, Partner. He commented: We have consulted Prime Energy for two years on diverse matters. The long-term relationship created a foundation of trust between Javier Cervino the client and the adviser. Prime Energy is a fast-growing consultancy in the dynamic oil & gas services industry, where companies set up by experienced professionals that are capable of successfully integrating multi-disciplinary services are valuable to E&P clients and are attractive to strategic buyers. “Working embedded within Prime Energy’s management allowed the Prime Energy team to continue with their demanding day-to-day business while ensuring the completion of the transaction. The close working relationship with Chadbourne & Parke was essential for a smooth completion. www.isthmuspartners.ae

XODUS ACQUISITION OF PRIME ENERGY

Regulatory Due Diligence Provider Technical Advisers

Tax Due Diligence Provider

Financial Adviser to the Vendor

Legal Advisers

Commercial Due Diligence Provider Legal Adviser to the Vendor

Tax And Accounting Advisers

Legal Adviser to the Purchaser

ACQUISITION INTERNATIONAL

August 2013 /

ENERGY & RESOURCES

DIF INFRASTRUCTURE III

DEAL DIARY:

Financial Services Deals

l The Hollard Group, South Africa’s best-known independent insurance group, is to acquire the business and all remaining shareholding interests in Etana Insurance. The proposed transaction is subject to regulatory and Competition Commission approval. Etana is a leading provider of intermediated corporate and commercial insurance products and services and has enjoyed tremendous market success and broker acclaim since being spun out of Hollard in 2007. The Hollard Group currently has a 40% shareholding in Etana. The combined entity would be a major force in the South African insurance sector, with premium income from shortterm insurance operations of over R10.6 billion in the year to 30 June 2012 (based on audited financials). The joined entity will comprise over 1,700 South African employees, including those housed at Etana branches and Hollard offices, all of which will remain in service. In typical Hollard and Etana fashion, the proposed transaction is a little different from the norm. This is not just for the sake of being different, says Nic Kohler, Hollard Group CEO, but because we think we can make a real difference in a fiercely competitive market. Elaborating further, Kohler says Hollard and Etana have both been built on the foundations of true partnership AND a focus on crafting insurance solutions that provide the end consumer with real value. By joining forces, we will create greater choice and enhance innovation in commercial and corporate insurance. This will allow brokers to offer market-leading innovations and risk management practices to their clients. Of course, we will also improve utilisation of shareholder capital and increase capacity and that will ultimately benefit consumers. ENS represented both the Hollard and Etana groups, led by Alan Feinstein, executive consultant. ENS, and Alan in particular, have had a relationship of some thirty years with the Hollard group and a relationship with the Etana group since inception. He commented: The main challenges that will be faced in completing this transaction from a legal perspective, apart from the usual commercial complexities, are likely to revolve around regulatory issues. ENSafrica.com

HOLLARD AND ETANA MERGER

INVEST INDIA MICRO PENSION SERVICES l Invest India Micro Pension Services (IIMPS), India’s leading aggregator of regulated micro-pension and long-term micro-saving products for economically active poor, has successfully completed its recent round of funding of US$3.75mn from new investor KfW and existing investor Michael & Susan Dell Foundation which had earlier invested US$1mn in 2011 in the company’s Series-A round of funding. Noted economist, Swaminathan Anklesaria Aiyar also participated in this round of funding. Other IIMPS institutional shareholders include UTI AMC and SEWA. Unitus Capital was the sole financial advisor to the transaction, while HSA consulted IIMPS as their legal advisor to the transaction. IIMPS provides economically active but financially excluded urban and rural poor with convenient and secure access to an integrated pension, savings and insurance product solution using a unique, scalable and sustainable technologyled Micro Pension® model. Founded by Gautam Bhardwaj and Ashish Aggarwal in 2006, both veteran experts on pension sector reforms and implementation, IIMPS is the only firm globally that is committed exclusively to educating, encouraging and enabling the working poor to accumulate micro-savings for their old age in a secure, affordable and well regulated environment. AZB & Partners, Delhi represented Michael & Susan Dell Foundation (“MSDF”) in the transaction. Mr Hardeep Sachdeva, Partner, led the transaction with Ms Priyamvada Shenoy, Senior Associate, assisting in the same. Mr Sachdeva commented: IIMPS was undertaking an additional round of funding to raise capital wherein KfW, a German promotional bank owned by the Federal Republic of Germany agreed to fund the entire additional capital requirement of IIMPS by subscription to the securities of IIMPS and also additionally purchased certain securities from the Promoters. “Our role in the transaction involved advising MSDF, who is an existing investor in IIMPS, in assessing and determining the impact on the rights, entitlements and obligations of MSDF pursuant to the investment of KfW and further involved the review of the transaction documents in relation thereto.

KFW INVESTMENT IN INVEST INDIA MICRO PENSION SERVICES PRIVATE LIMITED

ONLINE RESOURCES CORPORATION l ACI Worldwide, a leading international provider of payment systems, has completed the acquisition of Online Resources Corporation, a leading provider of online banking and full service bill pay solutions. The acquisition adds Electronic Bill Presentment and Payment (EBPP) solutions as a strategic part of ACI’s Universal Payments portfolio. It also strengthens ACI’s online banking capabilities with complementary technology, and expands the company’s leadership in serving community banking and credit union customers. Under the terms of the agreement, ACI acquired Online Resources in an all cash transaction for $3.85 per share. Driven by the increase in electronic transactions from online and mobile banking, bill pay is becoming a major pivot point and area of strategic investment for our customers, said Philip Heasley, president and CEO of ACI Worldwide. With the addition of Online Resources’ capabilities, customers can rely on ACI as an end-to-end, integrated provider addressing the full range of payment needs including: wholesale and retail payments, payments fraud, online banking, merchant retail and now bill pay. “In addition, the acquisition will expand ACI’s bestin-class online banking capabilities to offer a suite of solutions supporting banks and credit unions of all sizes, continued Heasley. We are delighted to welcome Online Resources’ talented employees into the ACI family to help seize these opportunities and advance the best solutions to customers going forward. ACI also announced that consistent with ACI’s long-standing lifecycle management policy, the company is committed to maintaining multi-year roadmaps and contractual commitments to Online Resources’ customers. Online Resources’ customers will benefit from ACI’s size and scale to support current and future initiatives. ACI invests 18% of revenues in R&D, significantly ahead of others in the industry. The company also provides a world-class hosting environment, as well as global 24x7x365 support. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloudbased collaboration solutions. For more information, visit www.intralinks.com

ACI WORLDWIDE COMPLETES ACQUISITION

OF ONLINE RESOURCES DRV Corporate FinanceCORPORATION Virtual Data Room Provider

Legal Adviser

Advisers to Michael & Susan Dell Foundation

Debt Provider

Legal Adviser to the Vendor

Debt Adviser

Advisers to IIMPS

Virtual Data Room Provider

ACQUISITION INTERNATIONAL

August 2013 /

FINANCIAL SERVICES

HOLLARD AND ETANA MERGER

DEAL DIARY:

Financial Services Deals CREDIT SUISSE EUROPEAN ETF BUSINESS l Credit Suisse has signed an agreement to sell its exchange traded funds (ETF) business to Black Rock, Inc. (BlackRock). This is an important strategic step in an industry that requires significant scale, and allows Credit Suisse to realize value in a business successfully built over many years. The sale is part of Credit Suisse’s strategic divestment plans that were announced on July 18, 2012. It comprises Credit Suisse’s ETF business with assets under management of CHF16.0 billion as of November 30, 2012.

FINANCIAL SERVICES

The transaction is subject to customary closing condition ns, including regulatory approvals and is expected to complete by the end of the second quarter of 2013. The terms of the deal are not being disclosed. Martin Keller, Head of Distribution for Core Investments, said: In BlackRock we have found a buyer who is a leading ETF player with a successful track record and well established products. He continued: Credit Suisse will remain a large investor of ETFs through our Private Banking & Wealth Management division and will partner closely with BlackRock to broaden the ETF product offering for our clients. We believe that BlackRock is well positioned to realize the long-term value of our ETF business. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloudbased collaboration solutions. For more information, visit www.intralinks.com

BLACKROCK ACQUIRES CREDIT SUISSE

EUROPEAN ETF BUSINESS DRV Corporate Finance

HELLENIC POSTBANK

PACIFIC & ORIENT INSURANCE

l Eurobank Ergasias S.A. (“Eurobank”) has signed a binding agreement with the Hellenic Financial Stability Fund (“HFSF”) to acquire 100% of the shares and voting rights of New TT Hellenic Postbank S.A. (“HPB”).

l South African financial services group Sanlam has announced that all conditions precedent have been met to conclude the acquisition of a 49% stake in the Malaysian niche short-term insurer Pacific & Orient Insurance Co. Berhad (POI).

In exchange for 100% of the shares and voting right s of HPB, Eurobank agreed to pay a total consideration of €681m in the form of newly issued Eurobank ordinary shares, subject to approval by an Extraordinary General Meeting (“EGM”) of Eurobank ordinary shareholders.

The value of the transaction is Malaysian Ringgit (MYR) 270 million (approximately R814 million) and the effective date of the transaction is 17 May 2013. The transaction is being executed by Sanlam Emerging Markets (SEM), the business cluster responsible for Sanlam Group’s international expansion into selected emerging markets.

The final number of shares to be received by the HFSF will be determined based on the volume weighted average price of the Eurobank share on the Athens Exchange over the 10 working day period prior to the EGM, and at a minimum of 1,418,750,000 shares.

PwC South Africa led by Cape Town based Director Tertius van Dijk acted on behalf of Sanlam Emerging Markets Proprietary Limited to perform a financial, tax, actuarial, regulatory and IT due diligence on Pacific and Orient Insurance Company Berhad. PwC South Africa worked in conjunction with PwC Malaysia to gain access to local industry, regulatory and tax expertise.

Eurobank has also signed a binding agreement to acquire 100% of the shares and voting rights of New Proton Bank S.A. (“Proton”). The integration of HPB and Proton in the enlarged Eurobank Group strengthens its strategic position in the Greek banking sector, enhancing its capacity to support Greek businesses and households. The significant synergies creation makes Eurobank’s investment proposition more attractive, facilitating its re-privatisation to the benefit of the Greek State and economy. Within the new Group, HPB will operate as an autonomous network capitalising on its long history, its relationship with savings clients and its role in the economy.

