Acquisition international June 2013 by AI Global Media

June 2013 /

8 68 78

IN THIS ISSUE/

DEAL GURU:

Deloitte Survey: Executives Lack Confidence in M&A Financial Forecasts.

SHIP REGISTRATION:

We Examine the Benefits of Registration Under a Number of Flag States and Wider Shipping Issues.

2013 Q1 REVIEW:

Acquisition International’s Quarterly Review Series.

TRILEGAL WINS... — Private Equity Law Firm of the Year – India. / 14 www. ACQUISITION-INTL .com

Avoiding and Resolving Disputes in the Aviation Industry — Acquisition International discusses the key issues with experts in aviation disputes. / 44 A Step by Step Guide to Forming Companies — Acquisition International speaks to leading experts to discuss the company formation process in a variety of locations. / 72

CONTENTS:

June 2013

Editors Comment Welcome to the June issue of Acquisition International. In this month’s cover story, we take a closer look at one of our 2013 Fund Award winners – Trilegal. Arti Mashru, Senior Manager with the firm, gave AI some insight into India’s business environment, its tax regime and what made the firm our Private Equity Law Firm of the Year in India. Turn to page 14 to read more.

CONTENTS — June 2013

In our “The New Rising Stars” series we examine the emerging markets that present attractive alternatives to the BRICS and discuss the advantages of investing in a “rising star” location. This month’s feature looks at Angola, Peru, the Philippines and Zambia, and begins on page 30. “Avoiding and Resolving Disputes in the Aviation Industry” investigates the key issues in disputes for the industry. Aviation is one of the world’s most highly regulated industries and the plethora of such regulations, if not understood and properly dealt with, can have a dramatic effect on those working within the industry. Read the opinions of leading experts from page 44. Our guide to forming companies continues this month, with commentary from experts in a variety of regions. We examine formation levels around the world, the ease of doing business and forming companies in various jurisdictions and the most significant regulations and challenges. “A Step by Step Guide to Forming Companies” begins on page 72. This month’s exhaustive features also include a thorough examination of anti-money laundering systems (page 42), an in-depth discussion on the role of the cross-border M&A specialist (page 64) and a comprehensive review of ship registration issues around the world (page 68). Enjoy the issue, Phil Grainger, Editor phil.grainger@acquisition-intl.com

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

ON THE COVER – 2013 FUND AWARDS PRIVATE EQUITY LAW FIRM OF THE YEAR – INDIA - TRILEGAL: /14 Dealing with a Downtrend NEWS: /04

The Latest News Stories From Around The World.

DEAL GURU: /8

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

SECTOR TALK: /10 Powered by Zephyr/ Bureau van Dijk

Q1 REVIEW: /78 Acquisition International’s First Quarterly Review of 2013.

DEAL DIARY: /84 @acquisition-int

ACQUISITION INTERNATIONAL

Introduced by Zephyr/ Bureau van Dijk.

6/ Appointments 16/ Australia: Life Beyond the Boom 17/ Bambrick Legal 18/ A Brighter Future for Germany’s Economy 20/ Committing to the Future: The Cayman Islands 23/ Gibraltar: Defying Global Trends 24/ India: Experienced, Growing and Welcoming Investment 25/ Malaysia: Continued Growth for 2013 26/ Mozambique: Attracting Growth and International Investment in 2013 27/ A Positive Outlook on Nigeria’s Economy for 2013 28/ Driving UK investments in Oman 29/ South Africa: Leading the way in Foreign Direct Investment 30/ The New Rising Stars 34/ Pitfalls and Potential: Navigating Emerging Markets 35/ Corporate Immigration: Issues and Challenges in the Current Economy 36/ Corporate Governance as a Strategic Tool 38/ Merger Control Reform 39/ Folio Corporate Services Limited 41/ Exploring the Captive Insurance Industry 42/ Implementing an Effective Anti-Money Laundering System 44/ Avoiding and Resolving Disputes in the Aviation Industry 47/ Resolving Financial Services Disputes 48/ Resolving Transfer Pricing Disputes 51/ Employment Litigation: Resolving Workplace Disputes 52/ Avoiding & Resolving Construction Disputes 54/ Arbitrating Disputes in Cross-Border Transactions 56/ Copyright Infringement and Protection 58/ Managing Collective Redundancies 60/ The Importance of Anti-Corruption Due Diligence in Corporate Transactions 63/ Noble Management 64/ The Cross-Border M&A Specialist 68/ Ship Registration 72/ A Step by Step Guide to Forming Companies 82/ Meet the Experts

