Acquisition international December 2013 by AI Global Media

December 2013 /

IN THIS ISSUE/ 55 Arbitrating Maritime disputes: SV Anchan from Safesea Transport discusses maritime arbitration options in the US. 60 Getting to Grips with Merger Control: Luther Rechtsanwaltsgesellschaft mbH provides advice. 63 Islamic banking – a viable alternative: EY Malaysia explains why.

Deals of the Year: Meet the winners...

AFIG Funds - Support Services Deal of the Year - Middle East Cellmid - Healthcare Deal of the Year - Asia PT Creador - Consumer Deal of the Year, Asia Pacific DEKRA - Industrials Deal of the Year - Asia Pacific Dubai Islamic Bank Financial Services Deal of the Year 2013 EIG Energy Partners AI Deal of the Year Eurobank - Financial Services Deal of the Year - Europe GA Telesis - Industrials Deal of the Year - Europe De Gaulle Fleurance - Dealmaker 2013 Immofinanz - Real Estate Deal of the Year ipCreate Inc - TMT Deal of the Year - Americas Nuclearelectrica - AI Deal of the Year Pembroke - Consumer Deal of the Year - UK San Leon Energy - Energy & Resources Deal of the Year - Europe Soho Flordis International - Healthcare Deal of the Year - Asia Pacific Swiftpage - AI Deal of the Year Vingroup JSC - Real-Estate Deal of the Year - Asia/Pacific Vipnet - TMT Deal of the Year - Europe

Ethiopia

The last big untapped African market

Vibrant, growing and on the radar of many top executives – Ethiopia has come a long way. Zemedeneh Negatu, Managing Partner EY Ethiopia and Head of Transaction Advisory Services, explains what’s happened. / 40 www. ACQUISITION-INTL .com

The New Rising Stars: Nigeria Tamuno Atekebo, Partner at Streamsowers & Köhn discusses the attractions of investing in Nigeria with Acquisition International. / 45 Forming an SME and trading in... AI speaks to experts from Colombia: Cavelier Abogados, Greece: Phoenix ECTS Ltd, Iran: TANDS, the DRC: DHL Global Forwarding Congo, Turkey: Destek Global Inc. / 51

Şehit Ertuğrul Kabataş Cad. No:3 D:13 K:3 Mecidiyeköy, İstanbul, Turkey +90 212 356 88 89

CONTENTS: December 2013

Editors Comment It is not often the world unites. As I write this tributes are still pouring in from around the world, recognising the inspiration Nelson Mandela provided. In happier times there was definitely a sense the world had united for a party on December 31, 1999.

CONTENTS — December 2013

2014 is the 30th anniversary of Michael Buerk’s iconic report from Ethiopia, which led to the Band Aid charity single and Live Aid. Those of you who are too young to remember Live Aid perhaps don’t realise what a big deal it was – back in 1984/5 there was no internet and hardly any mobile phones – the idea of a simultaneous broadcast between London and Philadelphia, being screened in 150 countries was amazing. For many of us who remember those events there are two questions: 1) can we have a recount please? It really doesn’t feel as if all this happened nearly three decades ago; and 2) what happened in Ethiopia? As I read this month’s cover story from EY’s Zemedeneh Negatu, I got the answer to my second question – and there were moments when I had to smile. You can find it on page 40. If you are celebrating this month, the team at Acquisition International hope you have a wonderful time, and we would like to wish all our readers a happy and prosperous 2014. I hope you enjoy the issue. Louise Birkett, Editor Louise.Birkett@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, Unit 10 Barton Marina, Barton Turn, Barton Under Needwood, Burton on Trent, Staffordshire, DE13 8AS. Tel/ +44 (0) 1283 712447 Email/ reception@acquisition-intl.com Website/ www.acquisition-intl.com Find us on/

Ethiopia: The last big untapped African market / 40 Vibrant, growing and on the radar of many top executives – Ethiopia has come a long way. Zemedeneh Negatu, Managing Partner EY Ethiopia and Head of Transaction Advisory Services, explains what’s happened.

News: /4 The Latest News Stories From Around The World.

Sector Talk: /9 Powered by Zephyr/ Bureau van Dijk.

Deals of the Year: /10-37 Meet the winners.

Regional Round-Up: /38-53 Our regional round-up travels the globe to bring the experts’ view.

Deal Diary: /80 @acquisition_int

Introduced by Zephyr/ Bureau van Dijk.

54/ Financing the 2014 Shipping Industry 55/ Arbitrating maritime disputes 56/ Arbitration Seats: Weighing up the Pros and Cons 58/ Dealing with trademark infringement in India 59/ Protecting and Patenting Your Business Ideas 60/ Getting to grips with merger control 61/ Labour and Employment Aspects of Corporate Transactions 63/ Islamic banking: a viable alternative 64/ Insurance issues arising during M&A transactions 64/ Forming and structuring private funds – Guernsey 65/ The Czech Republic: Revolutionising Regulation of Collective Investments 67/ 2013 Q4 Review 70/ Boardroom trends 70/ Incentive programs for management: option plans 72/ Leading adviser 78/ The British Virgin Islands: Leading the Offshore Pack 90/ Deals of the Year 93/ playHARD Acquisition International | December 2013 |

NEWS: from around the world

News: from around the world Appointments Crumbling and Ryan join Altius Altius Holdings Ltd, the parent company of Altius Associates Ltd, has appointed Mr Joseph Crumbling to the Board of Directors. The appointment was confirmed at a meeting of the Board on 5 December. Joe Crumbling is a vice president of T Rowe Price Group, Inc, and T Rowe Price Associates, Inc. Before this position, Joe served as a general manager in both the Third Party Distribution and Investment Operations divisions of T Rowe Price. Altius Associates has appointed Ms Rhonda Ryan as a Partner and Head of EMEA Investments. Ms Ryan will be based in the London office, reporting to Brad Young, Co-CEO and Head of Investment. Ms Ryan has over 20 years of international investment experience, including 16 years within alternative investments. She was previously Managing Director, Head of Private Funds Group Europe for Pinebridge Investments, the spin-out of AIG Investments.

The Hideaways Club How many people can honestly say they enjoy their investments? Within any balanced portfolio the tendency is for money to be locked away. Untouched and unseen for decades. Not so with The Hideaways Club, a private holiday club offering a unique way to own a part of a worldwide property portfolio with million-pound villas and apartments in the world’s best locations. With initial investment starting at £67,500, The Hideaways Club has attracted more than 450 investors all looking to make their savings do more than simply sit in a bank account. Yet it was an everyday holiday experience that led to the club’s creation. Unable where to decide with his wife where to buy overseas and aware of the list of repair and maintenance jobs that face an owner when he arrives at his holiday home, founder Stephen Wise came up with the idea of sharing properties between a group of people. Alongside his great friend and co-founder Helmut Schon, the former Bain consultant founded The Hideaways Club in 2006. Seven years later and they have amassed a $100m portfolio in some of the world’s most incredible destinations. Stephen explains: “Members of The Hideaways Club all have something in common: they’re savvy investors, have a passion for luxurious properties in exclusive locations around the world, yet very little time to allocate to holiday planning.

Eger new CEO at OANDA

“They don’t want to arrive on holiday and be faced with days of chores or a list of repairs. In fact, they want the complete opposite of this – a concierge to have everything organised so when they turn the key in the villa they don’t have to lift a finger.”

OANDA Corporation, the global pioneer in foreign exchange trading services, today announced the appointment of industry veteran Edmond Eger III as President and CEO.

Although often called collaborative consumption or even ‘posh timeshare’, The Hideaways Club has given investors a unique way of using their money – and making the most of it.

Mr Eger commands 30 years of proven experience in growing businesses through customer-focused, disruptive technologies to consumers in markets around the world. He joins from PayPal where, as Senior Vice President and General Manager for the Americas, he oversaw dramatic growth in the customer base as well as in revenues while he opened new markets. Previously, he was the CEO of Citibank’s multi-billion dollar international consumer credit card business, spanning over 50 countries. 4

| Acquisition International | December 2013

All members own an equity stake in the properties and get use of the villas and apartments in return. “The typical timeshare offers does not offer any opportunity to share in any future growth in the value of the property. Nor does a timeshare offer any security for the investment or any real ownership of the underlying properties. A timeshare purchaser acquires the rights to use a specific property, for a specific week, within a specific development for a finite period of time (10 years, 20 years etc). “An investment in The Hideaways Club, on the other hand, provides security, ownership, potential upside and diversity for the life of your membership. Investors buy a share in the property company and become members of The Hideaways Club. Membership entitles investors to use any of the properties within their portfolio.”

NEWS: from around the world

Indeed, because members have an equity stake in the portfolio they see each of their properties as their own. British tennis ace Tim Henman, an evangelist for The Hideaways Club since joining, said in an interview “it feels like we own hundreds of properties around the world because we can go to each of them whenever we want.” The properties are divided into two collections: the Classic Collection composed of luxury villas and ski chalets across Europe, South East Asia, South Africa and Mauritius. The City Collection includes stylish apartments in many of the most exciting cities around the world such as Singapore, Paris, New York, Miami, Istanbul, Dubai and London. With captains of industry, celebrities and sports stars among the high-profile members, including Ryder Cup golfer Francesco Molinari and Formula 1’s Nick Heidfeld, The Hideaways Club has a growing reputation. Indeed, many of its members have sold second homes abroad and used some of the money to join The Hideaways Club instead. “Like a lot of people who work hard, they are cash rich and time poor,” says Stephen. “Owning property abroad seems idyllic but unless you are willing to throw huge amounts of money at it, the everyday maintenance will fall on your shoulders. “Our members want to make the most of their time away. If they are going away for two weeks with the family they want to maximise every single minute of that time because it’s so precious. “Most people’s investments are under lock and key so here’s one you can actually enjoy all year round.” The former chartered accountant and venture capitalist hopes to increase the size of its property portfolio to $1bn within ten years and will do so with a sound footing.

He continues: “I do have two very important maxims: one is to change the rules; if you go into an industry and change the rules of conventional wisdom then you can often make huge leaps forward. The other is something I learned in my time at Bain and it was called Best Demonstrated Practice. We would look for businesses that seemed to have every box ticked when it came to operations and management and essentially imitate it. “So who did we imitate? Well, The Hideaways Club is something of a hybrid. We looked at Exclusive Resorts in the US, which was a destination club and brought together like-minded people but their members didn’t own any of the assets. UK people like to own assets so the Hideaways Club gives them three elements: a destination club, fractional ownership and private equity interest. “Pushing the business forward is vital and Helmut and myself are still constantly involved in the business. It’s been a long time since we came up with the original concept of The Hideaways Club while studying at IMD, an International Business School in Switzerland, but our commitment to the project has been a big reason for its success.” Stephen has, arguably, bought more luxury properties in more jurisdictions than anyone else in the world. The properties are immaculately presented and offer members simply the finest holidays they will ever have. “There is a huge sense of satisfaction in what we do,” he concludes. “From the cleaning staff to the concierges to the sales staff to the board, each and every one of us knows that we are tasked with giving our members the best experiences of their lives. It’s a huge pressure but one we relish each and every day.” For more information check out www.thehideawaysclub.com

Acquisition International | December 2013 |

NEWS: from around the world

News in brief EU-US trade talks brew up tax calls Brewers are calling for EU-US trade talks to create a more level playing field by removing taxes on European brewers from which their American competitors are exempt, said panellists at the 4,500-strong Brewers of Europe’s annual Beer Serves Europe gala, highlighting a sector that supports two million jobs. New initiatives for China investors Investors in China will benefit from a series of fundamental market reforms and initiatives over the next few years, including the potential inclusion of China A stocks in the MSCI Emerging Market Index, according to Baring Asset Management (Barings), the international investment firm. BT renews Telefónica hosting BT today announced it has renewed and extended its network equipment hosting contract with mobile operator Telefónica Deutschland. As Telefónica continues to invest in the future of its mobile network to meet their customers’ demand for fast mobile broadband (4G) access, BT will provide hosting capacities in 17 locations throughout Germany. The contract covers capacity to host some of the network equipment, such as routers and servers, that form the core of Telefónica’s German mobile network. IHG focuses on Greater China InterContinental Hotels Group (IHG), one of the world’s leading international hotel companies, has outlined its strong position in Greater China and ambitious growth targets for the region with plans to recruit another 110,000 staff to support its growth which involves doubling the number of hotels in China in the next three to five years. Ireland’s bond market re-entry under scrutiny The President of the American Chamber of Commerce Ireland has warned that Ireland will remain under international scrutiny as the country re-enters the bond markets and that the Government must continue to take the necessary strategic decisions to remain on the path to growth. Speaking at the American Chamber’s Annual Thanksgiving Lunch today, Peter Keegan said that while it is true that Ireland continues to attract significant levels of investment, including the creation of almost 500 new jobs announced by US companies in the past three weeks, “we cannot get complacent. There is still much to be done.”

| Acquisition International | December 2013

There may be trouble ahead… More than a quarter (28%) of cross-border M&A deals in emerging and developing markets by global listed companies are hit by major setbacks such as regulatory investigations, government opposition, stakeholder litigation and management outcry, according to international law firm Freshfields Bruckhaus Deringer. The answer – perhaps unsurprisingly – was that perspectives largely depend on ‘whose shoes you are in’ but there are areas of strong agreement, including new regulations not increasing public trust in the corporate sector. An analysis of cross-border transactions valued at $750m (circa £500m) or more in high-growth countries by global listed companies announced since 2008 found that: • The higher the stakes, the greater the chances are of hitting a problem. More than a third (38%) of the deals valued at $2bn or more encountered an issue, compared to around a quarter (23%) of those under $2bn. • Regulatory probes are most common among the issues faced, affecting half (51%) of the troubled deals. Besides competition authorities, which featured in almost one in every two cases (42%) affected by regulatory probes, financial regulators also displayed teeth, instigating the probe in more than one in three (36%) instances. • Litigation impacted a third (35%) of the deals that encountered setbacks. • Disputes such as activist protests and quarrels with landowners and employees were also prevalent, impacting one fifth (22%) of the troubled deals. Freshfields corporate partner Bruce Embley said: “M&A deals in growth markets usually have a different risk/reward profile when compared to M&A transactions in more mature markets. This research underscores the importance of thinking through the likely issues and putting in place effective and resilient risk mitigation solutions. No deal team at any listed company wants to deliver the message to the board that its big emerging market investment has hit an unexpected and significant obstacle.” Edward Braham, global head of corporate adds: “Regulators around the world have increasingly been flexing their muscles, especially since the global financial crisis. Investors ignore the potential regulatory impact on their deals at their peril.”

NEWS: from around the world

Navigating M&A deal risk in high-growth markets

Emerging market deals valued at

Investment hot spots: percentage of deals facing issues

$750m+

The higher the stakes Percentage of deals with issues per deal size

China

25%

(2008–2013)

28%

hit by major setbacks

> $2bn

38%

> $1bn

21%

> $750m

26%

Troubled deals

51% faced regulatory probes

Mexico

Indonesia

43%

60%

Brazil

17%

India

South Africa

35%

25%

83%

Countries where listed companies faced deal issues

faced litigation

22%

faced disputes such as activist protests

Buyers from developed economies as likely to face trouble as those from emerging markets

27%

from developed economies

Examples of cross-border M&A deals facing significant issues made public include the following: • Indian telecoms giant Bharti Airtel’s $10.7bn acquisition of Nigeria’s Zain Africa in 2010 encountered four major hurdles: Nigeria’s High Court declared its ownership null and void; the Congo Republic launched a regulatory dispute over its telecoms licence; an employee attempted to block the sale and the Kenyan government initiated a tax investigation. • Kazakh miner Eurasian Natural Resources Corp became embroiled in a dispute after the Congolese government seized the Kolwezie project from a rival company, First Quantum Minerals, and sold it for $20m to an associate of the president. After ENRC bought the mining rights for $175m, First Quantum sued, claiming they were ‘stolen assets’. ENRC settled with First Quantum Minerals for approximately $1.25bn to end the dispute. • Vodafone ran into trouble when it acquired Ghana Telecom in 2008. Dismissed Ghana Telecoms workers filed a writ of summons against Vodafone Ghana over termination of their appointments, the UK’s Serious Fraud Office asked officials to investigate allegations of irregularities in Vodafone’s African dealings, activists staged a protest and the deal faced heavy government opposition.

32%

from emerging and developing economies

• US retail giant Wal-Mart faced opposition from the South African government when it acquired Massmart Holdings in 2010. After a two-year battle, Walmart had to set up a $27.5m supplier development fund for the acquisition to go ahead. • The Anti-monopoly Committee of Ukraine has suspended its previous decision to approve the merger of Ukraine’s dominant mobile operator Kyivstar into Russian cellular group Vimpelcom, in order to review a complaint submitted by Ukrainian cellular rival Astelit, owned by Turkish mobile group Turkcell and domestic conglomerate System Capital Management. • Sherwin-Williams Co said Mexican antitrust regulators have rejected the paint maker’s planned $2.34 billion acquisition of Consorcio Comex of Mexico SA. The Cleveland-based company said the Federal Competition Commission of Mexico voted 3-2 against authorizing the deal and the company is currently reviewing the commission’s rationale.

Acquisition International | December 2013 |

SECTOR TALK: Powered by Zephyr/Bureau van Dijk

Sector Talk: Round-up of 2013 Looking at the results for 2013 to date, it is easy to identify the sectors which stand out as being the most frequently targeted in terms of both volume and value. In total, 64,340 transactions with a combined value of USD 3,092 billion have occurred in the year to date. Compared to the second half of 2012, this year started disappointingly in terms of volume and value, according to Zephyr, the M&A database published by Bureau van Dijk. In H1 2013 there were 34,958 deals worth USD 1,582 billion, compared to 36,768 with a combined value of USD 1,773 billion in H2 2012. However, the result was still higher than the USD 1,460 billion posted in H1 2012, but volume reached its lowest ebb since the second half of 2008, when there were 33,492 deals. Although there is still around a month to go before 2013 draws to an end, M&A activity in H2 does not look likely to improve upon the opening six monthsâ&#x20AC;&#x2122; showing. To date there has been investment of USD 1,510 billion across 28,382 deals since the start of July. Volume has a long way to go if it is to avoid reaching its lowest level since before the start of 2006. However, the low deal volume appears to suggest that valuations have increased and could be a sign of investors getting over their previous reluctance to dig deep and shell out large sums as considerations. It will be interesting to see whether this trend is carried over into 2014 and if it could also inspire more parties to inject funds and therefore boost volume.

NUMBER AND AGGREGATE VALUE (MIL USD) OF DEALS GLOBALLY: 2006-2013 YTD (as at 27 November 2013) Number Number Aggregate Deal half yearly value of deals of deals deal value (mil USD) with (Announced known date) values 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 TD

36,078 36,667 40,987 38,310 36,415 33,492 35,585 38,736 36,454 36,366 36,271 35,932 35,623 36,768 34,958 29,382

20,773 21,081 25,212 24,021 21,938 20,533 22,475 25,121 23,222 23,617 23,248 22,472 22,303 23,288 22,463 18,363

2,130,678 2,253,595 3,131,872 2,490,513 2,094,486 2,118,723 1,959,724 1,766,450 1,625,432 1,762,628 1,860,403 1,539,199 1,459,571 1,772,889 1,582,355 1,509,601

The most frequently targeted sectors in 2013 to date do not necessarily correspond with those which have attracted the highest investment levels. The banking, insurance and financial services industry has been the big winner in terms of value, bringing in USD 610,769 million over the 11 months. It was followed by wholesaling with USD 590,480 million, personal, leisure and business services with USD 501,127 million and communications with USD 374,011 million. Some of these sectors also feature at the top of the pile by volume, but the order is somewhat different. Personal, leisure and business services was targeted in the highest number of transactions (13,441), while computer, IT and internet services placed second but was some way behind on 10,836 deals. Hot on their heels was wholesaling with 10,627 and banking, insurance and financial services was ranked fourth with 10,537. This may seem surprising but we can ascertain from this that the banking, insurance and financial services industry, although it was involved in fewer transactions, was targeted in higher value deals. This appears to be borne out by the fact that of the top ten deals of 2013 by value, two involve targets in the banking sector. Although they are ranked ninth

and tenth, their considerations are still relatively high and have likely had a big impact on the industryâ&#x20AC;&#x2122;s overall result for the year. In May Spanish bank Bankia raised USD 13,748 million via a rights issue to Banco Financiero y de Ahorros and other undisclosed shareholders. National Bank of Greece was not far behind, placing tenth with another rights issue, this time worth USD 12,696 million. The presence of the communications sector (USD 374,011 million) towards the top of the table is also unsurprising given the deals by Cellco Partnership (USD 130,040 million) and Sprint Nextel (USD 23,900 million) in the top ten by value. To sum up, although results may not look particularly promising when compared to previous periods, there have been a number of cases this year when investors have proven willing to pay high prices to get the deals they want. This may be a sign of confidence returning to the market and could lead to M&A value increasing in the long-term. However, only time will tell if this is the case and whether the markets will finally be able to get over the slump that has been plaguing them since the onset of the global financial crisis in 2008.

AGGREGATE VALUE (MIL USD) OF DEALS BY REGION: 2013 YTD (as at 27 November 2013) World region (target)

2013

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

1,159,263 829,155 562,889 203,880 178,396 83,791 44,221 19,983

NUMBER AND AGGREGATE VALUE (MIL USD) OF DEALS GLOBALLY BY DEAL TYPE: 2013 TO DATE (as at 27 November 2013) Deal type

Number of deals

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

27,449 34,968 1,101 354 1 85 428 12 15

Number of deals with known values 9,792 30,606 379 75 1 8 2 2 3

Aggregate deal value (mil USD) 1,625,594 1,296,889 172,010 5,425 912 282 128 107 6

Acquisition International | December 2013 |

DEALS OF THE YEAR: The Best Deals of 2013

Support Services Deal of the Year Sub-Saharan Africa AFIG Funds’ investment in Elton and Senbus (Impaxis Capital’s Senegal portfolio.)

Papa Madiaw Ndiaye is the CEO of AFIG Funds, an Africa-focused private equity fund manager registered in Mauritius, with offices in Dakar, Washington DC, and Johannesburg. He started AFIG Funds with Patrice Backer, the COO of the company, with the vision to use a value-added approach to private equity investing, whereby an equity investment is buttressed by a proactive portfolio involvement in growing African companies. He spoke to Acquisition International about the award-winning deal. ---------------------------------------------------------------------Advanced Finance & Investment Group LLC (AFIG Funds) is a private equity fund management company that I founded in 2005 with my college and business school friend, Patrice Backer. We established AFIG Funds to create and implement a new paradigm for African private equity investing by mobilizing capital in investment vehicles managed by experienced African private equity professionals to support the growth and expansion of African companies, particularly those led by local entrepreneurs. AFIG Funds further sets itself apart by putting a heavy emphasis on value addition beyond financial contributions. AFIG Funds strives to participate actively, through its investments, in the acceleration of the emergence of ‘global African brands’ by addressing the substantial lack of financial and human capital that African entrepreneurs are facing, and helping develop African blue-chip companies that can be regional and global market leaders. AFIG Funds actively seeks companies and African entrepreneurs who have built strong local companies and brands, and help them develop and implement regional growth strategies capable

of overcoming historical language barriers. African countries’ recent investments in regional trade networks, technology, and the improving regulatory environments in many countries have laid the foundation for sustainable economic growth. AFIG Funds differentiates itself from other private equity firms in its investment approach and the hands-on operating assistance on strategic and growth initiatives that it provides to its portfolio companies. The critical elements of our investment strategy include: Market Focus • AFIG Funds opted for a regionally focused strategy, rather than being a pan-African fund in order to focus our resources on a subset of the continent. We identified a 29-country region, covering West and Central Africa, plus Morocco, Mauritania, Uganda, Rwanda and Burundi because of their strong economic ties to parts of West and Central Africa. Within these, we have identified several countries that anchor these regions, and serve as the likely home for African companies with regional and global ambitions. • We focus primarily on profitable companies with a verifiable track record and are seeking growth equity, regardless of the sector in which they operate. We do not have a sector focus, but have identified a few sectors of particular interest because they can be platforms for regional expansion and diversification. These include financial services, agribusiness and fast moving consumer goods. • We work by building strong and deep ties in our target countries. We put particular emphasis on

10 | Acquisition International | December 2013

understanding the drivers of market leadership, and the entrepreneurs who are most likely to succeed. Many of the companies we support operate in difficult environments (including post conflict countries), or tend to operate outside of the view of the typical private equity fund. Hands-on Involvement • AFIG Funds’ portfolio companies benefit from extensive value-added services, including refining of their business plans and strategies, strengthening of their human resources management practices, restructuring of their balance sheet, and implementation of international standards of corporate governance and best practices. Team Composition and Expertise • We have built a diversified team to leverage language and cultural specificities which can be deterrent to less prepared investors. English is our working language even though we are headquartered in a Francophone country. This gives us an advantage in approaching deals in countries that have remained elusive to much of the private equity world, as well as serving as a bridge between companies from countries with different languages and cultures. This is perfectly illustrated by our investment in Elton International, which recently added Guinea Bissau to its historical presence in Senegal and Gambia. Our team’s complimentary backgrounds enable us to assess risks, design innovative financial instruments to fit each transaction, develop meaningful relationships and ultimately add more value.

DEALS OF THE YEAR: The Best Deals of 2013 In early 2012, Impaxis Capital (the Sponsors) became the beneficial owner of Elton Senegal, Elton Gambia, and Senbus through its acquisition of Société d’Interventions Financières, a Senegal-based holding company. The Sponsors subsequently turned to AFIG Funds to explore funding and support for the operating entities in connection with their respective ambitious regional expansion plans. The AFIG Funds / Impaxis partnership is bringing to bear significant resources and capabilities to drive strong financial and operating performance going forward. Elton International For AFIG Funds, the investment in Elton constitutes a partnership with an established home-grown downstream oil company in Senegal, Gambia and recently Guinea Bissau with significant scope for operational improvement and regional expansion. Despite substantial growth in oil demand across Africa (regional growth forecasts reflect an increase of 4.9% in West and Central Africa according to downstream consultants CITAC), there has been a trend of divestment in downstream operations by oil company majors over the last three to five years. Most of the large multinationals have restructured to focus on larger regions and business segments where they can achieve immediate scale and where political and business risks are perceived to be lower. There has been an accompanying swing towards upstream oil and gas exploration and production, and a shift in downstream investment from West to East Africa. This trend has created opportunities for homegrown companies like Elton to step into the void being created by some of the majors, and leverage its understanding of the local markets to profitably increase its market shares. AFIG Funds’ investment was contingent on the establishment of a holding company to aggressively pursue profitable downstream assets in the region. Senbus Industries For AFIG Funds, the investment in Senbus constitutes a partnership with the sole player in the Senegalese automotive assembly sector in technical partnership with leading Asian manufacturers such as Tata (India) and Xiamen King Long (China). Senbus has identified a strong pipeline of assembly projects for delivery including approximately 2,000 new buses for delivery to a Senegalese public transporters association, with the support of the Government of Senegal, which the company has started to execute. The company has a growing private sector interest as it has been working with a number of private transportation companies in Senegal and the broader region who have approached it in recent times for assistance in the renewal / replacement of ageing transportation fleets. With an annual production capacity of 1,000 buses, Senbus has the potential to become a regional player in the automotive assembly sector in West Africa. As is the case with many companies AFIG Funds follows, we stayed in frequent contact with the sponsors of the companies leading to formal discussions as of March 2012. The due diligence process was undertaken in July 2012 and the investment was closed in December 2012. It is important to emphasize that the process that led to this investment was not atypical for AFIG Funds. Indeed, central to our focus on companies in West and Central Africa (excluding Nigeria) where private

equity is less developed, and our specialty in working with mid-sized companies with strong local brands and great regional potential, is our patient strategy. Many of our deals require us to work closely with existing management and shareholders, supporting their growth and strategy development even before we actually invest. This allows us to build very strong relationships, and to become deeply familiar with all aspects of a company before making an investment, typically with a depth of knowledge that a standard more time-constrained private equity due diligence process could never enable. For all these reasons, it took us nine months to complete the transactions. Elton International One of the primary challenges faced in the Elton transaction was the simultaneous creation of a new umbrella organization (Elton International) with our investment. This lead to the management of many moving parts including the implementation of a consolidation system, taking into account the different reporting standards of subsidiaries in various jurisdictions (Guinea Bissau, Senegal, and Gambia). AFIG Funds worked with the Sponsors on the standardization of reporting across the various businesses, and subsequently the establishment of a holding company to consolidate (both from an operational and accounting perspective) the various activities of the subsidiaries. We also worked to staff the holding company with an experienced management team, including the recruitment of a CEO and a Group Financial Controller, while moving talented members of the Senegal and Gambia operations to the marketing operations and internal controls departments of the newly formed Elton International. Senbus Industries Senbus, on the other hand, lacked adequate senior management to oversee day to day operations, and subsequently implement a regional growth strategy. Therefore, as part of the investment, AFIG Funds has worked with the Sponsors to make several important recruitments including a CEO and CFO. The main difficulty consisted in undertaking such big strategic initiatives while honoring important contracts for the company. Elton has made considerable progress in the implementation of its West Africa regional growth strategy, and is increasingly poised to capitalize on these gains. Since our investment in December 2012, the company has acquired Engen Bissau, which is now

undergoing a rebranding exercise. The company is also in important discussions with several acquisition targets in the region. This ambitious growth trajectory will undoubtedly be reinforced and refined by the strong cross-country experience of the new CEO in the oil industry. Elton and Senbus are building strong management teams and benefit from engaged shareholders, and strong internal controls and procedures which should enable them realize their shared ambition to build panAfrican brands. By the end of 2014, we expect to see that our active support to the companies would have contributed to the strengthening of the respective management teams and governance structures, which will in turn drive strong operating and financial performance. We have also set clear revenue and profitability milestones. Ultimately, our hope is that our contributions (both financial and otherwise) will translate into strong commercial returns for our investors in addition to substantial development outcomes for companies that are local champions in countries where they operate. We are very proud of our partnership in this transaction with Impaxis. They are a leading local investment bank that is launching into new ventures to expand the range of support that they provide to local companies beyond providing financing and now becoming shareholders. These are people we have known for many years and they have accomplished great things, and so we are very excited to join forces with them and complement each other’s skills to push these promising companies to the next of stage of growth.

Company: AFIG Funds Name: Papa Madiaw Ndiaye Email: info@afigfunds.com Web Address: www.afigfunds.com Address: 83 boulevard de la Republique, Immeuble Horizons, Dakar, Senegal Telephone: Tel: +221 (33) 865-0515 Fax: +221 (33) 825-4888

Acquisition International | December 2013 | 11

DEALS OF THE YEAR: The Best Deals of 2013

Healthcare Deal of the Year Asia Pacific Maria Halasz is CEO and Managing Director of Cellmid Limited, an Australian biotechnology company. Recently, Cellmid acquired Advangen Inc and Halasz explains more about this transaction as well as the economic climate in Australia. ---------------------------------------------------------------------Cellmid is an Australian biotechnology company listed on the ASX (ASX:CDY) developing innovative novel therapies and diagnostic tests for inflammatory diseases, heart attack and cancer. Cellmid holds the largest and most comprehensive portfolio of intellectual property related to midkine and midkine antagonists globally. The Company’s most advanced development programme is for the treatment of inflammatory disorders and cancer using its large portfolio of anti-midkine antibodies. Midkine has also been implicated in hair growth and since 2010 Cellmid has been involved in developing topical hair growth products. In May 2013 Cellmid acquired Advangen Inc. to build a global product development company.

adviser to an independent sector based research firm in life sciences and managed Direct Capital Group Pty Ltd., a specialist biotechnology fund. She has science and business qualifications and many years of industry experience. She is a Member of the Australian Institute of Company Directors and holds a science Degree in microbiology and an MBA.

Chief Executive Officer and Managing Director, Maria Halasz, has been at the helm since 2007. Halasz has been a venture partner at the Emerging Technology Fund of venture capital firm Allen and Buckeridge. She has been involved with biotechnology companies for 18 years initially working in executive positions in biotechnology firms, managing funds in the life sciences sector and senior positions in corporate finance. Prior to joining Cellmid, Halasz served as an

In 2010, on the back of promising pre-clinical data, Cellmid set up a dedicated subsidiary, Advangen International Pty Ltd, for the development of midkine for hair growth. The Company was looking to boost this asset portfolio with scientifically validated hair growth products that are on the market, and acquired exclusive rights in 2010 from Advangen Inc (Japan) to a range of hair growth products utilising FGF-5 inhibition technology for certain regions.

Halasz explains more about the hair growth market, the industry and what sets Cellmid’s products aside from the competition. “The global hair growth market is immense and awash with products that make claims but have no scientific basis or clinical validation. In fact, when you assess there is only a small number of competing topical products. We have been able to go one step further, and establish a clear mechanism of action as to how our products effect hair growth. In that category we are the only ones with product on the market.”

12 | Acquisition International | December 2013

Halasz explains more about the transaction, the rationale behind it and the issues it raised. “Cellmid had been looking to boost its resources, both expertise and access to capital, since 2010, when the company discovered that midkine is a potent hair growth factor in animals. The Company filed patents around this new intellectual property and has been looking for alternatives to funding the product development program.” Advangen Inc. (Advangen) was a private Japanese biotechnology company funded by venture capital investors since 2002. It was originally set up to commercialize the FGF-5 inhibitor hair growth technology developed at Japan’s National Institute of Advanced Industrial Science & Technology (AIST). “The Advangen Inc (Japan) and Cellmid relationship started in 2010, when an agreement was signed between the companies which granted Cellmid manufacturing and distribution rights to Advangen’s products in Australia, Europe and the USA. According to this agreement Cellmid was to pay a royalty on sales of the évolis® lotions. Once the products proved successful there was a strong strategic drive to acquire Advangen Inc.” Following the successful launch of the FGF-5 inhibitor hair growth products on the Australian

DEALS OF THE YEAR: The Best Deals of 2013 pharmacy market, and strong interest from overseas distributors, Cellmid was keen to acquire Advangen Inc (Japan) to take control of the technology globally. The opportunity arose in late 2012 to complete the acquisition on terms that represented win-win to both sides and the transaction was completed in May 2013. Under the terms of the agreement Cellmid acquired 100% of the shares of AdvangenInc in a deal involving the payment of JPY120M (AU$1.2M) in cash and the issuing of 55,737,624 shares at a nominal issue price of 5 cents each. All of the shares have been subject to voluntary escrow agreements for up to 12 months. “Indeed it is a highly strategic acquisition that will significantly increase Cellmid’s revenues in the short to medium term,” states Halasz. “It enables Cellmid full ownership of the FGF-5 inhibitor technology platform, which underpins the Company’s existing successful évolis® hair product range and is the basis of other Advangen Inc. brands generating solid revenues in Japan. “The Company has gained immediate access to the established Japanese hair growth market. New market opportunities are being actively pursued including China where import permits are already in place for the Lexilis® and Jo-Ju® branded products. “The profitability of évolis® sold in Cellmid’s existing markets will improve as there will no longer be royalties payable. In addition, savings are expected on raw material costs of the active ingredients, which will have a positive impact on pricing and consumer value. “Boosting the product pipeline of the merged group, Advangen’s FGF-5 inhibition technology comes with a number of new candidates that include natural extracts and novel compounds with very high potency. Another important strategic driver is Advangen’s product development expertise in the hair growth sector. This should greatly facilitate Cellmid’s original program to develop midkine as a hair loss treatment.”

“Cross border acquisitions always represent specific challenges in relation to banking, taxation and legal issues. Here we had the added challenge a language and culture. The fact that the teams have worked together for some three years before helped establish a great deal of trust that assisted in getting a great outcome for all.

patents and products within the first 12 months of joining the two teams.” Halasz can also see great things for both Cellmid and Advangen with regards to the future. “Both companies are growing extremely fast at the moment, and we haven’t made our projections public. However, we expect at least one new geographical region opened within the next 12 months, in addition to continued sales growth in Australia and Japan.

Advangen Inc. has developed a range of hair loss prevention lotions and shampoos over the years based on the company’s FGF-5 inhibition technology and commenced sales of its first product in Japan in 2007. The market response to Advangen’s products has been outstanding and more than 700,000 bottles of the products have been sold since in Japan. In addition to the current technology Advangen has been actively involved in research and development of additional hair growth products, including new FGF-5 inhibitors. The scientists at Advangen have deep knowledge and experience in developing hair loss products. They understand the requisite animal models and have laboratory facilities to test compounds for in vitro anagen activity (growth promoting) of any compound. It has collaborations with research institutes and has been generating new intellectual property with the view to filing new patents.

Despite this lengthy, yet lucrative, transaction, the deal was not without its issues and challenges, as Halasz divulges.

“We’ve had two highly motivated parties, and adding in the trust between the teams, the focus was on establishing an equitable deal. However, our customers will also benefit greatly over time. Once we rationalise manufacturing our production costs will be significantly reduced. This saving will be passed on to customers.” Halasz explains how Cellmid plans to assess the success of the acquisition in 12 months time, although the benefits are already becoming clear. “We completed the deal four months ago and we can already see the signs of exponential benefits. Our first measuring stick will definitely be distribution, sales and then we will look at gross margins as key measurements of success. Less tangible is the technical advance, but we can already see that we will have new

“China is expected to become the most significant market for Advangen’s products in the medium term, and discussions have commenced with several potential distributors to achieve maximum sales,” explains Halasz. “The challenge is to find the most suitable partner that can not only secure strong market penetration through their distribution network, but is also willing to fund marketing costs.”

CELLMID Company: Cellmid Limited Name: Maria Halasz Email: halasz@cellmid.com.au Web Address: www.cellmid.com.au Address: Suite 1802, Level 18, 15 Castlereagh Street, Sydney NSW 2000 Telephone: +61(0)2 9221 6830 Fax: +61(0)2 9221 8535

Acquisition International | December 2013 | 13

DEALS OF THE YEAR: The Best Deals of 2013

Industrials Deal of the Year 2013 Asia Pacific DEKRA acquisition of VTNZ

Dr Rolf Krökel is the managing director of DEKRA International GmbH, Acquisition International talked to him about the acquisition of VTNZ. -------------------------------------------------------------The acquisition of 60% of the shares from VTNZ is the first step in an important move for DEKRA into the Asia Pacific region. Together with the seller Motor Trade Association (MTA) we will strengthen the market position of VTNZ until we take over the remaining shares. Under the guidance of our project manager Peter Matthes – with friendly support from various DEKRA colleagues and departments – DEKRA International prepared, lead and controlled the process of the VTNZ acquisition right from the start and altogether we will accompany on its further path into the worldwide DEKRA family.

At DEKRA International GmbH we take careful note of and apply global automotive market research to our international automotive business development. Our strategic rationale for the acquisition of VTNZ was that we wanted to be present in the Oceania region and we started our research in 2012. It is obvious that New Zealand has strong relations with the UK (where DEKRA is also present) and is linked to international markets which could be interesting for DEKRA in the future (eg Australia and Japan). NZ was identified as a good hub for a first footprint in the region with interesting business partners and, as VTNZ is the market leader in NZ, they automatically became our focus. First contacts with MTA and VTNZ were made in mid 2012 with the first meetings in New Zealand at the end of 2012. Serious discussions and negotiations took around six months before we achieved the final closing end of October 2013. Of course the whole procedure and the deal faced some challenges like gaining the approval of the members and the management board of MTA, gaining permission of the authorities and handling the distance and time difference. These challenges were overcome by close personal contacts including meetings in NZ, strong exchange of information, confidence building activities with the MTA and VTNZ, the use of local experts to negotiate with government agencies and, last but not least, flexibility as well as huge personal engagement from all parties to cope with the time difference and all other cultural factors.

Company: DEKRA International GmbH Name: Dr. Rolf Krökel (managing director) and Peter Matthes (project manager) Email: rolf.kroekel@dekra.com; peter.matthes@dekra.com; Web Address: www.dekra.com Address: Handwerkstr. 15; 70565 Stuttgart / Germany Telephone: +49 711 7861 4310 (R.Krökel) +49 711 7861 2176 (P. Matthes)

The successful integration of VTNZ into the DEKRA family is one of our next steps. Our aim is to keep VTNZ as strong as in the past and strengthen its future position while cooperating with a common management and board team. DEKRA SE can now enlarge its global network and offer services in NZ and later on in neighbouring countries for our worldwide active customers. The first reactions from our global partners were positive as they confirmed that the step to NZ was a great and welcomed decision.