Frost & Sullivan represented Sanlam Emerging Markets, led by Mark Simoncelli Global Director: Growth Implementation Solutions and supported by a Technical Lead: Sanjay Singh Vice President & Head BFS - Asia Pacific. The Delivery of the project was completed by both the Automation & Transportation and Financial Services teams, based in Malaysia. Mr Simoncelli commented: “We have been engaging and working with Sanlam for approximately a year in the build up to this project. Our focus as a Growth consulting company was to partner with Sanlam in order to deliver an in-depth market study and complete the commercial due diligence of the transaction.

For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloudbased collaboration solutions. For more information, visit www.intralinks.com

“The real challenge was to ensure that the right team (Industry experience and Geographic coverage) was mobilised to effectively deliver this global project. It required that the project was led from South Africa, to ensure an intimate understanding of Sanlam’s requirements, yet was delivered from Malaysia to ensure the relevance of the insight and recommendations where the deal was taking place. In order to develop the necessary insight, a three tiered approach was followed between: an in depth market study; customer research, both through primary and secondary mediums; and finally the economic modelling as part of the commercial due diligence.”

GREEK EUROBANK TO ACQUIRE HELLENIC POSTBANK

MALAYSIAN PACIFIC & ORIENT INSURANCE DRV Corporate Finance

SANLAM ACQUIRES 49% STAKE IN

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/ August 2013

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ACQUISITION INTERNATIONAL

DEAL DIARY:

Healthcare Deals FORTIS - HOAN MY

OKAIROS

ONCURE HOLDINGS

l Fortis Healthcare Limited (“Fortis”), one of India’s largest healthcare companies, has entered into an agreement with Viva Holdings Vietnam (Pte.) Ltd., a wholly owned subsidiary of Chandler Holdings Limited and a Chandler Corporation company, to sell its entire stake in Fortis Hoan My Medical Corporation (“Hoan My”), Vietnam, for a total consideration of US$ 80m. The offer price provides a premium to the purchase price paid by Fortis for the acquisition of Hoan My.

l GlaxoSmithKline (GSK has acquired Okairos AG (Okairos), a specialist developer of vaccine platform technologies for €250 million (approximately £215 million/$325 million) in cash.

l Radiation Therapy Services Holdings, Inc. (“Radiation Therapy” or “the Company”), a leading operator of radiation therapy centers, announced today that its wholly owned subsidiary, Radiation Therapy Services, Inc. (“RTSI”), entered into a “stalking horse” investment agreement to acquire OnCure Holdings, Inc. (together with its subsidiaries, “OnCure”) upon effectiveness of its plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code for approximately $125 million, including $42.5 million in cash (plus covering certain expenses and subject to working capital adjustments) and up to $82.5 million in assumed debt. In addition, OnCure’s secured noteholders have executed a restructuring support agreement outlining their commitment to support the transaction.

Leo Gribben

EY has a long-standing relationship with GSK and has been advising the group on transactions for a number of years, said Mr Gribben. I was delighted to be working with GSK again on a successfully completed cross border acquisition www.ey.com

The transaction is EPS accretive to Fortis Healthcare and post this divestment the Net debt to equity ratio of the company is expected to go down to less than 0.6x.

Brian Ng

R&T Vietnam LLC is representing Fortis Healthcare Group on this deal, with whom the firm has a long-standing working relationship, led by Brian Ng, partner. The core team includes Giao Nguyen (senior associate) and Hoan Bui (senior associate) from R&T Vietnam LLC.

Rajah & Tann’s Singapore office assisted with some aspects of the transaction and the partner on the Singapore side was Evelyn Wee. Other lawyers and paralegals assisting include Hoon Chi Tern (Singapore associate), Jackie Thia (Singapore associate), Thuyen Bui (Vietnam paralegal), Tran Truong (Vietnam paralegal) and Cang Nguyen (Vietnam paralegal). Mr Ng commented: Challenges included aspects of Vietnam law (and in particular, the Investment Law and Enterprise Law of Vietnam) which had to be harmonized with the cross-border nature of the transaction. We advised clients on almost all the aspects of the deal, including working with the tax and financial advisers to come up with a structure that was amenable to both our clients and the acquirer, Chandler Corporation. http://vn.rajahtann.com/Brian_Ng.html http://vn.rajahtann.com/vietnam_law_firm.html http://www.rajahtann.com/

CHANDLER CORPORATION

FORTIS - HOAN MY DRVACQUISITION CorporateOF Finance

Adviser to Fortis

Blum&Grob Attorneys at Law Ltd represented Okairos AG and its selling shareholders, led by Ralf Rosenow, Partner, Head of the Life Sciences Working Group. The firm has represented Okairos AG over approximately the past three years in all contractual and some corporate matters. Mr Rosenow commented: Despite the fact that Okairos is a relative small company with operations only in Switzerland and Italy, the transaction had links to various jurisdictions, on the one side through the acquirer being a multinational big pharma group and on the other side through the international investor group (individuals, VCs and corporate investors) holding and selling shares. Aligning these interests and finding the overall best solution by compromise is a must to close these transactions.

Ralf Rosenow

“As usual, a big challenge for a lean managed biotech company was to cope with the extensive due diligence requirements of a Big Pharma buyer while continuing day to day operations. Providing support and assistance to the top management in these tough times is one of our services on top of pure legal advice and contract negotiations. Amstutz Greuter Attorneys at law acted as one of the main legal advisers to GlaxoSmithKline (GSK) on the deal. The team was led by Partner Andreas Amstutz, Attorney at Law LL.M., who maintains a close working relationship with GSK since more than ten years on a wide range of legal matters (corporate & commercial issues, M&A). In the context of the Okairos deal Amstutz Greuter Attorneys at Law strongly were involved in both pre-acquisition legal due diligence work and drafting transaction documents. They also are providing post-acquisition support. Andreas Amstutz a.amstutz@amstutzgreuter.ch www.amstutzgreuter.ch

GLAXOSMITHKLINE (GSK)

ACQUIRES OKAIROS AG DRV Corporate Finance Legal Adviser to the Vendor

The investment agreement constitutes a lead or “stalking horse” bid in a sale process being conducted in conjunction with OnCure’s reorganization. As such, the acquisition of OnCure by RTSI remains subject to approval by the United States Bankruptcy Court for the District of Delaware and a subsequent auction process in which other interested buyers may submit competing bids for OnCure. Completion of the transaction, which is expected to occur prior to the end of October 2013, remains subject to competing offers, approval by the United States Bankruptcy Court, and customary closing conditions. Dr. Daniel Dosoretz, President and Chief Executive Officer of Radiation Therapy Services said, “We are pleased to have entered into an agreement with OnCure to acquire the business. The addition of OnCure, including its partnerships with teams of many of the most highly respected physicians in the industry, will broaden and deepen our ability to provide world-class treatment to patients and offer our integrated cancer care model in key markets across the United States.”

Brad Burkett

Bradford C. Burkett is a Senior Managing Director at Match Point Partners, LLC. Match Point is acting as restructuring advisory for the Company and Brad is acting as interim CEO and Chief Restructuring Officer.

RADIATION THERAPY SERVICES ACQUIRES ONCURE HOLDINGS

Restructuring Advisor to Oncure

Advisers to the Purchasers

Advisers to Chandler

Legal Counsel

Financial Advisers Legal Adviser to the Purchaser

amstutz | greuter RECHTSANWÄLTE

ACQUISITION INTERNATIONAL

August 2013 /

HEALTHCARE

Commenting on the development, Mr. Vishal Bali, Group CEO, Fortis, said, In keeping with our current priorties in allocation of resources and further strengthening our balance sheet we have decided to accept this unsolicited offer from Viva Holdings.

EY, led by Leo Gribben, a transaction advisory services partner, advised GSK on the acquisition. EY was involved in providing pre-acquisition financial and tax due diligence, and tax structuring advice. In addition, the firm continues to support GSK in the post-acquisition work, including the tax and valuation aspects.

DEAL DIARY:

Healthcare Deals PARTNERSHIP ASSURANCE GROUP IPO

PROTHERA

l Cinven’s Fourth Fund has successfully completed the IPO and partial realisation of Partnership Assurance Group plc (“Partnership” or “the Company”), a leading provider of non-standard annuities, which offers better terms to customers with medical conditions. Following its Admission to the London Stock Exchange on 12 June, Partnership will have generated gross proceeds of €343 million for investors and a total return of more than 8x including Cinven’s remaining shareholding in the Company.

l Soho Flordis International (SFI), an international provider of clinically proven natural medicines, announced today the acquisitions of Ginsana and ProThera. Ginsana from Pharmaton, is a Swiss based leader and innovator in natural medicines and ProThera is a specialist US nutraceutical company. The acquisitions mark an important milestone in establishing SFI as the leading global provider of clinically proven natural medicine.

Cinven made its original investment in Partnership in 2008 and retains a 52% shareholding in the Company post-IPO (following the exercise of the over-allotment option). Based on yesterday’s closing price of 450p (up 17% on the IPO price of 385p), the Fourth Fund’s residual stake is valued at €1.1 billion. Cinven’s investment reflects its track record of investing in successful Financial Services businesses following the establishment of a dedicated Financial Services team in 2006. Its other financial services investments include Avolon, the aircraft leasing business, and Guardian, the consolidator of closed life assurance books.

HEALTHCARE

Hugh Langmuir, Managing Partner of Cinven Partners LLP, commented: The success of Partnership underscores Cinven’s Financial Services team’s expertise in successfully investing in what is a complex and regulated sector. As a result, we are well positioned to target further investment opportunities in the sector for Fund 5. We are also continuing to see highly attractive investment opportunities across our other core sectors. Keefe, Bruyette & Woods was a co-lead manager on the deal advising Cinven, led by Charles Lucas, Managing Director and Head of European Equity Capital Markets. The firm has a long standing relationship with Cinven.