June 2013 /

NEWS:

from around the world

2.4m Million Move from Big Banks 2.4 million customers left the UK’s five biggest banks in 2012, according to new figures announced by Laura Willoughby MBE, at the City and Common Good debate in St Paul’s Cathedral on 12 June 2013. The figures, based on quarterly market polling publically available, show a mass movement away from the big banking groups, Lloyds, RBS, Barclays, HSBC and Santander. This represents a 5% point loss of the market share of current accounts, and demonstrates a massive response from ordinary people to a year of scandal by voting with their feet and switching who they bank with. The news comes as a boost to local, ethical and mutual financial service providers who increased their customer base significantly. Launching the findings, Laura Willoughby MBE, Chief Executive of campaigning website MoveYourMoney.org.uk, said: “The constant slew of scandals last year has opened the floodgates, and people are beginning to realise that they don’t have to put up with the arrogance of the big banks. “People are switching because they are angry about the lack of reform in Britain’s broken

banking system, and have decided to take matters into their own hands. “This shows that real change won’t come from Westminster or the boardroom, but from ordinary people putting their foot down and saying ‘enough is enough.” The data, drawn from industry studies, supports anecdotal evidence and growth figures from alternative providers. The acceleration of migration away from the big banks looks set to continue in 2013, as Britain prepares for the biggest shake-up in the current account market for decades. From September the rules governing switching bank accounts will change, limiting the time it will take to change banks to only 7 working days. Today’s research suggests that up to 9 million people may be more likely to switch as a result of these changes. Separate research from YouGov predicts that the number could be as high as 14 million. Laura Willoughby MBE continued: “This is a long-term trend about creating a fairer, more competitive and socially responsible banking

system – one that puts customers first, supports the economy, and cares about the society in which it operates. “With ever more banking scandals and new competitors nipping at their heels, these figures are another nail in the coffin of the dominance of the big banks in the UK.” Alistair McClean from Newcastle switched his personal and business accounts from Barclays to Handelsbanken last year. He said: “The UK banks had no idea who I was or what my business required, I was just a numbered income stream to them. “Ridiculous bonuses and the Libor fixing scandal simply pushed me over the edge. These bankers are so arrogant that they think themselves above the law. “Switching banks was so straightforward that I actually enjoyed telling Barclays why I ditched them. I wanted a bank that would treat me as a human being, and would use my money for socially and ethically responsible projects.”

Pelargos Capital was established in 2008 and currently manages 360mn USD in Long / Short Asian equities in Fundamental Value strategies. Pelargos seeks to generate alpha via fundamental analysis, predominantly bottom-up and uses its top-down views as a risk overlay. The majority of the value added is from stock selection. The Funds are managed with relatively low market exposure and will hold concentrated positions. The Funds target double digit returns with single digit volatility. The Pelargos Japan Alpha Fund has one of the best risk adjusted track records among its global peers and has appreciated 42% since inception with realized volatility of 7.2%.

www.pelargoscapital.com

/ June 2013

ACQUISITION INTERNATIONAL

NEWS:

from around the world

First Certified European Turnaround Professionals Created A pioneering body dedicated to promoting the accreditation of turnaround management professionals across Europe has accepted its first members.

continuing practice may be entitled to become and remain members. The certification allows EACTP members to use the designation Associate, EACTP (AEACTP) or Fellow, EACTP (FEACTP).