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One of our next steps will be to analyse the NZ market to introduce new and appropriate products from our DEKRA service portfolio; this will be against the background of the Vehicle Licensing Reform taking place in NZ in the next few months and will be to compensate for the reform’s impacts. Parallel to this analysis, we will try to support the Ministry of Transport as well as the automotive industry by offering our experience to bring enhanced road safety to the public. DEKRA is already working together with European authorities to improve road safety and thus has an enormous amount of expertise on this topic. A following step will be looking for new markets and new partnerships in the region. With the acquisition of VTNZ we have a trusted and absolutely professional team ‘down under’ so we will also analyse the pacific region in more depth in the near future. We at DEKRA International are glad to work with such a professional and well organized partner like the VTNZ team and the MTA and we are looking forward to a long-lasting successful partnership which brings benefits to everybody, including the NZ economy and the people of New Zealand. DEKRA International is part of DEKRA SE, one of the world’s leading expert and inspection organisations. DEKRA SE is an expert organisation in automotive businesses, as well as in industrial and personnel businesses. Its headquarters are in Stuttgart, Germany, and it is globally active with more than 30,000 employees in more than 50 countries, generating annual revenues of more than €2 billion. DEKRA provides more than 23 million vehicle inspections per year worldwide, making it the market leader in vehicle testing. Our main aim is safety – not only on the road and for vehicles, including drivers, but also in industrial plants and environmental matters. We are absolutely independent and are active worldwide with a wide diversified portfolio; therefore we can provide global customers with a high standard range of products.

DEALS OF THE YEAR: The Best Deals of 2013

Middle East Financial Services Deal of the Year Dubai Islamic Bank Acquisition of Tamweel

Acquisition International discusses the acquisition of Tamweel with Dubai Islamic Bank’s CEO Dr Adnan Chilwan. -------------------------------------------------------------Dubai Islamic Bank Islamic banking and finance is today one of the world’s fastest-growing economic sectors that comprises more than 400 institutions tasked with managing assets in excess of US$ 1.5 trillion globally. Established in 1975, Dubai Islamic Bank has witnessed exceptional growth to become a leading player in the industry. Throughout this meteoric rise, the bank has remained true to its roots as a customer-centred organisation, where close personal service and transparency form the basis of all relationships. Tradition and heritage blend with a commitment to flexibility, innovation and modernity, so that every customer is provided with comprehensive solutions for any financial need. In short, the establishment reflects the progressiveness, diversity and growth of the city whose name it shares. “DIB’s acquisition of Tamweel puts us in a strong position to propel our expanding home finance business, especially given the recent performance of the property sector here in Dubai,” explains Dr Chilwan, CEO, DIB. “Clearly a strategic move, the bank’s robust balance sheet and low funding costs combined with Tamweel’s vast experience in the mortgage business have yielded synergies that have not only led to a profitable business model for DIB but have been a catalyst in revitalizing the mortgage market, thereby benefiting the growing sector of end users and first time home buyers.” DIB’s commitment to excellence is apparent in its approach to and adoption of Sharia law. Its Fatwa and Sharia supervisory board comprises scholars of high repute who specialise in Islamic Sharia and also have expertise and experience in law, economics and banking and finance. While clearly a flag bearer in the field of Islamic Finance, DIB is known as a ‘bank for all’ successfully positioning and competing in the entire banking and finance market space.

Acquisition of Tamweel Tamweel is a leading provider of mortgages in the UAE. A pioneer in the field, the company’s growth parallels the ongoing economic development and diversification of the country.

Dr Chilwan said: “Right from the outset, we had a very clear vision with respect to Tamweel, which effectively revolved around three core areas – stability of operations, rationalisation of costs and return to profitability.”

Established in March 2004 by DIB and another Dubaibased entity, Tamweel has financed property worth over AED 10 billion, backed by innovative home finance solutions.

“With a consistent positive trend in revenue and net profits over the last few quarters, growth is our clear strategic theme. Our acquisition of Tamweel is one of the activities that have been geared towards positioning DIB on a robust growth platform.

In July 2006, Tamweel achieved a major milestone by going public through an IPO that was overwhelmingly subscribed, exceeding the required amount by 485 times. Tamweel’s commitment to diligence, sound principles, reliability, teamwork and Islamic values, together with unparalleled customer service, made it a natural fit with DIB. DIB acquired a majority stake in Tamweel in November 2010 through buying out other large institutional stakeholders and increasing the bank’s holding to 58%. Dr Chilwan said: “We implemented a well-defined strategy to establish an efficient operation within the entity, extract synergies for both institutions and offset the liquidity constraints faced by the company at that time. “With funding constraints removed, Tamweel returned to the market with renewed vigour and in a much better competitive position than before.” Having brought the company back to a growthoriented, profitable franchise, DIB announced a tender offer to acquire outstanding shares of Tamweel in March 2013. Following the closure of the tender offer by the bank, DIB now owns close to 90% of the entity, which is in the process of being delisted from the Dubai Financial Market. Clear vision The takeover and merging of operations means the entire mortgage business is now funded by DIB’s balance sheet. It also means that the organisation has been able to explore significant synergies across its operations.

Ahead of schedule DIB settled all bilateral liabilities of Tamweel, amounting to over AED 4 billion, two years ahead of scheduled maturity. The early repayment was due to robust capitalisation and ample liquidity. Dr Chilwan added: “Creating an efficient balance sheet is a critical component of DIB’s growth strategy. Given our significant liquidity and low cost of funds, the early repayment is perfectly aligned towards progressively building an even more effective and efficient business.” The future So, what’s next for DIB? Dr Chilwan says: “The focus for DIB now is to capitalise on the momentum built over the last few years and become the most dynamic and progressive Islamic financial institution in the world. “Our aim is to continue to make a meaningful contribution to the economic growth of the UAE by meeting the banking needs of all customers – our acquisition of Tamweel is an important contribution to this aim.”

Company: Dubai Islamic Bank Name: Dr Adnan Chilwan, CEO Web Address: www.dib.ae

Acquisition International | December 2013 | 15

DEALS OF THE YEAR: The Best Deals of 2013

AI Deal of the Year EIG Global Energy Partners acquires a controlling stake in LLX 16 | Acquisition International | December 2013

DEALS OF THE YEAR: The Best Deals of 2013 EIG Global Energy Partners is a leading institutional investor to the global energy sector with $16.1 as of December 1, 2013 (including $6 billion from EIG’s recently closed Energy Fund XVI). It distinguishes itself through its ‘project finance’ approach to investments across the energy value chain, together with its ability to commit significant capital to a project. -------------------------------------------------------------EIG specializes in private investments in energy, resources and related infrastructure and has been a trusted partner to many preeminent companies in the energy sector since 1982. Its global platform supports seven offices on five continents. During its 31-year history, EIG has invested over $15.7 billion in the sector through more than 290 projects or companies in 34 countries on six continents. EIG invests across the entire energy value chain from upstream oil & gas, midstream and infrastructure, to power generation, renewables and resources. EIG first became aware of the opportunity to invest in LLX in late July 2013 when members of the EIG investment team travelled to Brazil to learn about several of the companies in Eike Batista’s infrastructure empire. The mandate of EIG’s investment funds is to invest in energy and related infrastructure assets and the investment team quickly realized that LLX’s main asset, the Superport of Açu, is critical to the development of Brazil’s oil & gas and iron ore industries. The Superport complex is strategically located between the iron ore producing region of Minas Gerais and the offshore oilfields in the Campo and Santos Basins and will be one of the largest port complexes in the world. Açu consists of two terminals currently under construction, an offshore terminal utilizing a 3km pier and an inland harbor terminal utilizing a 6.5km long, 300m wide dredged channel. Each terminal primarily serves the petroleum and iron ore industries and will have combined capacity for up to 47 vessels, including Capesize, Chinamax and Very Large Crude Carriers. In addition to the two terminals, Açu consists of a 90 square km industrial complex with existing tenants including National Oilwell Varco, Technip, Wartsila, GE and Anglo-American. Açu has been under development and construction since 2007 and major project works are scheduled to be completed by 2015 with funding from the transaction. This was an extremely complex transaction that had to be completed in a very short timeframe. EIG signed a term sheet with the company and Eike Batista, the company’s controlling shareholder, on August 14, 2013, which provided for one month of exclusivity. EIG executed an investment agreement on September 15, 2013 and closed the first funding tranche of the transaction on October 14, 2013.

The basic structure of the transaction was for LLX’s controlling shareholder to assign to EIG’s investment funds pre-emptive rights to participate in a rights offering to be conducted by the company. At the same time, part of the transaction was to consolidate ownership of port-related ownership and opportunities within LLX from a variety of other entities related to the controlling shareholder. Because of the rights offering format and the right held by minority shareholders to participate in the rights offering, it was impossible to determine in advance EIG’s total final level of shareholding in the company. EIG therefore had to include in the structure contingency plans for ensuring outright control of LLX going forward. The principal mitigant was to secure from the controlling shareholder an obligation to assign to EIG’s funds voting interests in however many shares would be necessary to guaranty EIG control. A shareholders agreement also guaranteed certain basic governance protections in the event that EIG ended up with below a 50% stake in the company following completion of the rights offering. In order to complete an extensive due diligence process, refinancing of the company’s existing indebtedness, securing additional financing from private and state lenders in advance of the closing and to obtain all necessary governmental and contractual consents relating to changes of control, EIG dedicated a robust team of investment professionals and third party consultants both onsite and remotely. It was extremely challenging to complete the transaction in the timeframe allowed while orchestrating the various components working concurrently under the same deadlines. The key metrics for success over the next 12 months will primarily be tied to construction milestones at the project as well as the company’s ability to generate cash flow from anchor tenants to the port’s industrial complex. The investment in LLX was made by EIG Global Energy Partners on behalf of certain EIG managed funds, including, Energy Fund XVI. LLX represents Energy Fund XVI’s first investment in its portfolio and falls within its sector and geographic diversification requirements. This investment provides timely exposure for EIG to the energy and infrastructure opportunities in Brazil and Latin America.

Company: EIG Global Energy Partners Web Address: www.eigpartners.com

Acquisition International | December 2013 | 17

DEALS OF THE YEAR: The Best Deals of 2013

Financial Services Deal of the Year - Europe Eurobank acquisition of Hellenic Postbank Christos Megalou is the CEO of Eurobank Ergasias SA. He talked to Acquisition International about its acquisition of Hellenic Postbank – and the simultaneous acquisition of Proton Bank. -------------------------------------------------------------About Eurobank The enlarged Eurobank Group is a European banking organisation with total assets of €80.1 billion, more than 20,000 employees and a network of more than 1,100 branches. The new Eurobank Group has a strategic position in the Greek banking system, offers Wealth Management services in Cyprus, Luxembourg and London and has an international presence in Bulgaria, Romania, Serbia and Ukraine. Our primary objectives are to transform our business and operating model to focus on being our clients’ primary banking relationship and to restore the bank’s profitability. Also, we aim to integrate our recent acquisitions, New Hellenic Postbank (Hellenic Postbank) and New Proton Bank (Proton Bank), and introduce private sector capital in the first quarter of 2014. During the past 15 years, Eurobank has been the most dynamic and fast-growing among Greece’s large banks, expanding both domestically and abroad. Its competitive strength rests in its entrepreneurial business model and personnel, as well as its state-ofthe-art IT systems. Those distinguishing factors enabled the bank to achieve leading positions in most retail and wholesale financial markets it operates in. The integration of the Hellenic Postbank and Proton Bank in the Eurobank Group strengthens its position

Company: Eurobank Ergasias S.A. Name: Christos Megalou, Chief Executive Officer Web Address: www.eurobank.gr

in the Greek banking sector, enhancing its capacity to support Greek businesses and households. Strategic reasoning Both the acquisition of the Hellenic Postbank and Proton Bank occurred in the context of the on-going consolidation of the Greek banking sector. Strategically, the acquisitions enhance Eurobank’s systemic position by improving its liquidity and capital position and materially increasing its earnings generation capabilities. They also represent the most compelling value proposition for our shareholders, including the Hellenic Financial Stability Fund, while it reinforces the financial stability of the Greek banking system. The deal An acquisition in the financial services sector is typically a complicated process. However in Eurobank’s case, the complementarity between Eurobank and the acquired banks, the clear integration plan we developed, the commitment of the management team and the transparency in relevant communications with all key stakeholders substantially moderated the challenges. The work ethos and extraordinary effort of all our employees was naturally a prerequisite and has been a key enabler in the successful implementation of the integration of the two banks. The acquisition, including the legal and the operational merger, is expected to be completed by April 2014. On July 15, 2013 Eurobank signed the two binding agreements with the Hellenic Financial Stability Fund to acquire 100% of the shares and voting rights of the Hellenic Postbank and Proton Bank. On October 23, 2013 all publicity formalities of the Draft Merger Agreement were completed. The legal and the operational merger of Proton Bank was completed successfully on December 6, 2013. The legal and operational merger of the Hellenic Postbank will be concluded in the period between December 2013 and April 2014. Embracing the principle of ‘One Bank-Two Brands’, Eurobank developed a detailed integration plan, aiming to utilise the Hellenic Postbank´s competitive

18 | Acquisition International | December 2013

advantages while fully respecting its long and strong tradition. In this framework, the Hellenic Postbank branch network will remain under the ‘TT’ brand, a name synonymous with savings and servicing its clients, who are complementary to Eurobank’s. Concerning Proton Bank, Eurobank concluded successfully the integration of the existing branch network, while ensuring the continuity of service to existing clients. Customers will therefore benefit from enhanced product offerings and a significantly wider distribution network. The future The integration plan provides a detailed ‘roadmap’ to the full and successful integration of the two banks. The enlarged Eurobank Group intends to realise approximately €200 million in annual synergies from 2015 onwards by increasing revenues, reducing funding costs and centralising and automating operations. Our success will be judged against those objectives. The Eurobank Group has launched an extensive transformation programme with initiatives designed to enhance profitability. The bank also recently announced the initiation of the process to raise approximately €2 billion in a capital increase through a marketed equity offering. This will further strengthen Eurobank’s capital position and enhance its ability to support the Greek economy. In this context, the Hellenic Financial Stability Fund, which currently owns 95.2% of Eurobank, may consider allowing an institutional investor or a consortium of institutional investors to acquire a significant stake in the bank. In conclusion The acquisitions of the Hellenic Postbank and Proton Bank are a major milestone both for Eurobank and for the restructuring of the Greek banking system. By combining the forces of the three organisations, Eurobank will be able to support Greek businesses and households and to further contribute to the efforts to re-start the Greek economy. We are proud to be in the forefront of this process and to make an important contribution to the realisation of the development prospects for the Greek economy.

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Acquisition International | December 2013 |

DEALS OF THE YEAR: The Best Deals of 2013

Industrials Deal of the Year - Europe / GA Telesis acquisition of Finnair Engine Services assets

In the 11 years since its inception GA Telesis has grown to become a global brand synonymous with commercial aerospace services. With a footprint that spans from its headquarters in Ft Lauderdale Florida to its newest business in Helsinki, Finland and on to Beijing, GA Telesis continues to create value both organically as well as through M&A strategies. -------------------------------------------------------------You have had a healthy CAGR since inception; did you decide to enhance growth through acquisitions? Yes and no. We definitely wanted to continue our organic growth, but in 2008 I felt it was a good time to venture into additional service-based-solutions, so we acquired the component aftermarket maintenance business of Curtiss Wright. Acquiring Curtiss Wright Accessory Services and rebranding it as GA Telesis Component Repair Group SE, afforded us the opportunity to further integrate our businesses up the customers’ value-chain. We immediately followed that acquisition with others but we took a huge step when we acquired Helsinki-based Finnair Engine Services, the engine overhaul unit of Finnair, now rebranded as GA Telesis Engine Services (GATES). Before we discuss GATES, can you share more on your growth acquisitions strategy? The truth is we don’t have a specific growth through acquisitions only strategy. What we have is the ability to see value and the potential to scale a business by

Intelligently Defining Aviation ™

Company: GA Telesis LLC Email: info@gatelesis.com Web Address: www.gatelesis.com Address: 1850 NW 49th Street, Fort Lauderdale, FL 33309, U.S.A Tel: (954) 676-3111 Fax: (954) 676-9998

capturing additional customer touch points. These touch points are essentially a method we use to test whether we can integrate a business into our valueproposition, thus adding more opportunities to build revenue with our existing or new customers. Then we analyze whether we can scale the business. Will you explain your touch point strategy further? Sure, our business is providing solutions-based services to our airline customers. We sell products but the point of sale transaction is just one element. What we do in that case is make sure that when an airline needs a replacement part for the aircraft or jet engine, that we have the right part, in the right condition, at the right place and that we can get the part to them in the right time. So that service is one touch point. Now, we also repair components for airlines. So in that instance, like providing a part, the repair is also just one element. The key in this service is to make sure that we repair the part, research the reliability of that specific part, add service bulletins to ensure that the part is at the latest specification or standard, ensure that the part meets reliability standards, then get it back to the customer in time for their operational requirement. Did I mention that the customer might be in Asia and we need to get it back to them swiftly and economically? So providing and repairing parts within an airline’s operational requirements are two touch points with an airline customer. Currently, our parts division operates four touch point businesses. Our maintenance operations have three touch points and our financial services unit has three touch points. All in, we have about ten touch points within an airline customer that create service revenue opportunities. Can you explain your thinking as it relates to buying Finnair Engine Services (now GATES)? Last year we had a chance to look at this opportunity and struggled with it at first. We saw a lot of extra maintenance capacity in the market at the time and were concerned about competitive pricing pressure. However, we saw through that element and discovered the real opportunities. First, the business had a solid reputation and workforce that was confirmed by customers. Second, it had a current technology

20 | Acquisition International | December 2013

infrastructure that would cost no less than $40 million and 2 years to recreate. Third, it was scalable. Fourth, we were able to right size the operation to fit the market demand. They focused on the overhaul and repair of four jet engine platforms. We saw an opportunity to increase this without increasing the footprint. Fifth, was location, location, location. The business is the only full-scale engine overhaul operation attached to Russia. As you can imagine, jet engines are quite large and quite heavy. The ability to truck or rail transport jet engines to and from Russia gave us a unique capability and had the potential to save our customers millions in air-freight costs. I understand your Finland/Russia gateway strategy, but was acquiring a business with a different culture and mind-set difficult? It certainly was not easy. However, we had a high-energy strategy from the get-go. There were definitely a lot of new things that we had to think about, but we looked at it pragmatically. Alvin Khoo, our Chief Investment Officer, parked himself in Helsinki and he and his team stayed there until we had a deal with Finnair for the business, with the labor unions (there were several) and the government. Additionally, we had a lot of support from the US Ambassador to Finland, the Finnish Ambassador to the US, the Ministers of the Economy, the Minister of Labor for Finland and local regulatory agencies. In the end, it was obvious that everyone wanted this to work. It was good for us, good for Finnair, good for the employees, and good for Finland. What can we expect to see from GA Telesis in the coming year? Cross-border is our focus. The fact is that the US and much of the European and markets are somewhat saturated, so we are looking at emerging markets: Eastern Europe, China, Southeast Asia, Middle-East and South America for growth opportunities. In the past year Asian-based airlines have placed orders for a half a trillion US dollars in new airplanes. This surpasses the US and European markets by far. With that in mind, we are focusing on following the growth. But we are also working very hard at understanding what the unique drivers are for each of our target markets.

DEALS OF THE YEAR: The Best Deals of 2013 William Perugini / Shutterstock.com

De Gaulle Fleurance & Associés is an integrated full service law firm, offering both transactional and litigation services, which today includes more than 100 fee-earners, including 30 partners, in both Paris and Brussels. Partners Stéphanie Roy and Vincent Schmitt, and senior counsel François Couhadon explain more… -------------------------------------------------------------De Gaulle Fleurance & Associés advised Andromède with the takeover bid initiated by the latter on the shares and convertible bonds issued by Oeneo, a major player in the wine industry specialising in cask and barrel-making, as well as cork-based closure systems among others. Pursuant to this takeover bid opening on 4 June 2013 and closing after reopening on 6 August 2013, Andromède’s shareholding in the capital and voting rights of Oeneo rose from 37.92% to 62.73%. “We were in charge of the bidders’ interests and as such structured the deal and its financing, drafted the documents required under stock market regulation (including information note and regulated press releases) and liaised with Oeneo and its counsel, the financial advisor of Andromède (DC Advisory) and the two sponsoring banks (Crédit du Nord and Société Générale)” explains Stéphanie. Stéphanie and François acted with respect to structuring, corporate and stock market regulation while Vincent acted with respect to structuring and tax aspects. Other major achievements this year have been assisting a listed group, specialising in the production, sale and marketing of spirits, eaux-de-vie and liquors, with the sale of their Cognac production and activity to a foreign state-owned company that specialises in the production and sale of alcoholic beverages. De Gaulle Fleurance & Associés also represented a privately owned holding in the sale of the shares of a listed national spirits producer via an accelerated book building transaction, amounting to US$128 million. Both of these cases were complex due to their legal structure, timing and the current economic climate. De Gaulle Fleurance & Associés has managed to maintain its growth trend despite the frequently

Dealmaker 2013 De Gaulle Fleurance & Associés

distressed economic environment. This has given us increased opportunities to work with listed groups which appreciate our team organization and strategic approach with regard to the vigilance and reactivity they require for their M&A transactions. As part of the growing activity of the firm at a European level, in October 2012 de Gaulle Fleurance & Associés established a fully owned subsidiary in Brussels, with three new partners. The firm has strengthened its practice in European competition law, among other complementary practices, as well as in state aid issues and has the capability to: • Assist clients in investigation, pre-litigation and litigation matters before the European Union Commission and courts of justice • Assist clients in EU regulatory matters and policy, as well as with lobbying strategies in a wide range of areas, and • Assist clients in France-Belgium cross-border and economic investment activities. De Gaulle Fleurance & Associés is organized around two main divisions: a Corporate Structure Division and a Corporate Operations Division, in order to better align with its corporate clients’ own organizations and meet their needs.

practitioners will become more crucial in future years. Moreover, the French Stock market regulations should be heavily simplified and significantly accelerated (for private placement for example) so France will become one of the most competitive financial markets in Europe. Stéphanie Roy, partner Stéphanie has developed highly specialized expertise in the context of mergers and acquisitions, capital markets and capital ventures in various fields such as finance, real estate, industry or services. She particularly appreciates large-scale projects involving intricate structures or complex technical issues. Vincent Schmitt, partner Vincent’s area of practice covers tax advice and tax litigation regarding both corporate and private clients. He is mainly involved in international operations and complex corporate structuring, and domestic and cross border mergers and acquisitions. François Couhadon, senior counsel François is involved in mergers and acquisitions, securities law and private equity and advises a variety of listed and unlisted companies and investment funds on domestic and cross-border transactions.

Rather than being organized in vertical teams or department based, the firm favours an integrated and cross-practice approach to client assignments with the implementation of virtual teams of experts on a project-by-project basis, to foster strategic goals with regard to the legal concerns of the matters at hand. Our human resources management strives to ensure excellent harmony between our teams, which is reflected by the stability and low turnover of team leaders and the reinforcement of the firm’s knowhow with strong dynamism illustrated by in-house promotions and external hiring. Its ability to mobilize, pool talent and tap synergies allows the firm to ensure the delivery of a first-class service and the availability of its teams. Looking to 2014 we have noticed that even M&A deals are more frequently dealt with in a litigious context resulting in the appointment of an ad hoc agent (mandataire ad hoc) or a judicial proceeding. We think such negotiations with the firms’ litigation

Firm: De Gaulle Fleurance & Associés Lawyers: Stéphanie Roy, partner - Vincent Schmitt, partner - François Couhadon, senior counsel Email: contact@dgfla.com Web Address: www.degaullefleurance.com Address: 9 rue Boissy d’Anglas, 75008 Paris, France Telephone: +33 (0)1 56 64 00 00

Acquisition International | December 2013 | 21

ERHC Energy Inc. (OTCQB: ERHE) is a publicly traded American company with valuable oil and gas assets in Sub-Saharan Africa. We are proud of our heritage of visionary leadership that was responsible for ERHC being among the first to identify the possibility of significant oil reserves in what was once an undeveloped oil region of the world. We continue to build upon that heritage by taking strategic chances and having the commitment to do the hard work necessary to realize the value of our assets. The goal of ERHC Energy Inc. is to maximize its value through exploration and exploitation of its rights to working interest in exploration acreage in Sub-Saharan Africa.

(713)-626-4700

www.erhc.com

DEALS OF THE YEAR: The Best Deals of 2013

Real Estate Deal of the Year Europe Record year for property sales

In September 2013 IMMOFINANZ Group closed the sale of the Hilton Vienna Danube to a fund of Internos Real Investors Kapitalanlagegesellschaft, Frankfurt am Main. The total price for the hotel was EUR 48.4 million – since the hotel comprises 367 rooms, this results in EUR 132,000 per room. The Hilton Vienna Danube hotel was opened in 2003 and stands out – as the only one of its kind in Vienna – with a location direct on the Danube. The building was completely renovated in 2010/2011; and the lease with the Hilton Group, which operates this four-star hotel, was extended for 20 years in 2011. These factors altogether made the timing right for this transaction: We evaluate each case individually together with asset management, and then decide whether it is a good time to sell or whether the property could be optimised. When it comes to the Hilton hotel, we managed to sell the property at the peak of its cycle. Apart from that, this deal continues our exit strategy from the non-core hotel business: We intend to withdraw completely from the hotel segment and are using the current attractive seller’s market. Following the profitable sale of the Grand Hotel Kempinski in St. Moritz during February of this year, selling the Hilton Vienna Danube moves us close to our goal of ending our business in this asset class. Our hotel segment (based on the primary use of the property) now only includes one more asset: the Leonardo Vienna. This property will be sold soon, following the completion of renovation. With regard to the transaction activity in general, we currently have the most extensive pipeline of potential deals in years. The demand for prime properties has been fuelled by the reserved forecasts for economic growth, low interest rates and the belief of many market participants that this situation will not change in the near future. This trend benefits our 2010-2015 sales programme: Our strategy calls for the generation of approx. 10% of income from the sale of commercial

and residential properties. A five-year, EUR 2.5 billion sale programme was launched at the beginning of the 2010/11 financial year to optimise the property portfolio and improve the balance sheet structure. This programme has resulted in property sales of EUR 1.61 billion and fund sales of EUR 231.9 million since 1 May 2010. By 31 July 2013 IMMOFINANZ Group had generated proceeds on sale totalling approx. EUR 1.84 billion. Compared with the proportional target value, the Group had exceeded its objective by EUR 214.5 million, or more than 13%. When referring to the 2012/13 financial year only, we sold properties with a total value of EUR 661.3 million – a new record: Property sales, which are a major source of power for our real estate machine, rose to the highest point since the start of our sales programme. All of these transactions closed over the book value, which again confirmed the value of our properties – in both Western and Eastern Europe since these deals involved all asset classes and regions: The sale of our Silesia City Center in the Polish city of Katowice for more than EUR 400 million to an international consortium of investors led by Allianz in September 2013 is an impressive example of the recovery on the transaction market in Eastern Europe – as well as a milestone in the history of IMMOFINANZ Group. Incidentally, the Silesia City Center is one of IMMOFINANZ’s most notable success stories to date in the retail sector. The shopping mall is fully rented and one of the top five in Poland. Cycle-optimised sales like this are an important part of our business model – in this way we release equity and create the necessary liquidity to invest in new development projects. Based on the total volume of sales in 2012/13, we not only recorded a double-digit increase over the book value, but also met our strategic targets for the optimisation of the portfolio (exit from non-core countries, sale of a further property in the hotel segment). Also key operating indicators for our

business – rental income, results of operations and sustainable cash flow – climbed to new record levels. In short: The targets for the five-year sale programme were topped, and the portfolio turnover increased speed. About IMMOFINANZ Group: IMMOFINANZ Group is a real estate investment and development corporation that is listed on the Vienna and Warsaw Stock Exchanges. Since our founding in 1990, we have compiled a high-quality property portfolio that now includes more than 1,500 standing invesments with a book value of approx. EUR 9.2 billion. We currently manage 6.4 mln sqm of rentable space; the occupancy rate in these properties equals 89.8%, which confirms the quality of our portfolio. We generate sustainable income for our investors with high-quality properties. Our activities are concentrated on prime properties in four asset classes – retail, office, logistics and residential. At the same time, our geographic portfolio in eight core countries – Austria, Germany, Poland, Czech Republic, Slovakia, Romania, Hungary and Russia creates a balanced diversification of risk.

Company: IMMOFINANZ Group Name: Marco Kohla, Director Transactions Email: marco.kohla@immofinanz.com Web Address: www.immofinanz.com Address: Wienerbergstraße 11 1100 Vienna, Austria Telephone: +43 (0)1 88 090

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DEALS OF THE YEAR: The Best Deals of 2013

24 | Acquisition International | December 2013

DEALS OF THE YEAR: The Best Deals of 2013

TMT Deal of the Year Americas Juridica acquisition of stake in ipCreate Inc Can you give us some background on what ipCreate does? Certainly. ipCreate will generate new intellectual property (IP), acquire and further enhance foundational IP into focused portfolios for sale, license, joint-venture, spin-off or IPO. It uses proven, proprietary processes to invent commercially valuable new products and create new IP to protect its inventions. In addition, ipCreate identifies, acquires and develops IP to serve the needs of large corporations, working with our affiliate, ipCapital. OK, so what makes you different? The power of ipCreate’s business model lies in its ability to provide patent holders with a diverse spectrum of monetization options. ipCreate uses proprietary methodologies to survey the entire economic and technological context of a client’s portfolio as it relates to current and future market dynamics. It then systematically increases the value of these portfolios by developing and acquiring strategically complementary patents by leveraging its extensive network of individual inventors, subject-matter experts, microcap, midcap and Fortune 500 companies. What was the strategic rationale behind Juridica’s acquisition of a stake in ipCreate? The benefits to Juridica, beyond the potential financial returns on its investment, will be access to ipCreate and the ipCapital group of companies and their market leading tools for enhancing and protecting the company’s current and future patent and IP investments. These benefits include: • Improved valuation methodologies of current investments beyond legal arguments, adding market knowledge, technology business value and relationships with potential buyers, licenses and defendants • Enhancement of the Company’s investment selection process by adding a business and technology context to the existing legal context; and • ipCreate and ipCapital can provide additional pipelines of patent holders and law firms interested in accessing capital for corporate legal claims.

The strategic partnership between ipCreate and Juridica represents a unique and innovative model of IP creation and monetization that has never been done before. That did give us some challenges but they were consistent with any industry pioneering effort and were primarily in unifying our respective business models to harness the synergies and leverage of the combined platform. Despite these challenges it only took three months to complete the deal. How will the deal affect ipCreate’s customers? By forming this partnership, ipCreate has created a complete IP offering that can benefit the entire IP community, from inventors to Fortune 500 companies. ipCreate can now bring an understanding of the complete spectrum of monetization opportunities beyond litigation to its customers. What does the future hold for ipCreate and Juridica? We will know if we’ve succeeded if we have successfully executed on the shared vision to create and monetize de novo IP of strategic relevance and value. The partnership allows for the expansion of Juridica’s relationships with Fortune 500 companies to assist in their monetization of patent portfolio efforts and positions Juridica at the forefront of the intellectual property industry.

Company: ipCreate, Inc. Name: John Cronin Email: jcronin@ipcgcreate.com Web Address: www.ipcgcreate.com Address: 426 Industrial Avenue, Suite 150, Williston, VT 05495 Telephone: 802-859-7800

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DEALS OF THE YEAR: The Best Deals of 2013

AI Deal of the Year Nuclearelectrica IPO

SN Nuclearelectrica SA was set up in 1998 as a strategic national energy producer able to deliver clean and affordable energy to both population and industrial consumers. Nuclearelectrica is the only nuclear producer in Romania and, given its uniqueness among its competitors, since the very beginning the company has proactively focused on implementing the most appropriate strategies, using the most efficient management systems, relying on the most advanced technological measures and building a large team of highly qualified specialists in order to obtain the best operational results within an unbreakable organizational nuclear safety culture. CEO Daniela Lulache says: â&#x20AC;&#x153;The pillars of our

success are: nuclear safety as top priority, economic efficiency and responsibility for environment and population. The high level of nuclear safety is ensured by the design, construction and operation of nuclear equipment and it comprises all technical and organizational measures and related activities to protect both population and environment.â&#x20AC;? With two nuclear units operating a 706 MW capacity each, Nuclearelectrica produces clean energy using safe nuclear technology, namely a Canada Deuterium Uranium reactor type and heavy water as moderator and cooling agent. For energy production, the company relies on a highly efficient domestic infrastructure that allows it to control the entire fuel cycle, from uranium ore to final storage. Nuclearelectrica is the third most important energy producer

26 | Acquisition International | December 2013

in the country, covering 20% of the national consumption; namely, household consumers and as well as a large share of the energy consumption of industrial consumers. The two units of Cernavoda NPP operate almost constantly at 100% full power, with a fuel consumption lower than design level; wellprogrammed outages completed on schedule and the energy loss caused by unplanned outages three times lower than the global average per nuclear unit. Throughout 2009-2012, both units ranked among the best nuclear units worldwide in terms of the average annual capacity factor. According to the International Atomic Energy Agency, Romania, with its two units of Cernavoda NPP, ranked first out of 30 countries operating a total of 450 nuclear reactors worldwide, based on the energy

DEALS OF THE YEAR: The Best Deals of 2013 listed 10% of its shares on the Bucharest Stock Exchange Market. It was the first IPO in five years and it was a success, as shown by the oversubscription rates: 5.6% for natural persons and 2.3% for large investors. There was a tight schedule, which presented a challenge: the underwriter was selected in the fall of 2012, the engagement letter was signed a few weeks later. The Underwriting (Intermediary) Contract was signed on February 1, 2013. The IPO was completed on September 20, 2013. However, the company was determined to build a sound and adequate business process and infrastructure capable of withstanding the rigors and scrutiny of a public company and settingup/adopting a corporate governance procedure in accordance with best practice and reporting policies that protect shareholders’ interest. Ms Lulache adds: “Until recently the company focused mainly on the production process, from now on we are going to also focus on improving its profitability. Thus, we plan to have a 30%

the tradition of excellence, but we will modernize the managerial vision. Therefore, our aims are to: • Meet market expectations • Execute new initiatives • Comply with public company regulation • Drive business performance • Be accountable for the use of IPO proceeds. “We are keen to deliver shareholder value and ultimately share price appreciation, as assumed within the business plan, offering prospectus and other communications. In building post IPO shareholders’ value, the most important factors, aside from operational excellence, are delivering effective investor relations and finance functions.” The company plans to implement a series of changes inherent to the listing process. The presence of the company on the capital market needs to function as a stimulus for constant value growth. Meeting the performance indicators must reflect the quality of the management activity and the attention given to positioning the company on the market.

“Our focus is on financial growth: we aim to correlate the operational results with the financial ones, to capitalize on the favourable market context that we have estimated for the next years based on a rigorous analysis of all related risks.”

availability factor achieved during 2010-2012.

progressive increase in turnover and a 3.6 times increase in gross profit by 2017.” 2013’s results outperformed the forecast. Nuclearelectrica’s IPO was a success, a confirmation of its previous results on the newly accessed capital market. It took a team effort to prepare a successful listing process as there were several corporate aspects to address right before launching the offer, to allow both institutional investors and natural persons to see the company’s future growth prognosis and existing results in such a way as to become a guarantee for their successful investment.

The IPO Nuclearelectrica’s IPO was a strategic decision of the Romanian Government to privatize stateowned companies through the capital market. The strategy was to provide major state-owned companies with real development opportunities by taking full advantage of the capital market opportunities.

The future Managing a company like Nuclearelectrica means equal responsibility for safe operation, maintenance of the operation results, progressive financial growth, a wise investment policy, taking the company from a stable energy producer towards a strong corporation, attracting investments and completing major projects.

The company would become actively engaged in the dynamics of the capital market and proactively oriented towards modernization, financial growth, and corporate standards implementation, functioning as a guarantee of secure investment for the shareholders and share price increase on medium and long term.

Success has its source in applying strong modern management standards in order to gradually build a strong and reliable player in the market.

In September of this year, Nuclearelectrica has

“The very meaning of the IPO the company has recently been through is a step forward in changing the vision from a long-established stateowned company to a strong Romanian Energy Corporation,” says Ms Lulache. “We will preserve

Currently, it is implementing corporate governance standards alongside other management criteria including: performance criteria management; developing human resource policies that focus on responsibility increase and commitment at all levels – and helping its people achieve these; transparency in managing the company’s funds; transparency and communication with shareholders, stakeholders and society. Ms Lulache adds: “Our focus is on financial growth: we aim to correlate the operational results with the financial ones, to capitalize on the favourable market context that we have estimated for the next years based on a rigorous analysis of all related risks.”

Company: SN NUCLEARELECTRICA SA CEO: DANIELA LULACHE Email: office@nuclearelectrica.ro Web Address: www.nuclearelectrica.ro Address: 65 Polona Street, District 1, Bucharest, code 010494 Telephone: 004 021 203 82 00

Acquisition International | December 2013 | 27

DEALS OF THE YEAR: The Best Deals of 2013

Consumer Deal of the Year UK / Pembroke investment in La Bottega

Andrew Wolfson, CIO Pembroke VCT, talks to Acquisition International about its investment in La Bottega. -------------------------------------------------------------La Bottega was founded in 2005 by Bepi Augustin and his wife Roberta. The deli- café’s offering of fresh, high-quality, authentic Italian food, coffee and selected groceries soon proved popular with the local Chelsea community and further sites were opened in Belgravia, South Kensington, St James and Fitzrovia. The Pembroke team recognised that the La Bottega business represented a unique roll-out opportunity in the café and restaurant market. Currently there are a limited number of premium coffee outlets on the high street serving quality food. The management team of Piergiorgio Lo Greco and Matt Hermer bring a wealth of industry experience to the business and will help us leverage the brand awareness that La Bottega has built up in the Chelsea/ Belgravia area.

Company: Pembroke VCT Name: Andrew Wolfson Email: info@pembrokevct.com Web Address: www.pembrokevct.com Address: 3 Cadogan Gate, London, SW1X 0AS Tel: 020 7766 6900

We used a preferred equity and mezzanine structure in order to finance the acquisition and provide funding for the subsequent roll-out of further sites. The investment took approximately three months to close due to the complexity of the deal. We aim to open up to three new sites by the end of 2014 as part of a longer term strategy to have over fifteen new sites open in the next five years. The deal is a good example of our approach to investment – Pembroke VCT plc (Pembroke) is a new venture capital trust investing in a diversified portfolio of smaller, principally unquoted companies, which are largely consumer facing. Pembroke seeks to identify investment opportunities which are capable of significant organic growth and sustainable cash generation which have an established brand or the potential to develop their brand. Pembroke is managed by Oakley Capital, an asset management and financial advisory business led by private equity veteran Peter Dubens. Peter is the founder and a non-executive director of Pembroke and together with the Pembroke team has a long track record of investing in private companies. We provide investors with access to a private equity style investment strategy with significant tax advantages for UK investors. Pembroke always adds value to its investee companies beyond capital and has assembled its own in-house team of digital marketing, PR and branding strategists,

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to help nurture its consumer-facing portfolio companies. Pembroke’s objective is to create significant capital appreciation in the investments, thereby providing strong returns to investors. Pembroke also strives to provide a supportive framework for our investee companies and access to unparalleled talent across our network, management teams and advisors. Pembroke prides itself as being entrepreneurial in spirit; always working closely with management teams and maintaining good business relationships. Pembroke VCT is seeking to raise additional capital in the financial year 2013-14 and we expect to close the fund in Jan 2014 to new investments. At present we have raised ~£15m and are on target to hit ~£20m. We have made seven investments to date, in a range of assets (eg consumer fashion, hospitality / restaurants and health / fitness) committing £5.5m of capital. We have a healthy pipeline of deals which we are currently executing and expect to commit approximately £4m in the next six months. Going forward we target ~60% of assets in late stage, profitable businesses and the remaining 40% in early-stage / start-up companies. We will look to raise another VCT fund (Pembroke 2) over the 2014-15 tax years. Advisers involved in the transaction included: for Pembroke - Steptoe & Johnson (legal), Sopher & Co (financial and tax); for management - Chiomenti Studio Legale (legal).