With superior expertise, state-of-the-art manufacturing facilities and a complementary line of six natural medicine brands with significant growth potential, Ginsana helps SFI advance an extensive product portfolio and new product pipeline through a strong network of international distributors. These capabilities will enhance SFI’s M ission to give healthcare professionals and patients access to the best natural medicines supported by clinical studies. Ginsana will continue to market its products under the Ginsana brand name and manufacture world class natural medicines. The trademark rights of Pharmaton® remain at Pharmaton. Ginsana headquarters in Bioggio, Switzerland will become an SFI centre for product development, manufacturing and rapid commercialisation through its worldwide distributor network. ProThera has over 50 years of formulation experience and a comprehensive product line of probiotics and dietary supplements distributed exclusively by healthcare providers. ProThera gives SFI entry into both the growing field of probiotics and the US market, further delivering on its mission to give healthcare providers and patients access to the best natural medicine supported by clinical studies. ProThera headquarters in Reno, Nevada, USA will serve as a regional hub for the rapid commercialisation of the extensive SFI Group product portfolio and future pipeline. Gordon, Herlands, Randolph & Cox, LLP represented SFI Health USA Holdings, Inc., the Purchaser, led by William H. Cox, Partner. Mr Cox has worked with SFI’s affiliated companies for about two years.

Charles Lucas

Mr Lucas commented: The challenge was to ensure that Partnership’s growth and margins were fairly reflected in the IPO price.

CINVEN-BACKED PARTNERSHIP ASSURANCE GROUP IPO

William H. Cox

www.gordonherlands.com wcox@gordonherlands.com

SOHO FLORDIS INTERNATIONAL (SFI) ACQUISITION OF PROTHERA

Commercial Due Diligence Provider

SHELBOURNE SENIOR LIVING l Gracewell Healthcare has acquired Shelbourne Senior Living.

Gary Watson

Jones Lang LaSalle acted on behalf of the vendor Shelbourne Senior Living Limited to effect a successful transaction with Gracewell Healthcare acquiring the asset for their premium care home portfolio. The Jones Lang LaSalle team was led by Gary Watson – Consultant and responsible for the agency side within Jones Lang LaSalle’s Healthcare Department.

The transaction represents a prime acquisition for Gracewell but also a clean divestment for Shelbourne’s parent company. Whilst the asset was premium grade the challenge faced by the vendor was to achieve maximum proceeds for a business that had yet to mature. This process was greatly assisted through Jones Lang LaSalle’s ability to identify and communicate a turnaround for the business which all parties could buy into and this contributed greatly to the successful outcome that was achieved. Jones Lang LaSalle is uniquely placed to offer a full M&A advisory service through its dedicated Healthcare and Corporate Finance divisions. Carterwood advised Gracewell Healthcare on the deal, led by Ben Hartley, Director and Co-Founder of Carterwood. The firm has a long standing relationship with Gracewell Healthcare, having worked for them since 2010. Mr Hartley commented: The subject home was in a semi-rural location and had taken nearly four years to fill despite offering exceptional quality accommodation. The client was keen to identify that there was sufficient demand for the service. Our bespoke demographic analysis and a market survey of competing care homes identified a substantial shortfall of market standard bed spaces within a highly affluent catchment area. Ben Hartley

“The home was operating at below levels we would expect for a unit of its quality, with both staff and non-staff costs significantly above market norms. We identified that there was scope to increase profitability given that mature trade had been reached. We also advised on the 14 cottages situated within the grounds of the home, to determine their future potential. “The home remains of outstanding quality and is currently occupying a position close to the top of its local market.

GRACEWELL HEALTHCARE ACQUISITION OF

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/ August 2013

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ACQUISITION INTERNATIONAL

DEAL DIARY:

Industrial Deals

l MB Aerospace, the international aerospace engineering group, has acquired US-based aeroengine component manufacturing business Delta Industries, which had annual revenues in excess of $60m in 2012. MB Aerospace is an international aerospace engineering group providing complex engineering solutions to some of the key names in the aerospace and defence market. The multi-million dollar deal to acquire Delta, based in Hartford, Connecticut, will expand the MB Aerospace business to projected revenues of more than $160m (£100m) and to 550 employees (up from 370) for the 2013 financial year. The acquisition follows MB Aerospace chief executive Craig Gallagher leading a secondary MBO of MB Aerospace sponsored by Washington DC based private equity firm Arlington Capital Partners (‘Arlington’) in March of this year. Mr Gallagher said: With its wide range of capabilities, long-standing customer relationships and its strong management team, the Delta business has been a longterm target for MB Aerospace. It is a perfect fit with our ambitions for future growth. “We are delighted to have succeeded in securing such a highly prized company and we believe that the combined group is positioned to take advantage of the available opportunities for further expansion in the months and years ahead. “Today’s announcement adds significant technical capabilities to the group, especially in relation to large-diameter fabrications and robotic welding of complex high-value aero engines components. In addition to its high levels of capability, Delta has an industry-leading reputation for its ability to manufacture challenging system-critical components. The enlarged group now has a range of capabilities able to provide OEMs with engineering skills/services alongside the complex products found throughout aero, marine and industrial gas turbine engines. Core product technologies include casings, complex fabricated casings, rotating rings, complex structural assemblies and a range of diffusers, sync rings and high-value casings.

MB AEROSPACE BUYS DELTA INDUSTRIES Virtual Data Room Provider

IBERCHEM l Magnum Capital Industrial Partnershas acquired 87.1% of the shares owned by Alianza Iberian Private Equity in Iberchem. Iberchem is a producer of fragrances and aromas. The company has over 320 employees worldwide and 11 production centres in Spain, China, Indonesia, Malaysia, India, Italy, Tunisia, Colombia and Mexico. Iberchem had a turnover of approximately €57 million in 2013. The Iberchem acquisition is part of Magnum Capital’s corporate strategy to invest in solid, market leading Spanish and Portuguese companies with the potential for international growth. This is the eighth business operation of Magnum Capital since its foundation, enabling the firm to be active in the healthcare, pharmacy, energy, industry services, infrastructures and geriatrics sectors. Representatives from Magnum Capital representatives stated that the main goal is to support Iberchem personnel in this new long-term expansion phase. Deloitte Abogados y Asesores Tributarios represented Magnum Industrial Partners on the deal, with whom the firm has had an on-going relationship for a number of years. The tax structuring work and global coordination was led by Borja Escriva de Romaní, partner and head of the Deloitte Spain M&A Tax team. The tax due diligence piece was led by José María Gómez Rosende, also a partner to the Deloitte Spain M&A Tax team. The financial due diligence work was led by Senen Touza a partner to the Deloitte TAS team. The firm stated that the main challenge in the transaction was the multinational presence of the target group and consequently the need for an efficient coordination between the Deloitte and Magnum teams in order to comply with the short deadline available to file the binding offer in time. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloudbased collaboration solutions. For more information, visit www.intralinks.com

MAGNUM CAPITAL ACQUISITION

OF STAKE IN IBERCHEM DRV Corporate Finance

KILIAN GMBH & CO. KG l International Process and Packaging Technologies GmbH (IPPT) has acquired Kilian GmbH & Co. KG. The official contract of sale has been signed by the German IPPT and the Italian IMA Group (www. ima.it). The final completion of the contract is conditional, amongst other things, on the approval of the antitrust authorities. IPPT, based in Karlsruhe, is a portfolio company of Deutsche Beteiligungs AG (DBAG). The transaction is expected to be concluded in the late summer. IPPT is the parent company of the Romaco Group with production sites in Germany, Switzerland and Italy as well as Sales & Service Centres in the US, Spain and Brazil. Kilian will be a sister company of the Romaco Group. Kilian is a leading international supplier of tablet press machines residing in Cologne with reported sales of approximately 45 million euros in 2012. The manufacturer’s technologies are used in the pharmaceutical, food and chemical industries both in serial production and on a laboratory scale. Apart from a wide range of tablets for pharmaceutical use, stock cubes, dishwasher tabs and pressed dextrose and sweetener products are just a few of the many applications. The portfolio encompasses a variety of services in addition to classic machines and lines. Kilian offers outstanding prospects in national and international markets alike. Demand for equipment from European OEMs is especially high in the rapidly expanding pharmaceutical markets of Asia, Eastern Europe and South America, due partly to the sharp rise in generics production worldwide. Kilian was established in Berlin in 1875 as a family owned business. The firm moved to Cologne after the Second World War, by which time numerous patents relating to tablet press design and manufacture were already in its possession. Kilian was acquired by the IMA Group in 2000 and currently employs some 150 staff at its Cologne headquarters. IPPT ACQUIRES IMA SUBSIDIARY: ROMACO GROUP HOLDING COMPANY BUYS KILIAN GMBH & CO. KG

Tax Adviser Legal Adviser to the Vendor Legal Adviser to the Purchaser & Legal Adviser to the Equity Provider

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ACQUISITION INTERNATIONAL

August 2013 /

INDUSTRIAL

DELTA INDUSTRIES

DEAL DIARY:

Industrial Deals ORÈGE IPO

STENI

WIDEROE

l ORÈGE, the “Company”, a global player specializing in the design, development and industrialization of innovative technological solutions for the treatment of complex effluents (SOFHYS) and sludge (SLG), has announced the success of its initial public offering on the regulated market of NYSE - Euronext in Paris (compartment C).

l Accent Equity 2012 has acquired, together with Steni’s Management, 100% of the shares of Steni from the previous owners. Steni’s CEO, Tom Rønning, and the new Chairman, Olav Kjell Holtan, are investing in parallel with the Accent fund.

l SAS Group (“SAS”) has signed an agreement to sell 80% of its shares in Widerøe’s Flyveselskap AS (“Widerøe”) to a group of investors consisting of Torghatten ASA, Fjord1 AS and Nordland Fylkeskommune (together referred to as the “Investor Group”). SAS will retain a 20% share in Widerøe but will have the intention to transfer full ownership of Widerøe in 2016.

Orège raises 20.1 million euros through the IPO. The net proceeds will in particular allow the Company to: •

•

Industrialise and market “standard products” for priority applications as identified by the Company, and thus develop its presence in these markets (oil & gas, chemicals, food & beverage and municipalities); Establish an international presence (in the United Kingdom, Germany, the Benelux countries the United States, Canada);

•

Continue and step up the development of dedicated solutions relating to its two SOFHYS and SLG technologies for other uses identified as particularly promising (non-conventional oil and gas, etc.);

•

Strengthen its shareholders’ equity in order to face the financing needs of its current business;

•

Maintain its technological edge by leveraging its two proprietary technologies, namely SOFHYS and SLG, not however excluding the design and development of other innovative technologies in the future.