Certificates have been presented to the first ten turnaround practitioners to qualify as fellow members of the European Association of Certified Turnaround Professionals (EACTP).

Certificates were presented to Dr Volker Beissenhirtz, Charles Bodie, David Bryan, Tyrone Courtman, Adrian Doble, Carlos Gila, Bryan Green, Reijo Jarvinen, David Mitchell and Alan Tilley at TMA Europe’s gala dinner on Thursday evening (6 June). The new members are from the UK, Germany, Spain and Finland.

The EACTP has established the first Europeanwide accreditation programme for all turnaround professionals across the continent, including lawyers, bankers, accountants, insolvency practitioners and managers. Through its programme, which is based on the Turnaround Management Association (TMA) Global Certified Turnaround Professional (CTP) scheme already established in North America, Australasia and Japan, the EACTP aims to promote high standards in turnaround by providing a respected and recognised pan-European professional qualification. Only those professionals who meet the strict admission criteria, and can demonstrate relevant academic qualifications, skills, experience and

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TMA Global Chief Executive Officer Gregory Fine, CAE, who presented the certificates, said: “Now in its 25th year, TMA is fully committed to the Certified Turnaround Professional program. As TMA continues to expand its global reach, it’s only fitting that the most sought after designation for turnaround professionals is now available in Europe.”

Tyrone Courtman, president of the EACTP, said: “I am delighted to welcome our first members, and look forward to many more qualifying soon.

New EACTP member Carlos Gila added: “This certification recognises the breadth and depth of practical and professional skills needed by those working in the restructuring sector, and identifies you as a turnaround professional of experience, credibility and integrity. I am delighted to be able to call myself a certified turnaround professional, and proud to be among the first to be accepted onto the EACTP.”

“Our accreditation scheme is the first in Europe, and offers benefits for both the practitioners and buyers of turnaround management expertise by providing a real benchmark against which restructuring professionals can be measured. In a competitive field becoming certified gives our members a distinct advantage over colleagues who aren’t; it will enhance their careers and lead to more work.”

The EACTP has three levels of membership – student, associate and fellow – each with different qualification criteria, including case studies and references. All applicants will also be interviewed by a member of the EACTP’s Standards and Admissions Committee. This committee is comprised of leading European turnaround professionals and chaired by eminent turnaround expert Alan Tilley.

About 100 more membership applications are in the pipeline of the association.

June 2013 /

APPOINTMENTS:

from around the world

Abenex Capital appoints Director Antoine Hoüel, who joined Abenex Capital at the beginning of 2011, has been appointed Director. Antoine started his career in 2002 at Goldman Sachs as an M&A Analyst. In 2004, he joined the investment bank DC Advisory Partners and took part in several mid-market transactions in many sectors, including: Health, Industry and BtoB services. At Abenex, Antoine has, among others, actively contributed to the acquisition of the Vulcanic Group. Antoine graduated from ESSEC.

Abénex Capital is a 100% independent private equity firm focusing on French based mid-market companies. Abenex Capital undertakes, alongside the management teams, long-term investment in companies with significant growth potential or in need of operational optimisation. Specialising in capital development and buyouts transactions, with or without financial leverage, the team enjoys a recognised and proven know-how in external growth projects, in spin off from large group or in the field of public-to-private operations. Abenex Capital invests, as a majority or an active minority investor, in companies worth up to €500m.