DEALS OF THE YEAR: The Best Deals of 2013

Consumer Deal of the Year Asia Pacific Creador acquisition of leading cereal and snacks company from Godrej Consumer Products Brahmal Vasudevan is the Founder & CEO of Creador, a private equity firm focused on long-term investments in growth-orientated businesses in Indonesia, Malaysia, Singapore and India. Recently, the firm was awarded Consumer Deal of the Year, Asia Pacific. ------------------------------------------------------------------Creador was established in 2011 by Brahmal Vasudevan with a goal of investing in Indonesia, Malaysia, Singapore and India. Brahmal, having been a General Partner for over 10 years in ChrysCapital, one of India’s largest Private Equity Funds, found the time right to move on and setup this venture given that Indonesia was at an inflection point of witnessing robust growth and market transformation in line with what China and India had undergone. In Indonesia, Brahmal partnered with Cyril Noerhadi. Cyril has 23 years of experience in the financial services industry in Indonesia. Prior to leading Creador’s activities in Indonesia, Cyril was Group CFO of PT Medco Energi International, a leading oil & gas operator. Between 1999 and 2005, Cyril was Corporate Finance Partner at PricewaterhouseCoopers’ Jakarta office. Prior to this, he was CEO / President Director of the Jakarta Stock Exchange where he transformed the newly privatized exchange in line with new regulations that took effect in 1996. In India, Brahmal partnered with Anand Narayan who spent the last 17 years working in Investment Banking where he helped mid-market and large corporates raise equity and debt capital in India. Most recently, Anand was a partner at Veda, a boutique investment bank. Anand also spent 12 years as Vice-President, Investment Banking at IL&FS where he mobilized funds for companies across India. Creador is essentially a growth-oriented investor, with a goal of providing smart capital to promoters with well-established businesses. During the period of the relationship, Creador works alongside the promoter and management on various areas of value creation in order to maximize shareholder returns while creating a sustainable platform for the promoter to further the business. Brahmal explains more about the firm and what distinguishes it from the competition.

“We believe that we have a first-mover advantage in Indonesia given that we are one of the few PE investors in the country. Three of our seven investments via Fund I have been in Indonesia, namely PT MNC Sky Vision, Indonesia’s largest Pay-TV operator; PT Simba Indosnack Makmur, a leading branded cereal and snacks business; and PT BFI Finance, one of the oldest and most diversified multi-finance companies in Indonesia.” “The robust growth in GDP over the last couple of years has been largely driven by internal consumption that accounts for two thirds of the economy. The longterm macro-economic outlook for Indonesia remains stable. “Malaysia being a relatively mature market provides a contrasting investment theme as compared to Indonesia. First is the need for expansion capital as Malaysian companies look to expand in the region as an avenue for growth. Given that we have a base in Indonesia, we work with the promoters in various capacities to enhance their Indonesia exposure. Another would be capital for M&A in both domestic and outbound territories, as it would serve the dual purposes of expansion and forward / backward integration.” “As a firm, we focus on consumer-oriented sectors that play on the domestic growth story of markets we operate in. For example, the rationale behind our investment in PT MNC Sky Vision was that there was a significant under penetration in of Pay-TV subscribers in Indonesia. India, Singapore and Malaysia have household penetration rates of above 50% and hence it is only of natural consequence that the Indonesian consumer would trade up from Free-to-Air to Pay-TV. Also, this is a sector our team understands well.”

“Simba is a leading cereal and snacks business with excellent growth prospects and was our second investment in Indonesia after MNC Sky Vision in 2012.” “The underlying theme for our investment is the growing middle class story that will contribute to a rise in discretionary income. The rise in discretionary income and a shift to “convenience food” will lead to a rise in consumption of breakfast cereals in Indonesia. This has been demonstrated by the breakfast cereals market growing by over 15% in the past few years. Creador believes that results of various initiatives will become apparent within 12 months time and Brahmal explains: “We believe, with strategic focus there are significant opportunities to accelerate the growth by making substantial investments in manufacturing, new product development as well as sales and marketing activities.” Brahmal also has predictions for Creador with regards to the future: “Over the next 12 months, we will continue to seek opportunities to invest in great companies across our operating geographies.” He adds: “We continue to see big opportunities in Indonesia and we are able to bring some of the learning from India. Growth in Indonesia is now accelerating and there is a role for private equity. In the past, many business families in Indonesia were not familiar with private equity as a channel to raise capital. Apart from capital, private equity firms can also provide advice and assistance in growing the business. Our model is to partner with the entrepreneur so he remains in the business and we buy a minority stake because we would like to provide additional tools for them to grow their business.”

Recently Creador acquired Simba Indosnack Makmur, from Godrej Consumer Products. Brahmal explains more about this transaction, including the strategic rationale behind it. “As a firm, we believe in maintaining relationships not only with promoters of firms but also with intermediaries such as bankers, consultants and independent advisors,” he states. “We knew about the opportunity at an early stage through our network. Simultaneously we connected with the Godrej India team with which we also have relationship.

Company: Creador Name: Brahmal Vasudevan Email: info@lpamina.com Web Address: www.creador.com

Acquisition International | December 2013 | 29

DEALS OF THE YEAR: The Best Deals of 2013

Energy & Resources Deal of the Year

Europe - San Leon Energy acquisition of 75% of Alpay Enerji

San Leon’s recent £31 million fundraising and entry as a major player in Turkish exploration and production, should be transformational to its future, believes Oisin Fanning, Executive Chairman. In one move the intention is to generate a steeply-increasing cashflow from Turkey, enabling the appropriate time to be taken to extract value from its company-maker potential resource plays in Poland and Morocco. ---------------------------------------------------------------------Company background San Leon Energy Plc (San Leon) is a junior oil and gas exploration and production (E&P) company, one of the larger on London’s Alternative Investment Market (AIM). Despite its current market capitalisation of around £100 million, and no debt, by acreage position San Leon is one of Europe’s largest unconventional oil and gas companies. It is very active in proving up those assets in what are acknowledged as highly significant resource plays. San Leon was listed in 2008, and has grown its sizeable portfolio of assets both organically and through the

acquisitions of four companies. Until the September 2013 deal to enter Turkey, its main focus of operations was in Poland and Morocco, and the company remains one of the major players in both countries. The mix of conventional and unconventional – shale and low-permeability (‘tight’) sandstone – assets, across different geological play types, lends balance to the portfolio. Turkish production further rounds the exploration-appraisal-production lifecycle. Poland as an example of potential To give an idea of the scale of its Polish shale operations, for instance, San Leon has over a million acres in the Baltic Basin in the north of the country. It, and the industry, generally regards this area as the most prospective in Poland, and San Leon believes its own acreage to be a particular ‘sweet spot’. In North America unconventional resources have become one of the dominant sources of energy, and have transformed the energy balance of the region, and the competitiveness of industries relying upon energy as a raw material. Poland is at the forefront of efforts to harness shale hydrocarbons in Europe, and San Leon is

one of the leading operators in that space. Success in Polish shale does not occur overnight, however, and requires extensive technical and operational work to iterate the ‘recipe’ for commercial extraction. Three years ago, the company’s Executive Chairman, Oisin Fanning, stated that he expected positive results to take three to five years. His belief in Polish shale, and the timescale remains unchanged: “Poland takes longer, you’ve got to be there. We can be there as long as we need to be now, to monetise effectively our big shale gas plays, and we won’t be coming back to market looking for cash to do so. If necessary, we can be the last man standing.” Such an approach to persevering is hardly surprising, considering the potential prize. The figure to the left shows the inflation in value per acre seen in proven areas of North America. This should also be read in the context of much higher Polish gas prices (roughly 2.5 times that of North America), a state take (royalties and taxes) in Poland of around half that of the US, and 30-year exploitation licences in Poland (whereas licences in the US often go back to public tender after a far shorter period). In other words, crack the code for commercial production in Poland and it could be of enormous value. This is not to say that success could not come in the near future. San Leon is currently in the process of performing hydraulic fracture stimulation on two wells in the Baltic Basin (one of which is through its partner, Wisent Oil & Gas, which is paying for the work to earn equity) – so this is certainly not a ‘watch and wait’ approach to proving up value. Mr Fanning’s reference to having the ability to be in Poland as long as required reflects two recent interlinked achievements, announced together in September. Strategy and recent newsflow Firstly, San Leon struck a deal to take a 75% stake in Alpay Energy in Turkey – a company with existing production, appraisal and exploration assets. This provides immediate cashflow on the deal closing, and rapid increases on that through the further exploitation of proven reserves. Secondly, a £31 million share placing is funding the entry into Turkey, the first phase of production escalation there, and ongoing activities in Poland and Morocco. Taken together, San Leon is confident that production increases in Turkey will enable the overall company to become cash flow positive by the first half of 2014, then funding further

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DEALS OF THE YEAR: The Best Deals of 2013 production increase in Turkey and continued work in Poland and Morocco. Pressure being removed from providing results in time for further fundraising, Poland and Morocco can have their huge resource plays proven up in the most appropriate technical timescale, thus maximising shareholder value. The deal in Turkey formed a large component of the fund raising story to new and existing major investors. The reaction from such institutions was very positive, with the placing being oversubscribed in what is generally regarded as a difficult funding environment for junior E&P. Mr Fanning showed his confidence by purchasing £1 million of the shares himself. ToscaFund, San Leon’s largest investor, participated in the placement, and several new institutional investors (including Capital Group) came on board. Profitability should not only mean that San Leon does not need to tap the market for more funds for existing operations, but in the opinion of Mr Fanning, should also help distinguish it from many of its peers. Turkey entry Turkey country entry is therefore a very logical and important part of San Leon’s strategy from a cash flow point of view. However it is far more than just that. There are many reasons for this particular deal in this particular country, and with San Leon’s particular background and value-adding expertise. Joel Price, Chief Operating Officer, opined that, “this deal would be great even without the strategic context, as a stand-alone, scaleable E&P asset”. Mr Price’s comments can be understood with reference to the sections below. Why Turkey? Turkey is Europe and Asia’s fastestgrowing energy market, so there is no lack of customers for increased production. Indeed 99% of natural gas is imported. The extensive national gas transmission network is being bolstered by the new utilisation of Turkey as a regional gas transmission hub from the East to Europe.

capital will be implemented alongside the in-depth regional knowledge, well-established connections and relationships, and access to drilling services which already exist in Alpay Energy (Mr Alpay owns three drilling rigs and a seismic company). Historically the sheer scale of the portfolio and the funding requirements for licences which have typically required operators to ‘drill or drop’ have been impediments to full exploitation for the company. The deal is very much a win-win for buyer and seller alike. Not that Mr Fatih Alpay should be thought of as selling – he retains a 20% carried interest in the company (whereby San Leon pays all of his costs), since he continues to believe as firmly in the future success of the company as does San Leon. A direct synergy exists between San Leon’s internal 3D-capable seismic acquisition company, Novaseis, and Mr Alpay’s Turkish-based seismic company, Geosens. To date only 10% of Turkey is covered by any form of seismic data, further emphasising the potential to leverage cost-effective and high-quality seismic services to unlock and optimise exploration and development drilling in the asset portfolio. The reserves figures are impressive. The latest mid2012 CPR (Competent Persons Report) by Senergy in the UK, gave 6.5 Bcf (billion cubic feet) of proven reserves (‘1P’) and 46.6 Bcf of proved plus probable (‘2P’) reserves. These are highly material numbers when pipeline sales of 1 Bcf yield around $10 million.

Hamam-1 well test, Hatay Block, Turkey

$1.30 per boe of 2P reserves (barrel of oil equivalent) net to San Leon is highly attractive. What are the plans in Turkey? The first phase of work will involve an estimated $18.5 million of capital to fund mainly low-risk activities to increase production. Several new wells, a number of workovers, and a new 11km pipeline are expected to ramp up production from 0.25 million cubic feet per day (cf/d) to the equivalent of 10 million cf/d by the end of Q1 2014. The pipeline could handle significantly higher rates in the future with the installation of compression.

“Poland takes longer, you’ve got to be there. We can be there as long as we need to be now, to monetise effectively our big shale gas plays, and we won’t be coming back to market looking for cash to do so. If necessary, we can be the last man standing.”

The profitability and ease of doing E&P business in Turkey are very favourable. Fiscal terms are internationally competitive, involving a modest 12.5% royalty, 20% corporate income tax and 10% withholding tax, while the permitting environment is geared up to make things happen for responsible operators. Why this deal? San Leon finds advantage in being one of the leading players in its focus geographies. The 16 licences involved in this deal make Alpay Energy the secondlargest acreage holder in Turkey aside from the state E&P company. This provides economies of scale and the spreading of risk amongst different asset types and locations, as well as operational flexibility. Scale is only useful where the constituent parts of are high quality and potential. The company is excited by the potential shown by the existing production, appraisal of nearby areas, and the new exploration. San Leon as a company is highly complementary to the existing assets and management of Alpay Energy. San Leon’s subsurface (geological, geophysical and reservoir engineering) excellence and access to

Yet these reserves figures are only for a single block out of the 16 blocks in the deal. As an example, heavy oil is produced in one of the other blocks at around 50 barrels per day from a single well, but is not included in the reserves figures as a CPR has yet to be generated. The potential, San Leon believes, is huge. Adding in contingent and prospective resources (which require appraisal or exploration) adds an order of magnitude to the above figures. A significant upside to gas sales is the existence of a Compressed Natural Gas (CNG) facility at each of two main licence areas, and which is part of the deal. This enables gas to be compressed and sold in bottles for more than twice the pipeline price. With minor upgrading, each facility could handle 3.5 million cubic feet per day, or $75,000 in sales per day per facility. It already operates to an existing customer base. What is the deal? The cost of entry to its 75% interest in Alpay Energy is $4 million up-front, plus the 20% carry on Mr Alpay’s remaining interest. The remaining 5% continues to be held by Niche Energy.

Further phases of work are expected to be funded by cashflow, and will include 3D seismic and significant further drilling. One area where there may be particular upside is the heavy oil block mentioned above, which an internal technical estimate suggests could recover millions of barrels if properly exploited. 3D seismic has regularly been found to be the key to de-risking exploration and development of similar assets in Europe, and is a technique which has been utilised to great effect by San Leon in Poland. Where does this all take San Leon? San Leon is confident that Turkey will become a thriving component of its portfolio on its own, as well as promptly generating the cash needed to fulfil the company’s ambitions with regard to its company-maker potential in Poland and Morocco. Newsflow from all three regions should be strong over the next year.

Company: San Leon Energy Plc Name: Oisin Fanning Email: london@sanleonenergy.com Web Address: www.sanleonenergy.com Address: 43 Grosvenor Street, Mayfair. London W1K 3HL, United Kingdom Telephone: +44 20 3617 3913

By any comparison, the effective entry cost of below

Acquisition International | December 2013 | 31

DEALS OF THE YEAR: The Best Deals of 2013

Healthcare Deal of the Year Asia Pacific

Soho Flordis International (SFI) acquisition of ProThera & Ginsana

Wolfgang Kuchen is Executive Vice President of Business Development at Soho Floridis, an Australian registered company created to provide global natural health solutions with high specific evidence and full control of supply chain. -------------------------------------------------------------Established in 2010, following a long collaboration between Flordis Pty Ltd and SOHO Group, Soho Floridis International (SFI) is an international provider of clinically proven natural medicines. An Australian registered company, SFI is committed to ensuring that people globally have access to the best natural medicines supported by clinical studies performed on the exact finished product. Rather than basing claims on highly variable ingredients, this higher standard enables the selection of safe, appropriate and effective treatments.

With over 50 years of formulation experience and a comprehensive product line of probiotics and dietary supplements distributed exclusively by healthcare providers, ProThera provided SFI with 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 will serve as a regional hub for the rapid commercialization of the extensive SFI Group product portfolio and future pipeline.

As Executive Vice President, Wolfgang Kuchen is responsible for innovation, licensing, mergers and acquisitions at Soho Floridis.

In a corresponding move, SFI also acquired Ginsana, a leader and innovator in natural medicine products based in Bioggio, Switzerland. Owned by Pharmaton, a Boehringer Ingelheim Group company, Ginsana brings superior expertise, state-of-the-art facilities and a complementary line of six natural medicine brands with significant growth potential to the SFI portfolio. 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.

In July of this year, SFI acquired ProThera, a leading nutraceutical company based in Reno, Nevada. The acquisition marked an important milestone in establishing SFI as the leading global provider of clinically proven natural medicine.

“The parallel acquisition of ProThera and Ginsana not only gives us entry into the attractive field of probiotics, it has extended our network and pipeline of natural medicine brands with a great legacy,” said SFI Chief Executive Officer Nigel Pollard.

The firm’s mission statement is to build the world’s first global brand focused on bringing quality evidencebased natural medicines to market through healthcare professionals.

Company: SohoFlordis International Name: Wolfgang Kuchen Email: Wolfgang.kuchen@sfihealth.com Web Address: www.sfihealth.com; www.ginsana.ch; www.prothera.com Telephone: +1-801-859-9700

“Building on our success in the southern hemisphere – in Australia and South Africa – we have now established a strong foundation for expansion in the northern hemisphere and its main markets, the US, Europe, Middle East and Asia. Both companies reflect SFI’s dedication to innovation and the advancement of natural medicines through healthcare providers.” Wolfgang tells us more about how the two acquisitions will benefit Soho Floridis. “SFI works on specific clinical evidence,” he begins. “And it prides itself on ethical marketing to health care professionals.

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“Since its inception in 1942 Ginsana has focused on providing innovative solutions to patients and healthcare professionals. All claims are substantiated and the marketing message is in line with the scientific platform. The firm also works on creating shared value with traditional communities through its networks in Latin America and Africa. New synergistic Ginsana combination products are also supported by relevant proprietary clinical studies.” The two acquisitions of Ginsana and Prothera took two years and six months respectively to complete and Wolfgang explains that these deals were not without their challenges. “The Ginsana deal was particularly challenging. As the company was part of Pharmaton/BoehringerIngelheim there were many intricate company relationships (R&D, manufacturing, licensing) that needed separate agreements pre-SPA.” However he continues to enthuse about how much the acquisitions will benefit Soho Floridis and its customers. “We are expecting it to benefit SFI very positively by putting the company on the map in different geographies and allowing SFI to deepen existing commercial relationships by increasing its service. “In 12 months time we will be assessing the success of the acquisitions by examining integration dimensions, as well as non-financial and financial reviews. We have some plans for the companies over the next year also as we would like to begin harmonizing product offerings across geographies and look for crosslicensing opportunities within (R&D, manufacturing, sales & marketing).” With regards to the future of SFI, Wolfgang has the following to say: “We will continue to look for acquisitions in the health practitioner space in different countries. We also have a successful direct to consumer business in North America with www.calorease.com, which will see our increased interest.”

DEALS OF THE YEAR: The Best Deals of 2013 City, and is in the most central location. Vincom Mega Mall RoyalCity, which opened on July 26, 2013, is the largest shopping center in Vietnam and the largest undergroundshopping and entertainment complex in Asia.The stabilized properties in the portfolio are at or near full occupancy with long-term, committedleases from top global brands.

Real Estate Deal of the Year Asia/Pacific / Warburg Pincus investment in Vingroup

On May 28, 2013, Vingroup and Warburg Pincus announced a definitive agreement under which a consortiumled by Warburg Pincus makes a US$200 million investment to acquirean approximately 20.2% equity interest in Vincom Retail. The agreement also includes a commitment from Warburg Pincus to participate in a future overseaslisting of Vingroup for up to US$25 million. In addition, it alsoincludes an opportunity for the Warburg Pincus Consortium to invest an additional approximately US$100million and the parent to make a matching investment up to four-folds in Vincom Retail to expand the platform and explore future retail property related opportunities. The first tranche investment of US$150 million was closed in July 2013, whilst the following two tranches are expected to close by the first quarter in 2014.

Hanoi / Vietnam

Ms Le Thuy is Vice Chairwoman cum CEO of Vingroup JSC, based in Vietnam. She speaks to Acquisition International about a recent transaction which should help shape Vingroup’s future. ---------------------------------------------------------------------Vingroup Joint Stock Company is the largest listed real estate company in Vietnam by market capitalisation with controlling interest in over 30 developments, which are in prime urban and high growth areas in key cities throughout Vietnam. In January 2012, the merger of Vinpearl JSC (established in 2001) and Vincom JSC (established in 2002) formed Vingroup JSC nowadays. Vincom JSC was the Vietnam’s No.1 brand-name in the real estate field, consisting of complexes of high-end shopping malls, offices and apartments in prime locations, which in turn created large modern urban complexes, and thus leading Vietnam’s trend of luxury smart eco-urban areas. Vinpearl JSC was the leader in the tourism industry with a series of international five-star and over hotels, resorts, beach villas, entertainment parks, golf courses. The amalgamation of Vincom and Vinpearl created Vietnam’s largest and integrated real-estate, commercial and hospitality group, poised to leverage the long-term economic development of Vietnam. As of November 2013, Vingroup JSC owns and controls over 30 large-scale real estate and tourism properties in prime locations across the country and at the same time possesses the largest charter capital in Vietnam’s stock market of nearly USD3 billion. Vingroup is also recognizedwithin Vietnam and in the region as one of the most dynamic and sustainable private enterprises with high a potential for international integration. Vice Chairwoman cum CEO, Ms Le Thuy, tells us more about how Vingroup distinguishes itself from the competition. “The company differentiates itself by being the largest developer in Vietnam with a premium brand name,” she explains. “Our strong brand equity attracts premium tenants & clientele. We are a fully-integrated real estate owner and developer with exposure to key consumer segments throughout Vietnam, and we have

a clear focus on serving all of the needs of the growing middle class Vietnamese consumers.” Ms Le Thuy embellishes on the recent investment led by a group of private equity investors into Vincom Retail, including the strategic rationale behind the transaction. “Warburg Pincus has been a leading private equity investor since 1966. Since its formation, Warburg Pincus has invested more than US$46 billion in approximately 675 companies across 35 countries, of which more than 120 companies have been listed on internationally recognized stock exchanges. “Warburg Pincus was also one of the first international private equity firms to invest in Asia in 1994. Since then, they have invested in over 70 companies with a total aggregate investment of over U.S.$3.7 billion. Additionally, Warburg Pincus has a long history of investing in Asia’s real estate sector at both the entity and asset level. This strategic partnership is founded on a common vision and that is to develop Vincom Retail’s operation so as to benefit from one of the world’s fastest growing domestic retail sectors, the favorable long-term economic outlook in Vietnam and the rapid development of an urbanized middle class. The partnership brings together Vincom Retail’s marketleading position in Vietnam’s most important urban centers and Warburg Pincus’ global retail and consumer industry expertise.” Vincom Retail is a subsidiary of Vingroup that owns, manages and develops retail projects throughout Vietnam. After Vincom Mega Mall Times City goes into operation in December 2013, Vincom Retail will have the largest portfolio of retail properties in Vietnam with six properties at prime locations in Hanoi and Ho Chi Minh City. Vincom Retail’s portfolio is unquestionably the best in class in Vietnam. According to CBRE, The retail spaces at Vincom Center Ba Trieu—Tower B and Vincom Center BaTrieu—Tower C collectively form the largest modern high-end shopping center in the central business district ofHanoi. Vincom Center Dong Khoi is the largest shopping center in Ho Chi Minh

The structure allows the Warburg Pincus consortium to make a direct investment into Vietnam’s largest retail platform, but also ensures that the sponsors are committed to the potential opportunities and long-term growth of the franchise. Leveraging onWarburg Pincus’ network and experience in developing retail businesses will allow Vingroup to accelerate itsroll-out of business plan in addition to growth capital. Last but not least, the management at Vingroup is hopeful that the partnership will helpenhance management capabilities and strategic flexibility with two Warburg executives joining the Board of Directors of Vincom Retail. Vingroup plans to expand into up-and-coming cities such as Hai Phong, Ha Long and Da Nang as well. The joint venture establishes an exclusive vehicle for the development and management of Vingroup’s retail property portfolio. Within the Group, Vincom Retail will have priority rights to develop and expand retail or mixed-use projects in key major cities across Vietnam. As for the rest of the Group, with regards to the future, Ms Le Thuy adds: “Vingroup intends to continue to focus on what it does best, to use its expertise and experience in identifying and securing prime sites in major urban centers and tourist destinations in Vietnam, in negotiating and bidding for sites, in carrying out land clearance and designing and in executing development projects with the highest standards of construction. We believe these qualities are particularly important for high profile sites, where bidders are assessed based on various criteria, including financial capacity and track record of successfuldevelopment.”

Company: Vingroup JSC Email: ir@vingroup.net Web: www.vingroup.net Address: No.7, Bang Lang 1 Street, Vincom Village, Viet Hung Ward, Long Bien District, Ha Noi Tel: +84 (4) 3975 9999/ ext. 926

Acquisition International | December 2013 | 33

DEALS OF THE YEAR: The Best Deals of 2013

Deal of the Year

Swiftpage acquisition of Sage ACT! and Saleslogix

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DEALS OF THE YEAR: The Best Deals of 2013 Swiftpage and Sage were long-term partners before the acquisition, which was announced on February 15 and completed on March 20 – so why go down that route and what benefits has it brought? Acquisition International spoke to Mallory Bowers from Swiftpage’s corporate communications department to find out. -------------------------------------------------------------Swiftpage was founded in 2001 as a start-up with a great product and an even better go-to -market strategy. The Swiftpage E-marketing platform was created for micro and small businesses to convert and retain customers while growing their businesses. Swiftpage uniquely positioned itself by partnering with large corporations who had significant customer bases comprised of micro and small businesses. Soon, these partnerships enabled Swiftpage to grow from a start-up to a stable, growing multi-million dollar business. We have a very large and growing user base, spanning Fortune 500 companies down to companies of one. Collectively, our growing network of partners, customers, end-users and employees represent what we call Swiftpage Nation, united across the globe as one team, on one journey. Together, we are dedicated to enabling individuals, small businesses and mobile sales teams to convert more customer interactions into transactions, by intelligently recommending the right action to take next, with the right contacts, at the right time. When Swiftpage acquired the Act! and Saleslogix businesses in March, it created a new dynamic for CRM customers. Now, no matter what the interaction model an organization uses, whether it be the Book of Business model (one point of contact) or Team Sales model (multiple points of contact); Swiftpage can help that business transform and grow. One of the most important aspects of this acquisition were the challenges faced by customers, users and partners following Sage’s announcement that Act! and Saleslogix had been re-categorized as ‘non-core’ in the company’s go-forward business strategy. We saw that as a tremendous opportunity to come in and restore confidence in the partner ecosystem and grow the two products — which are, in many ways, the foundation of modern day CRM — back to their previous marketleading positions. To accomplish this, we are combining our marketing prowess and an appropriate level of investment with the existing capabilities and the already established customer footprint of both products. We’re seeing tremendous momentum, and in the months following the acquisition many have

told us that the acquisition simply made intuitive sense, since the Swiftpage email marketing platform was already so deeply integrated with both products. Many existing customers/ partners were therefore already familiar with the Swiftpage name, brand, and way of doing business. Since acquiring the businesses Swiftpage has experienced a dramatic growth in revenue, more than quadrupled in size in terms of employees (going from approximately 50 to 300+) with no sign of slowing down in the future. Right now we are in what we call post-close Phase 2. Now that we have fully disconnected both products from their previous owner, we are now building new systems and optimizing existing ones to ensure we are delivering the best partner, customer and user experience possible. It’s been hard work, but it’s been exhilarating too, and we’ve managed to fit it into our culture of working hard and playing hard. I think it is important to point out the cultural aspects of Swiftpage as acquiring these two businesses and experiencing such massive growth has been a challenge in itself. One of the main goals for the leadership team has been to maintain the ‘friends and family’ spirit that Swiftpage was founded on. Our number one value, or as we call it here at Swiftpage, ‘living the exclamation’, is that work is fun with a purpose. Our culture is about working hard, playing hard and enjoying ourselves while doing so. Every Friday afternoon we have our ‘Friday Afternoon Club’ where we open up the keg and unwind from a hard week’s work while getting together with our colleagues in a relaxed setting. We have a culture club that plans weekly/monthly activities; the atmosphere is very casual yet focused on always achieving our best and maintaining the highest levels of professionalism.

Company: Swiftpage Name: Mallory Bowers Email: mbowers@swiftpage.com Web Address: www.swiftpage.com Address: 621 17th Street, Suite 500, Denver, CO 80293 Telephone: 303-978-1000

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DEALS OF THE YEAR: The Best Deals of 2013

TMT Deal of the Year

Europe - Vipnet acquisition of Digi TV

Mladen Pejković, CEO Vipnet, spoke to Acquisition International about the acquisition of Digi TV. ---------------------------------------------

Please describe Vipnet’s background and primary aims.

mobile communications and, through multiscreen customer experience, to take over one-third of the total telecommunications market in Croatia. How does the company distinguish itself from its competitors? By becoming convergent, we made ourselves

Vipnet is the biggest greenfield investment in the Republic of Croatia and is a part of Telekom Austria Group. In September 1998, Vipnet was granted a concession for the second GSM network in Croatia and started its commercial operations on July 1, 1999. By entering the Croatian telecommunications market, Vipnet introduced competition into mobile telephony and reached 40% mobile market share.

“Vipnet will become the customers’ first choice in multiscreen multimedia entertainment in Croatia. We expect strong growth in fixed segment, especially broadband and TV. New opportunities will come out of the cloud but at the same time, we will continue to feel roaming and interconnection regulation. Along with that we have to continue with the development stream we have started. That is the foundation of our future.”

In 2011 a transformation program was started by the acquisition of the leading cable operator B.net. That changed the company into a converged operator offering mobile, fixed and TV services. In 2013 the acquisition stream continued with four local cable operators and finally with the acquisition of Digi TV, thus providing nationwide TV service over DTH. Our primary aim is to become the leader in

different from the most of the telcos in Croatia and we also differentiate ourselves by offering extraordinary customer experience with our services. This includes point of sale, multiscreen experience with our brand and technical support through the first 24/7 customer service operation in Croatia.

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Additionally, forward thinking and innovation has always been in our DNA. Vipnet was among the first in Europe to offer GPRS, UMTS, HSPA and LTE. In June 2013 at the Faculty of Electrical Engineering and Computing in Zagreb Vipnet set the new world record for the fixed segment with speeds of 5 Gbit/s using the hybrid fiber coaxial (HFC) network, and in the mobile segment presented speeds of up to 300 Mbit/s based on 4.5G – LTE Advanced technology.

But innovation is also to be perceived through customer oriented products. For instance, this year we offered an NFC ticket solution in public transportation in the City of Osijek, we launched crowdsourcing-based support through Vip Forum and advanced TV services, which can be viewed on every screen: TV sets, laptops, Tablets or mobile phones.

DEALS OF THE YEAR: The Best Deals of 2013 How long did the acquisition take to complete? The negotiation process and the legal defining of the contracts were finished within six months. Did you face any challenges as part of the acquisition? If so, how were they overcome? It is unusual for a mobile operator to acquire a satellite operator, primarily because of different processes, market approach and, in general, because of the different mindset. Therefore, after the acquisition we faced integration challenges and new processes, both internal and towards customers. On top of that, in order to succeed it was important that people within the organization had a full understanding of the reasoning behind the acquisition. That is why we invested time in quality internal communication. How will the acquisition affect Vipnet and its customers? Both Vipnet and its customers will profit from this move. Vipnet has fulfilled its goal, which is to ensure a strong presence of its television services throughout Croatia, while customers will have the opportunity to enjoy a premium satellite service. This gives us confidence in executions and in our ability to communicate and to serve our customers nationwide by choosing the optimal technical layer to meet the individual needs of any customer. On the other hand, customers have confidence that with us they will get a total telecom solution where ever they live. How will you assess the success of the acquisition in a year’s time? That will be measured through the realization of planned synergies and the fulfilment of transaction budget presumptions. We will take three criteria into consideration. Firstly, the speed and success of the integration; secondly, the market success of our DTH service, and thirdly, the enhancement of customer loyalty through combining satellite services with other services in our portfolio. What does the future hold for Vipnet? Do you have any predictions or expansion plans for the next 12 months?

Please provide some background to Vipnet acquisition of Digi TV? What was the strategic reasoning behind the acquisition? As a totally converged operator, we have to offer our services nationwide. This is an easy task for mobile voice and broadband services, but not so easy for fixed TV services. With the acquisition of five cable operators, we reached a significant urban superfast broadband and TV footprint. With our wholesale based bitstream offer over a copper network, we have expanded our services to smaller towns. To reach real nationwide coverage, satellite/ DTH is the optimal umbrella technology. So, that was a perfect complement to our existing products and services portfolio.

Vipnet will become the customers’ first choice in multiscreen multimedia entertainment in Croatia. We expect strong growth in fixed segment, especially broadband and TV. New opportunities will come out of the cloud but at the same time, we will continue to feel roaming and interconnection regulation. Along with that, we have to continue with the development stream we have started. That is the foundation of our future. EU challenges cannot stop us in next generation fixed and mobile access development. New cable technologies like DOCSIS 3.1 will enable continuous super-fast broadband and HD TV services improvement. On the wireless side we see LTE investment as an answer to mobile data explosion and the growth of smartphone penetration as an obvious opportunity in the coming years.

--------------------------------------------Member of the Board, Adrian Ježina talks to Acquisition International about Direct-To-Home, Telekom Austria Group’s new satellite TV system. Direct-To-Home (DTH) is a consistent broadcasting solution where one earth station, one satellite and one encryption system are used. DTH as a reception technology can be used for Pay TV as well as for freeto-air programs, and is preferred because adjustments on the customer’s side can be implemented easily, quickly and, therefore, cost-efficiently. The Direct-To-Home B2B solution is intended for broadcasting companies, but also for telecommunication operators. The Telekom Austria Group offers them the so-called ‘White Label Solution’, which allows providers to offer their own content to customers with their own branding and, at the same time, use the technical services of the Telekom Austria Group in the background. Vipnet`s reasoning was to utilize brand value and content rights at a national level. Growth of customer base will generate better terms with content providers. Since Croatia is a small country and there is a question of profitability volume, better terms will be achieved through Telekom Austria Group’s strong regional position. On top of above mentioned reasons, this fits perfectly into the Group strategy. The advantage of this offer is that providers can extend their market rapidly, use cross-selling potentials and benefit from a wide range of programs. Vipnet now uses the new DTH system of the Telekom Austria Group and the Satellite TV offer has improved considerably in terms of quantity and reception quality. The new DTH platform is tied to the Eutelsat 16° East satellite, and customers can now follow hundreds of attractive, free-to-air European channels. This is possible because of triple LNB which is unique satellite position that reaches three different satellites: 13° E (Hot Bird), 16°E (Eutelsat) and 19,2°E (Astra). The current boxes of all DIGI TV customers will be replaced by the end of December with new Vip SAT TV HD digital satellite receivers and, on top of the big variety of SD pay and FTA channels, they will also be able to watch a variety of HD channels. By combining this service with other technologies, such as LTE and bitstream, we are planning to offer interactive services in the future.

Company: Vipnet d.o.o. Address: Vrtni put 1, 10 000 Zagreb Web Address: www.vipnet.hr Email: Communications@vipnet.hr

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REGIONAL ROUND-UP:

Regional Round-up From Ethiopia to Hungary and not forgetting the DRC, Nigeria and Mauritius, our regional round-up travels the globe. Weâ&#x20AC;&#x2122;ve spoken to leading business, legal and financial professionals to find the best investment opportunities and the greatest challenges. From in-depth analyses to quick-fire roundups we highlight where the opportunities lie.

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REGIONAL ROUND-UP:

Acquisition International | December 2013 | 39

REGIONAL ROUND-UP: Ethiopia: The last big untapped African market

Ethiopia: The last big untapped African market

40 | Acquisition International | December 2013

REGIONAL ROUND-UP: Ethiopia: The last big untapped African market Vibrant, growing and on the radar of many top executives – Ethiopia has come a long way. Zemedeneh Negatu, Managing Partner EY Ethiopia and Head of Transaction Advisory Services, explains what’s happened. ---------------------------------------------------------------------A few weeks ago, in New York City, Ethiopia’s Prime Minister Hailemariam Desalegn gave a presentation to a group of senior business leaders about the investment opportunities in his country. The audience included the CEO of one of the world’s largest hotel groups, the COO of a ‘Fortune 500’ industrial enterprise famous for its construction tools and several other executives including private equity fund managers. Ethiopia has indeed come a long way in getting the attention of sophisticated global investors. Attendance at similar road show presentations in Paris, Seoul and Tokyo, earlier this year was just as impressive: in Tokyo, there were over 400 people. So how did Ethiopia get to this point where global investors are starting to consider it as an attractive investment destination and even President Obama has included it in his $7 billion Power Africa initiative? It’s because Ethiopia’s economy has averaged 10.6% annual growth between 2004 and 2011 according to a recent World Bank report. The economy has tripled since 2000 and is ranked amongst the fastest growing in the world. Its $103 billion GDP is the fourth largest in Sub-Saharan Africa and is 25% bigger than Kenya’s. But for many analysts Ethiopia’s ascendance is best illustrated by the country’s ambitious 6,000 MW $5 billion hydro power dam under construction on the River Nile. The dam, which is the largest in Africa and fully financed by the Ethiopians themselves, is a point of great pride for its people and the political leadership.

Addis Ababa / Ethiopia

In the next few years, EY expects significant additional FDI in the promising oil and gas sectors which the UK’s Tullow Oil is leading working with Marathon Oil of the US. Furthermore, one of the largest Wall Street private equity funds recently announced that it has committed $600 million for oil and gas investments focused on Ethiopia and a few other Eastern African countries. Foreign investors, however, should note that two of the most attractive and extremely profitable sectors – financial services, where Ethiopian banks routinely pay out 40% annual dividends to local investors, and

that the city is one giant construction site. This includes the 34km, $400 million modern light rail under construction. Throughout the city thousands of affordable apartments are being built close to a modern six-lane ring road. Addis Abeba is forecast to have over 6 million inhabitants by 2025. There are similar scenes in several other new urban centres, albeit on a smaller scale. If current trends continue, Ethiopia will be one of the fastest urbanizing countries in Africa over the next 20 years.

“Ethiopia is one of the last big untapped African markets. And despite the challenges the country will face as it transitions from a completely bankrupt socialist economy just over 20 years ago to a middle income capitalist economy by 2025, I am realistically optimistic and positive about its prospects.”

Foreign Direct Investment (FDI) For global investors seeking a rapidly expanding and potentially large market, the Ethiopian growth story, with a GDP EY forecasts at more than $400 billion by 2025 thus becoming the third largest in Africa, should stand out.

telecoms, which contributes $400 million annually to the State’s budget – are off limits for FDI and the government has publicly and firmly indicated that it does not plan to open up these sectors for many more years, perhaps not even by 2020.

Ethiopia offers growth opportunities in manufacturing, infrastructure, natural resources and most importantly, agriculture. One measure of investor sentiment about Ethiopia is the result from EY’s recent Africa attractiveness survey which has rated the country as a moderate risk with high opportunity ranked at number four in Sub-Saharan Africa.

But with Ethiopia’s expected membership in the WTO in 2015, many international investors have expressed hope that they will be allowed to invest in these key sectors sooner. Already, some of the world’s biggest telecom operators such as Vodacom of South Africa majority owned by Vodaphone of the UK have opened offices in Ethiopia to provide so called value-added services, while waiting for the sector to fully liberalize.

Our research and on the ground experience suggest that FDI into Ethiopia reached an estimated $1 billion in 2012, the highest figure ever, anchored by two Investments totalling over $415 million by global drinks giants Diageo of the UK, where EY was the M&A advisor, and Heineken.

A number of international banks, such as the PanAfrican Ecobank and the biggest financial institution on the continent, Standard Bank of South Africa, 20% owned by the Chinese, have announced that they are setting up representative offices, apparently as a first step.

Over the next three years, our FDI estimate is $1.5 billion annually in sectors allowed for foreigners. We expect significant investments from China, the other BRICS, Middle East as well as an increasing flow from the developed economies including the US.

Growth Drivers Two key drivers of Ethiopia’s economic growth which will be attractive to global investors are urbanization and demographics. Anyone who has visited the Ethiopian capital Addis Abeba will notice

The other major growth driver is Ethiopia’s demographic advantage: its large young population whose median age is around 20. As happened in China and India, Ethiopia has the potential to deploy millions of young people at a lower cost even compared to Chinese wages. For instance, manufacturing wages average about $80 per month in Ethiopia compared to more than $550 in China. Ethiopia’s economic transformation is based on the country becoming one of Africa’s leading manufacturing hubs and a top exporter of value added goods.

Conclusion Ethiopia is one of the last big untapped African markets. And despite the challenges the country will face as it transitions from a completely bankrupt socialist economy just over 20 years ago to a middle income capitalist economy by 2025, I am realistically optimistic and positive about its prospects. I also firmly believe that investors who come early, with a glass half full perspective will enhance their chances of success in a country which only now is receiving attention from global investors.