This IPO represents a significant step in the development of our company. It is, without any doubt, a move towards new strategic partnerships, commented Pascal Gendrot, CEO of ORÈGE.

INDUSTRIAL

ORÈGE RAISES 20.1 MILLION EUROS THROUGH THE IPO

Steni is the leading Norwegian façade panel company. The company’s turnover is expected to amount to approximately NOK 300 million in 2013. The company employs some 120 people and has subsidiaries in the Nordics, the Netherlands and the UK, and distributors elsewhere in Europe, the USA and Canada. The products (façade, interior and roof panels) are manufactured by fibreglass reinforced polymer composite with various surfaces depending on design and appearance. Since the material is chemically neutral and can be recycled, Steni is described as one of the most environmentally friendly façade panel solutions on the market. The products are resistant to impact, water and UV, and come with up to 40 years warranty. Steni has developed and produced façade panels since 1965. The company, which started almost 50 years ago, has today its head office and production situated in Steinsholt, southwest of Oslo. Since the start, Steni has developed a wide range of products and has up until today delivered al-most 30 million square meters of façade panels to buildings all over the world. Please see www.steni.no for more information. Steni is a great company, and we have followed its development for several years,” said Niklas Sloutski, CEO of Accent Equity Partners, advisor to Accent Equity 2012. “Steni’s façade panels are unique when it comes to durability, environmental friendliness and possibilities for the design of the panels. The company is well positioned for further growth on both existing and new markets. The goal is to see Steni’s products being used by more property developers, architects, constructors and DIY homebuilders.

ACCENT EQUITY 2012 ACQUIRES STENI

The sale of Widerøe represents an important step in the improvement of SAS’ financial position with a significant reduction of SAS’ financial leverage. SAS and Widerøe will have a continued close commercial cooperation after the transaction, with Widerøe remaining an important regional partner to SAS. As part of the transaction, SAS will sell seven Dash Q400 aircraft to Widerøe which are currently leased by Widerøe from SAS. The loans related to these aircraft will be transferred to Widerøe. Additionally, three aircraft, currently not in use, has been sold from SAS to a lessor and subsequently leased by Widerøe. SAS will receive approximately SEK 2.0 billion in conjunction with the divestment of Widerøe, including the aircraft-related transactions, and up to SEK 2.3 billion in total proceeds in the case of a full divestment in 2016. The total proceeds will reduce net debt by the same amount.[1] (http://connect. ne.cision.com#_ftn1) Additionally, the transaction will reduce the previously announced negative impact on equity of amended reporting rules for pensions by approximately SEK 1.0 billion from SEK 7.9 to SEK 6.9 billion.1 This divestment is in line with the 4Excellence Next Generation strategy to build a long-term financially strong SAS. We are pleased to have developed Widerøe into a successful airline under SAS’ ownership and we look forward to continue strengthening Widerøe’s position as the leading regional airline in Norway together with the new owners, says Rickard Gustafsson, SAS Group President &CEO.

SAS AGREES TO SALE OF

DRVNORWEGIAN CorporateREGIONAL FinanceSUBSIDIARY

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/ August 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

Real Estate Deals Consumer Deal Of The Month INVESTORS IN THE COMMUNITY LP PORTFOLIO l JLIF, the FTSE 250 international PPP infrastructure investment company, has agreed the acquisition of a portfolio of 11 operational and yielding assets (the “Portfolio”), from Investors in the Community LP (“IIC”), for c. £123 million. The total consideration is consistent with the current valuations of similar projects in JLIF’s portfolio and will be satisfied either wholly in cash or partly in cash and partly by the issue of new ordinary shares in JLIF. Any cash element of consideration will be funded by JLIF’s existing bank facility. The acquisition will complete once the customary consent process has concluded. Following the acquisition, the total number of projects in the JLIF portfolio increases to 49, with an approximate aggregate valuation of £697.8 million. The Portfolio comprises high quality, robust social infrastructure assets in the Education, Healthcare, Social Housing and Street Lighting sectors. The projects are all fully operational and supported by government-backed, inflation linked revenue streams. The average remaining contract life of the Portfolio is similar to JLIF’s existing portfolio at 20.4 years. The projects fit strongly within JLIF’s stringent investment criteria, offering long-term, stable cash flows with low correlation to the economic cycle or other assets. The projects in the Portfolio include:

• • • • • •

Leeds Combined Secondary Schools (100% ownership) Bexley Schools (100% ownership) Bristol BSF (37.5% ownership) Peterborough Schools (81% ownership) Miles Platting Housing (33% ownership) Realise Health LIFT (Colchester) (60% ownership)

• • • • •

Northampton Mental Health (100% ownership) Barnet Lighting (85% ownership) Enfield Lighting (85% ownership) Lambeth Lighting (85% ownership) Redcar and Cleveland Lighting (85% ownership)

The projects are managed by Mill Asset Management Group, one of the largest independent asset and SPV managers of PPP infrastructure projects in the UK, and will continue to be so after completion. Andrew Charlesworth from John Laing Capital Management, Fund Manager to JLIF, said: We are delighted to announce the acquisition of the portfolio from IIC. The portfolio is an excellent fit with our investment criteria. We continue to benefit both from a strong pipeline of attractive assets from John Laing and from our ability to make attractive purchases such as this from the wider market. Indeed, since the start of 2012, over 70% of acquisitions by value have been sourced outside of JLIF’s first offer agreement with John Laing. Tom Symes from Mill Asset Management Group, SPV Manager to the IIC Fund, said: We are very pleased that ownership of IIC’s portfolio is passing to JLIF, where it will be an excellent fit with the existing JLIF assets. The projects in the IIC portfolio have performed exceptionally well, and provide great benefit to the communities in which they are located. MAMG looks forward to working with the JLIF team in managing the projects. KPMG Corporate Finance, led by Jonathan White (Partner), acted as lead sell side advisor to Investors in the Community Infrastructure Fund (“IIC”) on the sale of their interests in eleven PFI/PPP projects. KPMG has a long-standing relationship as adviser to the Fund since its inception in 2004, particularly through the provision of tax advisory services from Margaret Stephens. Mr White commented: KPMG ran a competitive auction process targeting infrastructure funds, pension funds and new entrants to the market. In particular the process was performed over a short timescale Jonathan White with KPMG supporting IIC throughout the process enabling management to continue to focus on their day to day management of the assets. Maintaining a healthy competitive process between bidders ensured IIC were able to maximise the value of the assets driving prices to new highs within the market. PwC advised JLIF on the taxation aspects of the acquisition including due diligence and structuring work. The work was led by tax partner Zafar Patel, who commented: We were delighted to assist JLIF on this exciting acquisition.

Consumer Deal Of The Month JLIF ACQUISITION OF INVESTORS IN THE COMMUNITY LP PORTFOLIO Financial Adviser to the Vendor & Vendor Tax Adviser

Tax Adviser to the Equity Provider

Hogan Lovells acted as Adviser to IIC LP, structuring the transaction and managing legal aspects of the sale process, led by Andrew Briggs, partner. Navigant provided the financial due diligence for JLIF, in a team led by Ed Goodall, Associate Director.

REAL ESTATE

Mr Goodall commented: Navigant reviewed the financial model and relevant aspects of the contract to ensure consistency between the two. A critical analysis of the vendor’s assumptions and an assessment of any other areas where value could be added were also undertaken. As appropriate the financial model was amended, which impacted on valuation. A particular challenge on this transaction was the short timeframe with which to analyse a large amount of information, necessitating a committed approach from Navigant’s consultants.

Insurance Adviser to the Equity Provider

Legal Adviser to the Equity Provider

The Aon team, led by Aon Project Finance Director Mark Courtneidge and Natasha Rogers, undertook detailed insurance due diligence in support of JLIF. Mr Courtneidge commented: This required intrusive analysis of the project documentation and insurance policies to report on the contract compliance of the programmes, and identify opportunities for improvements in terms of coverage and premiums. Mark Courtneidge “Insurance is a key risk tool in PPP projects and we were able to demonstrate positive opportunities to JLIF assisting them in their successful acquisition of the portfolio.

Robin Baillie

Kristy Duane

Nabarro advised JLIF on the legal aspects of this secondary market acquisition of eleven infrastructure assets (spanning the education, health, social housing and street lighting sectors). The Nabarro team was led by client relationship partner, Robin Baillie who has advised JLIF on a number of similar acquisitions over the past two years. Robin’s team carried out the extensive due diligence required on each of the eleven assets in a very short time scale and was assisted by partner, Kristy Duane who is advising JLIF on the corporate elements of this complex deal. www.nabarro.com r.baillie@nabarro.com k.duane@nabarro.com

For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com

/ August 2013

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ACQUISITION INTERNATIONAL

DEAL DIARY:

Real Estate Deals CAN FIRST

HILLSTREET SHOPPING CENTRE

LANDMARK VILLA TRE VILLE

l Dundee Industrial REIT has entered into an agreement with CanFirst Industrial Realty Fund III LP and CanFirst Industrial Realty Fund IV LP (“CanFirst”) to acquire a portfolio of 22 industrial properties (the “Portfolio”) for approximately $151.5 million.

l NewRiver Retail, the retail-focused UK REIT, has completed its acquisition of the Hillstreet Shopping Centre in Middlesbrough. NewRiver and LVS II Lux IV S.a.r.l. have each taken a 50% equity stake in this acquisition.

l Ivanhoe Italia LLC, a subsidiary of Ivanhoe Capital Corporation, has completed the acquisition of the Villa Tre Ville luxury hotel, a complex of distinctive suites that has been a cultural landmark in the Positano area of south-western Italy for several generations. Villa Tre Ville is nestled on a landscape promontory overlooking the Tyrrhenian Sea.