Bird & Bird strengthens international franchising offering Bird & Bird today confirmed that leading global franchising specialist Mark Abell will join the firm as a partner in the newly created position of Head of Franchising, Licensing and Multi-Channel Strategies. Mark has built an impressive long-standing practice on matters relating to franchising and the internationalisation and exploitation of intellectual property rights. The Chambers legal directory rates him as the UK’s top franchising lawyer and describes him as “the Guru of franchising”. Earlier this year, Bird & Bird appointed Victoria Hobbs and Graeme Payne in the same area of practice to complement its growing international capability in this field. CEO of Bird & Bird David Kerr said: “There are excellent synergies between Mark’s expertise, the clients he works for and Bird & Bird’s strong

reputation for protecting and commercialising ideas and brands. His practice aligns closely with our experience helping clients in industries that are being disrupted by technology. In addition, his practice is extremely international, which fits with our expanding global footprint. This is a very exciting move for the firm.” Mark commented: “Franchising relies on an indepth understanding of how businesses work and how to exploit brands and ideas. In addition, because it is a very effective way to expand operations internationally, you have to be able to work all around the world. Bird & Bird’s expertise in commercial contracts and its reputation for protecting brands, as well as its global-reach, mean it is the perfect place in which to build a leading international franchising practice. I am now looking forward to working with colleagues across the firm to achieve that goal.”

NBGI Private Equity appoints Tim Kelly NBGI Private Equity (“NBGIPE”), a leading private equity investor focused on the UK lower mid-market, has appointed food and drinks industry veteran Tim Kelly as the second member of a panel of senior industry advisers. NBGIPE, a private equity firm that typically invests in UK businesses of between £5m and £50m in enterprise value, earlier this month announced that it was increasing its strategic focus around three core sectors in which it has developed a strong track record: Support Services, Healthcare and Food Manufacturing. As part of this initiative, the firm made its first appointment as Senior Adviser – that of former Rentokil Initial senior executive Sandy Young.

/ June 2013

NBGIPE adds to this panel with the appointment of Tim Kelly, a leading figure in the Food & Drink industry. Kelly began his career with Unilever, before joining Coca-Cola Enterprises Europe. He was subsequently Marketing Director at Diageo plc in Ireland and President of Guinness Bass Import USA. Most recently he has held the position of COO at Constellation Brands, a NYSElisted wine and spirits company, and COO at Rank Hovis McDougall, where he was responsible for eight stand-alone business units with combined sales of £800m and 3,000 staff. He was part of the management team that lead the successful IPO of RHM, joining the Board of Premier Foods following its purchase of RHM in 2007.

Currently Kelly serves as Non-Executive Director for DEFRA (AHDB Board) and for Burts Potato Chips, and is a senior advisor across the consumer and retail sector for KPMG. NBGIPE’s Senior Advisory group will provide high-level strategic advice and indepth industry knowledge. They will bring support across all investment activities from origination through to completion, covering strategic direction and advice on build-ups and as companies move towards exit. They will advise the investment team but not formally join the Boards of individual investee companies.

ACQUISITION INTERNATIONAL

Bernadt Vukic Potash & Getz is a South African boutique law firm based in Cape Town, South Africa specializing in Corporate and Commercial law (including stock exchange, mergers and acquisitions and franchising), Commercial Litigation, Property Law, Labour Law and Estate Planning. Pursuant to its areas of focus, the firm is broadly organized into five main departments: l Corporate and Commercial l Commercial Litigation l Property and Conveyancing l Labour and Wills l Estates Planning The firm has a substantial number of South African and international commercial and corporate clients, including clients listed on the Johannesburg Stock Exchange and other exchanges internationally. The firm has extensive experience and expertise in national and international transactions at the highest levels. The firm has extensive professional networks, consultancy and referral relationships with local and international professional firms in order to provide and enhance expert related specialist services available to clients and provide seamless turn-key advice for clients. 11th Floor No. 1 Thibault Square Cape Town South Africa 8001 Tel: +27 21 4053800 Fax: +27 21 4182317 Contact Person: Keith Getz Email: mail@bvpg.co.za / kgetz@bvpg.co.za

www.bvpg.co.za

DEAL GURU:

DELOITTE SURVEY Deloitte Survey: Executives Lack Confidence in M&A Financial Forecasts

Executives Lack Confidence in M&A Financial Forecasts regulators, such as the SEC, begin to allow dissemination of public company press releases and other market-moving information via social media. “Social media is the new frontier in the M&A space. As companies try to gain competitive advantages, we think they may increasingly use social media platforms to collect information, draw insights and ultimately identify new targets,” said Marco Sguazzin, principal, Deloitte Consulting LLP.