Company: EY Ethiopia Name: Zemedeneh Negatu Email: Zemedeneh.Negatu@et.ey.com Web Address: www.ey.com Address: Bole Road, Mega building 11th floor, P.O. box 24875 code 1000, Addis Abeba, Ethiopia Telephone: +251 11 550 4933 Mobile: +251 91 120 1741 Fax: +251 11 550 4932

Acquisition International | December 2013 | 41

REGIONAL ROUND-UP: The new rising stars – Mauritius

The new rising stars Mauritius

Shane Seebaluck, Executive Operations/Acting General Manager, and Chanda Peerthum-Woodun, Head, Business Development, Sales and Marketing, both from CSL BPO Services explain the advantages of Mauritius as a business process outsourcing (BPO) destination. -------------------------------------------------------------CSL is a wholly-owned subsidiary of Mauritius Telecom Group (the historical telecommunication company in Mauritius) and has been the pioneer in the development of the contact centre and BPO industry in Mauritius since 1999. The core services of CSL are inbound and outbound Customer Relationship Management (CRM) services. Initially serving as an in-house call centre for Mauritius Telecom Group, CSL has now grown organically with customers in sectors like betting, utility companies, financial institutions, market research and government bodies. CSL’s activities cover both the voice and the non-voice segments of the BPO sector. Its call centre segment handles both inbound and outbound calls while its ‘non-voice’ department caters for the ‘corporate services’, ‘knowledge process outsourcing’ and ‘industry specific back office’ tasks. CSL endeavours to innovate and has recently introduced the Hotel Call Centre concept that allows small/medium call centres to rent call centre working positions without any infrastructure investment.

Today, CSL also offers expert consultancy services on the setting up of call centres. Presently, we are fully involved in the setting up of a call centre for the Swaziland Posts and Telecommunication Corporation in Swaziland. We have also diversified our service portfolio by introducing the disaster recovery service for business continuity and a full fledge debt recovery service for both local and international businesses. Its 14 years of specialist experience in the Call Center/ BPO industry and association with the latest technology (CISCO and VOCALCOM) and state of the art infrastructure gives CSL a competitive edge over its competitors. Being a subsidiary of the Mauritius Telecom Group, one of the leading and most profitable companies in Mauritius, CSL can provide an assurance to its clients that there is no risk of relocation or site closure. This fact also helps CSL to attract human resource and to maintain a relatively low attrition rate compared to other small or short life-span call centres. CSL’s production platform, which started with 100 positions in 1999, presently hosts some 467 positions. The volume of calls, which stood at 7 million in 2005, rose to 10.4m in 2012 and at least the same performance is expected in 2013. In addition, CSL has been an ISO-certified company since June 2005 and the first call centre in Mauritius to obtain the NF (Normalisation Française) certification in March 2013. CSL is endeavouring to become the first call centre in Mauritius and in the region to become COPC (Customer Operations Performance Centre) certified. CSL is also planning to set up a new call centre platform as from April 2014 in Madagascar. This initiative is being taken by CSL’s top management to further expand its call centre business and offer its existing and potential clients with services at a very competitive rate.

Company: CSL BPO Services Web Address: www.cslbpo.com Address: 5th Floor, Orange Tower, Ebene Name: Shane Seebaluck Email: shane.seebaluck@mauritiustelecom.com Telephone: +230 203 9903 / +230 203 9901 Name: Chanda Peerthum Woodun Email: chanda.peerthum@mauritiustelecom.com Telephone: +230 203 9914/+230 203 9904

These continuous quality improvements demonstrate that CSL is committed to providing the best possible service to its client and becoming a centre of excellence. Why Mauritius? Mauritius, ideally located at the heart of the Indian Ocean, has positioned itself as an enticing global business platform to many international players in the ICT/BPO industry. Because of its strategic position, Mauritius acts as a natural gateway between Europe, Asia and the African continent.

42 | Acquisition International | December 2013

Its time zone (GMT + 4 hours) allows an uninterrupted connection between important international business centres. One of the reasons Mauritius is a preferred call centre/ BPO destination is that it has bilingual agents who can easily switch between French and English. The Ministry of Information and Communication Technology has put in place a Placement and Training programme, in which CSL is fully engaged, to enhance employability of school leavers/job seekers. This programme provides for at least 50% reimbursement of the salary cost of these recruits as well as their training cost. It is expected that the ICT/BPO Sector will be the leading pillar of the Mauritian economy by 2020. Its contribution to the economy currently stands at 7% of GDP. Investing in Mauritius, which is ranked 54th out of 144 countries and 2nd in Sub-Saharan Africa, after South Africa as per The World Economic Forum’s global competitiveness index for 2012-2013, brings a number of benefits: • Political and Legal stability – Mauritius benefits from its solid democratic condition within the Commonwealth, an independent judiciary and a sound legal system incorporating French (civil) and British (common) law. • Liberal and innovative economy – Mauritius’ sound economy and its adoption of bold economic reforms have projected the country to its place among the top most competitive, liberal and innovative economies in the world. • Social and cultural harmony – known for its legendary hospitality, high standard of living and cultural openness, Mauritius is projected as a safe destination for trade and investment. • Modern Telecommunication Infrastructure and Network – Mauritius has a well-developed digital network infrastructure and high bandwidth capabilities. Mauritius is connected to a global network of communication via the submarine fibre optic cables: SAFE/ EASSy/ LION/ SAT-3, ensuring very high bandwidth communications & reliability whilst reducing connectivity costs. • Trained and skilled workforce – Mauritius has the highest adult literacy rate in Africa and offers a pool of qualified and skilled workforce. Mauritius is a preferred destination for French and English speaking clients. • A light tax regime – Mauritius being a low-tax jurisdiction country, offers a range of fiscal incentives to investors such as: a flat corporate and income tax rate of 15%, 100% foreign ownership, free repatriation of profits, dividends, and capital etc.

REGIONAL ROUND-UP: The new rising stars – Mauritius Cread & Co Ltd is a leading marketing communications, branding and design agency in Mauritius, with experience in the broader African markets. We are a full-service marketing communications agency that delivers innovative and pragmatic solutions to our clients’ business problems. -------------------------------------------------------------Cread upholds a reputation of 30 years for accountability and creativity. We put the consumer front and centre, leading to campaigns that are relevant, distinctive and memorable. Our research tools, supported by the Draftfcb Worldwide network of agencies with 180 offices, are unique and constantly updated. These include Mind & MoodSM, the 6.5 Seconds That MatterSM and Ideas That MatterSM.

Cread has garnered numerous awards over the years, both in Mauritius and abroad. The agency is also gaining prominence internationally. In recognition of its exceptional track record, and as a testimony to Draftfcb’s trust in Cread’s performance, the agency was conferred the DraftFCB affiliation for Madagascar in 2010. Cread also believes in innovative ideas that stand the test of the marketplace and bring measurable results. New economic challenges, new media and new industries cannot invalidate this old truth in advertising: creativity performs best when it is held accountable. By acting as fully committed partners to your business rather than mere service providers, we bring you the innovation and creativity necessary for growth both short and long term.

Cread’s work extends into a wide array of disciplines, most notably branding and retail marketing, as well as media advertising, direct marketing, devising innovative events and PR strategy, and digital and social marketing. Creating, sustaining and nurturing brands are becoming a focal point of Cread’s activities. Strong, distinctive brands resonate with target audiences, turning customers and consumers into loyals and friends. Our branding strategy promotes sustainability of our clients’ businesses, enabling them to grow and prosper even in the midst of financial crises.

GFin Corporate Services Ltd (GFin) is a full service licensed administrator in Mauritius. We are a focused low volume and high quality service provider, with a particular emphasis on providing a customized service to each client through a dedicated service group and constant access to the executive group leading the firm. -------------------------------------------------------------GFin’s principals have been on the clients’ side of transactions and their background provides the relevant experience and expertise to handle operational issues. The co-founders of GFin are Tej Gujadhur and Santosh Gujadhur. Tej is a UK qualified Chartered Accountant with over 16 years’ experience in financial services and asset management in Europe and the US and has been the COO/CFO of funds with several billion dollars in assets under management. Santosh is a US trained attorney who used to practice corporate law with Sidley Austin in New York and has assisted corporates and funds in various US-centric and global capital markets and investment transactions. GFin’s broader executive management team has a combined experience of over 50 years in very broad and diversified fields, including accounting, law, aviation, wealth management, investment management, real estate, trading and agriculture. GFin’s staff-to-client ratio is indicative of our desire to provide a service to

Dev Erriah is Head of Chambers at Erriah Chambers, which specializes in international tax law, international trusts law, international business laws, and all aspect of offshore business activities. He explains more about investing in Mauritius. -------------------------------------------------------------Mauritius has built its reputation as a safe and trusted jurisdiction. I think it is fair to say that Mauritius is now widely recognized as a proper international financial centre. We have the appropriate legal and regulatory frameworks; a sufficiently high level of expertise, a very attractive fiscal regime and our vast network of double taxation treaties make Mauritius an attractive and business-friendly jurisdiction for investment purposes. We currently have 14 such agreements with African countries, for example. Mauritius is now a quite experienced and proven jurisdiction in terms of attracting investments. We have been prominent internationally for more than a decade now – over the years, a considerable number of international banks, accountancy firms and funds have been incorporated in the country.

Company: Cread & Co Ltd Name: Vino B. Sookloll Email: cread@intnet.mu Address: Les 5 Palmiers, Royal Road, Beau Bassin Telephone: +230 454 6414 Fax: +230 454 6405

Mauritius does not impose any withholding taxes on dividends or interests as well as no capital gains tax. It is worth noting that there is no exchange control in Mauritius.

meet each client’s tax structuring, governance and investment objectives of using Mauritius. In the 30 months of operations, the total aggregate assets under management and investment of funds and other entities where GFin is the administrator is in excess of $2.8 billion. GFin’s aim is to provide each client a local Mauritian ‘CFO/GC’ service on an as-needed basis to provide the comfort and re-assurance of proper administration at local Mauritius level. Additionally, our competitors cannot offer such a dedicated service to thousands of pre-existing clients, a critical consideration in light of increasing use of anti-avoidance rules worldwide.

I am confident that 2014 will be yet another positive year for Mauritius with respect to its use as an international financial centre. I expect foreign investments in Africa through the Mauritius platform to increase quite considerably. -------------------------------------------------------------The chambers was set up in response to the demand for Mauritius-based lawyers with international exposure and specialized expertise in the fields of International Trust, International Finance, Banking Law, Shipping Law, Aircraft Finance and Leasing, Project Finance, Corporate & Commercial Law, Litigation and cross border insolvency, tracing and debts recovery. Erriah Chambers also acts as legal adviser and legal consultant to various banks in Mauritius and internationally. More than 80% of the chamber’s practice involves advising international clients, multinational enterprises, international law firms, the top ten international accountant firms, management companies, domestic and international banks.

Erriah Chambers Company: GFin Corporate Services Ltd Name: Tej Gujadhur and Santosh Gujadhur Web: www.gfingroup.com Email: tej@gfingroup.com / santosh@gfingroup.com Address: 9th Floor, Orange Tower, Cybercity, Ebene, Mauritius Phone: +2304043900 Fax: +2304043949

Company: Erriah Chambers Name: Dev R. Erriah Email: deverriah@intnet.mu Address: Erriah Chambers, Level 2, Hennessy Court, Pope Hennessy Street, Port Louis, Mauritius Telephone: (230) 208 2220

Acquisition International | December 2013 | 43

REGIONAL ROUND-UP: The New Rising Stars - Nigeria

The New Rising Stars - Nigeria 44 | Acquisition International | December 2013

REGIONAL ROUND-UP: The New Rising Stars - Nigeria

Tamuno Atekebo is a Partner at Streamsowers & Köhn, heading up the Corporate Commercial Group, Legislative Oversight and Related Government Activities Group as well as the Infrastructure & Privatisation Group. He discusses the attractions of investing in Nigeria with Acquisition International. ---------------------------------------------------------------------How would you describe the current business environment in Nigeria? Nigeria is a free enterprise economy where doing business is encouraged and several measures are put in place year on year to ensure that trade remains robust and accommodating to all participants, both local and foreign. What do you believe to be the key pull factors for foreign investors? There is a huge consumer base drawn from the estimated population of 160 million. Recently national GDP has been on the rise, exceeding the regional average, and so has disposable income, thus lifting the spending power of the people. Further, there is a marked increase in small and medium scale enterprises (SMEs) which are thriving, owing to technologicallydriven advances and government-backed measures to promote SMEs. In which sectors do the greatest opportunities for investors lie? The petroleum industry remains the biggest draw for investors. Nigeria is still Africa’s biggest exporter of crude oil according to the African Development Bank’s ‘Open Date for Africa’ portal. Recent efforts targeted at deregulation, including the part-removal of subsidies on petrol and work on a Petroleum Industry Bill targeted at industry-wide improvements, are bound to provide a boon to financiers and specialists in the oil and gas sector. Telecommunications and telecommunications-driven areas provide even more attractive opportunities as mobile telephony use has soared to about 114million users while internet usage has climbed from one million to well over 44 million users within a decade, as reported by the Nigerian Communications Commission. On the back of this unprecedented expansion in access to telecommunications services,

a glut of investors have poured capital into different facets of the sector including e-commerce, high speed broadband and mobile banking. What do you think the advantages of investing in a ‘rising star’ nation are compared to investing in the more established BRIC economies? MINT (for Mexico, India, Nigeria and Turkey) represents another influential bloc on the rise. The fact that analysts such as former Goldman Sachs analyst, Jim O’Neill (who also coined the term BRIC) are taking notice of Nigeria’s rise is a clear indication of the abundant investment opportunities available in Nigeria. In ‘rising star’ economies like Nigeria the primary advantage is that protectionist policies are rare. Foreign investment is seen as a boon and is heavily courted. Local participation in investment is even more welcome. All in all, it is a more favourable investment climate. How does Nigeria compare with its neighbouring countries? Nigeria is the biggest country in West Africa by population size and its GDP and investment opportunities outrank its neighbours as a corollary of that fact. There is also an unparalleled entrepreneurial spirit which marks Nigeria out ahead of most territories in Sub-Saharan Africa and, indeed, the world. Human capital is the most significant difference however, with a large market for goods and services and a greater workforce than its nearest competitors, Nigeria is a great destination for investment.

activities in Nigeria. Profiteering and entrepreneurial indelicacy are not welcome in Nigeria. What is Nigeria doing to encourage sustainable growth? A Power Sector Roadmap, which sought to unbundle the national electricity provider (Power Holding Company of Nigeria) into more efficient sub-entities, is already a key driver of growth. Unstable power, which has dogged the economy for years, will, if corrected, drive down the cost of doing business which is affected by power cuts and high expenditure on alternative power platforms. The award of contracts to private sector owners of distribution companies is the latest step in the bid to improve capacity and delivery in the sector. Since the banking crisis suffered in 2009-10, the Nigerian Central Bank has been focused on promoting accountability and increasing stability in the sector. Pronounced programmes targeted at economic diversification are all ways by which the Federal Government has announced its intention to carry on growing GDP well into the new millennium. Streamsowers & Köhn is the product of a merger between two leading commercial practicesStreamsowers & Co and Kohn Associates. We are a full-service commercial law practice with six distinct practice groups including Aviation, Dispute Resolution and Energy, Natural Resources and Environmental Law all working together to provide cutting-edge legal advice.

High levels of poverty have been identified as a concern for investors – what is being done to ease these concerns? Microfinance banking legislation was introduced to ease the flow of credit to the lowest income earners and start-up entrepreneurs. In the same vein, merchant banking was recently reintroduced to free up capital for those less able to procure financing from the established commercial banks. Increased alertness of the tax collecting agencies will also help redistribute income to bridge the gap between the very rich and the less privileged in the country. Investors have been encouraged to have community development and corporate social responsibility as the backbone of their

Company: Sreamsowers&Köhn Name: Chiagozie Hilary-Nwokonko Email: tamuno@sskohn.com Web Address: www.sskohn.com Address: 16D AkinOlugbade Street, Victoria Island, Lagos Telephone: +234 1 271 2276, +234 1 271 3846

Acquisition International | December 2013 | 45

REGIONAL ROUND-UP: The New Rising Stars - Nigeria

Strachan Partners is a well-regarded full-service commercial law firm with offices in Lagos - Nigeria’s commercial hub; and Abuja - the capital city of Nigeria. It is recognised by legal directories as one of Nigeria’s leading law firms. ---------------------------------------------------------------------Nigeria has the potential to be the fastest growing economy among the world’s top 20 economies from now to 2050. With a projected GDP of nearly US$4 trillion by 2050 and an annual average real GDP growth rate of around 6%, as well as a youthful and growing working population, Nigeria is projected to rank 13th among the world’s largest economies by 2050 if it can realise its full potential. Nigeria has also been ranked by UNCTAD as Africa’s number one destination for FDI for the second consecutive year (2011 and 2012). In 2010, Nigeria was the second largest recipient of FDI in Africa (after Egypt) with FDI inflow of US$6.09 billion. The government has demonstrated a will to create and encourage a conducive environment to attract and retain

domestic investors and FDI, so there are various levels of legal protection and incentives for foreign investors: • Nigerian law provides for compensation in the event of expropriation. • Nigeria has entered into bilateral agreements with various countries to provide protection for foreign investors – France, Italy, South Korea, The Netherlands, Spain, Switzerland, Taiwan, Serbia and Montenegro. Nigeria is also party to the World Trade Organisation. • Nigerian law provides for a large measure of capital mobility, for the protection for intellectual property, and for dispute resolution through arbitration as well as in national courts. All these are rights that are available to a foreign investor on a non-discriminatory basis. Numerous incentives are also available to entities in Nigeria, including: • 100% foreign participation in businesses is permitted, except businesses listed in the ‘negative list’ and regulated sectors, such as broadcasting. The areas of business that are prohibited – ‘the

• •

negative list’ – are applicable to both Nigerian and foreign investors. Sector-specific incentives eg the oil and gas sector. Tax holidays for pioneer companies that establish new industries or expand production in important sectors of the economy. Also non-tax incentives are granted to non-pioneer firms.

Company: Strachan Partners Name: Afoke Igwe Email: afoke.igwe@strachanpartners.com Web Address: www.strachanpartners.com Address: 5th, Floor, Akuro House, 24, Campbell Street, Lagos, Nigeria. Telephone: (+234 1) 2700721 2700722, 8720107

39B Eti Osa Way, Dolphin Estate, Ikoyi, Lagos, Nigeria Tel.: +234 1 4617684, 7409518, 7403785 Fax: +234 1 4621438

info@abrahamandco.com Abraham & Co. is a leading Nigerian Commercial law firm with a focus on Corporate Finance, Mergers & Acquisitions, Taxtion, Intellectual Property, Energy & Natural Resources, Aviation, Arbitration and Commercial Litigation. Our offices are located in Ikoyi, Lagos, the commercial hub of Nigeria. As leading Practitioners in our field we are committed to adding value to our clients’ businesses by keeping abreast of issues that affect the constantly changing business environment in which our clients operate to enable us to provide sound legal advice. Our clients comprise foreign and domestic corporations including some Fortune 500 companies. Our firm’s commitment to excellence makes us resourceful legal practitioners.

www.abrahamandco.com 46 | Acquisition International | December 2013

REGIONAL ROUND-UP: The New Rising Stars - Nigeria Patrick Osu is a partner in Ajumogobia & Okeke a leading commercial law firm in Nigeria. The firm’s main areas of practice are in corporate and commercial law, commercial litigation and arbitration/ADR, energy resources and environment, maritime and shipping, aircraft and aviation, and intellectual property. He frequently advises on foreign investment in Nigeria. ------------------------------------------------------------------Nigeria is the most populous country in Africa and the eighth largest in the world with a population of over 174million people. Its GDP grew to $262.61Billion in 2012, leading to an improvement in its global ranking from 44th to 36th. The country accounts for about 60% of intra-regional trade in West Africa due to its economic importance and population and its economy is projected to grow by an average of 7% in 2014.

The major challenges for the Nigerian economy are dependence on imported goods, lack of infrastructure, which includes power, and inadequate legal and regulatory policies. These challenges could, however, be tackled by the adoption of competitive policies that create a stable and attractive investment climate, encourage manufacturing and infrastructure development and put in place efficient legal and regulatory policies that further assure investment protection. However, in order to encourage sustainable growth, the Government has now increased its focus on national economic development in the power, infrastructural and agricultural sectors, the aim being to alter the structure of production and consumption activities while diversifying the economic base to reduce dependence on oil and foreign imports.

Nigeria has a dynamic business environment offering Africa’s largest domestic market with increased consumerism arising from the growth of the middle class. There is a potential for high yield returns, a lowcost labour pool and an improved capital market, and no African nation comes close as an available market. Nigeria’s attractions for foreign investors are the huge market availability, the country’s abundant natural resources and the increased government infrastructure spending and development in various sectors. Some of the key areas where opportunities exist for future investors in Nigeria are in the mining, power, oil and gas sectors, agriculture, infrastructure, information technology and communications. The tax incentives available and the exchange control regimes also encourage foreign investments.

Michael Orimobi is the managing partner of the Nigerian firm of barristers and solicitors Tokunbo Orimobi LP. He was recently ranked as a leading lawyer in Nigeria for capital market deals by the International Financial Law Review. -------------------------------------------------------------Tokunbo Orimobi LP (“TOLP”) was established in January 1979 and now has four partners as well as employing a considerable back up team. With offices in Lagos, Ibadan and Abuja, the firm is planning to open a New York office in the first quarter of 2014. Said partner, Michael Orimobi: “The motivating force behind Tokunbo Orimobi is our confidence and transactional ingenuity based on experience and the quality of human and material resources at our disposal. “On all our deals, we strive to be ‘primus inter pares’ (the first among equals) because for us at Tokunbo Orimobi, excellence and perfection are not Utopian ideals, they are the foundation of our practice and our working tools.” He added: “Our clients believe in us and we reciprocate that belief by exceeding their expectations at all times. Our partners believe strongly in the words of Napoleon Hill: ‘What the mind can conceive and believe, the mind can achieve’ and it is on this premise that they administer the firm.

Uche Nwokedi & Co (UNC) is a leading Nigerian law firm with a high degree of specialization in Energy and Natural Resources Law. The firm was established in 1990, primarily to render legal services to the oil industry, and to support the several joint venture companies then in operation. -------------------------------------------------------------UNC has been instrumental in the development of a legal framework for the exploitation of solid minerals in Nigeria. Principal counsel Mr Uche Nwokedi, a distinguished senior advocate and editor-in-chief of the law report, Nigerian Oil and Gas Cases, served on the Ministerial Committee of Legal Experts set up to review the minerals legislation in the Nigeria for the Nigerian government. The Committee was largely responsible for the current legal regime for the development of solid minerals in Nigeria. For the last 23 years UNC has been actively involved in many different aspects of negotiations, drafting of agreements, restructuring, privatization, and deregulation, and in the development of whole sectors of the economy, as well as their advisory work in relation to Oil and Gas law, Maritime law, Solid Minerals law, etc.

Name: Mr. Patrick Osu Position: Partner Company: AJUMOGOBIA & OKEKE e-mail: posu@ajumogobiaokeke.com Tel: +234 1 2719368-9 DL: +234 1 2711324 Fax: +234 1 2719882 +234 1 4622686

“Tokunbo Orimobi LP is where ingenuity, possibilities, team spirit, superior arguments and most importantly client satisfaction prevail and our mission is to be the global firm of choice and a benchmark for legal advisory services.” Listed and ranked as a recommended firm for finance deals in Nigeria by the International Financial Law Review, Tokunbo Orimobi LP have several areas of practice including corporate, project and structured finance, banking, insurance, business advisory, corporate, commercial and criminal law, energy, power and natural resources, private wealth services and taxation.

The firm’s litigation unit has been successfully involved in many complex and precedent setting cases, particularly in relation to concession interest acquisitions, and the regulatory authority approvals required. UNC won a landmark decision in the Supreme Court of Nigeria over the revocation of an oil prospecting licence, which settled for the first time, the rights of concession interest holders in Nigeria. Since 1990, UNC has evolved from a specialist oil and gas firm to a full service law firm with a team of dedicated lawyers and a full complement of highly qualified administrative personnel that are diligently selected. Other areas of the firm’s expertise include maritime law and practice, environmental law and practice, intellectual property, general corporate and commercial services, civil and commercial litigation, and consulting for and with major US/ European corporations and law firms.

TOKUNBO ORIMOBI LP

Firm: Tokunbo Orimobi LP Name: Michael Orimobi Position: Managing Partner Email: michaelorimobi@tolegalgroup.com Website: www.tolegalgroup.com Address: 5th Floor, 72 Broad Street, Lagos, Nigeria Telephone: +234 (0) 7098021693 - 4 Mobile: +234 (0) 8055190065; +234 (0) 8055190020

Name of Firm: Uche Nwokedi & Co. Contributor Name: Uche Nwokedi SAN Title: Principal Counsel Tel: +234 (1) 462 2389 E-mail: un@unc-legal.com Website: www.unc-legal.com Address: No 9 Military Street, Off King George V Road, Onikan, Lagos, Nigeria

Acquisition International | December 2013 | 47

A subsidiary of Abrempong Holdings, CIG Microfinance is currently one of Ghanaâ&#x20AC;&#x2122;s fastest growing micro finance institutions with an inherent disposition to become the best in the industry. With over 130 highly motivated, well trained and passionate staff, eight state-of-the-art branches and still counting , CIG Microfinance continues to offer an assorted bouquet of tailor-made financial solutions to the economically active poor, the unbanked, smart individuals with unique financial needs and thrivings SMEâ&#x20AC;&#x2122;s . Hence, our clientele base cuts across both the formal and informal sectors of the economy. While our primary goal is to ensure that the expectations of our clients are not only met but exceeded, CIG is also committed to delivering superior value to all stakeholders.

Address: Post Office Box GP21861, Accra Email: info@cigmicrofinancegh.com Telephone: 0249814990/ 0302982955

www.cigmicrofinancegh.com

REGIONAL ROUND-UP: The New Rising Stars - Nigeria

George Etomi & Partners (GE&P) was founded in 1984 and has grown to become one of the foremost commercial law firms in the country with offices strategically located in Lagos, Abuja and Port Harcourt.

Ongoing macro-economic and capital market reforms have sparked a re-evaluation of Nigeria’s economic prospects. In Africa, Nigeria is fast becoming the most appealing investment destination on the continent.

GE&P’s core practice areas include: Aviation Law, Banking Law, Capital Markets and Government Regulatory Liaison, Company Law, Construction, Energy and Natural Resources Law (Oil & Gas/ Power), Environmental Law, Project Finance and Telecommunications Law.

Amidst the subdued global economic performance, the Nigerian economy continues to grow at a relatively steady pace. GDP growth in the 3rd quarter of 2013 at 6.56% is significantly higher than the Sub-Saharan Africa average of 5.6%.

Over the years, we have rendered professional services in the field of Corporate Law - more particularly relating to company formation, company restructuring, mergers and acquisitions, privatizations and Initial Public Offers - to over 20 indigenous companies. GE&P Nominees Limited, representing the Secretarial Arm of the firm, has served as External Company Secretary to companies, efficiently performing secretarial services in full compliance with the Companies and Allied Matters Act, 1990.

Nigeria is strategically positioned to leverage on its expeditious growth rates and also its growth in market size thus giving it the potential to regain its position as Africa’s economic giant.

As a result, the total value of Foreign Direct Investment in Nigeria in 2012 was approximately $6.8billion, representing an increase of 17.24% from the previous year. We have noticed sustained growth in the country as activities in the non-oil sector remain the catalyst for growth in the Nigerian economy. The sector’s growth was driven by activities such as building and construction, hotels and restaurants, real estate services, manufacturing, finance and insurance and solid minerals, among others.

Company: George Etomi & Partners Name: George Etomi Email: George@geplaw.com Web Address: www.geplaw.com Address: No 1b Prof Tiamiyu Belo Osagie Street, Off Layi Ajayi Bemebe Road, Parkview Estate, Ikoyi, Lagos, Nigeria.

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REGIONAL ROUND-UP: A positive spin on Hungary’s economy

A positive spin on Hungary’s economy

Innovation the answer for Hungary’s economy

Innovation is steadily allowing Hungary’s economy to emerge from recession. As a result, the investment opportunities are moving away from traditional trade areas and into IT and technology. Agriculture too may be worth investigating. The country has taken the lessons of the downturn to heart and has raised the quality of work in a bid to prevent the problems reoccurring.

Company: Danubia Patent & Law Office Name: Michael Lantos Email: central@danubia.hu Web Address: www.sfihealth.com; Address: 16 Bajcsy-Zsilinszky út, Budapest, H-1051 Telephone: (+36 1) 411-8700 Fax: (+36 1) 266-5770

Company: Gide Loyrette Nouel Web Address: www.gide.com Address: Széchenyi István tér 7-8. “C” Mag - 4th Floor, 1051 Budapest Name: Eszter Kamocsay-Berta Email: eszter.kamocsay-berta@gide.com Telephone: +36 1 411 74 00 Name: Akos Kovach Email: kovach@gide.com Telephone: +36 1 411 74 00

Patent attorney and deputy managing partner at Danubia Patent & Law Office Michael Lantos explains the country is attractive to investor due to its highly educated and skilled workforce, excellent telecommunications, good infrastructure and friendly people. “Hungary combines modern education and knowledge with innovative traditions,” he says. “The IP protection system is modern and reliable and in the field of protecting intellectual property the awareness of the

Gide Loyrette Nouel Budapest is an international law firm devoted to business law and focused on assistance to foreign investors in Hungary and South-East Europe. -------------------------------------------------------------The current business environment in Hungary is substantially defined by structural reforms and anticrisis measures that are set to gain a strong hold on the economic situation. Even though Hungary has undergone a multitude of challenges, it is an attractive market for foreign investors from various industry sectors. The Heritage Foundation Index of Economic Freedom has ranked Hungary 22nd out of 43 countries in the European region whereas Hungary’s overall Doing Business 2013 ranking is 54 out of 185 economies. This shows that in respect of investment regimes Hungary’s overall score is well above the world average. The key pull factors for foreign investors primarily include its skilled workforce with sufficient language commands at optimal costs, Hungary’s central location in Europe offering proximity to various markets combined with a tightly-networked highway network and with high intensity of incentives for direct investments.

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significance of the fight against counterfeiters and pirates has increased. Our office does its best to make sure that the fight against counterfeiters bears fruit for the owners of IP rights.” Danubia is a full service IP law firm that has a 64-yearold tradition of providing high quality and reliable services. It is the oldest and largest IP Law firm in Hungary. Its partners have played key roles in leading litigation proceedings in Hungary in all fields of IP and are proud that their practice before the EPO and OHIM is also substantial and with a high rate of acceptance. Clients often mention the team’s friendly attitude and recognize the high degree of expertise. Each case is normally handled by the same patent attorney from the beginning to its conclusion but complex cases are allocated to teams of patent attorneys and IP lawyers to allow multiple viewpoints and the highest expertise to consider the issues.

The greatest opportunities for investors lie in the manufacturing sector in general, whereas the automotive sector and the booming of the logistics, IT and shared service centers are frequently referred to as the steamengines of the Hungarian economy in particular. Automobile manufacturers such as Audi, Daimler and GM attract a large number of suppliers to move to Hungary. In order to ensure economic growth, the Government of Hungary offers a wide range of incentives. These incentives include cash subsidies, generally granted from EU Funds, tax incentives, low-interests loans or land available for free or at reduced price. Additionally, the Hungarian government entered into a great number of strategic partnership agreements with a considerable number of multinational enterprises. In order to ensure more sustainable economic investments, it will be inevitable to shift from a business environment stimulated by a large scale of incentives granted on a case by case basis to a predictable regime of legal certainties which appeals to a broader band of investors.

REGIONAL ROUND-UP: Forming an SME and trading in / Romania: on the rise to economic recovery

Business in Turkey, a rising star in the region Nowadays, in many articles in economy magazines and sections, Turkey is being defined as ‘a rising star in the region’. Its long lasting political stability, political changes and improvements in the EMEA region, and a prospering Turkish economy despite the global recession, created a new environment in which Turkish companies and products find more opportunities around the world.

Being close to necessary resources and the main consumer markets, in Central Europe and Middle East and their surrounding countries, every business has an opportunity to grow faster than in any other country in the world. Establishing an SME in Turkey is now very attractive for investors regarding initial costs and simplified formalities, after many enhancements recently made by legislative actions.

labour, environmental, social and financial procedures which all companies have to comply with.

99.8 % of the companies in Turkey are SMEs, supplying 81% of the employment and creating 59% of the added value.

Hence, Turkey has a unique strategic and political position. Considering the Arab Spring and EC membership, Turkey has every positive key factor to cultivate successful businesses. These factors are shaping a modern country with qualified young work power, a sophisticated communications backbone, and a very effective banking system. Continuing and improving integrations with both western and eastern cultures, protective measures and safety regulations are also aligned with all EC requirements which provide a stable and secure working atmosphere. Increasing numbers of foreign investors shows that it’s the right time to start a business in this country.

Destek Global’s solid experience in all aspects of the requirements to do business in Turkey provides reliable support to its customers, and a wide portfolio of services starting from the feasibility phase to executive search and selection processes. We have a network of experienced consultants providing fast and useful services in every region and every sector, not only in Turkey but also in other countries in the region.

In the light of all these arguments, many new companies are being established daily, while many other foreign investors are searching for M&A options and available investment projects.

Company: Destek Global Name: Mehmet Emre Vural Email: info@destekglobal.com Web Address: www.destekglobal.com Address: Polaris Plaza, Ahi Evran Cad. No:21 Cat:17 34398 Maslak, Istanbul, Turkey Telephone: +90 212 346 34 20 Fax: +90 212 346 34 21

Due to very aggressive export target for the year 2023 (500 billion USD per year), Turkey and its governance developed many new priorities, subsidies and common supports for the new SMEs especially in the new developing cities. For many different sizes and sectors, through six stages of subsidies, Turkey provides tax exemptions, social security support, branding and innovation incentives. As the government in charge takes serious steps to solve ethnic problems in south-eastern Anatolia, huge agricultural capacity and integrated economical possibilities with Iraq and Syria will be unleashed, which will lead Turkey to enter further lucrative businesses with other Arab countries in the future. On the other hand, the European Community membership procedures are also moving forward albeit slowly, but may bear fruit in the near future.

However, as in every modern economy, Turkish working environment and legal regulations apply many

Destek Global, a 30 year-old consulting company headquartered in Istanbul, with a country wide presence via nine liaison offices and 200+ employees, has very close and reliable support capabilities all over the country and the region.

Romania: on the rise to economic recovery

The Romanian capital market is on the rise… Dragos Neacsu, CEO at ERSTE Asset Management Romania and President of the Romanian Asset Managers Association explains more. ---------------------------------------------------------------------The dual listing of natural gas company Romgaz (Bucharest and London via GDRs) gave us the opportunity to bring forward the Romanian capital market and also equity funds with an exposure on Romanian equities among local and foreign investors. The small investors showed their increased interest as they oversubscribed by 18 times the EUR 60m public offering retail tranche! The end of 2013 will see, for the first time, the most important domestic institutional investors (privately managed pension funds and mutual funds) breach the 5% of GDP milestone. Investment grade status is expected from S&P in 2014, and there are a few major energy and utilities listings in the pipeline.

Romanian assets still have a significant gap in their valuation by foreign institutions, due to a historically limited and opportunistic presence on the international markets, almost exclusively via sovereign issues. Bond funds can represent an opportunity for investors that are looking for short to medium-term investments. Erste Asset Management Romania offers an extensive range of asset management services and products and is part of Erste Asset Management Holding (EAMH), which coordinates and is responsible for all asset management activities within the Austrian based ERSTE Group Bank. EAMH manages assets worth about 46 billion Euros (per 31.12.2012) in its locations in Austria, Germany, Croatia, Romania, Slovakia, the Czech Republic and Hungary. After just five years, ERSTE Asset Management Romania is the market leader in the local funds market and manages over 5.5 billion lei (EUR 1.2bn) for more than 110,000 investors (end November 2013). Our

focus is on delivering high-quality investment services while promoting the European standards in fund classification, transparency and enhanced distribution capabilities into this fast-growing emerging market for investment products.

Company: SAI Erste Asset Management Name: Dragos Neacsu Email: dragos.neacsu@erste-am.ro Web Address: www.erste-am.ro Address: 14, Uruguay Street, sector 1, 011445, Bucharest, Romania Telephone: +40 372 269 989

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REGIONAL ROUND-UP: Forming an SME and trading in…

Colombia With over 50 years of professional experience, Cavelier Abogados has always been known for acting with the highest standards of efficiency, honesty, permanent care and personal attention to its clients. The firm currently has a team of approximately 40 specialized lawyers from the top universities in Colombia and abroad, most of them bilingual (particularly in English and French), who are distributed between its offices in Bogota and Medellín. Colombia has been increasing the number of Free Trade Agreements signed with countries from other regions, such as with the United States, Canada, Chile, the European Union, South Korea, and many other

Company: Cavelier Abogados Name: Martha Bonett Email: marthabonett@cavelier.com Address: Carrera 4 No. 72-35 Telephone:571 3190250

are currently under negotiation, which simplifies the circulation of goods and services. Colombia has also entered into double taxation agreements with Chile and Spain, as well as Agreement 578 of the Andean Community of Nations, which comprises Colombia, Ecuador, Peru and Bolivia. Setting up a company in Colombia is very simple, as a new associative figure was created in 2008 known as a Simplified Joint-Stock Company (SAS, for its initials in Spanish), which greatly simplified the requirements for incorporation of companies in Colombia. The process for incorporation of a SAS consists, in general terms, of a voluntary agreement reflected in a private document and including the company’s articles of incorporation. This document is subject to registration at the chamber of commerce with jurisdiction in the domicile of the corporation. Once registered at the trade register, the company must process its registration with the national tax authority and in the municipality in which its activities are to be performed, for which it is required to open a bank account attesting to their financial relationship. According to Colombian law, there are other types of companies, such as the Sociedad Anónima

(corporation) or the Sociedad Limitada (limited liability company), where, although there are stricter formal requirements for their constitution, they can meet the needs of investors. Likewise, and for those cases where companies do not wish to set up an independent company in Colombia, they may ultimately opt to establish a branch of the foreign company. However, to carry out commercial activities in Colombia, it is necessary to set up a place of business in Colombia, either through a partnership or through a branch. The government has created a number of tax benefits for businesses setting up in Colombia: these allow employers to pay their income tax progressively over the first five years of operation, including two years with a 0% tax rate. However, that the 9% corresponding to CREE tax is paid from the first year of activities. Currently Colombia is a country with a good status for foreign investment. In recent years, Colombia has developed a new relationship with the world and, as result of that, different companies from around the world are interested in establishing either a company or a branch in Colombia. Our corporate experience can help the new investors to obtain the benefits available in Colombia for new companies.

Greece by Athanassios G. Carayannis, CEO of PHOENIX ECTS LIMITED, a leading international freight forwarder, logistics services provider and supply chain management company, established in 1991 in Greece with its head office at Piraeus and offices in Thessaloniki and Athens Airport. ---------------------------------------------------------------------SME trading in Greece has traditionally been seen as opportunity to import products and services for distribution in the local Greek market. Imports considerably exceeded exports. The country maintained an inflated and inefficient public sector and financed its growth mainly through sovereign debt. However, disposable income was increasing and this supported transaction costs of SME formations who had found space for supernormal profit. In the years following the 2008 crisis, this model collapsed. The country came under a bail out agreement with EU,

Company: PHOENIX ECTS LIMITED Name: Athanassios Carayannis Email: agc@phoenixltd.gr Web Address: www.phoenixltd.gr Address: Akti Miaouli 85, Piraeus 185 38 Greece Telephone: +30 210 429044

IMF and ECB providing loans on tight conditionality to reform its economy. Austerity measures were taken to implement reforms, downsize the public sector and control tax evasion. The toll was unprecedented: the economy lost more than 25% of its GDP. Several SMEs went bankrupt or wound up, including an array of freight forwarders and logistics providers. Privately held Greek bonds took a haircut. Unemployment rose to 26%. Banks cut credit as they sought to recapitalise after the dramatic increase of their bad debtors. SME finance became scarce. Under such circumstances, SMEs seek to re-define their role and market positioning. To do so they have to study external environment conditions and changes in political, economic, sociological, technological, environmental and legal factors. Furthermore, the internal environment of these firms should adapt to globally accepted business competences and capabilities. It is now all about developing novel products, services and processes that are difficult to imitate and exporting them. This enables the formation of distinct competitive advantage to offer superior value to buyers in terms of quality, special features and after sales service for sustainable growth and development. The challenge is to mindset on niche activities and focus on differentiation strategies to serve effectively global market segments where customers appreciate specialisation, bespoke service, quality and compliance.