Upon completion of the acquisition of the Portfolio and the recently announced acquisition of C2C Industrial Properties Inc. (“C2C”), Dundee Industrial will own a nationally diversified portfolio totalling 15.6 million square feet of gross leasable area, reinforcing its position as Canada’s largest industrial REIT. The Portfolio comprises 1.6 million square feet of gross leasable area located entirely within the GTA. The Portfolio will provide additional scale in the GTA and further enhances the REIT’s geographic and tenant diversification. The transaction is immediately accretive to the REIT. The Portfolio has a year-one capitalization rate of 6.5%. Including property management fee income, the capitalization rate increases to 6.7%. The CanFirst Portfolio complements the REIT’s existing assets in terms of asset type and quality, as well as other key portfolio metrics. The Portfolio has a current in-place occupancy rate of 96%, a weighted average lease term of approximately 3.7 years and an average in-place rent of $5.83 per square foot. Dundee Industrial will acquire the Portfolio for a purchase price of approximately $151.5 million, equating to a value of approximately $93/square foot. Year 1 NOI is expected to be $9.9 million, resulting in a capitalization rate of 6.5%. Including property management income, the capitalization rate increases to 6.7%.

DUNDEE INDUSTRIAL REIT TO ACQUIRE INDUSTRIAL PORTFOLIO FOR $151.5 MILLION Commercial Broker

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The REIT said the acquisition supported its stated intention to “efficiently deploy the proceeds of its recently oversubscribed £67 million equity fundraise and the centre is NewRiver’s largest single asset acquisition to date”. The centre is a covered, single level shopping complex comprising 224,000 sq ft of retail accommodation and a 753 space car park. NewRiver has acquired the centre from Ignis Asset Management, on behalf of its Phoenix Assurance fund, for a total consideration of £49.4m, reflecting a net initial yield of 9.6%. The centre has a weighted average lease expiry of a pproximately nine years and is anchored by Primark, Debenhams and Marks & Spencer with other key tenants including Sports Direct, Home Bargains, Superdrug and Argos. It has annual footfall of approximately 12.6m ensuring high occupancy, currently at 98%. NewRiver has identified extensive asset management opportunities to unlock additional value including potential improvement of the entrances, increased commercialisation initiatives and potential reconfiguration of units within the Centre.

Robert Friedland, Chairman and founder of Ivanhoe Capital Corporation, stated that Villa Tre Ville would form part of an Ivanhoe group of international boutique hotels and villas, with other locations under development in Thailand and Japan. Villa Tre Ville is steeped in the rich cultural history of the Positano region and was home for 35 years to celebrated opera director and moviemaker Maestro Franco Zeffirelli. Thoughtfully converted to luxury accommodations three years ago, it is a magical showpiece of art and design in a spectacular seaside setting. Ivanhoe Capital is a private, family-owned enterprise that specialises in providing venture capital, project financing and related financial services to client companies around the world from its head office in Singapore and international offices in London and Beijing. SCM LAWYERS represented the buyer as legal advisors and due diligence providers in its first deal for the client. The team was led by Vincenzo Sinisi, senior partner of SCM lawyers, with large experience in real estate and hotel transactions.

The company is funding its share of the purchase out of cash resources from the placing proceeds and the joint venture has agreed a new debt facility from a UK lending bank. Jonathan Milburn, Partner at Jackson Criss advised the purchaser (NewRiver Retail), with whom they have a longstanding working relationship, upon the acquisition. Jonathan commented “the key to the deal from our perspective was to obtain a thorough and complete Jonathan Milburn understanding that the underlying occupational fundamentals of the asset, particularly in the context of the wider often maligned geographical catchment, were entirely robust to further endorse the highly attractive income yield at purchase.”

NEWRIVER RETAIL ACQUIRES HILLSTREET SHOPPING CENTRE IN MIDDLESBROUGH FOR £50 MILLION (UK)

Vincenzo Sinisi

He commented: The main complexity lied on the fact that property is used as top scale touristic resort and property, business and marketing issues were therefore deeply interconnected. Time constraint was an important factor as the deal had to be closed before peak season and smooth turnover to buyer had to be insured. Concurrent use of negotiation team and due diligence team was key factor to close successfully and timely. Several face to face meetings with Sellers help tremendously creating a good will relationship that shortened negotiations. www.scm-lawyers.it

IVANHOE CAPITAL ACQUISITION OF

LANDMARKFinance VILLA TRE VILLE DRV Corporate

REAL ESTATE

The CanFirst Portfolio comprises 1.6 million square feet of gross leasable area wholly located across the Greater Toronto Area (“GTA”) in key industrial markets and along major transportation corridors providing direct highway access.

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August 2013 /

DEAL DIARY:

Support Services Deals AVANTA l The shareholders of Avanta Managed Offices Limited (Avanta), a leading provider of flexible workspace for growing businesses, have entered into an agreement for the company to be acquired by Serviced Office Group plc (SOG) for £15.0 million. Avanta’s current property portfolio, offering and service levels are expected to stay as they are now with Avanta operating as part of the wider group, combining Avanta’s 17 business centres with SOG’s 20. It is intended that, following completion of the Transaction, Avanta’s CEO, Alan Pepper, will become Chief Operating Officer of SOG, running the serviced office operation for the enlarged group. The Avanta management team will also take up positions at SOG. Alan Pepper, CEO of Avanta, commented: This is a good deal for Avanta, its customers and employees. SOG and Avanta are an excellent fit, with a similar service ethos and a complementary office portfolio. “Avanta customers will continue to receive flexible workspace in central London locations with market-leading levels of customer service and support, from the same award-winning team as they do now. With Avanta’s portfolio of office space, SOG will become one of the largest serviced office group providers in the UK by number of workstations. Serviced Office Group plc is an AIM-listed provider of flexible office space and IT solutions, which operates 23 business centres, predominantly in London and the South East. The company was founded by Chairman Michael Kingshott CVO in 2003.

DOMSJÖ FABRIKER l Standard Chartered Bank has granted a credit facility to Domsjö Fabriker. Domsjö’s main product, specialty cellulose, is used for the textile material viscose, which is an environmentally sound alternative to cotton and synthetic textile fibres. Domsjö is a biorefinery that produces products and energy with a clear environmental profile from renewable raw material from the forests. As well as specialty cellulose, Domsjö produces lignin and bioethanol. Our unique process also gives us the opportunity to produce complementary products such as carbonic acid, biogas and energy. The bioenergy generated by the process is used internally and makes Domsjö virtually independent of fossil energy sources. The raw material mainly consists of spruce and pine. The company’s manufacturing takes place in Domsjö, just outside Örnsköldsvik. The number of employees is 400. The products are mainly sold outside Sweden. The largest markets are in Asia. The head office is located in Domsjö and the turnover is over 1.9 billion SEK. There are subsidiaries in Latvia and Lithuania with altogether 25 employees. Domsjö Fiber, a company jointly owned with Övik Energi, is responsible for supplying raw materials to both Domsjö and Övik Energi. Trilegal acted for Standard Chartered Bank in connection with (i) the refinancing of the debt undertaken for the original acquisition and (ii) a separate capex facility provided to the target entity (Domsjö Fabriker). The firm has a long-standing relationship with Standard Chartered Bank and has acted for them in a number of acquisition financing transactions The team at Trilegal was led by Ameya Khandge. He is a partner in the banking and finance practice at the firm’s Mumbai office. Mr Khandge commented: The transactions involved a springing guarantee from the Indian parent which got trigAmeya Khandge gered upon the occurrence of certain identified events. This was different from the traditional forms of credit support for outbound acquisition financings such as a corporate guarantee, pledge or shortfall undertaking. www.trilegal.com Ameya.Khandge@trilegal.com

SERVICED OFFICE GROUP ACQUIRES AVANTA MANAGED OFFICES

STANDARD CHARTERED BANK INVEST IN DOMSJÖ FABRIKER

LAMBERT CONTRACTS l Leading Private Equity and Alternative Asset manager Maven Capital Partners (Maven) has invested £3.8m into Paisley based Lambert Contracts. Maven’s investment will help to position the business for further growth and accelerate its strategy for expansion into new geographic markets. The business, which was founded in 1986 and now employs over 100 staff, is a leading specialist contractor in Insurance Reinstatement, Property Maintenance and Fire Protection, and has long standing relationships with many of the UK’s best known insurance companies, loss adjustors and property managers. Lambert has over 25 years’ experience in the sector, with a reputation for providing a high quality, professional and reliable service, through a customer focussed approach. The company provides Insurance Reinstatement and Property Maintenance services on a 24/7 basis as part of an integrated offering to home and business owners aimed at minimising disruption. Core services range from restoring properties damaged by fire, flood, smoke, water and storms, to carrying out general property maintenance for an extensive network of property managers, and fulfilling specialist fire safety contracts. Lambert is led by an ambitious and experienced management team which has worked together for over 10 years and has achieved impressive financial performance to date. With a track record of winning and retaining key clients, allied to a robust IT infrastructure, the business is clearly scalable with a number of opportunities already identified to achieve further growth through geographic expansion. Commercial due diligence on behalf of Maven was undertaken by Robin Leggett, Director at Market & Customer Insight. MCi carried out a market overview as well as customer referencing which helps to gain real insight into how the business is perceived providing not only input into Maven’s decision making but also serving as a helpful working document for management.

MAVEN INJECTS £3.8M INTO LAMBERT CONTRACTS Commercial Due Diligence Provider

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/ August 2013

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ACQUISITION INTERNATIONAL

DEAL DIARY:

Support Services Deals LEXIA LEARNING

OAG

l Rosetta Stone Inc. has agreed to acquire leading education-technology company Lexia Learning Systems, Inc., whose innovative English reading products are used in over 14,000 schools and by more than one million students online, for $22.5 million in cash.

l Electra Partners has, following successful regulatory approval, acquired the majority of UBM plc’s Data Services businesses, including OAG.