-----------------------------------------------------------------------Only one-quarter of executives are very confident in the accuracy of the financial forecasts they use to support Mergers & Acquisitions (M&A) deal decisions, according to Deloitte’s fourth annual Corporate Development survey. -----------------------------------------------------------------------Only one-quarter of executives are very confident in the accuracy of the financial forecasts they use to support Mergers & Acquisitions (M&A) deal decisions, according to Deloitte’s fourth annual Corporate Development survey. This finding demonstrates the high level of uncertainty in predicting M&A deal success in the current environment and may help explain the disconnect between heightened expectations for M&A market growth earlier this year and the lacklustre deal activity that has persisted. The survey, which assesses how companies are managing strategic transactions, found that 75% of respondents believe they could improve the accuracy of their deal analyses but lack a crisp understanding of exactly how to correct their course. In fact, 43% of respondents are not able to detect any pattern in their forecasting errors and only one-fifth have M&A business case forecasts that are consistently accurate. “Forecasting quality is a critical component of M&A success,” said Chris Ruggeri, principal, Deloitte Financial Advisory Services LLP and leader of its M&A practice. “While accuracy is important, deal teams should strive to generate useful

/ June 2013

insights that can be used to inform judgment about a deal and to develop mitigation plans or contingent deal structures that respond to potential variances in the forecast.” The Corporate Development survey results show little change in the expected uptick of deal activity among respondents. Nearly half of respondents this year (49%) anticipated an increase in deal activity. In 2012 the figure was similar at 46%. Furthermore, when placed into a broader economic context, it is anticipated that M&A activity will likely remain at current levels.

Additional survey findings: • M&A Decision Process: Three-quarters (75%) of companies reported having a clearly-defined M&A decision process, but only 19% rated the efficiency of the approval process as excellent. However, companies that complete more deals were more likely to have a welldefined decision process and to consider its efficiency as excellent. • Corporate Venture Funds: Roughly one-fifth (19%) of companies reported already having a corporate venture fund and almost half (47%) of executives expected the number of corporate venture funds in their industry to increase over the next two to three years, citing access to technology, new product innovation and new market entry as the key benefits driving the growth of such funds. • Data Analytics: 41% of companies reported using technology-driven analytics in M&A, either as a core component (12%) or in select areas (29%) and another 17% said their companies are considering it. The most frequent uses in the context of M&A were to analyse customers and markets of target companies (52%), evaluate the potential synergies of a deal (29%) and assess the target’s workforce and compensation schemes (24%). “Data analytics” refers to the practice of using data to drive business strategy and performance.

“The relatively stable year-over-year survey findings suggest that the anticipated deal activity will likely remain at its present pace unless something changes,” said Ruggeri. “Potential catalysts for increased activity include a surge in corporate earnings, a higher pace of economic growth, or more regulatory certainty in industries including financial services and health care.” For the first time, the survey also explored the use of social media in M&A deal-making. One third (34%) of respondents reported already using social media for M&A. More than half (56%) of executives believed that social media could play the greatest role in identifying targets and 30% cited social media’s role in due diligence. Social media use in M&A is anticipated to grow as companies continue to look for opportunities to gain competitive advantages and as

Company: Deloitte Name: Melissa Zandman Web: www.deloitte.com Email: mzandman@deloitte.com Telephone: +1 617-437-2156

ACQUISITION INTERNATIONAL

SECTOR TALK:

Healthcare

l So far, 2013 has looked extremely promising for the healthcare sector, surpassing results from the previous three half-year periods. In the five months to 1st June, the industry notched up 537 deals worth a grand total of USD 33,850 million. The second half of 2012 proved disappointing for healthcare companies, with the lowest showing by value since H2 2009, according to data from Zephyr, the M&A database published by Bureau van Dijk. In total 637 deals worth USD 27,384 million were recorded. In spite of volume being relatively high, investors’ reluctance to inject large amounts resulted in values dropping 6 per cent on the USD 29,232 million recorded in H1 2012. Even that result was relatively low, particularly compared with the USD 69,254 million invested during the first six months of 2007. However, after three periods of consecutive decline beginning in H1 2011, things have finally taken a step back in the right direction. The first five months of 2013 have borne witness to 537 transactions worth USD 33,850 million, already showing a 23 per cent increase on the last six months of 2012 in terms of value. This figure was also spread across a smaller number of deals, suggesting buyers have recovered some of their confidence and are becoming more inclined to dig deep once again. In addition, by the end of June, figures will have most likely climbed further, but it remains to be seen whether they will be able to leave the USD 55,329 million recorded in the first half of 2011 in their wake.

Number and Aggregate Value (mil USD) of Healthcare Deals Globally: 2006 - 2013 YTD (as at 01 June 2013)

749 747 830 727 623 636 643 771 636 639 646 595 598 637 537

Aggregate deal value (mil USD) 59,204 48,982 69,254 47,742 33,680 24,241 82,499 19,668 33,217 35,634 55,329 33,297 29,232 27,384 33,850

Number and Aggregate Value (mil USD) of Healthcare Deals Globally: 2006 - 2013 YTD (as at 01 June 2013)

Results to date have been driven by a number of high value purchases, with three deals between January and May topping USD 1,500 million and another two coming in at just under USD 1,000 million. The healthcare sector’s most expensive transaction saw Thermo Fisher Scientific agree terms to

10 / June 2013

90,000

900

80,000

800

70,000

700

60,000

600

50,000

500

40,000

400

30,000

300

20,000

200

10,000

100

Aggregate deal value (mil USD)

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

Number of deals

Period

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

acquire Californian biological products maker Life Technologies for USD 13,600 million while also assuming debts of USD 2,200 million. However, that deal remains subject to approval by the target’s shareholders and regulatory bodies, with completion expected in March next year. The second-placed

Number of deals

transaction was a USD 1,850 million purchase of injectables makers Agila Specialties and Agila Specialties Asia by Mylan. Hot on its heels was Bain Capital and Kohlberg Kravis Roberts’ USD 1,782 million exit of hospital operator HCA Holdings, in which they jointly offloaded a stake of just over 11 per cent.

ACQUISITION INTERNATIONAL

SECTOR TALK:

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

2006

2007

2008

2009

2010

2011

2012

2013 YTD

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

79,275 21,318 997 125 214 5,046 319 21

98,020 14,364 1,840 364 29 2,016 187 1

39,907 9,772 3,065 517 131 4,365 161 16

89,896 6,406 1,109 142 21 3,429 64 1

48,391 10,667 4,950 1,397 148 3,505 97 0

73,120 11,085 1,675 2,202 19 760 230 2

45,361 7,082 1,926 1,014 81 1,105 101 12

25,728 3,599 2,912 683 531 331 50 1

Breakdown of Healthcare Deals by Region: 2006 - 2013 YTD (as at 01 June 2013) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013 YTD

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

74% 20% 1% 0% 0% 5% 0% 0%

84% 12% 2% 0% 0% 2% 0% 0%

69% 17% 5% 1% 0% 8% 0% 0%

89% 6% 1% 1% 0% 3% 0% 0%

70% 15% 7% 2% 1% 5% 0% 0%

82% 12% 2% 2% 0% 1% 1% 0%

80% 12% 3% 2% 0% 2% 1% 0%

76% 11% 9% 2% 2% 1% 0% 0%

Breakdown of Healthcare deals by Region: 2006-2013 YTD (as at 01 June 2013) 100%

90% 80%

12%

20% 17%

2% 12%

2% 3%

12% 11%

15%

70% 60% 50% 40%

89%

84% 74%

82%

80%

70%

69%

76%

30% 20% 10% 0% 2006 Middle East

2007 Oceania

2008 Eastern Europe

2009 Africa

2010

South and Central America

2011 Western Europe

2012 Far East and Central Asia

2013 YTD North America

Number and Aggregate Value (Mil USD) of Healthcare Deals Globally by Deal Type: 2013 to date (as at 01 June 2013) Values All deal structures