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In this context PHOENIX has developed a unique portfolio of internationally accredited competences in the freight forwarding, logistics and supply chain industry. Company certifications include AEO, Quality ISO-9001:2008, Environmental Management ISO14001:2004, IATA Cargo Agent and Business Ethical Conduct. Furthermore through global cargo alliances and partnerships PHOENIX has developed an extensive global agency network. Strong points in favour of Greece are its membership of the EU and Eurozone, its infrastructures and potential to become the economic hub of Southeast Europe. In 2013, for the first time after the crisis, Greece generated operational surplus in its public finance. Several multinationals took FDI in Greece or negotiated terms with the Greek government. Among them are companies like Cosco, Hewlett Packard, IKEA, Dell, LG, Samsung, Lenovo, ENI and ArcelorMittal. It is now more convenient and inexpensive to set up a company in Greece. Capital requirements have become very modest. According to the EU, in October 2013 the average time required to initiate a company in Greece and start trading has dramatically improved to an average of five days and the cost of initiation is less than €1,000. Furthermore costs of renting, leasing or acquiring business premises, after deflation of the real estate market, are very attractive. Educated and skilled staff members are available to hire and employment laws have been relaxed.

REGIONAL ROUND-UP: Forming an SME and trading in…

Forming an SME and trading in customs brokerage Democratic Republic of the Congo William Katunda is the key account manager at DHL Global Forwarding Congo; he talks to Acquisition International about trading in the DRC. ------------------------------------------------------------------The socio-political and economic context, namely factors like armed conflicts or inefficient fiscal policy in the Democratic Republic of the Congo, have deeply influenced traditional plans for setting up our organization as an authorized customs agent in this location. From DHL’s perspective, the availability of market demand and the stability of the local economy as well as a good fiscal policy should be accurately assessed before forming a new logistics firm and/or branch. This could also be true for any other organization or industry in the jurisdiction. When it comes to setting up a new business in the country, no prior authorization is required and the registration with the Congolese Federation of Enterprises is to be regarded as a winning asset. To start trading, businesses must obtain the Trade Register Certificate, the National Identification

Number, the Tax Registration Number and present their Articles of Incorporation along with an application for the customs brokerage license at the Customs Department, Ministry of Finance. Currently there is a positive trade environment and the business climate improved considerably. This is the result of heavy corrective measures against administrative harassment and financial opacity taken at decision-making level. Still, more could be done to establish a leaner registration policy for new businesses, with reduced administrative steps to encourage investment. On the other hand, we have strong expectations for a massive registration of mining and construction companies in 2014. Investors can gain particular benefits from the Single-Customs- Wicket (sort of an administrative one-stop-shop) Procedure for importexport transactions in the DRC. This provides more benefits to commercial operators when it comes to saving time in administrative steps or reducing the number of state services involved in a trade transaction.

Iran

T&S Associates (TANDS HAMKARAN) is an Iranian law firm (first established over 60 years ago under the name of Ghani & Tavakoli and subsequently Tavakoli & Shahabi prior to its registration under its current name) that has specialized, over the past six decades, in providing international companies, firms and banks with high quality legal advice on doing business in and with Iran. Notwithstanding very significant changes in the political and economic landscape over recent years, the firm has continued to maintain its reputation as a purveyor of prompt, loyal and reliable advice to its foreign clients. In the event that the international sanctions that are currently applied to Iran are lifted in a manner that would be conducive to the permanent reestablishment and development of business relations between foreign concerns and Iran, the Iranian economy would be in a position to offer tremendous benefits to the foreign business community. The enormous potential of Iran, with its boundless natural resources, skilled pool of human resources, insatiable consumer market and urgent need for development projects all indicate the country’s magnetic appeal to both local and foreign business concerns.

At DHL we are happy to help any organization considering trading in the DRC in asking them to observe strict compliance to the laws and regulations in force in the country. We will work in a clientele/ partnering relationship to acquaint them to relevant local and/or international customs laws and regulations related to their traded commodities.

Company: DHL Global Forwarding Congo S.A. Name: William Katunda, Key Account Manager Email: William.katunda@dhl.com Web Address: www.dhl.com Address: 4630 Avenue de la Science, Kinshasa – Gombe, Congo (DRC) Telephone: +243818850500; +243817109409

Imam Square, Naqsh-e Jahan Square viewed from Ali Qapu, Isfahan, Iran

Certain foreign concerns may find it expedient to do business with Iran by means of off-shore supply to local distributors with or without the existence of a locally registered entity to monitor their local representatives. Iranian law has no regulatory corpus dedicated to distributorship; this situation allows a good deal of flexibility to private conventions between principal and distributor. However, the authorities have in the recent past introduced certain administrative rules that tend towards protecting distributors’ rights. Other foreign concerns may, however, decide it more advantageous to make direct investments in Iran through joint venture arrangements with established local entities and supply the local market directly from within. Such joint ventures may either implement green field projects or result from foreign acquisition of existing local companies. Foreign investors may file for a license to obtain certain advantages that may be found in the currently applicable foreign investment regulatory corpus. The establishment and registration of any type of legally recognized registered entity in Iran is not problematic or particularly time-consuming, provided

that all documents required in form and substance by the Companies’ Registrar are presented in a timely manner. The relevant authorities have not demonstrated resistance to the establishment of foreign business or entities – on the contrary. One may only hope that, with the gradual elimination of international sanctions, Iran will finally demonstrate its full potential as a market that could offer tremendous economic opportunities to both the international and local business communities.

Firm: T&S Associates (TANDS HAMKARAN) Email: mailroom@ts-associates-counsel.com Web address: www.ts-associates-counsel.com Address: Suite #3, 20 Esfandiar Boulvard, Afrigha Avenue, Tehran, Iran Telephone: +98 21 88 08 00 42.

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SECTOR SPOTLIGHT: Financing the 2014 shipping industry

Financing the 2014 shipping industry

Mohamed Idwan (Kiki) Ganie is the Managing Partner of Lubis Ganie Surowidjojo (LGS). He graduated from the Faculty of Law of the University of Indonesia and holds a PhD in Law from the University of Hamburg, Germany. Dr Ganie has completed further studies at the Institute for Advanced Legal Studies in London, UK; the Max Planck Institute for International Private Law in Hamburg, Germany; and in political studies at the Staatswissenschaftliche Fakultaet of the University of Zurich, Switzerland. Dr Ganie has more than 30 years of legal experience, and specializes in commercial

Company: Lubis Ganie Surowidjojo Name: Mohamed Idwan Ganie Email: ganie@lgslaw.co.id Web Address: 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

transactions and commercial litigation, including alternative dispute resolution and has acted as an expert in a number of court and arbitration proceedings. His expertise covers general corporate/company law, mining, investment, acquisitions, infrastructure projects/project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance. In the course of LGS’ more than 28 years of service, we have secured our position as the premier Indonesian corporate transaction and commercial litigation law firm. This combination of commercial law experience and litigation uniquely positions LGS to deal with the full range of commercial issues faced by our clients. We have experience representing a diverse range of clients, including domestic and multinational corporations, public and private companies, Government instrumentalities and State Owned Enterprises. We work closely with our clients to understand their problems, determine their needs, and arrive at practical solutions that are both cost-effective and viable over the long term. LGS has obtained Lloyd’s Register Quality Assurance certifications of ISO 9001:2008 for Quality Management systems and ISO 14001:2004

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for Environmental Management systems to ensure the quality of the firm’s operations. Dr Ganie explains that following several shipping companies running into debt trouble, including defaults and subsequent restructurings, the environment is accordingly challenging. “This is combined with the overall view of the shipping sector, which has faced economic problems and excess capacity over the recent years,” he adds. “Nonetheless, with the rebound in the US economy it should be expected that the medium term future will see improvements in this area, which should accordingly translate into availability of financing options. “Bonds are becoming increasingly popular in the broader Indonesian market, mainly due to the recent increase in interest rates by the Indonesian central bank, which has translated into a higher cost of borrowing from banks. The shipping industry, however, has a recent history of financial troubles that it needs to work through before the bond markets become a particularly attractive option. However, the option does remain open, especially for companies that can demonstrate the soundness of their business to potential bond investors.”

SECTOR SPOTLIGHT: Arbitrating maritime disputes

Arbitrating maritime disputes - USA With 90% of the world’s cargo travelling by sea the maritime industry is inherently open to risk. The global financial crisis has only added fuel to the fire, with disputes increasing in all areas of commerce, shipping and international commodities. Disputes arise in a multitude of areas: damaged cargo, detention and demurrage, general average, hazardous ports and cargoes, pollution, limitation of liability, personal injury and piracy – the list could go on. Arbitration is, without doubt, the preferred method for settling maritime disputes but the question is where to go? It is estimated that thanks to its historical position, proven track record and wealth of specialists London handles around 70% of the world’s maritime arbitrations. But with cost playing an ever-important role, financial restrictions have encouraged more and more companies to look at alternative regional maritime arbitration centres, which may allow them to get the desired outcome at a reduced price.

S V Anchan is the president of Safesea Transport Inc and Samrat Container Lines, which is one of the few groups that has the following shipping expertise under one umbrella: ship operations , chartering , feeder ops , consultancy , NVOCC , FF , bulk and break bulk , warehousing , distribution to name but a few. He talks to Acquisition International about arbitrating maritime disputes in the US. ----------------------------------------------------------The US is very effective as a maritime arbitration seat. However it’s an established fact that the UK controls the maritime industry in terms of marine insurance and maritime law. So, although we have the requisite infrastructure here, the UK has more options. But it’s important to remember that the US controls a far greater fleet when compared to the UK and most of the European nations, so the industry has a wealth of experience. The Federal Maritime Commission is effective and there is a strong chamber of shipping.

Everyone involved in the industry accepts that maritime arbitration plays a vital role in maintaining the just and fair settlement of industry disputes. In fact, when it comes to impartiality and convenience I would give the US a score of at least eight out of ten. The main challenge parties who wish to use the US as a maritime arbitration seat face is to find multiple choices of arbitrator with diversified ground experience as their exposure to international trade is limited. This is because so many contracts are tagged with UK law and arbitration. It is difficult to predict the future because so much depends on whether the coal mining industry is revamped. We have seen a decline in the number of US flag vessels but a virtue of changes to the coal mining industry would be the growth in the fleet of smaller US flag tonnage. If the mining industry doesn’t grow,

then I do not foresee any changes for the next decade as the shipping industry itself is likely to remain stagnant. At the moment the Jones Act requires that all goods transported by water between US ports be carried in US flag ships, built in the US, owned by US citizens and crewed by US citizens. The Act is nearly 100 years old and I would like to see changes to it. As well as helping traders, changes to the Jones Act might also have an impact on the US’s place as a maritime arbitration centre.

Company: Safesea Transport Inc Name: S V Anchan Email: svanchan@sstiusa.com

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SECTOR SPOTLIGHT: Arbitrating maritime disputes / Arbitration Seats

Arbitrating maritime disputes - Greece Victoria Liouta has a vast legal background in shipping and is the founder and Managing Director of Vilmar International SA, a company with established offices in Greece. She explains the benefits of Greek maritime arbitration. --------------------------------------------------------------The benefit of arbitration in Greece is speed. The parties have greater flexibility in establishing the procedure to be followed. There is no need to follow the Civil Procedure Rules, which can be too restrictive at times. Arbitral awards are not subject to appeal, although they may be subject to an application for setting aside. Arbitration in Greece has become an alternative dispute resolution procedure for maritime

Vilmar International SA Company: Vilmar International SA Name: Victoria Liouta Email: vliouta@vilmar.gr Address: 107-109 Filonos STR. Piraeus 185 36 Greece Telephone: 30 210 4511615

disputes; international recognition ensures reliability and it produces high quality results at lower cost and within a shorter time than other international arbitrations. Piraeus’ gradual development into one of the main centres of international shipping has led to development of Greek law of arbitration. The lex arbitri – if Greece is the place of the arbitration – is the new Greek law on international commercial arbitration (in force since 1999; Law no. 2735/1999), by which Greece adopted the well-known UNCITRAL Model Law on international commercial arbitration. This means that the old regime of the Greek Code of Civil Procedure, which governs domestic arbitrations is not applicable, and so the parties will have a legal regime almost identical to the laws of around 50 countries around the world that have adopted the UNCITRAL Model Law, instead of a peculiar and unknown national legislation. Greece’s popularity is further enhanced by its geographical location: it is the place which joins Western and Eastern cultures. As a result, foreign ship owners and merchants are able to recognise Greece as a neutral location and representatives of all shipping disciplines congregate here. Although Greece is experiencing difficulties, the shipping industry is still strong. Greek ship owners

lead the industry and have faced challenges successfully through the years. Arbitration in Greece is equally recognised to be mature by ship owners. Despite not being a popular arbitration seat yet, there is considerable knowledge, expertise, professionalism and impartiality in the Greek system. Costs are paid by the party making the claim and by a party making a counter claim. Each arbitrator is entitled to a fee calculated in levels on an ad valorem basis on the value of the amount in dispute, based on a special table of fees determined and periodically readjusted by the Arbitrators’ Association. The parties also bear all expenses relating to the conduct of the arbitration, including but not limited to travelling expenses of arbitrators, and travelling expenses and remuneration of witnesses called by the arbitral tribunal. Vilmar invests in providing the tools to serve its clients and meet their expectations in the shipping industry. Vilmar deals with maritime claims and provides both commercial and strategic considerations. For the past 18 years Vilmar has primarily focused on finding the best solution by keeping the necessary standards and relationships that regulate shipping business worldwide. It combines understanding and know-how together with legal expertise and a practical approach to provide efficient ways of answering its clients’ – usually ship owners and Clubs – needs.

Arbitration Seats - Weighing up the Pros and Cons – Hong Kong By Louise Barrington , Aculex Transnational Inc ----------------------------------------------------------------Aculex is a small service company specialising in dispute resolution, both by mediation and arbitration. It handles cases in Hong Kong, in many Asian jurisdictions, in Europe and America. Aculex provides highly professional service with an eye for efficiency, tailoring the process to the needs of the parties. After 142 years as a British colony, since 1997 Hong Kong once more belongs to China. However the ‘one country, two systems’ regime means it retains its common law tradition and court system, as well as English as an official court language. A specialised judge, responsible for construction law and arbitration, understands the fundamental

Company: Aculex Transnational Inc Name: Louise Barrington Email: info@aculextransnational.com Web Address: www.aculextransnational.com Telephone: 852 64090356 (HK) 1 416 848 0203 (Toronto)

principles underlying arbitration, so Hong Kong has a well-deserved reputation as an ‘arbitration friendly’ jurisdiction. A Model Law jurisdiction, although with some extra provisions to respond to Hong Kong’s unique situation, the arbitration law is accessible and modern, having recently been updated to incorporate the 2006 amendments to the Model Law. Hong Kong is a major arbitration hub, not only within Asia, but also for parties who have disputes with China, but prefer to arbitrate in a neutral forum. The Hong Kong International Arbitration Centre, which recently celebrated its 25th anniversary, is an arbitration commission, but also a centre of excellence, supporting many Hong Kong dispute resolution organisations, and hosting events for the dispute resolution community. HKIAC’s recently revised rules are among the most modern in the world, including provision for emergency arbitrators prior to the constitution of the tribunal. A sophisticated, comfortable and cosmopolitan jurisdiction, a pool of excellent arbitrators, broad language and support services, geographical proximity to mainland China, excellent transportation and infrastructure: all these factors contributed to the ICC’s choice of Hong Kong for

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its very first ‘outpost’, ICC Asia. Now parties may submit requests for ICC arbitration to a dedicated Asian team, and receive the same high-level service they expect from Paris. More recently, CIETAC last year established its first office outside mainland China. As more arbitrations take place between parties without connections to Europe or America, Hong Kong is seeing a steady and significant increase in arbitrations. Institutional arbitration appears to be the preference, but there are also many ad hoc cases taking place every year. Although the cost of legal services can be a drawback, parties may use anyone they wish to represent them in Hong Kong arbitrations, so many bring their own lawyers, retaining Hong Kong counsel on a consulting basis as necessary. Hong Kong is also the home of the Vis East Arbitration Moot, which brings over a thousand students and arbitrators to the territory each year. Many return to practice law and arbitration, adding to the cosmopolitan nature and broad spectrum of expertise available. Today, many international law firms are setting up shop in order to share in what they perceive as a growing market. For Hong Kong as the arbitration hub of Asia, the future is bright.

SECTOR SPOTLIGHT: Arbitration Seats

Arbitration Seats - Weighing up the Pros and Cons – Switzerland Gilles Thieffry is the founding partner of GTLaw, an exclusive law firm based in Switzerland specialising in commodity trading and finance law, with a particular emphasis on commodity finance. It advises parties in commodity trading arbitration. Gilles Thieffry also acts as arbitrator. -------------------------------------------------------------Switzerland’s reputation for impartial diplomacy is reflected in its position as one of the ‘big four’ arbitration seats. Geneva in particular is a worldwide centre for diplomacy, which makes it a popular arbitration seat due to its international character, its highly qualified professionals and the modern and flexible Swiss arbitration law. Gilles describes Switzerland’s impartiality and convenience as an arbitration seat as ‘first class’ – parties have a high degree of autonomy, the system is efficient and there is the option of an expedited procedure should parties agree to use that route. Gilles has over 25 years’ experience, primarily in the City of London where he was a partner in two leading international firms. Gilles can properly be regarded as one of Europe’s leading specialists in commodity finance, structured finance, derivatives and commodity trading.

As a small, highly focused, practice without the infrastructure and overheads of a major law firm GTLaw is able to offer a value added service at highly cost-effective rates. The firm’s philosophy is based on personal service. Clients instructing GTLaw will not find that their matter is dealt with by someone they have never met. Nor will they pay for teams of assistants and trainee lawyers. Indeed GTLaw is very happy to work alongside a client’s regular, mainstream, legal and/or accounting advisors. Who should instruct GTLaw? Any organisation or individual requiring specialist advice on a complex financing transaction from a recognised specialist who will provide a dedicated personal service, combining extensive experience with a multi-cultural approach, at a reasonable cost. For example, if the following applies to you, then you should probably speak to GTLaw: • I need specialist but practical advice from a senior, experienced practitioner who provides strategic advice as well as legal advice • Value added is more important to me than ‘brand’ recognition • I want an advisor who will wish to develop a long-term professional relationship based on mutual trust

• I don’t want a lawyer who will endlessly argue about trivial drafting points • I want a lawyer who will build good working relationships with other lawyers involved in the arbitration On the other hand, GTLaw may not be the firm for you if the following applies to you: • I need to field a team of lawyers in several jurisdictions working for the same firm • I am happy for the work to be delegated to junior lawyers • I need, for internal constitutional reasons, to be seen to employ a big internationally recognised law firm.

Company: GTLaw Name: Gilles Thieffry Email: gilles.thieffry@gtlaw.ch Web Address: www.gtlaw.ch Address: rue de la Scie, 1204 Geneva, Switzerland. Telephone: +41225929495

Arbitration Seats - Weighing up the Pros and Cons – UAE Jacqui Record is a Director with Deloitte Forensic Middle East and has over 20 years’ experience of complex disputes and forensic investigations. Jacqui has testified both in the UAE and internationally. Deloitte Forensic ME is a full service Forensic practice, with services including Dispute Resolution, Forensic Investigations, Forensic Technology, Fraud Risk Management, Financial Services Regulatory Consulting and Business Intelligence. Deloitte was recently ranked #1 in Forensic and Dispute Advisory Services by Kennedy. -------------------------------------------------------------The key arbitral bodies within the UAE are the Dubai International Arbitration Centre (DIAC), Dubai International Financial Centre – London Court of International Arbitration (DIFC-LCIA) and Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC). In addition, as elsewhere, ICC and Uncitral Rule Arbitrations may also be run in the UAE. The Rules for all the Arbitral Bodies broadly follow International standards and Uncitral Model Law. DIAC is currently the most popular choice for UAE-based arbitrations and is the arbitral body written into many local contracts pre the global financial crisis that are currently arbitrating. ADCCAC has very recently updated its rules for

the first time in 20 years, which may improve its popularity particularly for Abu Dhabi-based disputes, although the new rules will, no doubt, need to be tested.

Whilst cost structures vary slightly between the arbitral bodies, generally costs are on a par with international arbitration cost structures elsewhere in the world.

Local enforcement of awards for both local and international arbitrations is through the UAE courts. These courts require that proceedings are in Arabic and require the use of a local Arabic legal team. UAE law is founded upon Civil Law principles and Islamic Sharia’a law, and as such is unfamiliar to many more used to Common Law or Western legal systems. Whilst the UAE is a full signatory to the New York convention, the application of local law, in some cases has caused issues, including the requirement that experts are sworn in and how and where the arbitral award is signed.

The UAE, and Dubai in particular, attracts many international disputes, given its central location, easy travel connections, good infrastructure and safe environment. In addition Dubai has an excellent pool of internationally qualified arbitrators, lawyers and experts to assist clients through the arbitration process. Whilst the local legal system can cause some issues with enforcement, overall Dubai remains the preferred choice for Middle East arbitration.

The DIFC is a Freezone and operates under its own laws closely related to UK law. Similarly the DIFC-LCIA is based on the UK LCIA rules. Enforcement is initially through the DIFC courts, although ultimately cases can also be referred to the UAE Courts. As such the DIFC-LCIA may be preferable to those used to a Common Law or more Western legal system. However there are still issues regarding jurisdiction and to date only a more limited number of arbitrations have been held within the DIFC.

Company: Deloitte Name: Jacqui Record Email: jarecord@deloitte.com Web Address: www.deloitte.com Telephone: +971 (0) 4 506 4887

Acquisition International | December 2013 | 57

SECTOR SPOTLIGHT: Arbitration Seats / Dealing with trademark Infringement in India

Arbitration Seats - Weighing up the Pros and Cons – UK International law firm Clifford Chance combines the highest global standards with local expertise. Leading lawyers from different backgrounds and nationalities come together as one firm, offering an unrivalled depth of legal resource across the key markets of Africa, the Americas, Asia Pacific, Europe and the Middle East. Audley Sheppard, global co-head of Clifford Chance’s International Arbitration Group, gives us his thoughts on London’s popularity as an arbitration seat. -------------------------------------------------------------English arbitrators and judges are renowned for their impartiality. In addition, nationals of most countries can enter England for business purposes. England is convenient because it is a global transport hub, and English is the most common language of international

Company: Clifford Chance LLP Name: Audley Sheppard Email: audley.sheppard@cliffordchance.com Address:10 Upper Bank Street, London, E14 5JJ Telephone: +442070068723

business. Between 2010 and 2012, in LCIA arbitrations alone, parties originated from over 20 jurisdictions, with a clear majority of those parties not from the UK. In a survey conducted by the School of International Arbitration in 2010, London was the most preferred arbitration seat (30%) followed by Geneva (9%) and Paris, Tokyo and Singapore (each 7%) and New York (6%). There are other legal and practical reasons why London enjoys such popularity. The Arbitration Act 1996 governs domestic and international arbitrations seated in England, Wales or Northern Ireland. It restated and improved the law relating to arbitration and provides a legal framework that is very supportive of arbitration; for instance, court intervention is limited. The Act has many features similar to the 1985 UNCITRAL Model Law but it is more detailed in many respects. The English courts have shown repeatedly that they have a pro-arbitration approach, for example by enforcing arbitration agreements and limiting challenges to awards. The judges of the High Court, Court of Appeal and Supreme Court are well informed about and support arbitration.

London has several dedicated hearing facilities. It is also home to a number of the world’s leading arbitration institutions, including the London Court of International Arbitration (LCIA) and the London Maritime Arbitration Association (LMAA), as well as arbitrations conducted under the rules of the Grain and Feed Trade Association (GAFTA), the Federation of Oils, Seeds and Fats Associations (FOSFA), and the London Metal Exchange (LME), to name a few. Costs could be considered to be a drawback: London is a relatively expensive city for the hearing, but these costs will be a small proportion of the total costs of the arbitration, and not necessarily any more expensive than others of the ‘Big Four’. London lawyers can be expensive, but increasingly they offer flexible fee arrangements. The Act allows tribunals to award the successful party its reasonable costs, to be paid by the unsuccessful party. Because of its perceived neutrality, its convenience and the prevalence world-wide of English law and English language, I predict that the popularity of London as a seat will continue to increase. I expect that flexible fee arrangements and third party funding will receive ever more attention.

Dealing with trademark infringement in India

It is a common belief that IP litigation in India can be lengthy and expensive. However, Dr Mohan Dewan, Principal of R K Dewan & Co argues that with proper handling and selection of an appropriate forum, this is not necessarily the case. -------------------------------------------------------------IP laws in India dictate that a suit for infringement cannot be instituted in a court lower than a district court. Many litigants, however,

Company: R K Dewan & Co Name: Dr Mohan Dewan Email: dewan@rkdewanmail.com niti_dewan@rkdewanmail.com Web: www.rkdewan.com Address: R.K.Dewan & Co. Podar Chambers, S. A. Brelvi Road, Post Box No. 711, Fort, Mumbai - 400001. Telephone: +91-22-6177 5300

mistakenly believe that the high courts are the most appropriate forums for obtaining remedies in Intellectual Property matters. However, we suggest an alternative forum strategy. A trademark infringement case recently filed by Finolex Cables Ltd. (Represented by R K Dewan & Co) against M/s Raj Industries, highlighted the advantages of filing a suit before the Pune District Court instead of a high court. The suit was finally decreed after two years. This included all stages of trial – filing of the suit, the court granting an interim injunction, framing of issues, leading evidence, final arguments and the court granting a permanent injunction in favour of Finolex Cables. Moreover, the cost involved was considerably lower than it would have been had the suit been filed at a high court. Generally, filing an infringement suit at the district court costs roughly US$ 4,000 compared to the US$ 12,000

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- 15,000 for filing a similar suit at the Delhi, Mumbai or Chennai High Court. This particular suit for permanent injunction was instituted in 2011, by M/s Finolex Cables, the owner of the trade mark ‘Finolex’, against M/s Raj Industries and others, to restrain them from using the trademark ‘Farolex’, which was deceptively similar to ‘Finolex’. The plaintiff has been using the trademark ‘Finolex’ since 1958. The court held that the use of the mark ‘Farolex’ was indeed deceptively similar to the trademark ‘Finolex’. Thus, the court granted a permanent injunction against the opposite party. So, before filing a suit for infringement, we recommend carefully assessing the forum in which the case should be filed and prosecuted. Filing a suit at a district court might be significantly less expensive with a speedier resolution process than filing one at a high court.

SECTOR SPOTLIGHT: Protecting and Patenting Business ideas

Protecting and Patenting Your Business Ideas - Albania

Eno Dodbiba is an Albanian patent and trademark attorney. He looks at how the Albanian government has worked towards strengthening the country’s intellectual property right laws over the past 20 years. -------------------------------------------------------------Political and economic changes over the last 20 years in Albania have enabled and gradually strengthened the system of intellectual property rights. Since moving from a centralised market and political system into a democratic and market economy in early 90s, Albania has discovered several socio-economic challenges as well as the need to establish an entire infrastructure around intellectual property rights to play a positive role in encouraging new business development, rationalization of inefficient industry, and inducing technology acquisition and creation. Albania, with a population of over 3 million, has become a rapidly emerging economy progressively adhering to the principles of the market economy, rule of law and democratic governance. The

country has taken steps to establish the necessary legal framework and institutions to implement intellectual property rights and is making efforts to protect industrial property to EU levels. Intellectual property theft is penalised by up to two years in prison. In Albania now, patents prevent the unauthorised making, selling, importing or using of a product or technology that is recognised in a patent claim for 20 years.

One of the final elements of an intellectual property system is its enforcement. Enforcement entails two tasks: punishing infringement and disciplining enterprises that try to extend their rights by acting in an anti-competitive manner. The Albanian government has put a lot of effort into developing and strengthening the relevant institutions dealing with IPR including technological support, know-how, and training.

The intellectual property protection system in Albania is anchored in two main economic objectives: • Promoting investment in knowledge creation and business innovation by establishing exclusive rights to use and sell newly developed technologies, goods, and services • Promoting widespread dissemination of new knowledge by encouraging or requiring rights holders to place their inventions and ideas on the market and encouraging national applications from Albania.

Eno Dodbiba Name: Eno Dodbiba, European Patent Attorney Email: enod@albmail.com / edodbiba@adasip.com Str. Naim Frasheri, pa. 60/3, shk 1, ap. 16 Tel: + 355 42 237947 Fax: + 355 42 358689 Tirana, Albania

Protecting and patenting ideas UK

Rohan Setna is a partner with Boult Wade Tennant, a leading Patent and Trade Mark firm and the only UK firm to be ranked in Tier 1 for both the Patent and Trade Mark categories in The Legal 500 and Managing Intellectual Property for the last eight consecutive years. -------------------------------------------------------------Intellectual property (IP) can be an extremely valuable asset to companies for many different reasons, for example: patent and trade mark protection can help companies keep ahead of their competitors and IP license agreements may provide an important revenue source for companies. Thus, it is essential to protect IP. The landscape in the UK is changing. The UK Patent Box, which allows certain companies to apply a lower rate of Corporation Tax to profits earned from its patents (as well as profits earned from supplementary protection certificates, regulatory data protection and plant variety rights), came into force in April 2013. This has been of great interest to many applicants from

all over the world. It is likely companies will exploit this tax break more in the future. Another change on the horizon of interest to applicants who file and/or litigate in Europe is the introduction of the Unitary Patent and the Unitary Patent Court. At present it is not possible to calculate the economic advantages of filing a Unitary Patent rather than a European patent and validating it in several countries, as the fees have not yet been set. However, initially at least, it will certainly provide applicants with more choice. Our firm specialises in patents, designs and trademarks. We have expertise in drafting, filing and prosecuting UK, European and International patent applications. We also handle large patent portfolios for well-known clients such as Boeing and Vodafone, to name just two. Typically our attorneys are both UK qualified and European patent attorneys. We have specialised

expertise across a wide range of technologies and are used to liaising with business people, technical personnel, in-house patent attorneys and individual inventors. Our clients are diverse and include start-ups and spin-outs, University clients, SMEs, large UK and non-UK corporates. We tailor our services to meet their needs and we pride ourselves on working with our clients, not just for them.

Company: Boult Wade Tennant Name: Rohan Setna Email: rsetna@boult.com Web: www.boult.com Address: Verulam Gardens, 70 Gray’s Inn Road, London, WC1X 8BT Telephone: +44 (0)20 7430 7500

Acquisition International | December 2013 | 59

SECTOR SPOTLIGHT: Getting to grips with merger control

Getting to grips with merger control

Please give a brief description of your firm. Luther is one of the leading German business law firms, with over 350 lawyers and tax advisers in 11 locations in Germany and six international offices. Luther has a competition practice consisting of six partners and their associates, as well as one counsel. For multi-jurisdictional merger proceedings, our Group benefits from Lutherâ&#x20AC;&#x2122;s international network with business law firms in all relevant jurisdictions around the world. What kinds of deals require filing? Under Regulation No 139/2004 (Merger Regulation), a concentration, ie, the acquisition of control of one company over another, must be notified if certain turnover thresholds are exceeded. The thresholds are reached if the combined aggregate worldwide turnover of the companies involved exceeds EUR 5 billion and

Company: Luther Rechtsanwaltsgesellschaft mbH Name: Marie-Madeleine Husunu Email: marie-madeleine.husunu@luther-lawfirm.com Web: www.luther-lawfirm.com Address: Avenue Louise 326, 1050 Brussels Phone: +32 2 627 77 60 Fax: +32 2 62 77761

the aggregate EU-wide turnover of each of at least two of the companies exceeds EUR 250 million. Alternatively, the thresholds are met if the combined aggregate turnover exceeds EUR 2.5 billion on a worldwide basis, the combined aggregate turnover of all companies concerned exceeds EUR 100 million in each of at least three EU Member States, and the aggregate turnover of each of at least two of the companies concerned exceeds EUR 25 million in the aforementioned three Member States and the aggregate EU-wide turnover of each of at least two of the companies concerned exceeds EUR 100 million. If each of the companies achieves more than two-thirds of its aggregate EU-wide turnover in one and the same Member State, the concentration has no EU-dimension and is consequently not subject to EU merger control, however, in such a case, the merger would have to be assessed under the merger control laws of the 28 EU Member States. What factors impact the likelihood of receiving clearance, and how long will it usually take? The European Commission assesses the implications of the concentration on the EU common market or a substantial part of it. If a concentration would significantly impede effective competition in the EU, for example, if the concentration creates or strengthens

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a dominant position, the Commission will prohibit the merger. The procedure has two phases: within 25 working days after receipt of the complete notification, the Commission has to decide whether it intends to initiate a closer investigation. If it chooses to initiate such investigation, it must, as a rule, conclude the investigation with a final decision within 90 working days after the procedure has begun. Have there been any recent or proposed changes to relevant legislation? What impact will these changes have? The Commission is currently developing a potential amendment to the Merger Regulation. The proposed changes would address the case referral procedures from Member States to the Commission. At the moment, this process is seen as being time-consuming and too cumbersome. With the proposed review, the Commission also intends to prevent forum shopping by companies that launch in Member States rather than with the Commission. A more important part of the review is that the Commission assesses the possibility of applying the merger control rules to the acquisition of non-controlling minority shareholdings, so called structural links. Such acquisitions are already subject to merger control in Austria, Germany and the UK. However, at EU-level, this would constitute an extension of the current scope and would impact a number of acquisitions not previously concerned with EU merger control.

SECTOR SPOTLIGHT: Labour and employment aspects of corporate transactions

Labour and employment aspects of corporate transactions Top three UK trade union cases: 2013 By Dr Mirza Ahmad LLD (Hon) Barrister -------------------------------------------------------------This article highlights some key learning points emerging from the following top cases impacting on UK Trade Unions, during 2013. The article will be of particular interest to any organisation entering the UK market, through acquisitions or otherwise already in the UK: 1. East Midlands Trains Ltd v National Union of Rail etc [2013] EWCA Civ 1072 - Court of Appeal 15 August 2013; 2. Mark Alemo – Herron et al v Parkwood Leisure Ltd EU Case C-426/11 – European Court of Justice 18 July 2013; and 3. USDAW v Ethel Austin Ltd (in administration) [2013] IRLR 686 – Employment Appeals Tribunal 30 May 2013. The East Midlands Trains Ltd case related to the interpretation of collective agreements and whether certain terms had become incorporated into the terms and conditions of employment of the staff. It arose from the failure of the train company to obtain an injunction against the trade union when it asked its members to take industrial action short of a strike. The clause at issue in the proceedings concerned amendments made by the train company to the start times of the hours of its staff because of planned engineering works and whether the same constituted ‘cancellation’ of the original rosters under the collective agreements. The Court of Appeal emphasised that the starting point was that the parties had meant what they said and said what they meant. Accordingly, the court had to ask what the collective agreements, read as a whole, against the relevant background, would reasonably be expected to mean. Since the cancellation of work rosters was in the reasonable contemplation of the parties to the collective agreements and, as evidenced by the terms of the agreements, it was a reasonable interpretation of the same that the employer – so long as the employer acting reasonably did not breach the duty of co-operation to its employees – could make amendments without the agreement of the staff/ unions because of the planned engineering works.

The court was not interested in whether any event was limited to a small number of trains or a large number of workers / services. The Mark Alemo – Herron case is an interesting case involving the rights of collective agreements post Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) transfers. In that case, the House of Lords had made a request to the European Court of Justice for a preliminary ruling relating to a transfer of leisure services from Lewisham Council to a private contractor (CCL) in 2002, which was subsequently sold in 2004 to another private company (Parkwood). The issue was whether the collective agreements applicable to Lewisham Council and agreed post the TUPE transfer were binding on the subsequent private contractors. The European Court of Justice was asked, in effect, whether Article 3 of Transfer of Undertakings Directive 2001/23/EC must be interpreted as precluding a Member State from providing that dynamic clauses referred to in collective agreements negotiated and agreed after the date of transfer are enforceable against the transferee. In noting that Parkwood (subject to private laws) did not have any right to participate in any of the negotiations or otherwise agree to any of the terms established by a third party collective agreement relating to Lewisham/ local government (subject to public laws), the ECJ held that the private contractor’s contractual freedom was seriously reduced to a point that that it adversely affected the very essence of its freedom to conduct business. Accordingly, Article 3 precluded a Member State from providing, on transfer, that dynamic clauses relating to collective agreements negotiated and adopted after the transfer were enforceable against the transferee, if such transferee did not have the possibility of participating in the negotiation process, after transfer, of such collective agreements. Regardless of the rights and wrongs of any other ECJ rulings, the decision in this case appears to be a pragmatic one and stands the test of common sense.

The USDAW case is a most interesting case of the EAT’s confidence in re-writing primary legislation and using the Marleasing case [1990] ECR I-4135 principles; namely, the words ‘at one establishment’ in section 188 of the Trade Union and Labour relations (Consolidation) Act 1992, were to be omitted – and there was no need to add the words ‘at one or more establishments’ – so as to give it effect to and conform to the core objective of Directive 98/59 relating to the protection of workers dismissed by collective redundancy. This case, which has been granted leave to appeal to the Court of Appeal, will have long term implications far exceeding the present case, which granted protective awards to workplaces where 20 or more redundancies, in total, were made and not limited to ‘one establishment’, as there was no requirement in the Directive to introduce ‘at one establishment’ into the 1992 Act and those words did not come from the Directive and nor had those words been the subject of any consultation or Parliamentary debate around the Act. The Marleasing principles permitted the words to be added or removed when interpreting national law in accordance with European Union law and the only way to deliver the core objective of the Directive was to construe ‘establishment’ as being the business of the employer - ie not limited to any site/unit. The Directive did, of course, have direct effect in respect of emanations of the State.

Company: St Philips Chambers Name: Mirza Ahmad, LLD (Hon) Barrister Email: mahmad@st-philips.com Web: www.st-philips.com Address: 9 Gower Street, London, WC1E 6HB Telephone: 0207 467 9432 Mobile: 07429 335 090

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SECTOR SPOTLIGHT: Labor and employment aspects of corporate transactions

Merger and acquisition labor issues

New Orleans skyline

by Sidney F Lewis, V and Timothy P Brechtel, Partners, Jones Walker LLP --------------------------------------------------------------

Several issues are unique to mergers and acquisitions in Louisiana. The first issue involves the use of non-compete, nonsolicitation and/or confidentiality agreements. In Louisiana, non-compete and non-solicitation agreements are enforceable as long as they are limited to two years in duration, describe the business at issue, and list the specific parishes, counties or municipalities in which the competition is to be restricted and in which business continues to be conducted. Unfortunately, listing parishes, counties or municipalities may not work with businesses that are nationwide in scope.

Company: Jones Walker LLP Web Address: http://www.joneswalker.com/ Address: 201 St. Charles Ave, New Orleans, LA 70170-5100 Name: Sidney F Lewis Email: slewis@joneswalker.com Telephone: 504.582.8352 Name: Timothy P Brechtel Email: tbrechtel@joneswalker.com Telephone: 504.582.8236

Sometimes, the purchaser may have the opportunity to tie the non-compete/nonsolicitation to another state with more liberal laws. The success of this approach will depend on the connection to that state and/or other circumstances which could lead a court to uphold the choice-of-law provision. Louisiana will not “blue line” a non-compete agreement unless there is a severability clause. Even that is not a sure thing so it is better to get it right the first time. One of the more pressing issues in any purchase is whether the purchaser intends to hire the seller’s employees. This needs to be vetted at the outset so that all parties understand whether terminations will occur that trigger notice under the Worker Adjustment and Retraining Notification Act (WARN) and who will have notice responsibility. The logistics of how the purchaser intends to offer employment should likewise be discussed, as well as the purchaser’s pre-hiring criteria. Another important aspect of Louisiana law is the fact that earned vacation and PTO are considered earned wages that must be paid upon termination of employment. Allocating this responsibility to the seller for employees who will not be employed by the purchaser should be a priority. Employee benefit laws and regulations are primarily federal, as the Employee Retirement and Income Security Act (ERISA) pre-empts most laws at the state level (with state insurance law being a major exception). A key goal for a buyer is to eliminate the chances of unexpected large benefit plan

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liabilities by conducting due diligence to determine what types of benefit plans are provided by the seller. For example, unionized workforces often receive retirement benefits from multiemployer union pension plans, which are often under-funded and can trigger withdrawal liability if the employer ceases contributions. Even if the workforce is non-union, in some industries single employer ‘defined benefit’ pension plans are still common. Such plans may also be underfunded and can be costly to maintain and terminate if not well-funded. Actuaries should be consulted immediately if a seller has an underfunded pension plan, whether it is a single employer or multi-employer plan. Other areas of concern include retiree medical benefits (which can be difficult to revoke if the seller did not properly reserve and communicate to employees its right to do so), change of control agreements, employment agreements, employer stock as an investment in the seller’s retirement plan (due to fiduciary concerns), compliance with Internal Revenue Service requirements for taxqualified pension plans, compliance with deferred compensation rules applicable to nonqualified plans, and compliance with the Affordable Care Act (health care reform). Finally, as with most aspects of an acquisition, labor and benefits liabilities and related concerns will vary depending on the structure of the deal (stock, asset, joint venture, etc.). A multitude of labor and benefits issues may be present that could trigger liability on the parties, and any company considering an acquisition in the US should engage competent advisors and counselors.