The transaction marks Rosetta Stone’s first extension beyond language learning and takes the company deeper into the EdTech industry. With Lexia bringing greater breadth to Rosetta Stone’s K-12 Education business, the company plans to leverage Lexia’s expertise in children’s reading to deepen its engagement with schools and deliver its digital literacy solutions to young learners in the consumer market, both in the United States and internationally. This acquisition marks a major step forward in Rosetta Stone’s strategy to strengthen our leadership position in the use of technology in education, said President and Chief Executive Officer Steve Swad. Reading represents a natural adjacency to language learning, and Lexia enables us to expand into this important market with leading-edge products celebrated for their effectiveness by educators and parents. We see exciting synergies between the two companies globally. With Lexia now part of Rosetta Stone, we can address the market for learning English with a dynamic suite of solutions to help children read. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com

ROSETTA STONE ACQUIRES PREMIER READING TECHNOLOGY COMPANY

DRV Corporate LEXIAFinance LEARNING

Virtual Data Room Provider

To date, Electra Private Equity PLC and the Electra Partners Club 2007 have invested £91.5 million and £11.8 million respectively. Electra Private Equity PLC and the Electra Partners Club 2007 have agreed to invest up to a further £7.5 million and £1.2 million respectively to acquire further Data Services businesses from UBM - should this take place Electra Private Equity PLC’s investment would total £99 million. This is lower than the £114 million offer announced in February 2013 as it reflects a £15 million investment by a third party co-investor. The Data Services businesses provide data and information products which professionals use to support their decisionmaking and day-to-day business activities. Operating in 28 countries worldwide, the businesses serve a wide range of sectors including healthcare, technology & IP, global trade, aviation and forest products. OAG, the market leader in aviation intelligence, welcomed the acquisition by Electra Partners, a leading private equity firm, from former parent company UBM plc. Phil Callow, chief executive officer, OAG says: The sale of OAG allows the company to fully capitalise on its competitive advantages. As an independent business, OAG is now excellently placed to extend its position as a leader in the world of global aviation data and intelligence. “Our customers will benefit from new ownership, as it presents us with a welcome opportunity to accelerate the development of new products and deliver even greater overall value for our growing markets around the world. OAG is the industry’s trusted source for aviation information and analytical services. OAG’s leading aviation databases are unrivalled in their scale, accuracy and comprehensiveness and are integral to the world’s aviation industry operations. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com

ELECTRA PARTNERS ACQUIRES OAG

DRV Corporate Finance

TELEOSS CONSULTING l Ericsson has announced its intention to acquire the entire business of TeleOSS Consulting Ltd. in a business transfer agreement. TeleOSS Consulting Ltd. is a specialist in consulting and systems integration for Operating Support Systems (OSS), based in Bangkok, Thailand. The completion of the acquisition is subject to consultation and customary closing conditions and is expected to take place by the end of Q3, 2013. The deal sees around 50 skilled, Thailand-based OSS systems integration professionals join Ericsson. TeleOSS Consulting Ltd. delivers OSS-related solutions to telecom service providers, particularly in the areas of inventory and traffic management and software development. The acquisition complements Ericsson’s existing consulting and systems integration expertise in these fields and will further strengthen the company’s customer relations and OSS transformation capabilities in South-East Asia and Oceania. The acquisition of the entire business of TeleOSS Consulting Ltd. will complement our capabilities in systems integration for OSS in South East Asia and Oceania, particularly in the areas of traffic and inventory management areas to offer a wide-range of solutions to our customers, says Paolo Colella, Head of Consulting and Systems Integration at Ericsson. Tosaporn Wongweeratorn, Managing Director, TeleOSS Consulting Ltd. says. I am convinced that this acquisition will provide a valuable addition to Ericsson’s world class capabilities in systems integration in the OSS field. Together we can help to ensure high quality service delivery to customers and their subscribers through the combined comprehensive range of OSS solutions. The service professionals that join Ericsson will also benefit from its global presence. To enable customers to transform their operations and IT environments and to improve the user experience, increase efficiency and enable service innovation, Ericsson offers a combination of strong services capabilities and a comprehensive software portfolio. Ericsson has 15,000 consulting and systems integration professionals who deliver more than 1,500 consulting, systems integration and learning services projects in multivendor and multi-technology environments each year.

ERICSSON ACQUIRES THAILAND’S

TELEOSS CONSULTING DRV Corporate Finance

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SUPPORT SERVICES

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August 2013 /

DEAL DIARY: TMT Deals

CALLUS

CAPTIFY MEDIA

CIVICA

l COMDATA, the leading industrial partner in BPO (Business Process Outsourcing) of Customer Operations, has completed the acquisition from the Turkish company, KoçSistem, leader in the IT sector and part of Koç Group, of the entire share capital of the Turkish company CallUs.

l Panoramic Growth Equity (“Panoramic”), the leading equity investor in fast growing, entrepreneurial companies, has invested £1.2 million of growth capital in digital marketing business, Captify Media Limited (“Captify”). Panoramic will take a minority stake in the business and partner, Malcolm Kpedekpo, will join the board.

l 3i Group plc (“3i”), and funds managed by 3i, have agreed to sell Civica, an international market leader in specialist IT systems and business process services for the public sector, to OMERS Private Equity for an enterprise value of £390m. The total proceeds to 3i and funds of approximately £228m represent a 2.1x money multiple on their investment of £109m.

Thanks to the acquisition of CallUs, COMDATA will continue to expand its presence in international markets after the recent establishment of Comdata Argentina and Comdata Czech Republic, with expectations of reaching a turnover of 300 million Euros in FY 2013-2014. CallUs, founded in 2003, currently counts 1,400 employees and today is the fourth largest player operating in the contact centre services outsourcing market in Turkey with two locations in Istanbul and Samsun. In 2012 alone, the company registered more than 18 million calls. According to the Turkish Call Centers Association, the Turkish market for outsourcing services in particular will experience further growth in the coming years at the rate of 18%. CallUs holds a 5.3% market share and has a portfolio of over 50 clients operating in numerous sectors including Telco & IT, financial services, insurance, energy, automotive and retail. The most important clients are Vodafone Turkey and several companies within Koç Group. The acquisition of CallUs confirms Comdata’s commitment to boost investments at international level and to expand our presence abroad in fast developing markets”, commented Massimo Canturi, CEO COMDATA. “The internationalization process represents clear evidence of the growth that the Company has achieved, thanks to its innovation capacity and its skills development capabilities. With the acquisition of CallUs we see great opportunities to respond to the global demanding needs of our current and future customers by providing them with top quality levels of service. We now look forward to maximizing synergies and assets from the integration of the two companies to further establish COMDATA as a global player. Alexander Gross, Director at Merrill DataSite, supported provision of the virtual data room used throughout the due diligence phase of this deal. He was brought into the project by both Koc Holding and Pragma Corporate Finance, with whom he has long standing relationships. This project involved both Turkish and English speaking Merrill DataSite project managers who supported the deal team whenever required. Bidders were able to review critical company information via the VDR, facilitating a successful and speedy conclusion to this international transaction.

COMDATA ACQUIRED THE TURKISH CALL CENTER SERVICES COMPANY CALLUS FROM KOÇSISTEM

Rory Paterson of Ampelm, a strategic business consultancy specialising in commercial due diligence in the digital sector, was appointed by Panoramic Growth Equity in relation to the Captify Media deal. The commercial due diligence involved in-depth interviews with key Captify team members, interrogation of current and prospective revenue models aligned to the market dynamics of the programmatic media sector. Market and customer perceptions were measured via key client, publisher and technology partner engagements, an extensive global competitor analysis was undertaken and technological observations documented. www.ampelm.com HBJ Gateley acted for Panoramic Growth Equity (PGE) in relation to PGE’s recent investment into Captify Media Limited. David Kirchin led the team at HBJ Gateley working on the deal with David Anderson, Senior Associate and Ashleigh Bruce, Solicitor. David Kirchin commented: It was great to work with the Panoramic team to provide growth capital to this exciting digital business. A mark of the deal was the collaborative approach adopted by the teams through to deal completion. Jago Capital represented Captify and continues to do so as its exclusive corporate advisor, led by Lee Cory, Founder and Partner. He commented: Captify are a cutting edge technology business in a very new high growth sector. Getting investors Lee Cory to appreciate the potential in such a situation is always a challenge, one that Jago met head on by receiving multiple funding offers. “Jago sources, structures and promotes investment opportunities. Jago has extensive expertise and experience across a wide variety of asset types and sectors and work with a broad range of investors, including private individuals, family offices, and venture capitalists. Lee.cory@jagocapital.com

PANORAMIC BACKS CAPTIFY MEDIA

3i invested in UK based Civica in 2008, in a public to private transaction. 3i backed the incumbent management team, led by Simon Downing as Chief Executive, to support the team’s growth strategy through both organic and acquisitive growth in the UK and internationally. Since 3i’s investment, Civica has continued its strong track record of organic growth of both revenue and EBITDA, driven by a combination of sustained software sales from Civica’s market-leading product portfolio and the roll-out of cloud-based solutions in all markets. Further growth has come from up-selling services to existing customers including specialist outsourcing, such as an IT-enhanced BPO proposition. 3i has also supported Civica with the completion of 10 acquisitions in the UK, Australia and New Zealand, adding key product and geographical presence to Civica’s existing offering. In the same period, staff numbers across the business have increased from 1,350 to over 2,000, approximately 60% of which are in the UK. This transaction follows 3i’s sale of its stakes in MoldMasters, Giraffe and most recently Hyperion. Proceeds to 3i Group plc from today’s transaction, which is expected to complete later today, are approximately £127m, compared to a value of £68m at 31 March 2012 and £83m at 31 December 2012. OC&C Strategy Consultants provided commercial vendor due diligence to 3i on the deal, led by Partners Colin Tyler, David Hosein and Nigel Stirk.

3I MAKES A 2.1X RETURN

ON THE SALE OF CIVICA DRV Corporate Finance Vendor Due Diligence Providers

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/ August 2013

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ACQUISITION INTERNATIONAL

DEAL DIARY: TMT Deals

CUBEWORKS

GORENJE

GROUPE CAP VERT FINANCE

l Independent creative agency, MBA, has acquired Cubeworks, a leading web / mobile development and systems integration business, for an undisclosed sum. Cubeworks was established in 2002, employs 15 people in its Brighton office and its current clients include CGI (formerly Logica) National Express, Diageo and the UK Government.

l Gorenje Group and Panasonic Corporation today announced the creation of a long-term strategic alliance that will leverage the combined strengths and capabilities of the two companies, contribute to the profitability of both partners and improve their competitiveness in Europe, to the benefit of consumers.

l The investment firm Eurazeo PME, a subsidiary of Eurazeo specialising in medium-sized companies, has acquired Groupe Cap Vert Finance (CVF), a European leader in product life-cycle management of electronics infrastructures, on the basis of an enterprise value of almost €70 million.