SECTOR SPOTLIGHT: Islamic banking â&#x20AC;&#x201C; a viable alternative

Islamic banking a viable alternative by Muhammad Syarizal Rahim -------------------------------------------------------------The notion that Islamic banking could have prevented the 2008 banking crisis in the US and Europe continues to draw mixed reactions among the industry players. Whilst Islamic banks are not immune to any crisis, there are a number of strong arguments as to why Islamic banks are better able to withstand a banking crisis. Islamic banking is based on Shariah principles which ensure mutual risk and profit sharing among transacting parties. The core values of Islamic banking are to promote entrepreneurship, trade and commerce. Islamic banking prohibits activities that involve interest, gambling and speculative trading. These basic principles restrict Islamic banks from entering into speculative derivatives transactions which were one of the main contributors to the banking crisis. In addition, Islamic banking transactions are executed based on an underlying business activity or asset; hence the performance of the Islamic banking industry is dependent on the performance of the general economy. In any economic downturns, Islamic banks will still be affected as their customers will struggle to meet their repayment commitments to the banks. Whilst the Islamic banking industry continues to grow, there are still a number of challenges faced by the industry, preventing it from making further inroads to be recognised globally as a viable alternative to conventional banking. The global Islamic banking assets in 2013 are estimated at more than USD1 trillion, continuing its double digit growth. Although it is expected to double by 2015, Islamic banking assets still represent a minor percentage of the global banking assets of more than USD100 trillion. With circa 30% of the worldâ&#x20AC;&#x2122;s countries being Muslim countries and a Muslim population of close to two billion people, these are obvious reasons to be very optimistic about the growth potential of the industry. Some of the challenges that are hampering the growth potential include supportive regulatory and tax frameworks, product innovation and talent development. As a regulated industry, Islamic banking requires a conducive regulatory environment which supports its intricacies. In playing their role as an intermediary between investors, businesses and customers, Islamic banks require flexibility and clarity in executing their transactions.

In Malaysia, the recently introduced Islamic Financial Services Act 2013 (IFSA) provides greater clarity to the industry players on the prudential and legal requirements underpinned by Shariah principles. The IFSA governs the Islamic financial institutions while a separate regulation, the Financial Services Act 2013, governs conventional financial institutions. Other countries who are considering introducing Islamic banking in their markets should use Malaysia as a model on how they can ensure both systems, ie Islamic and conventional, can co-exist and operate in the same market. The tax legislation will also need to be modified to support Islamic finance transactions. In many countries around the world, applying the local tax framework on Islamic finance transactions will normally result in double taxation. This has adversely affected the attractiveness and competitiveness of Islamic finance products in those countries. In Malaysia, the tax structure has been modified to ensure that Islamic finance transactions are accorded the same treatment as conventional transactions. Whilst the growth of the Islamic banking industry is making headlines, the profitability of the products being offered is still not at the desired level. Product innovation is key to ensuring profitable and sustainable growth of Islamic banks. The products offered should also cater to the changing needs of the customers and the under-served segment of the market. In addition, although the industry has benefited from the diversity of the products introduced in different parts of the world, there are also confusion and reluctance in accepting products offered by Islamic banks from a region different from the customers. Currently, there are various structures or products that have been developed based on different Shariah principles which may not appeal to or be wellunderstood by investors from different regions or countries. The market players need to continue to work closely with one another to promote better understanding and to identify common grounds that can facilitate product standardisation. Talent development continues to be on the main agenda for Islamic banking in supporting the growth of the Islamic banking industry. The focus is not just on the numbers but also on the qualifications and quality of the talent having the requisite skills, both in banking and also Shariah.

The Central Bank of Malaysia had outlined a comprehensive talent development programme when they issued their 10-year Financial Sector Blueprint in December 2011. The programme looks at different development platforms at different stages of talent development. For example, at the entry level, the Financial Sector Talent Enrichment Programme (FSTEP) has been introduced with the aim of training top graduates to provide the requisite foundation for the financial services industry. The initiatives under FSTEP include collaborations between the industry and institutions of higher learning to develop a more structured programme for graduates so that they have the requisite knowledge and skills. In addition, the contents of the FSTEP will also be embedded into the curriculum of the institutions of higher learning so that the graduates will become industry-ready upon graduation. The blueprint also recommends that the professional programmes and qualifications in Islamic finance should meet the standards set by the Association of Chartered Islamic Finance Professionals, a professional body responsible for global quality standards of Islamic finance professionals. In summary, the Islamic banking industry continues to grow at a double digit growth. Its continued acceptance at a global level will require active participation by the stakeholders from the key Islamic financial centres, working together to address the challenges faced by the industry. Muhammad Syarizal Rahim is a Director of Islamic Financial Services in EY Malaysia. This article summarizes complex issues and is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither the author nor the global EY organization or any of its member firms can accept responsibility for loss related to any person acting on information in this article.

Organization: EY Name: Muhammad Syarizal Rahim Web: www.ey.com

Acquisition International | December 2013 | 63

SECTOR SPOTLIGHT: Insurance issues arising during M&A transactions / Forming and structuring private funds

Insurance issues arising during M&A transactions The need to conduct proper and adequate due diligence in respect of merger and acquisition activities is an obvious pre-requisite prior to concluding any such deal. What sometimes can be overlooked or not given sufficient importance are issues related to historical insurance matters. It is a simple matter to effect adequate insurance protection going forward post acquisition but not much can be done to rectify any deficiencies of the past. However, having proper knowledge is the next

best position to be in. Where insurance claims are disclosed it is important to ascertain that they are properly reserved, the limits are sufficient, there is coverage for those losses and that the insurers are solvent and likely to remain so. The first task is to understand if a given loss is covered by insurance. Apart from forming a view oneself, an audit would show whether insurers or their adjusters have conceded this or are acting in a manner which indicates that they do accept liability. Insurers might have made interim payments which is also a positive sign. Conversely an audit would also disclose any doubts raised by insurers or their loss adjusters, such as a formal Reservation of Rights letter. It is then important to see if the loss estimate is accurate and up to date and that the policy limits are sufficient to meet the exposure.

Company: Longdown EIC Web: http://longdowneic.com Name: Mike Dean Telephone: +44 (0) 203 427 6374 Email: mdean@longdowneic.com Name: Paul Martin Telephone: +44 (0) 203 427 6375 Email: pmartin@longdowneic.com Name: Dennis Culligan Telephone: +44 (0) 203 427 6373 Email: dculligan@longdowneic.com

Finally, are the insurers solvent and will they remain so? The answer to the first question is one of fact but the second is somewhat speculative. An opinion can be sought by reference to the rating agencies which together with an anecdotal view is probably the best that can be achieved. But what about what you do not know about? Old unreported health and pollution claims still dog the insurance industry. Whilst we know all about the

‘dirty’ industries of the old past, tomorrow’s new asbestosis has yet to appear. With this in mind, it is important to ascertain whether or not the target company has a legacy of ‘occurrence’ liability policies going back sufficiently far or claims made policies with an adequate retro date, both to give a high likelihood of protection. This can be a time consuming exercise unless the company has a proper register of insurance policies. Nevertheless it might well prove to be time and money well spent should a problem arise in the future. Again, the same insurer solvency issues arise as already referenced above. So insurance matters a great deal to good quality due diligence. At Longdown|EIC we specialise in these types of audits and investigations. Our staff have been engaged by merger and acquisition lawyers, financing parties and others in order to ascertain any legacy issues that might exist in any proposed deal. On some occasions we have been asked subsequently to help consolidate the insurance programmes belonging to the various parties to a merger or takeover transaction. We would be delighted to talk to you in detail in relation to any potential project you may be involved in to ensure the right procedures are followed.

Forming and structuring private funds - Guernsey Rhea Gordon is Head of Business Development, Heritage Fund Services and Heritage Depositary Company. She talks to Acquisition International about structuring private funds in Guernsey. ----------------------------------------------------------------What are the key factors that make your jurisdiction attractive to investors? Guernsey remains a key jurisdiction for structuring private funds due to its fiscal neutrality, specialism in private fund structures and servicing, and the island’s robust regulatory framework – all while being outside the EU. Guernsey continues to be proactive in its approach to worldwide regulatory changes ensuring that the jurisdiction continues to provide the important infrastructure to private

Company: Heritage Fund Services and Heritage Depositary Company Name: Rhea Gordon Email: rhea.gordon@heritage.co.gg Web: www.heritage.co.gg Address: PO Box 225, Heritage Hall, Le Marchant Street, St Peter Port, Guernsey, GY1 4HY Telephone: +44 (0) 1481 716000

funds and remains as the domicile GPs know and prefer to use. Which sectors are currently the most active? Infrastructure, renewable and traditional energy are extremely prevalent at present as well as debt funds which are looking to fill the gaps where banks are currently under pressure to reduce their lending exposure or simply don’t have the appetite. Private Equity and property continue to be significantly represented in Guernsey. What types of funds are best suited to the current market conditions? From our experience, investors are currently looking for a yield and regular returns as well as the usual absolute return funds. Cash is not providing yields and as such investors have to put that proportion of their portfolio to work elsewhere – debt funds, dividend yielding operating assets and infrastructure funds all tend to be structured to offer this yield. Can you highlight the major issues affecting asset managers and service providers at this time? Asset managers and services providers alike have been faced with a wall of regulation over the last few years, AIFMD and FATCA have been the most publicised in Europe however asset managers in particular have had the additional registration and reporting obligations to financial regulators worldwide.

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On the flipside, investors too are requiring more reporting and have an increased desire for more transparency which on the whole is a positive but leads to more operational expenses and logistics. Heritage Fund Services is a full service fund administrator with offices located in Guernsey, the UK and Malta. We have particular expertise in the establishment and servicing of private equity, property, infrastructure, emerging markets and esoteric (eg forestry, shipping, litigation) funds. We have assets under management and administration in excess of US$50billion and we service a broad range of structures across multiple jurisdictions. Our advantage is that we bring to bear considerable expertise and enthusiasm for the alternative asset classes. We work hard at our ethos of client partnership and at making the complexity of today’s structures work efficiently and cost effectively. We are independent and management owned and thus avoid the conflicts of interests that affect the larger players or those owned say by a private equity house. We are jurisdictionally agnostic but passionate about quality and we have ensured that we have offices to service the key requirements in the European time zones and also service business on a global basis. Our listed funds experience compliments our long standing private fund knowledge and expertise.

SECTOR SPOTLIGHT: The Czech Republic: Revolutionising Regulation of Collective Investments

The Czech Republic: revolutionising regulation of collective investments

Jakub Joska, partner at Advokátní kancelář KF Legal, s.r.o., talks to Acquisition International about effects of the forthcoming Act on Investment Companies and Investment Funds (AICIF) in the Czech Republic. -------------------------------------------------------------The new legal regulation of AICIF can be considered from two different points of view. Firstly, this has to be seen from the wider EU context of the regulation of collective investment and fund structures based on the Alternative Investment Fund Managers Directive (AIFMD). In this connection, I consider the new regulation of the AICIF a significant (macroeconomic) opportunity for both the economy of the Czech Republic and, of course, for the Czech fund industry. It is also a unique chance to make good use of our previous experience, particularly in the field of the management and administration of non-UCITS funds. Funds of qualified investors, ie a legal parallel of alternative investment funds within the meaning of the AIFMD, have existed in the Czech Republic since 2006 (so for six months longer than in Luxembourg) and they have been firmly established here. A strong and professional industry has been developed and is supervised by a responsible and ideologically and personally stable and communicative regulator. Secondly, we have to consider a close link between the AICIF and its particular institutes and the new recodification of the Czech civil law effective from 1 January 2014. On that day, the new Civil Code and the Business Corporations Act come into force, both representing crucial pieces of the private-law recodification which will be followed by a substantial part of new (especially corporate) AICIF institutes. The changes being introduced are the most important and the most considerable changes of legislation since 1989. The new regulation brings to existing clients (in particular, alternative investment funds and their managers) a wider range of options; however, at the costs of necessary updates of most internal rules and contractual documentation, which may be often connected with gaining new licences: we have noticed a growing tendency for existing externally managed investment funds to become ‘independent’, ie internally managed within the meaning of the AICIF.

However, there are sectors with minimum awareness about the existence and impacts of the legislation. Real estate business entities, or PE/VC, are exposed to the real risk of sanctioning by the Czech National Bank which may lead (in extreme cases) to dissolution and subsequent liquidation of an affected company. The change to the private law in the Czech Republic does mean a significant increase in flexibility, especially in products, and inclusion of a wide range of new institutes regarding funds which are common in traditional fund jurisdictions (an important model for the new legislation is just fund regulation of Luxembourg). For example, the separation of administration and asset management will resolve a multi-year discussion about a fund manager’s manner of acting. The AICIF admits creation of new legal forms of corporations exclusively for fund purposes – for example a joint stock company with variable registered capital (a Czech version of SICAV) – it includes an option to create sub-funds; a limited partnership company issuing ‘certificates of investment’, ie certificated securities containing certain elements stipulated by law (a Czech version of SICAR), an option to make capital calls; or the use of a trust, previously unknown to the Czech rule of law as it is foreign to the continental legal system. The AICIF further enables new (to the Czech Republic, although common abroad) categories of service providers, for example a fund depository may be now performed also by a brokerage or a notary; further categories include a prime broker, or a promoter. To sum it up, the new legislation was awaited impatiently by the market and its current state is, despite a lot of throughout factual and technical comments, perceived in a positive way. Despite the changes brought by the AICIF, we can see a strong link of continuity with the previous legal regulation. Consequently, we have a sufficiently large skilled workforce as well as deep practical knowledge and experience of the regulator (the Czech National Bank) regarding the operation and management of alternative funds (funds of qualified investors). In this context, the outstanding geographic location of the Czech Republic, in particular Prague, is worth noting, as it creates optimal conditions for its significant role in the CEE region. In addition, there are further economic and political prerequisites – for example, the

Czech Republic has more than 80 agreements for the avoidance of double taxation and the Czech banking sector was almost unaffected by the financial crisis. The first alternative investment fund, managed by Jakub Joska, was established after the amendment of legislation in 2006, since then he has participated in the establishment of another four managers and more than 50 funds of different types and forms. Jakub Joska is a member of the supervisory board of Czech Republic for Finance. KF Legal is a Czech law firm, providing its clients with comprehensive legal services relating to business transactions as well as court or arbitration proceedings together with legal counselling in particular specialized fields. Its key competitive advantage is deep knowledge of four - mostly very specific – fields of law together with its ability to identify mutual relations and synergies. Specifically, these four fields of law are as follows: - Financial services, namely administration and management of investment funds of qualified investors - Power and gas engineering - Environment, waste and packaging disposal - Litigation and insolvency. KF Legal is a member of a wide range of professional associations and organizations, such as the Czech Capital Market Association of the Czech Republic. KF Legal combines experience of its attorneys, coming from leading law firms, and flexibility in meeting clients’ needs.

Company: Advokátní kancelář KF Legal, s.r.o. Name: Jakub Joska Email: jakub.joska@kf-ak.cz Web Address: www.kf-ak.cz Address: Opletalova 55, 110 00 Prague 1, Czech Republic Telephone: +420 222 362 069-71

Acquisition International | December 2013 | 65

SECTOR SPOTLIGHT: 2013 Q4 Review

2013 Q4 review - LEXeFISCAL Clifford John Frank, Senior partner at LEXeFISCAL, has 36 years’ experience as an independent Tax advisor and Attorney, handling large and complex domestic and international tax structuring, Royalties and Dividend planning. He also advises on Trust issues and individuals on UK Capital Gains, Inheritance tax, Domicile and Residence issues, Remuneration Planning, Corporate and Family law issues. He reviews the UK economy at the end of Q4. --------------------------------------------------------------

For us the property sector is seeing the most activity, closely followed by technology and on-line gaming.

Although we experienced a flat start to 2013, from Q3 LEXeFISCAL has experienced a positive attitude to growth, which is reflected in new business. LEXeFISCAL has itself grown in Q4, with an intake of new consultants, to meet growing demand for our services.

There are some significant trends emerging. Alternative finance companies, as investors, are of the opinion that they can get a better return on capital than that offered by the bank. Also businesses no longer wish to be assessed by a computer. There is a strong demand for the return of traditional banking, when the bank manager had ‘pulse’ and not a ‘memory chip’.

As Q4 draws to a close it is my opinion that the UK is set to grow in 2014, although I do think growth has been hampered by the unjustified hike in consumer price for energy. We all understand that energy costs may need to increase to keep pace with capital investment to improve efficiency. In my opinion, the Government of the day should reduce its tax charge to the energy companies, not temporarily but long-term if they truly want to assist consumers and business. This would fuel growth and boost confidence as the savings are passed on to the consumer.

The ease of doing deals has reduced but we are seeing more complex financial structures being implemented. In the property sector ‘Seller Finance’ is becoming popular: this provides the seller with a continued interest in the property in addition to an income. This is very advantageous for older sellers as it supplements pensions.

For LEXeFISCAL 2014 will be about growth – we are set to grow the business by 60% in revenue and 25% in personnel. In the last year our marketing department has worked hard. This has brought very good results to the firm: first of all we have been awarded as ‘UK Law Tax Firm 2013’ in November, and we held an Accredited Seminar for Italian Chartered Accountants, recognized and promoted by ODCEC (Ordine Dei Commercialisti e degli Esperti Contabili)

of Monza and Brianza (Northern Italy) on Company Formation and Corporate Taxation in the UK in the same month. Next year sees the publication of my second book ‘WHY ME! A Tax Investigation’ which follows the publication of my first book in September: ‘3 Ways to Settle your Tax. Staying in Switzerland and Preserving your Anonymity’, which has received a lot of interest because of the subject – the UK/Swiss agreement has brought more company awareness and business to the firm. We also launched the two services: Family Law/ Divorce and Civil Mediation (ADR).

LEXe FISCAL vincit veritas

Company: LEXeFISCAL Name: Clifford John Frank Email: clifford@lexefiscal.com Web Address: www.lexefiscal.com Address: 2nd Floor, Berkeley Square House, Berkeley Square, London W1J 6BD Telephone: 0207 887 1948

Acquisition International | December 2013 | 67

SECTOR SPOTLIGHT: 2013 Q4 Review Katten is a firm of first choice for clients seeking sophisticated, high-value hedge fund legal service globally. Knowing the law is not enough – our more than 80 financial services attorneys demonstrate value by addressing our clients’ legal needs informed by their deep understanding of current market terms and practices.

Aberdeen / Scotland

The view from Infinity As Q4 of 2013 draws to a close, Infinity Partnership has closed in excess of 20 transactions with a deal value in excess of GBP£200m. There are further pending transactions due to close in the latter stage of Q4 and a further pipeline which will ensure that 2014 starts as 2013 finished. The stability of the oil price in recent times has led to the Oil and Gas sector being perceived as offering attractive opportunities. The deal pipeline has never been so strong and is reminiscent of the level of activities seen during the final quarter of 2007 and first quarter of 2008. Infinity Partnership predicts that 2014 will see increasing activity for as long as the oil price remains stable. A particularly significant transaction this quarter was the acquisition of GeoKey’s entire share capital by Paradigm Group BV, which represents their third UK transaction all of which were initiated by Simon Cowie of Infinity Partnership. Paradigm Group has been a retained client of Infinity Partnership for some time and, during a regular update meeting, they presented a new technology that they were in the process of developing. They were looking for a platform to acquire that would not only be complimentary but also act as a vehicle to accelerate the deployment of this novel technology to the Oil and Gas market. Mr Cowie recommended GeoKey Limited, a local company providing a ballistic service to the down-hole Oil and Gas industry as being a strategic fit. The pitch was made to the management of GeoKey Limited for the combination of the technology with their existing business and the Heads of Agreement were negotiated. There were a number of complications through the process ranging from remote overseas investors to future management incentives linked to the performance of the deployment of the new technology whilst still retaining the existing service lines.

Trends Trends we have seen emerging are those of large Oil and Gas service companies acquiring UKbased companies for complimentary service lines and technology, and Far East-based companies acquiring UK-based companies for experience and capability as they enter the European arena. The increasing awareness of the Bribery Act 2010 continues to manifest in increasing requirements for due diligence to ensure compliance is met. The primary issue which is affecting the completion of transactions is the access to finance from the acquiring companies. The inability to raise suitable finance continues to create issues on the ability to complete with an increased reliance on either equity or vendor loans being used to finance the funding gap that historically was filled by banks. This obviously increases the complexity of transactions and therefore the length of time to complete. Infinity Partnership was formed in 2011 with a focus on deal initiation in Oil & Gas service companies with a view of maximising shareholder value. This focus has led to a rapid growth within Infinity Partnership over a short period of time, with staff numbers doubling each year since inception and turnover in excess of £1m reported in its second year of trading. The forecast for the forthcoming year shows a marked increase on this.

Company: Infinity Partnership Limited Name: Simon Cowie Email: simon.cowie@infinity-partnership.com Web Address: www.infinity-partnership.com Address: 37 Albert Street, Aberdeen, AB25 1XU Telephone: +44 1224 618460

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Katten’s financial services team represents many of the world’s premier US, non-US and international investment managers, hedge funds and funds of funds, commodity pool operators and commodity trading advisors, and other significant market participants such as banks, broker-dealers, pension plans, sovereign wealth funds, family offices, administrators and insurance companies. Because we advise both sponsors and investors, we are well-positioned to respond quickly with practical solutions that move deals forward.

Company: Katten Muchin Rosenman LLP Name: Henry Bregstein Email: henry.bregstein@kattenlaw.com Web: www.kattenlaw.com Address: 575 Madison Avenue, New York, NY 10022-2585 Telephone: +1.212.940.6615 Fax: +1.212.940.3808

Camden is an investment advisory boutique with a strong emphasis on tech, biotech and mining that gets involved in the business plan and business model of the companies it advises. MD Jean-Claude Gonneau believes the firm’s greatest achievement over the past 12 months has been its ability “to raise money in a very difficult environment when larger firms are retreating”. He thinks 2013 has not given rise to any new trends but there has been a continuation of existing trends, saying: “The lack of willingness in the industry to take on mandates from smaller companies is gathering speed to the point of making it problematic for smaller companies to raise finance.”

Company: Camden Associates Ltd Name: Jean-Claude Gonneau Email: jcg@camdenassociates.co.uk Web Address: www.camdenassociates.co.uk Address: 27 Hill street London W1J 5LP Telephone:020 7290 9812

SECTOR SPOTLIGHT: 2013 Q4 Review Aura Healthcare was created primarily to bring innovation to markets in the post-National Programme for IT (NPfIT) era where arguably creativity had been strangled. Formed in late 2012, Aura delivered on its revenue and profitability targets in the first six months of trading, which suggests it is on the right track. While many businesses fail in the first year, Aura has grown from a team of five people to 25 and plans to double that number in the next year. The five-year plan is equally ambitious with significant growth forecast through a combination of inorganic and organic growth. The main focus is on driving sales of its own software, which currently includes clinical noting, patient flow and cloud solutions. Aura is using new technologies to fix old problems. Based on modern, social networking technologies its solutions are designed largely for a Facebook generation of doctors and medical professionals. They are designed to replace paper and so increase efficiency, release time to care and improve patient safety. Aura’s CEO Adrian Stevens said: “We are among a new breed of agile and innovative companies entering the UK market, amid a change to local empowerment and clinical decision making coupled with new government

Richard Hall is the founder and CEO of CloudOrigin. He has over 25 years’ experience in the IT industry, and 14 years in pre and post Transaction Advisory, Due Diligence, Performance Improvement and Strategy roles across the TMT sector and industries dependent on technology such as financial services. He founded CloudOrigin in 2009 to address the changing enterprise technology landscape working with end user firms, hyper growth technology providers, Private Equity and Venture Capital investors. Awards won include Acquisition International’s Leading Advisor of the Year in 2012 and 2013 and he was named a Deal Maker of the Year in 2013 by Finance Monthly. -----------------------------------------------------------There has been far more interest across the TMT sector in UK and Europe in 2013, from trade players, global investors and European specialists including Venture Capital and mid-market Private Equity. Moreover, in stark contrast to 2012, far more deals are reaching a successful completion

policy to drive innovation and SME participation in healthcare.”

sensible timescales, because of continuing delays in delivering solutions under the NPfIT.

Aura has enjoyed huge success in Ireland, on both sides of the border. Its solutions are installed at hospitals in Belfast, Newry and Craigavon in the north and at Galway and Dublin in the south.

Elsewhere Aura has a strategy of focusing on emerging markets such as the Caribbean and South Africa as the company’s directors have worked in these regions in previous roles.

A notable difference here is these countries have continued to embrace new technology and innovations as well as drive local initiatives to great effect. This is partly out of necessity as budgets are tight but there is a noticeable willingness to push boundaries. In England meanwhile the NPfIT has failed to deliver in certain areas and put NHS innovation back years. The NHS is out of step with other industries in its use of web and smartphone apps to transform service delivery. There is a huge gap between the needs of staff on the frontline and the technologies being employed. But there are some green shoots. Half the NHS trusts in England have embraced a best of breed approach to electronic patient records, rather than the one-size-fits-all approach of the past. The latest government drive for a paperless NHS is also driving demand for Aura’s applications. And there is a clear opportunity for solutions that can be implemented in

against the backdrop of greater Euro-zone macro-economic stability and rapid growth by new technology providers. In fact, even deals that ran aground in 2012 have found interested parties in the latter half of 2013. There are particular areas of strength: we have witnessed far greater investor interest and market opportunities across the Venture Capital first and second round sectors in UK and Europe, with Private Equity mid-market funds also increasingly acting as growth investors to accelerate the global expansion of relatively recently founded Software as a Service (SaaS) firms in particular. In 2014 we expect the substantial funds raised by TMT specialists in Private Equity and global Venture Capital to enable further growth investments across Europe, with active interest also from US trade buyers and recent technology IPOs seeking to cement their worldwide market presence.

“The need to improve the efficiency of services and quality of care while reducing healthcare costs are driving demand for IT applications, especially modern, innovative solutions that support care in remote areas,” Stevens said. “There are also altruistic reasons for entering these markets, including a genuine desire to help improve peoples’ health and wellbeing.”

Company: Aura Healthcare Limited Name: Adrian Stevens Email: info@aurahealthcare.com Web Address: www.aurahealthcare.com Address: 1210 Parkview, Arlington Business Park, Theale, Reading. RG7 4TY Telephone: 0161 870 2777

However, there is a note of uncertainty in the regulatory arena as we head towards 2014. All European and US TMT providers and consumers are very keen to understand any definitive changes to EU regulatory measures with respect to data privacy, protection and transfer of data outside of the EU which may modify current ‘Safe Harbour’ provisions. These changes could have a profound impact on the provision of cloud computing services and the location of datacenters.

Company: CloudOrigin Name: Richard Hall Email: Info@CloudOrigin.com Web: www.CloudOrigin.com Address: Exchange Building, London, UK Telephone: +44 203 642 5715

Acquisition International | December 2013 | 69

SECTOR SPOTLIGHT: Boardroom trends / Incentive programs for management: option plans

Boardroom trends Looking at boardroom trends and what is in store for 2014 is James Sherwin, Managing Partner at SOR Solicitors, Dublin. -------------------------------------------------------------SOR Solicitors is based in Dublin city and provides commercial, employment law, commercial property, dispute resolution and litigation advice to its business and private clients.

SOR’s managing partner, James Sherwin, explains the firm’s appeal: “We are a firm offering commercial

Company: SOR Solicitors Name: James Sherwin, Managing Partner Email: jsherwin@sor.ie Web Address: www.sor.ie Address: 74 Pembroke Road, Dublin 4, Ireland Telephone: +353 1 663 2000 Direct Dial: +353 1 2120450

advice to business and private clients. Our lawyers specialise in one area of law only so we don’t see ourselves as a general practice but rather a firm which specialises in four key business areas. It is certainly something that our expanding client base seems to like as they know that they won’t have a property lawyer giving them employment law advice or advising them on an international agency agreement which is quite unique for a firm of our size”. “Ireland”, he said, “has had very little growth for the last four years however this is changing. We are seeing some new lending from the banks and many of the indigenous companies are beginning to believe that we may be out of the recession and as a result are starting to increase output again. We feel that the signs for growth are quite good for 2014. In fact, a recent Forbes article on 5 December stated that Ireland heads the list of the best countries for business in 2013. They based this on the fact of our very low corporation tax rate and that we have a well-educated and highly skilled workforce but with low wage costs due to the recession. Ireland is as vibrant as London without the soaring rent costs so it’s a good time to invest in this market.”

He added: “the current business environment has been very challenging, without question. However we are seeing some positive signs now with a more consistent deal flow and more investors coming back to the market.” James Sherwin believes that there are plenty of opportunities for investment in the country: “There is certainly an increased supply of high yielding commercial property with solid covenants and with the increasing number of investors in the market there should be increased lending from the banks. There is also an increase in liquidity within companies which make them attractive from a takeover or investment perspective. It is also a good time for consolidation within the legal market and within the manufacturing and hotel sectors so we should see some movement in those sectors too.” The low corporation tax in Ireland is one of the key factors in attracting foreign investment to the country and with its highly educated workforce and proximity to mainland Europe there are a number of overseas companies, particularly US corporations, choosing it as the European base, he believes Ireland is proving itself to be a good commercial destination and with definite signs of recovery taking place, he believes that 2014 will see some very positive growth in Ireland.

Incentive programs for management: option plans Share option plans are considered to be one of the most wide-spread incentive schemes for top managers abroad. What is the purpose of such an incentive? Foreign companies (their shareholders) widely use share options to recruit, retain and motivate their employees. Moreover, the options are used to align the interests of employees, in particular top managers, with those of the company’s shareholders. Having become (or having the possibility to become) a company shareholder is thought to provide more motivation to managers to consider the best interests of shareholders in business management. Option plans benefits are: • the company becomes more attractive for highly qualified specialists (for both recruiting and retaining employees) • employees get additional motivation to reach and overachieve the operational and financial goals of the company. Moreover, option schemes contribute to ‘switching’ attention of their participants from short-term to long-term goals • managing succession planning by gradually transferring ownership to employees, rather than to new outside shareholders, if wished • cost-cutting while rewarding employees (employees possessing shares or share options are likely to be more tolerant when discussing issues of salary increase and bonuses, than the employees without shares or share options) • tax benefits (in some countries) What are the types of option plans for employees? There are an established a number of option schemes, in particular: • Classic options: if an employee fulfils the conditions for exercise of an option, he/she can buy a respective number of the company’s shares (normally, at a price below the market value). • Pooled options: a special company is established and a number of the company’s shares are transferred to it. The special company will own and sell shares, acting as a trustee for the benefit of participants of the option plan. • Phantom options: if an employee fulfils the conditions for exercise of an option, he/she cannot buy shares in the

company, but he/she gains the right to receive moneys, which he/she would receive (in the form of dividends or proceeds from the sale of shares) if he/she actually owned the respective number of shares. Does Ukrainian law envisage share options and derived incentives for top-managers of a company? The Ukrainian legislator hasn’t paid attention to such types of incentive schemes yet. As this issue is not regulated by law, there exist certain doubts about the enforceability of option plans structured at the Ukrainian level. Therefore, most of the option plans in Ukrainian companies are structured at the foreign level.

•

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to a strategic buyer or IPO of the company) or (b) to implement a pooled option that will create a limited internal market for the circulation of shares. The charter and the shareholders agreement may prevent or limit use of shares for option plans or restrict the disposal of shares. In this case it is necessary to amend the respective documents before implementing an option plan. Problems with fair market valuation of shares. Confidentiality issues. As a shareholder of the company, the manager may have access to information that was previously inaccessible to him/her, which may be quite undesirable for the owner.

Which companies use option plans most often? One can define two large groups of companies which use option plans: (а) public companies listed on one of the reputable Western stock exchanges and (b) private companies. In the first case, companies may not have option plans before the IPO, but they are most likely to implement options in the course of the IPO. This results from expectations of Western investors and is common practice. The situation with private companies is different. For historical reasons the implementation of option plans in private companies was less popular than in public ones. This can be explained by: • The initial owner not being willing to share its stake in, and control over, the business. The concerns of the owner may be addressed by: (a) the use of non-voting shares or (b) ensuring that the maximum amount of shares in the option plan does not exceed a certain threshold necessary for the owner to keep control over the company. It should be pointed out that this problem does not occur with phantom shares. • Lack of demand. There exists a perception that employees of private companies do not expect to acquire the right to participate in an option plan. • There are no or limited possibilities for free circulation of private company shares. Unlike listed shares, private companies’ shares have much lower liquidity, which makes them less attractive for employees. This problem may be solved in two ways: either (а) to tie in the exercise of an option with an ‘exit event’ (sale of the company

70 | Acquisition International | December 2013

Company: Avellum Partners Web: www.avellum.com Address: Leonardo Business Center, 19-21, B. Khmelnytskoho Str., 11th floor, 01030, Kyiv, Ukraine Telephone: +380 44 220 0335 Name: Kostiantyn Likarchuk Email: klikarchuk@avellum.com Name: Yuriy Nechayev

Leonardo Business Center 19-21 Bohdana Khmelnytskoho Str. 01030, Kyiv, Ukraine 11th floor Telephone/fax: +380 44 220-0335

...first class legal services in a first class way...

Avellum Partners is one of the leading full-service law firms in Ukraine with key strength in corporate finance and disputes. We cover capital markets, competition, corporate, disputes, finance, real estate, and tax and customs.

info@avellum.com

www.avellum.com

SECTOR SPOTLIGHT: Leading adviser

Leading adviser - project finance bank muscat, the largest financial institution in Oman, has a dedicated 24-member strong team of experienced professionals and constitutes the largest pure advisory desk in the Sultanate of Oman and in the region. The bank prides itself on offering unique solutions which combine their client knowledge and understanding with their structuring capabilities and product understanding to offer tailored solutions to meet client requirements. -------------------------------------------------------------The team at bank muscat represents an eclectic mix of chartered financial analysts, management

Company: bank muscat SAOG Name: Dr. Caroline Bolle Email: Caroline@bankmuscat.com Web Address: www.bankmuscat.com Address: PO Box 134, PC 112, Ruwi, Sultanate of Oman Telephone: +968 24767524

With an established history of 67 years and total consolidated assets reaching US$95 billion, Garanti Bank is Turkey’s second largest private bank.

Company: Garanti Bank Web Address: www.garanti.com.tr Address: Nispetiye Mah. Aytar Cad. No:2 34340 Levent Besiktas Istanbul Tel:+90 212 318 18 18 Fax: +90 212 318 18 88

graduates, doctorates in law, chartered accountants and engineering graduates. Dr Caroline Bolle is the group head of debt finance, she said: “A core element of bank muscat’s USP is its focus on client requirements and client objectives and its ability to structure and deliver innovative solutions that are tailor-made to suit client’s requirements.”

like Sohar, Salalah and, most recently, Duqm evidences this trend. During 2013, common trends emerging included long-term financing increasingly being achieved on ‘right’ project finance transactions. The banking sector in Oman, said Dr Bolle, has evidenced deep pockets of liquidity and shown ample interest in wellstructured projects in Oman.

bank muscat brings benchmark transactions to market to help shape the market, including the project finance market, in Oman and, as a result, is credited with many ‘first-ever’ transactions. This includes the first ever long term project finance transaction in Oman, the first ever project finance transaction with long-term Omani Rial fixed interest rate, the first ever greenfield project finance transaction in Oman with market risk and the first ever mezzanine transaction in Oman to name but a few.

During 2013, bank muscat has successfully structured and closed a number of project finance transactions with tenors in excess of 10 years which constitute some of the longest tenors achieved to date by private sector corporates in Oman and therefore this represents a major leap in the ongoing development of long term project financing transactions in Oman. In addition, bank muscat has been successful in structuring and raising the first sizeable shari’a compliant working capital financing for a project company in Oman.

In addition, in the capital markets space, bank muscat is credited with the first ever listed bond in Oman, the first ever USD listed bond in Oman, the first ever convertible bond in Oman and the first ever book-built IPO in Oman.

Looking forward to 2014, Dr Bolle thinks that fixed income (DCM & private placements) may well emerge as an additional source of funding although mature project companies may well be preferred candidates. Islamic finance, currently in its early stages of development, could also emerge as another significant source of funding in Oman.

In Oman, the business environment is buoyant. The increasing activity in special economic zones

We are an integrated financial services group together with our eight financial subsidiaries providing services in pension and life, leasing, factoring, securities, and asset management as well as international subsidiaries in the Netherlands, Russia and Romania. Following the best practices in corporate governance, Garanti is jointly controlled by two powerful companies, Doğuş Holding Co and Banco Bilbao Vizcaya Argentaria SA (BBVA), under the principle of equal partnership. Garanti Bank is the first Turkish bank to establish a dedicated team for project and acquisition finance in 1999. We are the industry leader in project and acquisition finance with our specialized teams in energy, acquisition, commercial real estate and

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transportation/infrastructure projects with the largest team in Turkish market with 32 people. Our team has a proven track record of and expertise on privatization, acquisition, BOT (Build-Operate-Transfer), TOR (Transfer of Operating Rights), infrastructure, energy and other greenfield projects which have been playing a major role for years in the sustainable growth of Turkey. We also provide advisory services in connection with structuring and arranging in order to develop the optimal equity and financing structure. Garanti Bank’s total project and acquisition finance exposure is US$13.4 billion as of November 2013 and expected to reach US$ 16.1 billion given the current outstanding commitments.

SECTOR SPOTLIGHT: Leading adviser J O Fabunmi & Co is regarded as one of the leading law firms specialising in public private partnerships in Nigeria. As one of the early movers in public private partnership advisory work in Nigeria from the mid 2000s with the Port Concession exercise, they have maintained the competitive edge as a leading law firm experienced in public private partnership transactions and advisory work. ---------------------------------------------------------Established in 1991 with the vision of becoming a foremost corporate and research law firm, J O Fabunmi & Co practice areas include corporate/commercial practice which consists of project finance, public private partnership, corporate finance and company secretarial practice, dispute resolution among others.

provide legal advisory services based on their local knowledge and international exposure on project finance. The firm has also been approached by government agencies to advise on complex and unconventional issues that require quick resolutions. They were also invited to join a team of advisers to prepare a business case for the development of greenfield crude oil pollution offshore reception facilities, the first of its kind in Nigeria. They were recently invited to join another transaction advisory consortium for a pack and charge municipal waste collation and transportation service delivery public-private partnership for one of the biggest cities in Nigeria. Members of the firm are repeatedly invited to speak at international training courses and seminars around the world.

Members of the firmâ&#x20AC;&#x2122;s corporate commercial practice team have been active over the years, especially in advisory work to governments. They have also been asked to facilitate a number of capacity building courses in publicprivate partnership and project finance aimed at strengthening contract negotiation and drafting in the public sector.

With the financial markets recovering, gradual progress is being made in Nigeria and there were a number of financial closures achieved in 2013 and, even though the expectation far exceeds the reality, there is still a huge amount of optimism that the market will respond to the growing demands.

J O Fabunmi & Co was recently approached by one of the top 10 banks in the world to

With the privatisation of the Nigerian power sector and continuing power sector reform,

Dr Mohamed Idwan (Kiki) Ganie is the managing partner of Lubis Ganie Surowidjojo and has more than 30 years of legal experience. He specialises in commercial transactions and commercial litigation, including alternative dispute resolution. ---------------------------------------------------------Lubis Ganie Surowidjojo has secured our position as the premier Indonesian corporate transaction and commercial litigation law firm. This combination of commercial law experience and litigation uniquely positions us to deal with the full range of commercial issues faced by our clients.

other political risks. This replaces the previous practice of government guarantee notes that were issued on a per-project basis and creates a robust framework within which all future PPP projects in Indonesia will operate.

We have the experience of representing a diverse range of clients, including domestic and multinational corporations, public and private companies, governments and state owned enterprises. At LGS we work closely with our clients to understand their problems, determine their needs, and arrive at practical solutions that are both cost-effective and viable over the long term. LGS acts as the lead legal advisor to the IIGF, which is an Indonesian government institution that insures risks of public private partnership projects stemming from a variety of sources, including unfavourable policy changes and

The infrastructure projects necessarily involve a large number of parties, both commercial and government, ranging from local regional governments to ministerial level, and often involving projects of national significance, with the associated political aspects of their development. As such, it is challenging, but necessary, to keep in mind the interests of all of the parties involved, and make sure that there is continued understanding and cooperation throughout the initiation and development of the projects. The legislative complexity is also of note, since the PPP framework in Indonesia is still developing, with a number of projects that we have worked on being prepared in conjunction with the drafting and issuance of the necessary legislation to allow the projects to proceed. A graduate of the faculty of law of the University of Indonesia, Dr Ganie holds a PhD in Law from the University of Hamburg,

there will be increased activities in that sector and it is envisaged that there will be more state governments participating in independent power projects to address the current electricity deficit. There are also emerging opportunities in Nigeriaâ&#x20AC;&#x2122;s housing sector. The Federal Government of Nigeria recently approved a $300m credit facility from the International Development Association to address the housing deficit in the country. The funds are aimed at establishing the Mortgage Refinance Company that will generate long-term loans for first-time home owners and new home owners with lower family incomes.