The strategic alliance between Gorenje and Panasonic will be structured around two pillars: joint R&D and sharing of selected manufacturing platforms for selected product categories (washing machines, refrigerators and built-in ovens); and the sales network and marketing know-how for distribution throughout Europe.

Eurazeo PME will hold 57% of the share capital alongside current management, including Bruno Demolin, Chairman of the Management Board. Loïc Villers, the founder, will retain 8% of the share capital and will remain Chairman of the Supervisory Board.

The move further bolsters MBA’s existing digital and mobile services by offering even more app, ecommerce and tech development opportunities to its new and existing clients, which include Everest, Embraer, Avios, Accor Hotels and Sage by Heston Blumenthal. Cubeworks will be merged with MBA with immediate effect. Cubeworks’ office in Brighton will be renamed MBA Brighton and will continue as a tech hub for MBA London and MBA Miami, which MBA recently opened. Cubeworks’ Managing Director, Alex Cowell, will join the MBA Management Board as MBA CTO as well as continue in his role as MD of MBA Brighton. Alex Cowell, MD of Cubeworks, said We are delighted to be joining up with MBA. Not only do we get on brilliantly, but we also share the same aspiration of delivering our clients the perfect blend of creative technology to drive their ROI. Simon Smith, CEO at Taveners Law Ltd, advised the seller on the structure and the execution of the deal which involved a variety of digital assets and related online services. The transaction included complex earn out provisions and a linked transaction relating to the acquisition of a Simon Smith minority shareholding in a related business, together with service and shareholder agreements reflecting the rights of the various parties. A key feature of the transaction was that all the activities of Taveners Law were carried out remotely without the need for lawyers to be “on-site” at any point.

In addition to these primary pillars, the alliance will also create a flexible foundation that will allow both companies to pursue other areas of cooperation. As a sign of confidence in the success of the alliance and a commitment to the long-term business relationship, Panasonic will invest 10 million euros and acquire a minority interest in Gorenje; and to allow existing and new shareholders to benefit from the alliance, Gorenje will execute an equity increase and dual listing. The strategic alliance will allow both parties to better serve their customers by creating synergies that leverage the respective strengths and competitive advantages of each party.

Greenberg Traurig Maher (Henrietta Walker and Naomi Feinstein) represented MBA on the acquisition.

Mr Laurent Abadie, Chairman and CEO of Panasonic Europe said: Gorenje’s commitment to developing innovative, design-led and high quality products make it the ideal partner for Panasonic. We are looking forward to working together to build a solid and long-term platform for growth that will propel both organizations to new strengths within the European home appliance market. By combining our complementary product and manufacturing technologies, sales channels and marketing expertise, we look forward to bringing advanced, smart and ecologically responsible appliances to consumers across Europe, including Russia, in the coming years.

MBA ANNOUNCES CUBEWORKS ACQUISITION

PANASONIC TO ACQUIRE MINORITY STAKE IN GORENJE AS PART OF PARTNERSHIP DEAL

simon.smith@tavenerslaw.co.uk www.tavenerslaw.co.uk

In becoming an equity partner of CVF, Eurazeo PME intends to support and accelerate the group’s growth and international expansion organically or through acquisitions. The deal is scheduled to close on Tuesday, 2 July. Groupe Cap Vert Finance, whose main subsidiaries are IB Remarketing and AS Lease, is a French group specialising in maintenance, repair and operations (MRO) of fleets of servers, critical IT storage and networking equipment for major corporate clients. CVF is also involved in recycling, trading and leasing activities, in perfect synergy with its MRO business. CVF thus stands out in its business approach and in taking environmental issues into account in its services, providing full traceability of electronics equipment, from first use to the end-of-life recycling imposed by European Waste Electrical and Electronic Equipment (WEEE) directives. Cap Vert Finance employs more than 150 people and generates one third of its revenues outside of France, in more than 85 countries, through 11 foreign subsidiaries. CVF’s revenues have risen by 10% annually over the past five years and by more than 30% in its maintenance, repair and operations support business. In the financial year ended on 31 March 2013, it generated almost €60 million in consolidated revenues.

EURAZEO PME ACQUIRES

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August 2013 /

DEAL DIARY: TMT Deals

NEXTEL PERU

OPTIVO

PANOPTICON SOFTWARE

l Empresa Nacional de Telecomunicaciones S.A. (Bolsa de Comercio de Santiago: ENTEL) (“the Company” or “Entel”) and NII Holdings, have agreed to acquire Nextel Perú for approximately US$400 million, corresponding to the enterprise value.

l Deutsche Post is taking over optivo, one of the leading German email marketing services. This expands the Bonn-based company’s portfolio in the online advertising market to include the attractive technological field of email marketing.

l Datawatch Corporation, the leading global provider of information optimization solutions, has agreed to acquire Panopticon Software AB, a privately held Swedish company specializing in the delivery of real-time visual data discovery solutions.

optivo is an ideal addition to our technology solutions in the online advertising market. Since 2010, we have been successively building up our Online Marketing business unit. Our goal is to be a neutral technology service and the first choice for the advertising industry, said Juergen Gerdes, Corporate Board Member for MAIL at Deutsche Post DHL.

Under terms of the definitive agreement - unanimously approved by the Boards of Directors of both companies - Datawatch will acquire all outstanding shares of Panopticon in an all-stock transaction. Based upon the closing price of Datawatch common stock as of June 14, 2013, the deal is valued at approximately $31.4 million. Completion of the transaction is subject to the approval of the Datawatch stockholders, which is expected to occur during its fiscal fourth quarter ending September 30, 2013.

The closing of the transaction is subject to certain conditions and is expected to occur in the second half of 2013. Nextel Peru is the third-largest mobile telephony company in Peru, has been in operations since 1998 and is wellpositioned in the enterprise segment. Entel also expects to make it grow in the consumer’s client segment. Antonio Büchi, Entel’s Chief Executive Officer, commented: The purchase of Nextel Peru is an important step for Entel, as it is a long-term investment that will position the Company as a regional operator in the attractive Peruvian market. He added that this transaction will allow the Company to complement its offering of fixed services, data transmission and IT, which Entel’s affiliate, Americatel Peru, has been offering since 2001, and the call center services developed since 2008 by its affiliate Servicios Call Center Peru. The Peruvian telecommunications market is one that we consider to be very attractive, and in a country that we highly respect. We aspire to being an operator that can, via a permanent investment, offer high-quality services with special attention to clients and to the environment, delivering a high value offer in Peru, he stated. In the negotiation process, Entel was advised by Asset Chile together with BNP Paribas. With annual revenues of Ch$ 1,440,978 million (US$ 3 billion), reported as of December 2012, Empresa Nacional de Telecomunicaciones S.A. provides mobile, internet, data and IT services, as well as local and long-distance telephony to both consumers clients and enterprises in Chile. The Company also has operations in Peru and is listed on the Chilean Stock Exchange (Bolsa de Comercio de Santiago) under the ticker symbol ENTEL. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloudbased collaboration solutions. For more information, visit www.intralinks.com

ENTEL SIGN AGREEMENT WITH NII HOLDINGS

ACQUISITION OF NEXTEL PERU DRVFOR Corporate Finance Virtual Data Room Provider

optivo offers advertisers technical solutions and services to expand their existing customer base. With its email marketing software, optivo® broadmail, companies can send customized newsletters and campaign emails and evaluate them effectively. The multi-channel solution integrates social media, text messaging, mobile email, web and fax in addition to traditional email. The software can send up to 20 million emails per hour and is easily integrable into existing system architectures such as web analysis and CRM solutions. Deutsche Post is an established and major player in the online advertising market and is therefore the ideal partner for positioning our innovative technology on an even wider scale. In addition, we benefit from the company’s international presence, said optivo CEO Ulf Richter. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com

DEUTSCHE POST ACQUIRES OPTIVO

The integration of Panopticon’s advanced visual data discovery software makes Datawatch the first company to deliver real-time analytics and discovery by accessing the industry’s broadest variety of data types simultaneously—including traditional structured relational databases, semi-structured sources like reports, PDF files, EDI streams, print spools and documents stored in files systems or enterprise content management systems, with a new mix of unstructured data such as machine data and social media stored in Big Data solutions or streaming directly from a host of real-time applications. The acquisition of Panopticon is a transformative event for Datawatch and the industry, said Michael A. Morrison, President and CEO of Datawatch. This acquisition will immediately benefit our combined customers, partners and prospects by allowing them to accelerate the development and deployment of solutions that use the wide variety of data formats and sources present in every organization. Our collective capabilities to address Big Data opportunities are vastly improved with the high velocity access enabled by Panopticon’s real-time visual data discovery solution and the variety of data sources and formats that can be transformed by the Datawatch Information Optimization platform.

DATAWATCH ANNOUNCES AGREEMENT

TO ACQUIRE PANOPTICON DRV Corporate Finance

Virtual Data Room Provider Virtual Data Room Provider

Financial Due Diligence Provider Financial Due Diligence Provider

Legal Adviser to the Purchaser

Tax Advisers Commercial Due Diligence Provider

Financial Adviser to the Purchaser

TMT

/ August 2013

ACQUISITION INTERNATIONAL

DEAL DIARY: TMT Deals

POST MODERN GROUP l Global Eagle Entertainment Inc. (“Global Eagle”) and Post Modern Group, LLC (PMG) have entered into a definitive agreement for Global Eagle to acquire Post Modern Group, LLC (PMG) for a total consideration of up to $23.9 million in a combination of cash and stock. The acquisition expands and strengthens Global Eagle’s relationships with airlines around the world and provides entry into the cruise line industry and other non-theatrical markets. The transaction is in line with Global Eagle’s strategic plan to consolidate the top content and distribution companies serving these markets. Founded in 1993, PMG is a leading provider of video production, post-production and digital content delivery services. Strategic Law Partners, LLP served as legal counsel to the Buyer, Global Eagle Entertainment Inc., led by Timothy F. Silvestre, Partner. SLP have a long-standing relationship with the company, having served served as issuer counsel to Row 44, Inc. from its formation in 2007 to its merger with Global Eagle in January 2013. Currently, SLP is working with Global Eagle on selected transactions. Mr Silvestre stated that there were challenges associated with the deal, particularly with respect to the identity and amount of closing date working capital. These challenges were overcome by working closely with Global Eagle to refine and focus the definition of working capital and review sellers’ presentation of same. Mike Pigott and Dave Davis are top notch deal guys and it always is a pleasure to work with them, said Mr Silvestre. http://www.strategiclaw.com/attorneys_tsilvestre.shtml