Company: J. O Fabunmi & Co. Name: Mr. OBA Fabunmi Email: oba.fabunmi@jofsolicitors.com Web Address: www.jofsolicitors.com Address: 11th Floor, CSS Bookshop House, 50/52, Broad Street, Lagos, Nigeria Telephone: 234-1-295-4807

Germany. He also completed further studies at the Institute for Advanced Legal Studies in London, the Max Planck Institute for International Private Law in Hamburg, and in political studies at the Staatswissenschaftliche Fakultaet of the University of Zurich, Switzerland. Dr Ganie has acted as an expert in a number of court and arbitration proceedings and his expertise covers general corporate/company law, mining, investment, acquisitions, infrastructure projects/project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance.

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SECTOR SPOTLIGHT: Leading adviser SANTERRE Limited leads businesses in all aspects of strategic planning, growth and business optimisation for complex products and services. -------------------------------------------------------------It manages major engineering, procurement and construction projects, and the vertically integrated development of infrastructure projects, including Public Private Partnerships (PPP) and energy related investments. SANTERRE also provides business management and consulting services to private firms and government agencies. CEO Charles Hardeman has a 25-year track record in business management, strategy, planning, marketing, and engineering, procurement and construction, which has enabled him to develop and deliver major business critical projects for private and public sector organisations. SANTERRE has been involved as a lead partner on numerous major projects. They include the turnkey engineering and construction of:

Company: SANTERRE Limited Name: Charles Hardeman Email: charles.hardeman@santerre-ltd.com Web Address: http://www.santerre-ltd.com Telephone: +1 415 994 9129

Partner Denis Petkovic, head of international finance and project finance at Withers, says the global economic outlook may be currently unclear but Asia represents some of the best opportunities there are. -------------------------------------------------------------Three trends are linked to the continuing scarcity of capital and the greater need for equity finance in projects. Firstly, infrastructure funds, private equity and similar entities are moving into the space vacated by traditional lenders. Secondly, with these new lenders arriving, intercreditor issues and more complexity in financing have invariably followed. So shareholders’ arrangements have become more complex as traditional sponsors work with infrastructure funds, private equity and other funds whose focus

Company: Withers Name: Denis Petkovic Email: Denis.Petkovic@withersworldwide.com Web Address: http://www.withersworldwide.com/ Address: 20/F Gloucester Tower, The Landmark, 15 Queen’s Road Central, Hong Kong Telephone: +852 3711 1698

• • • • •

•

power plants and electrical transmission systems water supply and waste treatment facilities onshore and offshore oil and gas facilities (including pipelines) transportation facilities (including ports, jetties, terminals, supply bases, toll roads and bridges) major industrial works (including light manufacturing facilities, and industrial estate developments) residential and commercial property developments.

Mr Hardeman and SANTERRE have led in the development of privatised infrastructure in selected markets requiring participation in the financing of the projects, including: • EPC contractor and financial arranger for the US$300Million ‘Bonny Export Terminal project, Nigeria - the first commercial lending to Nigeria from international commercial banks without the support of export credit agencies or multi-lateral agencies • Developer of the first privatised port facility in Malaysia – ‘Lumut Port and Industrial Park’ • Lead contractor and arranger of export credit finance for one of the largest hook-up and commissioning projects– ‘Mossel Bay’ Gas Platform, South Africa • Developer for the PPP privately financed 400 MW Coal Fired ‘Termopacifico’ Power Station in Southern Colombia • Developer of first BOT / PPP project in Southeast Asia – ‘Labuan Water Supply’ • EPC contractor and provider of bridging finance for the first privatised power plant in Indonesia‘Cikarang Power Station’ • Developer of the ‘Labuan-Beaufort

is influenced by exits and minority protection controls. Quasi equity, such as loans ranking lower than senior debt through subordination and priorities arrangements, is becoming more common along with traditional equity arrangements, such as ordinary shares, or hybrid arrangements, such as preference shares. Thirdly, ‘sponsor risk’ has become and will continue to become more important to lenders. The reputation, experience and creditworthiness of a sponsor will have more of a direct effect on a project’s viability and may require smaller developers to work with larger industry players and financial investors to take projects forward. It is not always the case that a project will result in the ‘keys to the plant’ being given to the lenders and sponsors walking away from the project at time of default. Commercial pressure from lenders and reputation issues may see a sponsor stepping into a project and funding gaps arising from difficulties in project documentation notwithstanding a formal risk allocation. For sponsors this emphasizes the divergence in their interests from those of lenders, the need to approach project documentation from an independent perspective and to focus on allocation of risk to other creditworthy parties to an even higher degree. Over the next year I think resources projects internationally will remain a priority and capital

74 | Acquisition International | December 2013

Interconnection’, the first BOT / PPP project for the power sector in Malaysia SANTERRE partnered with Bathgate Management Ltd to formulate, propose and apply Public/Private Partnership funding structures for the development of infrastructure in Africa, including: • A US$200 million PPP port expansion in Ghana • Lead developer for an international consortium made up of seven major companies for the expansion and management of Ghana’s Tema and Takoradi ports. The investment group, the Ghana Ports Service Consortium, negotiated a concession to invest $200 million in developing the container and oil export ports as part of the on-going Ghana Gateway Project. SANTERRE also led the activities of Bathgate subsidiary, International Energy Partners Ltd (IEP), an independent oil and gas marketing group that operates through a series of regional business associates covering almost every aspect of the physical oil market. IEP led the oil and gas trading activities for ‘West’, a joint venture with a Singapore-based trading company providing services in the procurement and trading of energy products on the world markets and a Lagosbased trading company experienced in the trading of energy products in West Africa. Through another Bathgate subsidiary, Rapid Installation Completions Ltd (RAPIDCO), SANTERRE engaged worldwide in the development of projects that require completion in the shortest possible time through innovative engineering, offsite fabrication, sea transport delivery and fast track onsite construction techniques.

markets should return a little. There will also be a trend towards debt and equity rations loosening up. Established in 1896, Withers Hong Kong is a leading international law firm comprising over 100 partners and more than 700 people across 10 offices in Europe, Asia, the USA and the Caribbean. Withers is arguably the largest and most prolific tax, trust and estate planning practice in the world. The project finance team at Withers has worked on major deals in Eastern Europe, CIS, Asia, Middle East and Africa in a huge range of industries. We regularly advise clients from the early stages of project structuring on risk allocation between different counterparties, bidding procedures and concession agreements, as well as on project bankability and security arrangements. Our experience extends to public private partnerships in the education and healthcare sector and the outsourcing and transfer of state functions to the private sector. We also have significant experience advising lenders and borrowers on debt and equity investments by multilateral institutions in emerging markets. Our lawyers have worked on private and sovereign transactions financed by the European Bank for Reconstruction and Development, the European Investment Bank, the International Bank for Reconstruction and Development (World Bank Group), the International Finance Corporation and the Black Sea Trade & Development Bank.

SECTOR SPOTLIGHT: Leading adviser

Leading adviser - Hong Kong

Julia Charlton is the Principal and Managing Partner at Charltons, a focused corporate finance firm employing a team of around 50 legal professionals and support staff who are vastly experienced in offering advice to both multinational and local companies operating in Hong Kong and the PRC. ---------------------------------------------------------Amid a continuing difficult time globally, Hong Kong is holding its own. The economy continues to grow, albeit at a modest pace. Hong Kong has a strong historic reputation as an excellent location for foreign investment. Julia says: “Hong Kong has always inspired confidence in foreign investors and I do not think this reputation has changed. Hong Kong is the gateway to Asia: we are ideally located close to many exciting business jurisdictions and we are at the edge of the Pearl River Delta, China’s most productive manufacturing region.”

Hong Kong has a transparent legal and business environment, committed to freedom of information. It is one of the most corruptionfree cities in the world, with rule of law and a completely independent judiciary. There are no barriers to trade and no restrictions on investment. “I believe we will continue to see moderate growth in the Hong Kong economy,” says Julia. “Low unemployment will assist domestic demand. As ever, Hong Kong is a great place to live and do business in, so I think its reputation and performance will continue to attract foreign investment and business.” Charltons aims to provide practical, creative and commercial solutions that match the business objectives and priorities of their clients. For 10 of the past 11 years Asian Legal Business has awarded it the ‘Boutique Firm of the Year’ title.

Charltons has been awarded Hong Kong’s top Independent Law Firm in the Euromoney Legal Media Asia Women in Business Law Awards 2012 and 2013, in recognition of its flexible work arrangements to help women advance in the legal profession.

Company: Charltons Name: Julia Charlton Email: juliacharlton@charltonslaw.com Web Address: www.charltonslaw.com Address: 12th Floor, Dominion Centre, 43-59 Queen’s Road East, Hong Kong Telephone: +852 2905-7888

Leading adviser - Singapore We are honored to be awarded the Leading Adviser 2013 Award. We believe that this prestigious award recognizes the core values and capabilities of JTJB. JTJB is celebrating its 25th year. We are a full service Singapore law firm with specialist practices in Commercial Dispute Resolution and Shipping. JTJB’s Shipping & Admiralty Practice Group is regarded as one of the top maritime practices in Singapore and one of the most experienced shipping practices in Asia. JTJB has also recently been named by Legal 500 as a leader in Shipping with a “strong panAsian presence and global reach”. Our boutique practice allows us to take on matters of any scope, urgency and complexity without compromising our commitment to provide our clients with personalized and dedicated attention. We are well equipped to provide our clients with effective multi-jurisdictional assistance, advice and representation in Singapore and throughout the world. We have the expertise and experience. We understand our clients’ business. Our focus is always on our clients’ needs and objectives. We aim to provide our clients with fast, practical and creative legal solutions in the most efficient and cost effective manner possible.

Company: Joseph Tan Jude Benny LLP Name: Murali Pany Designation: Managing Partner, JTJB LLP Email: info@jtjb.com Web Address: www.jtjb.com Address: 6 Shenton Way, OUE Downtown 2, #23-08, Singapore 068809 Telephone: +65 6220 9388

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SanLing Chan

Solicitor, Immigration BJuris LLB (UWA) MMIA Australian Migration Agent Registration Number 9701066

Knowledgeable, professional and prompt assistance for Visas and Migration to Australia If you are looking for a professional, efficient and knowledgeable Australian Migration Agent, you have come to the right place. Since 1997, SanLing Chan has been a Registered Migration Agent certified through the Migration Agents Registration Authority (MARA). She is also a practising solicitor combining nearly 30 years of legal experience, with a specialised focus on Australian migration law.

â&#x20AC;&#x153;I appreciate all your hard work getting our visa approved, I know it was very difficult and stressful at timesâ&#x20AC;? enquiries@sanlingchan.com

sanlingchan.com

SECTOR SPOTLIGHT: Leading adviser

Leading adviser A renewable future for Germany’s economy

Dr Jan Dittmann is an equity partner of HEUSSEN Rechtsanwaltsgesellschaft mbH and a member of the firm’s real estate and renewable energies practice group in Munich. ---------------------------------------------------------------------One of the key challenges facing Germany is the successful transition from the fossil fuel and nuclear energy age to the age of renewable energy. Under the so-called ‘Energiewende’ (energy turnaround) alternative energy sources will replace the nuclear power plants that are to be gradually switched off by the year 2022. The Renewable Energy Act (EEG) has already been very successful in increasing the renewable energy’s share of proportion of final energy consumption (electricity, heat, fuel). However, one factor now becoming an increasingly pressing issue (besides the need for enhanced energy storage solutions and

grid technologies) is the energy price hike due to the promotion of renewable energy. Under the EEG a sort of green-energy solidarity surcharge is automatically added to every consumer’s (including a lot of business sectors) electricity bill, which has led to electricity prices becoming the second-highest in Europe. It is now important that the German government finds the right way between the need for competitive energy prices and the aim of continuing with the fast development of renewable energies. HEUSSEN is one of the largest German commercial law firms, with offices in Berlin, Frankfurt, Munich, Stuttgart, Brussels and New York as well as associated law firms in Amsterdam (HEUSSEN BV) and Rome, Milan, Conegliano (HEUSSEN Italia). Our clients are served by over 120 lawyers who offer legal advisory services from 10 practice groups and three country desks.

Our partners have a deep knowledge of the industries where our clients are active: not only do we understand the law in general, we also understand the business of our clients.

Company: HEUSSEN Rechtsanwaltsgesellschaft mbH Name: Dr. Jan Dittmann Email: jan.dittmann@heussen-law.de Web Address: www.heussen-law.de Address: Brienner Strasse 9 / Amiraplatz, 80333 Munich, Germany Telephone: +49 89 29097-0

Leading adviser - Taiwan Jackson Shuai-Sheng Huang is a partner with Formosa Transnational Attorneys at Law, one of Taiwan’s largest and best-known law firms, which has gained a reputation for being exceptionally strong in dispute resolution, including negotiation, arbitration and litigation over the years. Presently, more than 70 Taiwanese and foreign licensed attorneys together with a team of IT and biotechnology patent engineers coordinate efforts to provide quality legal service to industry leaders in the diverse fields of banking, finance, IT, biotechnology, telecommunications and international trade. It has three specialised practice groups, namely litigation, corporate, banking and finance and IP group to focus on emerging areas of law. Combining our experiences of local and international laws, familiarity with Taiwanese market, custom and business practices as well as government regulatory requirements, our teams work collaboratively together to provide the most effective and innovative resolution to clients faced with contentious legal issues. Generally, we advise on general legal/regulatory issues, assist in the preparation and interpretation of contracts and help our clients to resolve commercial issues. Historically, Taiwan has always had a vibrant business environment that encourages and facilitates both international and domestic transactions. Proper legal and economic infrastructures are in place to

facilitate merger and acquisition deals. Even with the recent slowdown in the world economy, the merger and acquisition market remains strong and active in Taiwan. In addition, there are a large number of very strong and healthy mid and small size businesses and a good number of the business owners are looking to sell their businesses. Acquiring a company in Taiwan is a great stepping stone to entering the market in China because a large number of Chinese manufacturing companies are subsidiaries or joint venture companies with companies in Taiwan.

Traditionally, the policy makers in Taiwan were hostile to private equity. Even though the policy today remains the same, the lobbying force in favour of private equity is becoming stronger. Furthermore, Taiwan is going through a recession and the government is exploring various options to boost the economy; so it is foreseeable that the policy makers may change their attitude to favour private equity, which would create a stronger capital market and boost the economy of Taiwan. In addition, opening up the private equity market is essential for Taiwan to be connected and on a par with the rest of the world.

When the Taiwanese government opened its securities market to investors from mainland China, heavy restrictions were placed on certain industries. However, over the past few years, the trend has been to slowly lighten some of the restrictions and create programs to facilitate transactions between the two regions. The Taiwanese government has been active in signing bilateral trade agreements with other countries. For example, on November 6, 2013, Taiwan and Singapore entered into an economic partnership agreement. Free ports have been set up in various ports in Taiwan to allow certain activities at these ports to be tariff free. In addition, the policy makers in Taiwan are working on creating free economy zones in Taiwan.

Company: Formosa Transnational Attorneys at Law Name: Jackson Shuai-Sheng Huang Email: Shuai-sheng.Huang@taiwanlaw.com Web Address: www.taiwanlaw.com Address: 13th Floor, Lotus Building, 136 Jen Ai Road, Section 3, Taipei 106, Taiwan, ROC Telephone: +886 2 2755 7366

Acquisition International | December 2013 | 77

SECTOR SPOTLIGHT: Leading adviser / The British Virgin Islands: Leading the Offshore Pack

Leading adviser - Malaysia: Continued growth for 2013 The critical success factors for growth in 2013 and 2014 are broadly similar- Advancing into the higher added value strata; moving along the value chain in each core economic sector; continued progress from a commodities producer, to manufacturing, higher value add manufacturing and now as a services provider in a knowledge based economy. Services today account for 59% of employment, while machinery and transport equipment account for $87 billion out of $198 billion in exports (manufactured products at $17 billion in contrast). The external environment, the Government’s fiscal position and confidence building in terms of governance are critical. All said I expect growth for 2013 & 2014 to at 4% - 5%. Numbers aside, these are on my “to watch” list: 1. Strategic Growth areas namely the Iskandar Region (IR) and the East Coast Economic Region (ECER) in the East continue to drive growth and inward investments are significant. They are catalytic and have a transformatory effect on the economy. Iskandar’s well calibrated combination of 6 Pillars – Creative, Educational (Educity - Malborough College, Newcastle University etc GNI from Education is projected to grow from $11bil in 2009 to $20 billion in 2020), Financial, Healthcare, Logistics and Tourism (Legoland etc), has positioned it as a regional base while setting the stage for

domestic and inward investments along the value chain. 2. The ECER has successfully leveraged upon the Oil and Gas (O&G) assets along the East Coast to make it a destination for prominent international investment. RM 50bil in investments have been recorded over the last 5 years and is projected to reach RM 100bil by 2020.

The O&G and the Palm Oil (commodities and specialities) sector is an exciting playing field. From a net importer we are now a regional exporter with some 29 petrochemical plants producing 39 products and the world’s 2nd Largest LNG producer. In the Oleochemical sector we are a global leader led by firms such as the IOI Group. It is no less exciting with some 130 products. The Government’s Global Initiative For Trading (GIFT) aims to capitalize upon this, by drawing in global trading companies to use Malaysia as their base.

3. The expansion of the Mass Transportation infrastructure especially within the Klang Valley, will energize the real estate sector. It has already facilitated clusters of high quality real estate development and has changed the equation of time, distance and location. We can expect interesting forays in the real estate market as new brands eg The St Regis, Four Seasons, the Harrods Hotel and the Banyan Tree Suites take their place on the KL Skyline.

4. The continued liberalization of financial services. In 2009 new banking and insurance licenses have been issued on the back of a consolidation of the Banking industry. We are encouraged by the opportunities and mindful of the challenges and undercurrents. Recognizing extensive scope for cross border activity we have invested time and effort in enhancing collaborative ties. Beyond facilitating transactions we see a growing role in the origination of opportunities and strategic introductions. There is also a vast potential for the introduction of more sophisticated and flexible financial products to fund projects and continued corporate growth.

Company: The Chambers of R. Sivagnanam & Associates Name: Mr. Rutheran Sivagnanam Email: rutheran@rsachambers.com Web Address: http://www.rsachambers.com/ Address: 7 th Floor Wisma Genting, 28, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia Tel:603-2732 9530 Fax: 603- 2732 9530

The British Virgin Islands: leading the offshore pack Hélène Anne Lewis, Managing Partner at SimonetteLewis, Lawyers and Notaries Public, explains the attractions of the British Virgin Islands as an international financial centre to Acquisition International. ---------------------------------------------------------------------The BVI’s commitment to international best practice has pre-dated the international trends towards the imposition of global standards for compliance. Our Financial Services Commission has invested in top quality professional staff who maintain appropriate high standards and have done so long before many onshore centres. The BVI continues to rate highly against all international standards in this regard. The BVI is attractive because of the flexibility and innovation of its enabling legislation, the depth of its professional services, its political and economic stability and the recognisability of its brand. We have the right touch regulatory approach and we are responsive to our markets without losing our respectability and credibility as a particularly well regulated jurisdiction. The principal markets for BVI have long been Asia and Latin America. Since the introduction of the International Business Companies Act in 1984, the BVI has been the preferred jurisdiction of incorporation for those markets. The enactment of the BVI Business Companies Act in 2005, the introduction of the

innovative VISTA trust in 2003, and the trust laws amendments in May 2013, have all enabled the BVI to enhance its offering. The BVI is now also a premier provider of trust and trustee services to those markets as well. An extensive and effective public sector partnership with the private sector has helped the BVI to develop innovative legislation that meets the needs of our markets in the introduction of modern, pragmatic and flexible vehicles under both our corporate and trust legislation regimes. As with all the other international finance centres the BVI faces the challenges of implementing and administering extra territorial legislation in 2014. How FATCA and its various permutations around the world will eventually affect us remains to be seen, but we have proven in the past to be extra-ordinarily resilient in the face of threats to our jurisdiction and I have no doubt that we will rally and survive what looks like a tidal wave heading our way. Current challenges to the operations of prominent international finance centres like the BVI offer opportunities to our firm to reach out to our clients with more targeted advice and specialised services. We recognise that global standards on transparency are being reshaped but SimonetteLewis (like most firms in the BVI) has always been committed to maintaining the right balance between compliance and confidentiality so we continue to offer our clients the

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comfort of being able to rely on us to act always in their best interests. We are a multi-disciplinary boutique practice, focussed on individualised responsive attention to our clients who are global HNWIs as well as law firms, wealth managers and trust companies in Asia Europe and Latin America. We offer corporate, trust, litigation and other private client services from a team of highly experienced professionals with deep experience in the BVI, UK and the Caribbean.

SimonetteLewis Company: SimonetteLewis, Lawyers & Notary Public Name: Hélène Anne Lewis Email: heleneannelewis@simonettelewis.com Web: www.simonettelewis.com Address: Magnolia Chambers, Harbour House, Waterfront Drive, P.O.Box 431, Road Town, Tortola, VG1110, British Virgin Islands Telephone: +284 494 4367

SECTOR SPOTLIGHT: Global Expertise Directory

Global Expertise Directory Climate Shipping & Trading LTD

Cabinet d’Avocat Ould Abdoullah

Climate Shipping & Trading was established in 2001 and is now the second leading shipping agent in Ghana. It also carries out clearing and forwarding.

Cabinet d’Avocat Ould Abdoullah is based in Mauritania and specialises in business law. Lawyers at the firm speak Arabic, French and English.

Much of the company’s business comes via the Dubai-Ghana route and it has opened a branch in Dubai to facilitate this work.

Name: Mine OULD ABDOULLAH Telephone: +222 4641 7702 +222 4525 5954 Address: immeuble BMCI, 2em Etage, N’ 203. BP: 3807 Email: cabmine@yahoo.fr

Climate Shipping & Trading prides itself on the professionalism of its workers who work hard to meet the company’s vision of making shipping easier for everyone.

MIHOSO International Foundation (Here in after called Mission of Hope) is a reputable organization committed to providing public health, social and organizational development interventions to communities through evidence-based research, advocacy, capacity building training, sharing of resources, and provision of livelihood empowerment programmes to target women, youth and children in Ghana, especially in marginalized and deprived areas to bring local economic development and meaningful life style. MIHOSO has a board of trustees. They formulate policies for implementation by the national secretariat headed by the president and CEO. The organization has fully functional child protection, gender, human resource, finance and administrative policies. Additionally, the organisation has a comprehensive five-year strategic plan and a monitoring and evaluation policy.

Door-to-door service and highly competitive rates are on offer and the team at Climate Shipping & Trading look forward to working with shipping lines and importers, particularly those who want to use their Dubai-Ghana route experience.

Company: MIHOSO International Foundation Web: http://mihoso.org

McMurray Aldum Inc McMurray Aldum Inc. comprises a group of dedicated and driven young managers who, together, are creating a dynamic, fully rounded and highly motivated team. As a proud member of global and renowned organisation AGN, we offer the most advanced accounting and financial client service management solutions in South Africa. The demand for our services has grown tremendously since our inception and we provide our solutions to Johannesburg, Durban and Cape Town. Our expert staff guarantee you will receive the best end results, whether you require auditing, taxation, accounting, consulting, or payroll management services.

AGA Certified Public Accountants & Advisors, PSC AGA Certified Public Accountants & Advisors, PSC are licensed to practise in Puerto Rico, Florida and Washington. They offer a range of services from auditing and tax consulting to mock reviews of federal awards in preparation for federal or state agencies’ monitoring processes. They also act as expert witnesses, business development between Puerto Rico and the continental US and are a Federal monitor for Head Start programs. They work closely with IT providers and lawyers in corporate fraud cases and are fully bilingual in English and Spanish.

K-SAN LAW FIRM uses a multi-disciplinary approach to legal practice. With a substantial corporate client base the firm is committed to the protection of the interests of its clients. We advise corporate clients on a variety of issues in a wide range of areas of law. Our practice areas range from corporate law and political consulting to the legal consequences of investments and the legal conflicts that can arise from cross-border activities. K-SAN is setting the model and structures for modern legal practice in Ghana that other serious members of the profession will use as the benchmark for their own practices. Company: K-SAN Law Firm Email: info@k-sanchambers.com Web: www.k-sanchambers.com Address: Anona House, C125 Subukwe Close, Off Farrar Avenue, Adabraka, Accra P. O. Box GP21820, Accra Telephone: +233 (0)30 222 4301

Acquisition International | December 2013 | 79

DEAL DIARY: M&A from around the world

Deal Diary

CONSUMER 82

AL HAMD FOODS

BETTY BLUE

PARK MOVES TO CALEDONIA

ENERGY & RESOURCES

ARGOS SODITIC ARRIVES AT CISBIO

E.ON SELLS 80% STAKE IN RÖDSAND II

NEWFIELDS FOR SAPURAKENCANA

UMW OIL & GAS – 2013’S LARGEST OIL AND GAS IPO

INDUSTRIAL 85 AKZNOBEL

Welcome to December’s Deal Diary, Acquisition International’s round-up of recent M&A activity. Once again, we feature a range of transactions in various sectors. In Energy & Resources we have the largest oil and gas IPO of 2013, which was also Malaysia’s largest offering of the year. You can read more about the UMW Oil & Gas IPO on page 84.

GREEN LIGHT FOR GRINDROD AND RACEC

WITHAM MILLS ENGINEERING

SUPPORT SERVICES

CARGOTEC’S MACGREGOR MOORS UP WITH PUSNES

BAIRD’S ALPHA INVESTMENT

In industrials The Competition Commission has given the go-ahead for Grindrod Limited, the JSE-listed freight logistics company, to acquire the majority shareholding in RACEC Group Limited, the AltX-listed engineering services group (page 85).

GLOBAL RISK PARTNERS ATTRACT PENTA AND MAVEN

THE DRINKS ARE WITH MARMON

MEERENDONK JOINS JF HILLEBRAND BENELUX

Support services saw Baird Capital’s private equity group buy a majority stake in Alpha Financial Markets Consulting, which valued the firm at £28 million (page 86). Meanwhile, international engineering group IMI has sold its beverage dispense and merchandising divisions to The Marmon Group (page 87).

NEW ERA FOR METER PROVIDA

ARMSTRONG WATSON

SWIFT WORLDWIDE RESOURCES

WESTSTAR AVIATION SERVICES

In the TMT sector Manchester-based Out There Events, which is jointly owned by Marcie Incarico and the Timpson Group, has acquired publishing and events business Mix Media Ltd for an undisclosed sum (page 89). Have you done a deal recently? If so, we want to hear from you – head to our website www.acquisition-intl.com and submit the details.

80 | Acquisition International | December 2013

TMT 89

EXCLUSIVE NETWORKS GROUPS

NEXT MEDIA

OUT THERE GETS INTO THE MIX

DEAL DIARY: M&A from around the world

Acquisition International’s round up of 2013’s top M&A deal’s, with data from Zephyr, published by Bureau van Dijk According to Zephyr, the M&A database published by Bureau van Dijk, the highest valued deal of 2013 to date was announced in September and had a target operating in the telecommunications sector. This would have contributed significantly to the aggregate USD 374,011 million recorded for the industry in the year to date, placing it fourth in terms of value. On 2nd September US telecoms network operator Verizon agreed to purchase the remaining 45 per cent shareholding it did not already own in mobile communications firm Cellco Partnership, trading as Verizon Wireless, from Vodafone. The deal, which is expected to complete during the first quarter of 2014, is valued at USD 130,040 million. Unsurprisingly, this was not the only transaction targeting the telecommunications market; Virgin Media was targeted in the fourth-placed deal after Liberty Global paid USD 24,000 million for the business. Furthermore, in July Softbank, through its Starburst II acquisition vehicle, picked up Kansas-headquartered Sprint Nextel for USD 23,900 million, equating to an offer price of USD 7.65 per share, up from an initial approach of USD 7.30 following a competing bid from satellite television firm Dish Network. Other notable deals to have taken place during 2013 to date include Berkshire Hathaway and 3G Capital’s USD 28,000 million purchase of Pittsburgh-based food products giant Heinz, which completed in June and is the second-largest deal of 2013 to date by value. This is followed by the acquisition of Texan computing behemoth Dell, valued at USD 24,900 million. Denali, a vehicle formed by founder Michael Dell and Silver Lake Partners for the purposes of the transaction, picked up the business in late October in spite of a rival proposal from veteran investor Carl Icahn and Southeastern Asset Management. The rest of the top ten was made up of firms in the banking, entertainment, advertising and biological product manufacturing sectors, with those targeted including National Bank of Greece, Bankia, NBCUniversal Media, Omnicom and Life Technologies Corporation. All targets in the top ten were based in the US, with the exception of Bankia (Spain) and the National Bank of Greece.

NUMBER OF DEALS BY SECTOR: 2006-2013 YTD (AS AT 27 NOVEMBER 2013) Zephus classification (target) Personal, Leisure & Business Services Computer, IT and Internet services Wholesaling Banking, Insurance & Financial Services Industrial, Electric & Electronic Machinery Mining & Extraction Retailing Property Services Transport, Freight, Storage & Travel Services Chemicals, Petroleum, Rubber & Plastic Public Administration, Education, Health Social Services Utilities Construction Metals & Metal Products Food & Tobacco Manufacturing Biotechnology, Pharmaceuticals and Life Sciences Communications Hotels and Restaurants

2013 13,441 10,836 10,627 10,537 7,480 5,397 3,952 3,553 3,013 2,991 2,725 2,378 2,357 2,224 2,209 1,744 1,552 1,391

Acquisition International | December 2013 | 81

DEAL DIARY: Consumer Deals

CONSUMER

AL HAMD FOODS

BETTY BLUE

Fauji Fertilizer Company Limited (FFC), the biggest fertilizer company in Pakistan with a market share of 51%, acquired Al Hamd Foods limited (AHFL) as a wholly owned subsidiary on 3 October 2013.

Trilantic Capital Partners Europe has agreed to acquire a minority equity shareholding in Betty Blue SpA, an Italian company that operates in the luxury premium fashion and accessories market under the brand names Elisabetta Franchi and Betty Blue.

The complex acquisition deal was led and executed by MCB Bank Limited. Its team structured, arranged and advised on the entire financing arrangement of the PKR 1.6B longterm loan that facilitated the acquisition of AHFL. AHFL was incorporated on 6 October 2006 as a food processing and storage facility for frozen fruit, vegetables, cooked and semi-cooked food and fresh meat, with a total production capacity of 27,000 tons per annum. It established Pakistan’s first state-of-the-art Individually Quick Frozen (IQF) fruits and vegetables plant and later expanded to produce ready-to-eat meals, a chicken abattoir and controlled atmosphere stores. Acquiring it enables FFC to capitalise on its existing nationwide farmers’ network. The financing was arranged by the Corporate BankingNorth Team of MCB Bank, which has a long-standing relationship with FFC. The Bank’s team was led by Natasha Ahmed and Syed Faheem Ahmed and comprised Asma Saleem and Aadil Babar. Ms Ahmed said: “The company’s requirement was to obtain funding in domestic currency from local financial institutions in the shortest possible time – three weeks. MCB Bank Limited has arranged the financing in record time and the deal has fully met the client’s objectives and timelines.” As well as structuring the deal to meet the record-breaking time frame, the MCB team’s activities also included: arranging all required approvals; finalising legal documentation and structure, and providing a firm commitment to the existing lender to take over their loan which facilitated the smooth acquisition. Mr Ahmed added: “The MCB team was fully geared towards actively participating and providing solutions for the successful arrangement of funds in the shortest possible time. This included structuring the takeover modalities and linking the acquisition structure with the financing facility.”

FFC ACQUIRES AL HAMD FOODS LTD.

DRV Corporate Finance

Sin&rgetica acted as sole financial advisor to Betty Blue SpA, with managing partner Federico Giammarusto leading the transaction, assisted by Martina Visigalli. Sin&rgetica began working with Betty Blue two years ago. Sin&rgetica is a leading strategic management consulting and corporate finance advisory firm in Italy with more than 40 years’ consolidated experience. Federico Giammarusto acted as financial advisor to the Italian economic development Ministry for Ittierre Group (Ittierre, Gianfranco Ferrè and Malo) restructuring procedure in 2010. federico.giammarusto@sinergetica.net martina.visigalli@sinergetica.net Elisabetta Franchi has built one of the fastest growing premium womenswear brands in Italy since founding her company in 1998. She operates in Italy and international markets through a network of 80 mono-brand stores and over 1,100 multibrand stores. In geographical terms, the Italian market accounts for 65% of sales, while major international markets for the brand include Russia, the Middle East and Asia. Betty Blue SpA, based in Bologna, had revenues of approximately €105 million in 2012 and an EBITDA of approximately €26 million. The company forecasts further growth in 2013. Trilantic’s investment underlines its strategy of focusing on growth companies with further international expansion opportunities. Trilantic Europe’s local knowledge in Italy coupled with its international capabilities will enable it to work with Elisabetta Franchi to embark on the next phase of the company’s growth strategy. Elisabetta Franchi said: “The entry of Trilantic is based on a shared development plan, which will allow the company and the brand Elisabetta Franchi to significantly accelerate growth in international markets with particular reference to the markets of Southeast Asia.” Vittorio Pignatti Morano, Founder and European Chairman of Trilantic, says, “The company’s combination of creativity, professionalism and efficiency has convinced us to invest in this project. We are delighted to partner with her to embark on the company’s international growth plans into markets attracted by products which are ‘made in Italy’.”

TRILANTIC EYES UP BETTY BLUE

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PARK MOVES TO CALEDONIA Caledonia Investments plc has announced that it has acquired Park Holidays UK, a UK holiday park operator that owns and operates 21 freehold and two leasehold caravan parks in the south of England. Park Holidays has been run by its current management team of CEO Jeff Sills, CFO Al Loch and sales and marketing director Tony Clish since January 2006, when they acquired the business from its founders through a management buy-in backed by funds managed by Graphite Capital. Since then, Park Holidays has grown to become the UK’s fourth largest caravan holiday park operator. For the financial year to 31 December 2012, Park Holidays generated EBITDA of £20.4m and profit before tax of £2.5m, with gross assets of £256.5m. The transaction values the business at £172 million, which has been funded by £88 million of equity from Caledonia and £90 million of bank debt. RBS, HSBC, Lloyds Bank, Barclays Bank and Santander have provided the acquisition debt facilities. In addition, a £10 million acquisition and capital expenditure facility has been arranged to assist the future expansion of the business. The investment in Park Holidays was led by Tim Lewis, Duncan Johnson and Tarquin Wethered for Caledonia. Macfarlanes acted as legal counsel for Caledonia. KPMG provided financial due diligence advice and Deloitte tax advice. CBRE undertook property valuation work with CiL providing commercial due diligence advice. Management due diligence was performed by Catalysis. Wyvern Partners provided debt advisory services. CMS Cameron McKenna provided legal advice to the banking syndicate. Management were advised by Wyvern Partners and DWF.

PARK MOVES TO CALEDONIA

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Mohsin Tayebaly & Co. 82 | Acquisition International | December 2013

Property Valuation

DEAL DIARY: Energy & Resources Deals E.ON SELLS 80% STAKE IN RÖDSAND II

The funds managed by Argos Soditic have acquired, together with the management, Cisbio Bioassays. This cutting-edge biotechnology company is the leader in the field of products and services for human in vitro diagnostics and pharmaceutical research.

E.ON has agreed to sell an 80% stake in its 207MW Rödsand II offshore wind farm to the Danish energy company SEAS-NVE.

Through this management buy-out (MBO) Cisbio Bioassays becomes independent, with its spin-off departure from the Belgian group IBA. The acquisition represents a major step forward in the history of Cisbio Bioassays. The company’s 25 years of experience have given it a recognized position as a major player in the world of diagnostics and biotechnologies. The arrival of Argos Soditic opens up prospects for strategic growth, and will enable the company to strengthen its market positions. Confident in Cisbio Bioassays’ assets, Argos Soditic is accompanying the management team in implementing its strategic plan, focused on innovation, the launching of new products and international development. “Cisbio Bioassays is an innovative company, recognized for the quality of its services and products. It has the advantage of a remarkable international exposure, with over 85% of its turnover coming from outside France. The outstanding qualities of the management team, as well as the excellent company culture throughout Cisbio, have been crucial points in this takeover and in the implementation of a spin-off operation which proved to be particularly complex,” declared Gilles Lorang, a partner in Argos Soditic. The complexity of the deal required specialist advisors in a range of fields beyond the normal requirements of legal, tax and financial advisers. These included IT and systems advice from Vinci It Partners and IP advice from Cabinet Regimbeau. gd@vinci-it.com www.vinci-it.com

ARGOS SODITIC ARRIVES AT CISBIO

DRV Corporate Finance

The transaction values the wind farm at DKK 3.5 billion (€470 million) on a 100% enterprise basis. E.ON will retain a 20% stake and will remain the operator for the remaining lifetime of the wind farm, supporting its ‘less capital, more value’ strategic approach. At closing, a loan of DKK 2.1 billion (€280 million) will be taken out by the wind farm company and the proceeds remitted to E.ON. SEAS-NVE will then purchase 80% of the equity for DKK 1.1 billion (€150 million). As a result the total cash proceeds for E.ON will be DKK 3.2 billion (€430 million). Situated in the Baltic Sea between the German island of Fehmarn and the Danish island of Lolland, Rödsand II offshore wind farm produces enough clean, renewable energy for around 200,000 homes. The sale directly comprises shares in a Swedish legal entity whereas the assets (Rødsand II) are Danish, this cross-border aspect is the reason for both Danish law firm Bech-Bruun and Swedish law firm Mannheimer Swartling acting for E.ON. The team from Bech-Bruun was led by Energy Law Partner Per Hemmer and M&A Partner Claus Aagaard Nielsen.

Per Hemmer

“The transaction entailed a number of legal and other challenges, which were all overcome owing to great skills on the part of E.ON’s internal project team as well as all external advisers involved,” says Energy Law Partner of Bech-Bruun Per Hemmer.

can@bechbruun.com peh@bechbruun.com www.bechbruun.com E.ON SELLS 80% STAKE IN RÖDSAND II

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NEWFIELDS FOR SAPURAKENCANA SapuraKencana Petroleum Berhad has signed a share purchase agreement to acquire all of Newfield Exploration Company’s equity interests in Newfield Malaysia Holdings for a total cash consideration of US$ 898 million, which is expected to close in early 2014. The agreement is subject to the approval of Petroliam Nasional Berhad (PETRONAS), the approval of SapuraKencana’s shareholders and other customary closing conditions. “This acquisition will further strengthen and diversify SapuraKencana Group’s business portfolio. The transaction will enable SapuraKencana Petroleum to gain an immediate foothold and recognition as an upstream resource owner and operator,” said Tan Sri Dato’ Seri Shahril Shamsuddin, president and group CEO of SapuraKencana Petroleum Berhad. “The profitable Newfield Malaysia business has an excellent HSE and operational track record backed by a strong execution team and cash generating assets (about 23,000 bpd Net Production 2012).” Legal advice to SapuraKencana Petroleum was provided by Alan Jones and Guilia Carloni from Surreybased energy boutique LXL LLP, who pitched for the work and understands they beat 40 other companies to win the work. Tan Sri Dato’ Seri Shahril Shamsuddin added: “In essence we are acquiring a proven oil and gas operator with a balanced portfolio of producing and discovered fields and exploration assets in Peninsular and Sabah & Sarawak. “As a field owner and operator, this business will require different set of operating principles and as such we will manage this new business division separately as an independent subsidiary. We are confident that we will be able to grow the business further and provide a unique value proposition to our partners.”

NEWFIELDS FOR SAPURAKENCANA

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Acquisition International | December 2013 | 83

ENERGY & RESOURCES

ARGOS SODITIC ARRIVES AT CISBIO

DEAL DIARY: Energy & Resources Deals UMW OIL & GAS – 2013’S LARGEST OIL AND GAS IPO At an expected listing market capitalisation of approximately RM6 billion, the UMW Oil & Gas IPO will be the largest oil and gas offering globally in 2013, raising approximately RM2.4 billion for both UMW Holdings and UMW-OG. It is also set to be the largest offering in Malaysia for 2013 and the eighth largest IPO in Asia Pacific excluding Japan.

ENERGY & RESOURCES

The IPO involved an offering of a total of up to 843 million shares at an IPO price of RM2.80. This was split approximately 30:70, with an Offer for Sale of up to 231 million existing shares and a Public Issue of 612 million new shares to the following categories: • 249 million to Bumiputera investors approved by the MITI • 400 million shares to Malaysian institutional and selected investors (other than Bumiputera investors approved by the MITI) and foreign non-US institutional and selected investors • 194.58 million shares to retail investors comprising eligible directors and employees of the UMW Group, persons who have contributed to the success of the UMW-OG Group, entitled shareholders of UMWH and the Malaysian Public. Albar & Partners acted as legal counsel to UMW-OG as to Malaysian law. Lead partners in the transaction were Ms Lily Tan Chea Li, senior partner, corporate and capital markets, and Ms Cassandra Hogg, partner, corporate. They provided details of the transaction. “The listing exercise launched simultaneously with execution of the elaborate internal IPO reorganisation exercise. The work on this IPO has been intense. The submission to the relevant authorities on the proposal was made less than two months from the kick-off meeting in relation to the deal and the listing is anticipated to complete within seven months from kick-off. “Cross-border negotiations involving multiple parties in the various transaction documents to the IPO required delicate consideration in the execution of these agreements. For example:• The retail underwriting agreement involved six different underwriters jointly underwriting the retail offering. The interests of the different parties and the implications of the cross-jurisdictional nature of the transaction had to be considered. • There were heavy negotiations at the early stages of the deal with more than 30+ non-disclosure agreements executed with potential investors during the cornerstone presentations and road shows. This led to the execution of 21 cornerstone agreements with investors, which included three foreign cornerstone investors - Fullerton Fund Management Company Ltd, JF Asset Management Ltd and FIL Investment Management (Hong Kong) Limited. •

•

Lock-up arrangements were also put in place with UMWH, UMW-OG the Selling Shareholders and the cornerstone investors to restrict any dealings of UMW-OG shares for a period of 180 days from the date of listing. A share lending agreement between CIMB and UMWH was also entered into to undertake the price stabilisation activities for a stabilising period of 30 days from listing.”

UMW-OG is a Malaysia-based multinational provider of drilling and oilfield services for the upstream sector of the oil and gas industry. UMW-OG is responsible for drilling services and oilfield services. In drilling services, UMW-OG is one of the market leaders in provision of offshore drilling services, hydraulic work-over services and related oilfield services including premium connections threading, inspection and repair services for OCTG in Malaysia.

UMW OIL & GAS – 2013’S LARGEST OIL AND GAS IPO Issuer’s legal adviser as to Malaysian law

Issuer’s legal adviser as to United States and English law

The drilling services business is offered by way of its services through its fleet of offshore drilling rigs and hydraulic workover units (HWUs) which is operated in both Malaysia and other parts of south east Asia, as well as acting as an agent in Malaysia for international companies providing specialised drilling equipment and services. UMW-OG is the first Malaysian owner of jack-up drilling rigs and the sole Malaysian owner and operator of HWUs, as well as being a PETRONAS-licensed provider of HWU services. The drilling services business offers its services through offshore drilling rigs, which consist of the NAGA series of one semisubmersible drilling rig and three premium jack-up drilling rigs, as well as its fleet of four UP GAIT HWUs.

Managing Partner Syed Zaid Albar

In the oilfield services business, UMWOG offers Oil Country Tubular Goods (OCTG) threading, inspection and repair services in Malaysia, Thailand, China and Turkmenistan, which includes specialised services for premium threading for premium connections used in high-end and complex and demanding operating conditions. www.albar.com.my

84 | Acquisition International | December 2013

Joint global coordinators, Joint bookrunners, Joint managing underwriters and Underwriters’ legal adviser as to Malaysian law

Joint global coordinators and joint bookrunners’ legal adviser as to United States and English law.

DEAL DIARY: Industrial Deals

l Sika completed the acquisition of AkzoNobel’s Building Adhesives business on 1 October 2013. The deal was announced on 8 August 2013. With annual sales of CHF 228 million, AkzoNobel Building Adhesives is a top-three player in its core European markets and employs 550 people. With this acquisition, Sika will increase its product offering for interior finishing in its flooring, sealing & bonding and refurbishment markets and particularly be able to target the professional craftsman. The Building Adhesives business of AkzoNobel has a strong focus on the top quality segment through its leading brands Schönox, Cégécol, Casco, Synteko and EriKeeper. With two production sites in Germany and France and a pan-European distribution network, it supplies its customers with successful and innovative products. Sika benefits from a complementary product portfolio which is well established within important European countries such as Germany, France, the Netherlands and the Nordics. About 65% of the acquired business is related to the renovation and refurbishment market. Main technologies are gypsum and cement-based formulations for floor levelling compounds and water borne floor and tile adhesives. Furthermore, Sika will expand its position in the sealing and bonding market that sees growing demand due to a focus on energy efficient buildings, the ever greater variety of materials used in construction, increasing high-rise projects due to urbanisation, and the growing significance of low emitting materials for good indoor air quality. For more than 15 years Intralinks ® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace TM. 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

SIKA BONDS WITH AKZONOBEL

DRV Corporate Finance

GREEN LIGHT FOR GRINDROD AND RACEC

WHITHAM MILLS ENGINEERING

The Competition Commission has given the goahead for Grindrod Limited, the JSE-listed freight logistics company, to acquire the majority shareholding in RACEC Group Limited, the AltX-listed engineering services group. This follows the joint announcement in July 2013 stating that Grindrod intended to acquire the entire issued share capital of RACEC, other than 25.1% held by black empowerment group Solethu Civils Holdings Pty Ltd, and would then delist RACEC. The consideration amounts to 20 cents per share, totaling R27 138 573. Grindrod has been engaged in the rail sector in Africa since 2005 and has significantly expanded its rail service offerings and the scale of its existing operations. RACEC, an industry leader in rail track engineering and construction complements Grindrod’s current service offering which includes locomotive and wagon manufacture or refurbishment; locomotive leasing and maintenance and rail operations and presents synergies in respect of track maintenance and signalling contracts. “The last few months have been challenging for RACEC due to contract disputes and cash flow pressures. With an extended service offering and the financial backing of our new shareholder, we look forward to expanding our client base and growing our business,” said RACEC CEO Gary Harrod

l Acceleris has advised and secured the funding to acquire 100% of the equity of, and provide initial working capital for, the business of Whitham Mills Engineering Ltd (WME). The funding was provided by private investors sourced by Acceleris and incoming management. Ben Smart has led the acquisition and will take up the position of managing director of the new company. Terry Donovan, the ex-CEO of Pinacl Systems Limited, will act as chairman. Mr Smart said: “Following extensive discussions with the previous owners, I am pleased to lead the new management team within a very innovative and highly respected business. As landfill capacity disappears and legislative requirements on companies and local authorities to recover more re-useable waste increase, the value of the waste management market increases. Growth in the value of the waste management market, coupled with increasing waste volumes recovered, is indicative of growth in demand for waste recovery and baling infrastructure.” Norman Molyneux, chief executive of Acceleris, said: “We are delighted to have funded the buy-out of WME. The business is cash-generative and has a full order book and healthy enquiries. New management has an exciting plan to deliver substantial growth over the next three to five years.”

Peter Cheetham

The historic under investment in rail, together with the proliferation of large mining projects, supported by general economic growth, has provided a favourable environment for growth in the rail sector in Africa. Advisers to RACEC were Merchantec Capital and Werksmans Inc. Advisers to Grindrod were Grindrod Bank Corporate Finance and Edward Nathan Sonnenbergs Inc. Independent advice was provided by BDO Corporate Finance.

GREEN LIGHT FOR GRINDROD AND RACEC

DRV Corporate Finance

Patrick Morris

Financial due diligence and tax advice was provided by Fairhurst Accountants. Lead partner, Peter Cheetham, and senior manager, Andrea Gerring, were asked to carry out the financial due diligence and report back within 7 days. The above have subsequently reported on the Completion Accounts and the firm are assisting with the implementation of new accounting systems and controls. Fairhurst Tax partner Patrick Morris provided advice in respect of fund raising in order to secure EIS Income tax relief for certain investors in respect of certain funds raised. info@fairhurstaccountants.com www.fairhurstaccountants.com

Legal advice was provided by Lupton Fawcett Lee & Priestly, and Baxter Caulfield, and financial advice to the vendor was provided by Henley Business Group.

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Acquisition International | November December 2013 | 85

INDUSTRIAL

AKZONOBEL

DEAL DIARY: Support Services Deals CARGOTEC’S MACGREGOR MOORS UP WITH PUSNES Cargotec’s MacGregor has entered into an agreement to acquire Aker Solutions’ mooring and loading systems unit, known by the Pusnes brand name, for an enterprise value of approximately €180 million. The Pusnes unit provides mooring equipment, loading and offloading systems as well as a wide range of deck machinery for the global offshore and shipping markets. This acquisition complements MacGregor’s existing offshore offering, including the earlier announced acquisition of Hatlapa, and positions MacGregor as a leading player in the offshore equipment market. The Pusnes business was founded in 1875 and is headquartered in Arendal, Norway. In 2012 the unit had sales of approximately €130 million and EBITDA of €20 million. The unit employs about 370 people with main facilities in Norway, UK and Korea. “The Pusnes brand has a strong position in large and growing markets with active relationships across diverse customer groups,” says MacGregor president Eric Nielsen. “It has a solid position in lifecycle services with a large installed base and service scope. The unit’s flexible business model focuses on high-value activities and engineering competence with a dedicated management team. All this fits perfectly with MacGregor’s operating model and makes us an even stronger team than before.” Mika Vehviläinen, President and CEO of Cargotec, added: “With the previously announced acquisition of Hatlapa, MacGregor is now well on its way in executing its growth strategy having concluded two key cornerstone actions.” The acquisition is subject to regulatory approvals from competition authorities and is expected to be completed in the first quarter of 2014. CARGOTEC’S MACGREGOR

MOORS UP WITH PUSNES DRV Corporate Finance

BAIRD’S ALPHA INVESTMENT Baird Capital, the direct private investment arm of Robert W Baird & Co, announced today that its UK private equity group has bought a majority stake in Alpha Financial Markets Consulting Alpha, a leading international provider of management consultancy services to the asset and wealth management industries. The transaction values the company at £28 million. Founded in 2003 by Nick Kent and headquartered in London, Alpha provides a range of consulting services with respect to back and front office improvements, information technology, benchmarking, acquisition integration, compliance, and regulatory and operational improvements. Alpha employs almost 100 consultants and has locations in Luxembourg, New York and Paris, servicing Clevel executives of some of the largest global asset managers and service providers including Aberdeen, BNY Mellon, BNP Paribas, Northern Trust and Pioneer. Alpha has established a solid European platform and strong UK market position, and turnover has grown consistently since inception, to more than £20 million in the current year. Baird Capital will further expand Alpha’s European customer base, access cross-selling opportunities and continue to develop its business in the US. Highwire Consulting conducted the management due diligence on the deal and found the senior team well placed to lead the growth strategy. Andrew Ferguson, managing director with Baird Capital, said: “We are pleased to partner with the Alpha management team and look forward to applying our resources to build on the company’s success. The financial services sector is facing significant challenges and Alpha has built a strong reputation as a solution-oriented consulting firm with a highly differentiated offering.”

BAIRD’S ALPHA INVESTMENT

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GLOBAL RISK PARTNERS ATTRACT PENTA AND MAVEN Maven has announced that it has participated in the £55 million investment in Global Risk Partners (GRP), led by Penta Capital LLP. Maven is providing £5 million of the aggregate funding to GRP. This deal represents another opportunity for Maven client funds to invest in high quality private equity transactions led by Glasgow-based Penta, having previously invested as part of a syndicate in the 2010 acquisition of leading online insurance provider esure, which earlier this year undertook a successful IPO; and the 2011 buy-and-build platform Six Degrees Group. GRP has been set up by CEO David Margrett, formerly CEO of Willis International. He is joined by former Deloitte partner Stephen Ross, as the company’s COO, and chairman Peter Cullum, the founder of insurance broker Towergate which became the UK’s largest independently owned insurance broker, with a turnover of £400 million. The new business will be a buy-and-build acquisition vehicle targeting the global specialty insurance and reinsurance markets, and intends to pursue the same successful strategy employed by Towergate. GRP will focus on the Lloyd’s market, where David and Peter have spent the past 12 months building a strong pipeline of businesses which are at various stages in the acquisition process. The aim is to acquire a broad mix of accredited brokers and managing general agents in order to offer an unrivalled concentration of specialist underwriting expertise and knowledge. The first acquisition has already been made with the £9.25 million purchase of Towergate Commercial Property Underwriting Ltd, which underwrites large UK and European property risks.

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86 | Acquisition International | December 2013

DEAL DIARY: Support Services Deals THE DRINKS ARE WITH MARMON IMI plc, the international engineering group, has announced that it has reached an agreement to sell its Beverage Dispense and Merchandising divisions (the Retail Dispense business) to The Marmon Group, a Berkshire Hathaway company. The sale is for a cash consideration of $1.1 billion (£690 million), subject to customary adjustments for the amount of working capital, cash and debt in the Retail Dispense business at completion. Subject to regulatory approvals, completion is expected in early 2014. Following the Disposal, IMI will have a portfolio of highly differentiated, market leading flow control businesses entirely focused on industrial end markets. The board of IMI proposes that, subject to completion, IMI will return cash of £620 million to shareholders and contribute £70 million to the IMI UK Pension Fund. Martin Lamb, chief executive of IMI, said: “The Beverage Dispense and Merchandising businesses have been improved significantly over the last few years as they have focused their efforts on higher added value and more differentiated opportunities. I believe that Marmon, with its scale and focus on the retail space, will be an excellent long term owner of the business.” Frank Ptak, chief executive of Marmon, said: “The IMI Beverage Dispense and Merchandising businesses will become an integral part of the Marmon Retail Technologies company, one of three Marmon companies that together comprise approximately 160 independent manufacturing and service businesses worldwide.” IMI has received financial advice from JP Morgan Cazenove and Citigroup Global Markets Limited in relation to the disposal and the proposed return of cash. Robert W Baird & Co Incorporated were the lead advisers on the Merchandising disposal process. THE DRINKS ARE WITH MARMON

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MEERENDONK JOINS JF HILLEBRAND BENELUX

NEW ERA FOR METER PROVIDA

JF Hillebrand Benelux has agreed to acquire all Meerendonk Advanced Logistics’ activities in the Netherlands and Belgium. Part of the Hillebrand Group, JF Hillebrand Benelux was founded in Rotterdam in 1998 and currently employs 24 staff. Over the past 15 years, the company has become the market leader in Benelux for the logistics of wine, beer and spirits, covering both imports and exports for the Benelux market. “The acquisition of Meerendonk Advanced Logistics is a big step forward for JF Hillebrand,” said Hans Schipper, managing director of JF Hillebrand Benelux. “There are a great many synergies between our businesses, with many of their activities seamlessly connecting to our activities. In addition, their expertise in areas such as customs clearance will be a great extension of our service portfolio.” Meerendonk Advanced Logistics was founded in 1985 by current owner Michel van den Meerendonk, and has offices in Ridderkerk and Antwerp. The company has wide expertise in the import of wine for both importers and retailers, and is fully customs and AEO compliant. “We are delighted to become part of the Hillebrand Group,” said Michel van den Meerendonk. “It is a very exciting development and an important step for both companies, offering great opportunities for all stakeholders - including staff and clients. We look forward to using this unique opportunity to further enhance levels of specialist service to our clients across Benelux.” Legal advice and due diligence to Meerendonk was provided by Duco Lodder and Marlies Hulshoff from Ploum Lodder Princen; with financial advice provided by Rutger Groenewegen from Schipper Accountants.

MEERENDONK JOINS

JF HILLEBRAND BENELUX DRV Corporate Finance

Meter Provida Ltd (MPL) is being acquired from partner company, Fusion Group, by Total Capital Partners backing existing managing director, Tim Houtby and incoming finance director, Stephen Burr. The divestment comes on the back of several exceptional years of trading achieved by MPL: the business has increased revenues from £12m to £25m in the three years to March 2013. Fusion Group will retain a stake in the business and expects to continue its close working relationship with Meter Provida. Fusion Group contracted Avondale to sell Meter Provida having met them at Avondale’s annual M&A conference at the Institute of Directors. Having obtained five offers, Avondale facilitated significant negotiations culminating in the acquisition by Total Capital Partners. Tim Hardman, director at Avondale who completed the negotiations said: “We are delighted to have achieved the correct financial and deal structure for Meter Provida, Fusion and Total Capital Partners. The outcome of our negotiations has ensured the Tim Hardman business is perfectly positioned to take advantage of the new opportunities this market will present in the coming years.” Serving the gas metering industry with its Slipstream software system, MPL’s customer base includes the UK’s largest meter asset managers, gas suppliers, network operators and utility infrastructure providers. Total Capital is backing Tim and Stephen to maximise MPL’s growth in a market place that is forecast to grow strongly in the next few years as the UK’s 23 million industrial, commercial and domestic gas meters are replaced with smart meters. Ward Hadaway provided buy-side legal advice, KPMG conducted financial due diligence and PMSI completed commercial due diligence. DLA Piper provided sell-side legal advice.

NEW ERA FOR METER PROVIDA

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Acquisition International | December 2013 | 87

SUPPORT SERVICES

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DEAL DIARY: Support Services Deals ARMSTRONG WATSON l Northallerton-based Hanby & Co merged with Armstrong Watson Chartered Accountants on 1 October 2013. This now makes Armstrong Watson one of the largest independent chartered accountants and financial advisers in the region. The group established itself 146 years ago and now has 15 offices in the North of England and South West Scotland and has a combined turnover in excess of £20m. Marie Nicholl, relationship director profession sector, Natwest Commercial Bank, represented Armstrong Watson. “This is a long standing customer who we are delighted to be associated with,” she said. “We are pleased to be able to support them with their growth aspiraMarie Nicholl tions, this being one of several acquisitions they have made over the last 12 months.” Marie.nicholl@natwest.com The existing Northallerton Armstrong Watson office was looking to expand its service offering and found in Hanby & Co a very similar ethos to client care and service. The combined team will be headed up by Armstrong Watson’s lead partner Peter Molyneux, and supported by Hanby & Co partners Ian Cartwright and Peter Brierley. Armstrong Watson’s managing partner Paul Dickson said: “Hanby & Co is a well-respected firm in Northallerton and both Ian and Peter have run a good practice with a very loyal client following. The combined knowledge from both offices will help in continuing to develop Armstrong Watson’s position in Northallerton and the Yorkshire region, and I know we will have a strengthened team focused on providing private individuals, fast growing start-ups and established businesses with the right financial advice.” Peter Molyneux added: “Both firms have built up strong and professional reputations in Northallerton. Now as one office I feel confident that existing clients will gain an even wider level of advice under the Armstrong Watson banner across both accountancy and financial planning services.” Hanby & Co partner Ian Cartwright agrees “the merger of the two businesses should bring to Northallerton a level of expertise and service that will be extremely beneficial to the town.”

ARMSTRONG WATSON EXPANSION

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SWIFT WORLDWIDE RESOURCES Wellspring Capital Management LLC has acquired Swift Worldwide Resources from Gresham Private Equity. Swift’s management team invested alongside Wellspring in the transaction. Financial terms were not disclosed. Headquartered in Houston, Swift is one of the world’s leading providers of contract engineers and other skilled personnel to the global oil and gas industry. Swift’s client focus is on blue-chip, multinational energy companies in the exploration and production sector where specialist contractor needs are greatest given the technical demands of projects and the scarcity of experienced engineers. The company provides services ranging from personnel selection to complete mobilization in countries as diverse as Azerbaijan, Australia, China and the US Swift currently has over 3,000 contractors in active placements across 23 offices in 35 countries. Joshua Cascade, a Partner of Wellspring, said: “The leading multi-national oil and gas companies are increasingly turning to established manpower suppliers such as Swift to provide consistent and reliable service in multiple locations around the world. Wellspring will provide Swift with all of the resources necessary to expand with their clients” Purchaser commercial due diligence was carried out by Calash. Iain Gallow, Project Manager at Calash said: “In the course of our detailed review, our research raised a number of new and inIain Gallow teresting market issues. Working closely with the Wellspring team allowed us to amend and tailor the focus of the report, to accommodate these findings. We were very pleased to be able to assist Wellspring in this exciting opportunity for them, and look forward to working with them in the future.” SALE OF SWIFT WORLDWIDE RESOURCES TO

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WESTSTAR AVIATION SERVICES KKR has invested approximately US$200 million for a substantial minority equity stake in Weststar Aviation Services Sdn Bhd in what is KKR’s first investment in Malaysia. Additional terms of the transaction were not disclosed. Founded in 2003, Weststar is a leading provider of offshore helicopter transportation services to the oil and gas industry. With a large and modern fleet of world-class helicopters and a stable of blue chip oil and gas companies as customers, Weststar focuses on providing quality offshore helicopter services and is the largest of such providers in Southeast Asia. In seeking to provide the highest standard of engineering, flight safety and reliable operations, Weststar provides personalized and efficient services by adopting sound planning processes, utilizing state of the art aircraft, systems and equipment. KKR is a leading global investment firm with more than US$83.5 billion in assets under management. It has invested nearly US$1.5 billion in companies based in this region since 2005. KKR’s investment in Weststar represents its first investment from the KKR Asian Fund II, the recently-closed US$6 billion fund dedicated to pan-Asian private equity transactions. “With KKR, we have a value-added partner who shares our vision of growing the company into one of the world’s leading offshore helicopter services companies,” said Tan Sri Syed Azman Syed Ibrahim, Weststar Group managing director. D Azmi Mohd Ali “Established in Malaysia, Weststar has fast become a key player in the offshore aviation industry in this region. This partnership will enable Weststar to expand its reach overseas and to continue to set a new benchmark for quality in global offshore aviation,” he added.

R Mohd Salleh

N Abd Bahrin

Legal advice to Weststar was provided by a team from Azmi & Associates (A&A), led by senior partner Dato Azmi Mohd Ali and partners Rosinah Mohd Salleh and Norhisham Abd Bahrin from the Mergers, Acquisitions & Corporate practice group. It was the first time A&A had worked with Weststar Ms Mohd Salleh said: “The main challenge was the short timeline between the start of negotiations to closing. It also involved a multi-jurisdictional group of principals and lawyers. A team of associates was assigned to assist the three partners.”

FIRST MALAYSIAN INVESTMENT FOR KKR

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88 | Acquisition International | December 2013

DEAL DIARY: TMT Deals EXCLUSIVE NETWORKS GROUP l Exclusive Networks Group has confirmed a new package of substantial corporate investment across its international business as investors endorsed its business model. The group connects emerging and growing global technology vendors to pan-European markets through its ‘Super VAD’ – value-added distribution model. Exclusive Networks Group specialises in security, networking, infrastructure, and storage solutions for the ‘Smarter Social Enterprise’ and trades with over 4,200 reseller partners. Precise details of the funding are confidential, though it comprises existing investors Omnes Capital, Edmond Rothschild Investment Partners and Exclusive Networks’ management, with debt refinancing/financing through ICG (Intermediate Capital Group). The investment will fund group acquisition plans and corporate development for at least the next two years. “Our investors have again demonstrated their confidence in the direction of the business and in our strategy for further market scale and share,” said Olivier Breittmayer, CEO of Exclusive Networks Group. “The group’s goal to hit €1bn revenues by 2017 is further assured by successful closure of this funding package worth around €60m. It is particularly pleasing to see all our management team reinvesting and participating in the round, further demonstrating a collective belief in the potential of a major value-added distribution business strengthening its regional presence.”

“It was still being managed at retail bank level and they were maybe not so familiar nor so comfortable with the size of the deal envisaged. “Timing was the other key challenge, since some key strategic acquisitions were already in the pipeline and related negotiations had started. “However, I was struck by the speed of the process with ICG, its ability to quickly assess the business, its challenges and upsides, and moreover its ability to swiftly deliver a strong and firm commitment weeks, even months, ahead of traditional banks.” pgodillot@newroc.fr / www.newroc.fr

EXCLUSIVE REFINANCING

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OUT THERE GETS INTO THE MIX

l Forum Media Group has established a presence down under with its acquisition of the Australian Next Media Group on 1 October 2014. The deal increases Forum’s expected annual sales in 2014 by 40%. The company acquired the shares of the Australian Next Media Group from private equity firm Wolseley, David Gardiner (CEO of Next Media) and Bruce Duncan (CFO Next Media). The deal follows Forum Media’s acquisitions in Russia and Hungary earlier in 2013. “We are present in many European countries, we have a subsidiary in China and we want to conquer other international markets,” explained Forum Media’s managing partner Ronald Herkert. “As part of our global expansion the Australian acquisition is a logical next step.” Next Media (www.nextmedia.com.au) emerged in the past five years through the merger of three specialist magazine publishers and further purchases of individual titles and licenses to become Australia’s fourth largest magazine publisher. It publishes 40 magazines for various target groups. The portfolio includes lifestyle, technology and sports media as well as magazines for children and motorsport fans. In addition, Next Media publishes books and digital media. Now in its 25th year, Forum Media Group wants to grow dynamically in Australia and in neighbouring Asian markets. It is also still looking for attractive additional purchase, investment and cooperation opportunities, both in Germany and worldwide. For more than 15 years Intralinks ® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace TM. 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

FORUM MEDIA HEADS DOWN UNDER

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Manchester-based Out There Events, which is jointly owned by Marcie Incarico and the Timpson Group, has acquired publishing and events business Mix Media Ltd for an undisclosed sum. Out There Events has been a strategic partner to Mix Media for over five years, working with them to develop their events strategy. Mix Media produces Mix Interiors www.mixinteriors.com, a workplace and office furniture trade magazine, plus two high profile industry awards ceremonies called Mixology. The business is also a founding partner and equity holder in the London-based interiors/furniture festival Clerkenwell Design Week www.clerkenwelldesignweek.com. Out There Events’ managing director Marcie Incarico says: “We are delighted with this acquisition, we have worked with the team at Mix for a number of years, we understand their customers and market well and believe our expertise will develop the brand and business even further. “Being part of the Timpson Group has provided us with the resource and support to grow the business through strategic acquisitions and mergers. It’s a very exciting next chapter for the team.” Risk management and due diligence for the Timpson Group and Out There were provided by Carl Edwards and Philip Wright from Griffiths & Armour. The company has acted for the Timpson Group since 2008, with Timpsons saying: Carl Edwards “Our ethos is to give our customers amazing service and we expect the same from our suppliers – Griffiths & Armour meet that expectation.” Commenting on the deal, Carl says: “We took a practical approach and responded within 24 hours to turn the deal around.” OUT THERE GETS INTO THE MIX

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Pauline Godillot

Exclusive Networks was advised by Pauline Godillot, managing partner at NewRoc Partenaires, who explained some of the deal’s challenges: “The main challenge was the size of the company, which has over-performed so strongly over the past few years that it has grown from a small group to a corporate size group.

NEXT MEDIA

Acquisition International | December 2013 | 89

Deals of the Year: 2013 As 2013 draws to a close, itâ&#x20AC;&#x2122;s the time of the year when Acquisition International presents you with the Deals of the Year. Theyâ&#x20AC;&#x2122;re the deals that have captured the imagination, presented some of the best synergies and opportunities around, and have shown off some of the best business and professional skills worldwide.

Contents

91 91 91

Pond5 acquires Pixmac and expands international presence Groupama private equity operations sold to ACG Group Worleyparsons acquires leading Norwegian firm

DEALS OF THE YEAR: The Best Deals of 2013

TMT Deal of the Year Europe Pond5 Inc. and Pixmac s.r.o. announced that they have reached a definitive agreement under which Pond5 will acquire the assets of Pixmac, a leading stock imagery network based in the Czech Republic. Jeanne Goulet and Solomon Packer led the team at Marks Paneth LLP. They are both Senior Consultants in the firm’s Tax Practice.

Jeanne Goulet

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

They continued: “Pond5 wanted a firm who could put together a global team to assist them in setting up a foundation for their growing international business. The challenges involved creating and coordinating a worldwide team to bring the necessary expertise to bear on the tax and accounting matters at hand. Working with international atSolomon Packer torneys and other member firms of our global Morison International network, Jeanne and Solomon selected a global team that fully achieved Pond5’s goals. In addition, Jeanne and Solomon designed a structure that benefitted all stakeholders and resulted in a more competitive business model than the model that had previously existed.

Support Services Deal of the Year - UK

Industrials Deal of the Year Europe

UBS worked as sole financial advisor to Groupama on the disposal of Groupama Private Equity (GPE) to ACG. GPE, which was wholly-owned by Groupama, manages a series of Private Equity vehicles on behalf of Groupama and third-party institutional investors across three investment strategies, each with its own dedicated investment team and branding (Quartilium for fund-of-funds, ActoMezz for mezzanine investments and Acto Capital for small cap buyout transactions). In parallel UBS worked on the secondary sale of Groupama’s anchor investments in the two funds managed by Acto Capital to Luxempart (part of Le Foyer Group) and Five Arrows (part of the Rothschild Group) and the spinoff of the incumbent management team (Acto Capital) into a newly formed investment company backed by Luxempart, which will continue managing the Acto assets. Within UBS, the transaction was led by the Private Funds Group (Philip Tsai, Managing Director, Global Head of Secondary Advisory and Rodney Reid, Executive Director) in partnership with the Paris investment banking team (Xavier Paturel, Managing Director and Quentin Boucly, Associate Director).

“Marks Paneth LLP is the 34th largest professional services firm in the United States. We offer a wide range of accounting, auditing, tax, consulting, restructuring, bankruptcy and advisory services as well as litigation and corporate financial advisory services to domestic and international clients. Marks Paneth LLP also has a strong track record supporting emerging growth companies, entrepreneurs, business owners and investors as they navigate the business life cycle.

Despite the complex nature of the two interrelated transactions, UBS successfully executed both operations simultaneously in order to safeguard Groupama’s LP interests post disposal of GPE, as well as those of thirdparty investors. In addition, this solution allows both GPE and the Acto Capital team to continue developing the businesses they have built alongside new experienced and reputable partners.

“The firm, whose origins date back to 1907, has a long history of providing attentive and responsive client service. Our services are provided by industry-focused, experienced practitioners. The most important element of our culture is our unrelenting client focus. We recognize that our success depends entirely on how well we serve our clients, and nothing takes precedence over our commitment to meet each client’s continuing need for effective, insightful, responsive and professional service.” www.markspaneth.com

UBS acted as sole financial advisor to Groupama on the structuring, negotiation and execution of both transactions, further establishing the strength of UBS’ Private Funds Group as a leading secondary adviser for complex and/or large transactions.

POND5 ACQUIRES PIXMAC AND EXPANDS INTERNATIONAL PRESENCE

www.ubs.com/privatefundsgroup

GROUPAMA PRIVATE EQUITY OPERATIONS SOLD TO ACG GROUP Advisers

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l WorleyParsons acquired 100% of the shares of Bergen Group Rosenberg AS (“Rosenberg”) for a cash consideration of NOK 1,088m (including more than NOK 200m of acquired cash). Rosenberg is a wholly-owned subsidiary of Bergen Group ASA, a listed Norwegian company. WorleyParsons’ CEO Andrew Wood said: “The impressive history, capability and depth of client relationships of Rosenberg provide the ideal platform for us to expand our presence in the Norwegian Continental Shelf offshore oil and gas market. I am excited that this acquisition will continue to strengthen and grow our ability to support our hydrocarbons clients in this region and globally particularly through our Improve offering and modular expertise.” Rosenberg CEO, Kristin Færøvik, said “We have been actively looking for a partner to help us grow our business and are very pleased that we now join the WorleyParsons group. We see that by combining the local Norwegian experience of Rosenberg with the global support of WorleyParsons, we can continue to expand our support to our clients.” Ernst & Young provided financial advice to Bergen Group ASA, led by Kjell Stenersen, Partner and Thomas Norheim, Senior Manager. “In the beginning we assisted Rosenberg (the target) on some minor deals. As our strategic input and relationship evolved, we started to look at efforts providing a bigger impact on Rosenberg’s growth aspirations, and found that that significant engineering resources would be needed to be accessed from outside of Norway. This prompted first a strategic coopKjell Stenersen eration agreement with Bergen Group which was the start of a strong working relationship as of today. As usual in a cross boarder transaction, the key challenge was to deal with the professional due diligence process of a large international buyer while continuing day to day operations.” kjell.stenersen@no.ey.com Thomas Norheim thomas.norheim@no.ey.com

WORLEYPARSONS ACQUIRES LEADING NORWEGIAN FIRM

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Acquisition International | December 2013 | 91

playHARD The demands placed on today’s professionals are greater than ever, and when you work hard it’s important to play hard too. Acquisition International’s lifestyle section aims to provide you with a few examples of how to do just that. This month’s section heads off the beaten track – to Ireland’s number one hotel: Harvey’s Point, which can be found on the shores of Lough Eske at the foot of the Bluestack Mountains in Donegal. And, if you fancy something a little more urban, we’ve provided a contrast by visiting one of the UK’s most vibrant cities – Manchester – and its awardwinning Lowry Hotel. If there’s anything you’d like to see in our Play Hard section, just drop the editor a line – Louise.Birkett@acquisition-intl.com

Hotel Review

playHARD

Hotel y r w Lo ester Manch The award-winning Lowry Hotel, Manchesterâ&#x20AC;&#x2122;s most fashionable place to stay is ideally situated on the banks of the River Irwell in the recently-developed Chapel Wharf area on the Salford-Manchester boundary. The Lowry Hotel is the first five-star hotel in Greater Manchester and makes a bold contemporary architectural statement with its dramatic, curved, glass-fronted faĂ§ade that creates a light and airy feel within the hotel interior. We received a very warm welcome upon arrival. The dedicated team at the Lowry Hotel ensured that our stay was first class from the start and kindly showed us to our deluxe room. Our bedroom was stylish, welcoming and more than comfortable as well as equipped with the latest facilities including a large flat screen TV, high-speed internet and included a well-stocked minibar. Our spacious and elegantly decorated room with unrivalled views of the River Irwell provided an ideal setting for our relaxing break. Next stop was a visit to the hotel spa for a much needed manicure in a luxurious and relaxing setting. The innovative urban spa right in the heart of Manchester combines the highest quality products with an unmatched expertise in service. The relaxation rooms, gym, sauna and full range of highly exclusive and unique treatments in a calming atmosphere provide a perfect setting for those needing to wind down. The very friendly and conscientious team at the spa could not do enough for me and ensured my time with them was a truly relaxing and enjoyable experience. We concluded the day with an all-important visit to the River Bar and Restaurant, a spectacular riverside restaurant combining contemporary and classic design. The stunning views, chic decor and delicious food make the River Bar and Restaurant a must-try dining destination â&#x20AC;&#x201C; whatever the occasion. The recently revamped menu offers a Modern European range of dishes using the finest ingredients from the UK. The restaurant has a fresh, understated approach to top quality dining and the level of service we received was second to none. Our waiter Philippe was very knowledgeable of the wines and dishes on offer and helped to ensure a most enjoyable dining experience. Truly fabulous food in a truly beautiful setting! We will certainly visit the Lowry Hotel again and cannot wait to sample more of the delicious dishes on offer at the River Bar and Restaurant on our next visit to the city.

Hotel Review

playHARD

oint P e h t miss Don’t gal e in Don

Harvey’s Point Hotel, Lough Eske Donegal Town, County Donegal, Republic of Ireland

There are only three places in the world I keep going back to, writes Louise Birkett, Rome, Venice (well, if you’re into art and history…) and, when I want to head away from the crowds, Donegal. And when I’m in Donegal I stay at Harvey’s Point. It was a chance find nearly a decade ago and the only surprise on hearing it had been voted best hotel in Ireland earlier this year (and the only Irish hotel in Europe’s top 25) was that the accolade hadn’t been granted sooner. It combines luxury and space (there are houses with a smaller footprint than its smallest rooms) with the personal touch you get from what is still a family-run hotel. The smartly-dressed brunette who will appear at your table at breakfast or dinner and ask you about your stay is proprietor Deidre McGlone. And whether you need accommodation for your dog or a helicopter transfer from an airport, all you need to do is ask. Admittedly the majority of Irish hotels are good at hospitality – having stayed in hotels from Kerry to Louth and various points in between I’ve come to the conclusion that the old Gaelic notions of hospitality are firmly embedded into the national psyche. But Harvey’s Point manages to be different. Firstly, it never stands still: the walk to the restaurant features numerous pictures showing its early days as the fisherman’s cottage Jody Gysling discovered when on holiday from his native Switzerland and the magnificent Clydesdale horses that were part of the experience. Secondly, the staff somehow balance an attention to detail that borders on fanaticism with an air of unhurriedness that enables them to give time to everyone.

On your first visit you will be welcomed as a potential friend, your second visit sees you welcomed as a friend, on your third visit you’re practically part of the family. Deidre and Marc (Jody’s brother) think the secret is down to Swiss hotel management combined with the Irish welcome. My view is that it’s down to hard work and the constant search for improvement: perhaps they’re one and the same thing. The food has been winning awards for years and, as well as the fine dining in the Lakeside restaurant, there’s a hugely popular buffet before the Wednesday cabaret nights that run from June to October. The latest addition to the Harvey’s Point offering is a seafood restaurant that’s already winning rave reviews.

Donegal contains the most northerly point of the island of Ireland but it’s not part of Northern Ireland. It’s part of the province of Ulster but is not one of the six counties the media means when referring to Ulster. It is part of the Republic of Ireland but only shares a few miles of border with it; as a result of this geography it can feel remote. It’s home to about a quarter of the Gaelic-speaking area in Ireland, measured both by population and geography. Often the only clue a tourist will get that they’ve entered the Gaeltacht is the change in the road signs. Gaelic place names don’t always obviously translate to English so a map that features both is useful.

Food is all locally sourced and the suppliers are considered as much a part of the Harvey’s Point team as the staff. There’s an extensive wine list and it’s almost worth feeling under the weather for a chance to try the bar’s hot toddy.

Most of Donegal’s border is with the Atlantic, making the county popular with surfers, particularly in the south of the county at Bundoran and Rossnowlagh. There are stunning scenic drives and it’s a popular area for golfers, walkers and hill walkers. There’s plenty of fishing and climbing is growing in popularity. In short, it’s an active place.

And then there’s the location: the description ‘nestled by the shores of Lough Eske at the foot of the Blue Stack Mountains’ doesn’t really capture the combination of peace, romance and magic this unspoilt corner of Ireland offers.

But it’s also a place of music, art and poetry. Away from the coast you’ll find the Glenveagh National Park – full of beautiful walks and a romantic castle, formerly used as a summer holiday retreat.

The lough itself is a place of infinite variety: sheet silver; sun-sparkled; darkly brooding. I once asked a fellow resident how deep it was. He thought for a while before replying: “It gets Faust.” How many saints you’ll find in the Land of Saints and Scholars in the 21st Century is a moot point but there are clearly enough scholars for the literary joke to be alive and well.

Harvey’s Point is in the south of the county near Donegal Town. Slieve League sea cliffs – some of the highest in Europe – are a relatively short drive away and boat trips to see them set off from Teelin.

It’s worth keeping an eye on the website for activity breaks – watercolour painting and photography are two of the regulars – one-off events and special offers. Stay long enough and you’ll probably have made a friend or two who you’ll choose to meet up with again at Harvey’s Point.

Donegal: different up here

Keep along the coast road and you will find the stunning Glencolumbkille and, where the road ends, the beautiful Silver Strand: a perfect sheltered beach at Malin Beg. However, if you don’t fancy the lengthy climb back up the cliffs then turn north at Killybegs and head for Donegal’s west coast to find Portnoo and Narin, where there is a 2km sandy beach that’s more accessible and a renowned golf course.

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.

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We believe sound tax advice is more important than ever. It requires not only professional expertise but above all insight into our clientsâ&#x20AC;&#x2122; wishes and goals. Our personalized commitment adds real value to our tax advice, which is reflected in the C&B More motto: Â´Connect to add valueÂ´. We are specialized in advising the Shipping Industry with (re)financing and structuring challenges. We provide tax planning services to optimize financing structures or to provide new opportunities.

Rotterdam Van Nelleweg 1 3044 BC Rotterdam +31 10 7503195

Groningen Peizerweg 87B 9727 AH Groningen +31 50 7115290

Postal address: P.O. Box 13023 3004 HA Rotterdam

Connie.roozen@cb-more.com +31 6 51226404 Hendrik.boonstra@cb-more.com +31 6 47090150