Alastair Irvine

PwC Canada performed the financial and taxation due diligence for Global Eagle Entertainment Inc. PwC UK is also providing assistance to GEE with the post deal integration. PwC has a strong relationship with GEE and its subsidiary companies, and has assisted with several projects over recent years. alastair.x.irvine@ca.pwc.com www.pwc.com/ca

GLOBAL EAGLE ENTERTAINMENT ACQUISITION OF POST MODERN GROUP

SAGE CONSTRUCTION MBO l The Baronsmead VCTs have announced an investment in Eque2 Limited (formerly Sage Construction), a construction related Enterprise Resource Planning (ERP) software provider. The investment will enable the management buyout of Sage Construction from Sage plc. Over the last five years, Sage Construction has operated as a business unit within Sage (UK) Limited’s MidMarket Division. The software caters for businesses of all sizes, across construction, house building, and onshore & offshore services, allowing builders, contractors, architects, engineers and planners to accurately manage cost and processes during a construction project. From its offices in Manchester, Farnham and Glasgow, Sage Construction has been successfully developing, implementing and supporting construction and contracting software for medium to very large companies with products such as Sage ERP Intuita, Sage ERP EVision, Sage Estimating, Sage Housebuilding, Sage 50 Construction and Sage 200 Construction. The management team is led by Wes Simons who will continue his role as CEO. Richard Beaton has been appointed as Chairman. Richard has previously worked with ISIS as Chairman of portfolio companies Boldon James, a secure messaging provider bought by QinetiQ in 2007, and library and resource management provider MLS, which was recently sold to Capita Plc. Bridge Insurance worked with both ISIS, the private equity investor, and Clearwater, who were lead advisory team, having built up a working relationship over many years. The team was led by Gavin Ruben, Director, who commented: For any businesses coming out of a group there are always important insurance challenges. For an advisory business the key protections include past and future liability in respect of Professional Advice and Contract Novation. A comprehensive programme of insurance was successfully negotiated and put in place for deal close for the new company Eque2 Ltd. “We look forward to working with ISIS and Clearwater again in the near future.

ISIS BACKS SAGE CONSTRUCTION MBO TO FORM EQUE2

XRADIA l ZEISS, the international leader in the fields of optics and optoelectronics today announced the planned acquisition of the US-based Xradia, Inc. Xradia is a medium-size company providing innovative 3D X-ray microscopes for industrial and academic research applications. The closing of the transaction is subject to the fulfillment of customary closing conditions including a required filing with the U.S. competition authorities. After closing, Xradia, Inc. will operate under the new name Carl Zeiss X-ray Microscopy, Inc. During the last years Xradia recorded strong growth in revenue, profits, and number of employees based on its excellent technology position meeting customer needs worldwide. Xradia has become a provider of established solutions for advanced material research, natural resources and geology, semiconductor process optimization as well as the life sciences. Both parties have agreed to keep the purchase price confidential. For ZEISS the microscopy business is a strong pillar in its portfolio. The investment in Xradia underlines our strategy to grow with the most innovative and future-oriented technologies, stated Dr. Michael Kaschke, President and CEO of Carl Zeiss AG. The decision to acquire Xradia was made after careful consideration of its product lines as well as sales and service coverage. By combining the product lines, ZEISS will be able to better serve the growing demands in multimodal microscopic imaging and to develop solutions which create new values for our customers in science and industry.

Constantin Gall

EY performed Financial and Tax due diligence services, supported the SPA negotiations as well as performed the Closing Accounts review. The overall engagement was led by Constantin M. Gall, TAS Partner at EY Stuttgart, Germany. EY has advised other Carl Zeiss transactions in the past. The overall project management resided with Jens Brajer, Head of M&A at Carl Zeiss.

The appropriate and comprehensive consideration of equity/owner structure of the target in the overall transaction structure was a key challenge in this transaction, said Mr Gall.

ZEISS ACQUIRES XRADIA

Insurance Due Diligence Advisers Financial and Tax Due Diligence

Financial and Tax Due Diligence & Valuation Support

EQUE2 Legal Advisers

Legal Adviser to the Purchaser

Strategic Law Group, LLC

Legal Advisers for ISIS

Tax Advice

ACQUISITION INTERNATIONAL

TMT

Financial Adviser to the Purchaser

August 2013 /

playHARD The demands placed on today’s professionals are greater than ever, and when you work hard it’s vital to play just as hard. Acquisition International’s new lifestyle section features some of the best ways to do just that. This month’s section kicks off with a look Chewton Glen, a Luxury Country House Hotel & Spa located in England on the edge of the historic New Forest National Park. Recognised as one of the UK’s finest hotels, Chewton Glen is set in 130 acres of picturesque grounds and is the perfect location for some well-deserved R&R. There are few better ways to treat yourself than with a new watch, and this month’s Bling feature presents some of the finest timepieces on the market today. Finally, we examine the new Mercedes-Benz S-Class - billed as “The Most Advanced Car in the World” - looking at its improvements in technology, equipment, safety systems and efficiency.

playHARD

AI’s much anticipated lifestyle section kicks off with a real treat; a wonderful stay in a Treehouse suite at the luxurious Chewton Glen country house hotel and spa.

ountry c n e l on G a Chewt otel and sp h house Set in 130 acres of Hampshire countryside on the edge of the New Forest and just a few minutes’ walk from the sea, Chewton Glen is truly one of the finest luxury hotels in the United Kingdom. Easily accessible from London, whether you’re a UK resident, or just here on business; Chewton Glen is definitely one NOT to miss! Arriving early, keen to try out as many of the facilities as possible, our day began in the luxury health spa. After a few hours of hard work in the fully equipped gym and relaxation in the indulgent spa and hydrotherapy pools; we felt we’d more than earned lunch at the Pool Bar! Overlooking the main indoor Swimming Pool, it provided a light and airy environment to relax and enjoy a light lunch. Shortly after lunch we were informed that our Treehouse Suite was ready. In a wonderfully unique style, we were transported to our Treehouse, located a short distance from the main hotel, in a golf caddy! Built high among the trees of a secluded valley, each Treehouse is beautifully set and perfectly built for relaxing, unwinding, and enjoying. Sitting high on stilts, the treehouse pods are elegantly simple, yet wonderfully luxurious. On the exterior the architecture is in perfect harmony with the surrounding treescape and with huge panoramic windows, the interior invites nature into every room. Everything comes to you in this secluded, romantic world; from room service (and the particularly delightful daily breakfast hamper) to spa treatments; if you chose to, you could easily hide away and not leave until the dreaded time of checkout! Reluctant to leave the treehouse (although glad that we did!) we ventured back to the main hotel to sample some cocktails in the Bar and dinner in the Vetiver restaurant. The Bar at Chewton Glen provides a warm and friendly atmosphere in which to enjoy a pre-dinner beverage; the choice of cocktails were plentiful and the setting was perfect - as we managed to enjoy the last drops of sunshine on the terrace. Vetiver is cosmopolitan yet quintessentially English, it offers a nexus of beautiful conservatories, intimate dining spaces and a stunning open wine room; there’s not a bad seat in the whole restaurant! With an eclectic selection of dishes, all intelligently cooked from in-season ingredients, there is something to suit all tastes. The Chewton Glen Motto is to “consistently exceed expectations” and this certainly sums up our experience. Across all departments, the staff are 100% dedicated to personalized service and you truly get the impression that nothing is too much trouble. We just can’t wait to go back!

100 / August 2013

playHARD:

Chewton Glen country house hotel and spa FAST FACTS: • Relais & Chateaux Member since 1971 • Privately owned since 1966 • 5 AA Red Stars • 3 AA Rosettes • 70 Bedrooms and Suites including 12 brand new treehouse suites • 9 hole par-3 golf course • World class luxury health spa • www.chewtonglen.com • reservations@chewtonglen.com • +44 (0)1425 275 341

ACQUISITION INTERNATIONAL

August 2013 /

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playHARD:

Car & Product Reviews

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BLING His: alpina Worldtimer

The alpina Worldtimer is part of the alpina Aviation collection, developed in close collaboration with Cessna Aircraft and PrivatAir. alpina’s Worldtimer features a rotating ring with the names of 24 cities inscribed on it. A second rotating ring has 24-hour markers, used to display time in different time zones. The watch is water resistant to 10 ATM and is finished off with a black leather crocodile strap. The front and the back of the watch are covered with sapphire crystal.

102 / August 2013

We all know that time is money, and with that in mind we’ve found four of the finest timepieces on the market today.

Hers: TAG Heuer Formula 1 Lady Steel and Ceramic Pavée

A bold yet feminine 37mm case circumference in polished stainless steel supports the signature Formula 1 bezel that sets 84 Wesselton diamonds. The 12 deep black high quality ceramic inserts underline the sparkles by contrast, making the watch reminiscent of a dazzling flower. Its gorgeously feminine and smooth bracelet, an eye-catching combination of deep black ceramic and polished stainless steel, is held secure by the stainless steel “butterfly” folding clasp – designed to be effortlessly opened and closed for women on-the-go.

His: Omega Speedmaster Dark Side of the Moon

This all-black OMEGA Speedmaster represents a sleek and sporty new addition to the popular collection. The black zirconium oxide ceramic dial, complemented by a matching ceramic 44.25 mm case with a brushed and polished ceramic casebody, features striking 18K white gold applied indexes as well as two blackened sub-dials that distinguish the timepiece from its legendary predecessor, OMEGA’s “Moonwatch”.

Hers: Jaeger-LeCoultre Grande Reverso Lady Ultra Thin

To mark the 80th anniversary of the Reverso, Jaeger-LeCoultre celebrated femininity by unveiling a new interpretation of its iconic watch: the Grande Reverso Lady Ultra Thin. Jaeger-LeCoultre offers the ladies’ Reverso in a two-tone version combining pink gold and steel. To ensure optimal comfort, the designers of this Reverso have made it ultra-thin (at just 7.17 mm thick), light and curved, ensuring an ideal fit on women’s wrists.

ACQUISITION INTERNATIONAL