Number of deals

Aggregate deal value (mil USD)

Acquisition Institutional buy-out Management buy-in Management buy-out Merger Demerger Minority stake

153 5 1 2 1 2 373

23,547 0 0 0 0 0 10,303

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Of the USD 33,850 million notched up by the healthcare industry in 2013 to date, the vast majority was invested into companies in North America. Indeed, the region accounted for more than three quarters of total M&A to date (USD 25,728 million), some way ahead of its nearest rival, Western Europe, which received USD 3,599 million in the period and was closely followed by the Far East and Central Asia with USD 2,912 million. These rankings remained in place with regard to volumes; North America topped the bill with 274 deals, with companies in Western Europe signing off 134, followed by the Far East and Central Asia with 73. North America’s impressive showing can be partly attributed to the fact that of 2013’s ten highest-value transactions to date, six have targets based in the region, including the top deal, which itself accounted for 61 per cent of the continent’s total showing by value. Historically, North America has topped the tables by both volume and value for all of the last seven years, generally coming in well in front of its nearest competitor, and the trend looks to be continuing.

The majority of the healthcare sector’s transactions in 2013 to date have been spread across two deal types. Acquisitions accounted for USD 23,547 million of investment, while minority stakes posted USD 10,303 million. These two have also dominated the rankings since 2006, with acquisitions valued at USD 444,892 million in the eight-year period, followed by minority stakes with USD 134,783 million. However, institutional buy-outs have also made a significant showing by value, in spite of low volumes, with USD 53,995 million invested across just 172 deals since 2006.

June 2013 /

SECTOR TALK:

Breakdown of Number and Aggregate Value of Healthcare Deals Globally by Deal Type: 2013 to date (as at 01 June 2013) Deal Type

Number of deals

Aggregate deal value

Acquisition Institutional buy-out Management buy-in Management buy-out Merger Demerger Minority stake

28% 1% 0% 0% 0% 0 69

70% 0% 0% 0% 0% 0 30

Breakdown of Number and Aggregate Value of Healthcare Deals Globally by Type: 2013 YTD (as at 01 June 2013) 100% 90%

30% 80%

Minority stake Demerger Merger Management buy-out

70%

Management buy-in

60%

Institutional buy-out Acquisition

50% 40% 70% 30% 20% 10%

28%

0% Number of deals

Aggregate deal value

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

Number Aggregate deal value of deals (mil USD)

Personal, Leisure & Business Services Biotechnology, Pharmaceuticals and Life Sciences Wholesaling Industrial, Electric & Electronic Machinery Public Administration, Education, Health Social Services Computer, IT and Internet services Chemicals, Petroleum, Rubber & Plastic Transport, Freight, Storage & Travel Services Food & Tobacco Manufacturing Retailing Banking, Insurance & Financial Services Agriculture, Horticulture & Livestock Leather, Stone, Clay & Glass products Miscellaneous Manufacturing Mining & Extraction Hotels and Restaurants Property Services Metals & Metal Products Textiles & Clothing Manufacturing Printing & Publishing Communications Construction Utilities Wood, Furniture & Paper Manufacturing Transport Manufacturing

/ June 2013

7,657 5,114 1,120 1,623 1,307 251 597 14 89 109 89 34 4 9 2 4 13 14 3 6 1 4 3 3 1

454,530 419,346 136,914 114,843 65,333 29,990 26,034 7,805 6,275 6,026 1,755 1,063 268 143 130 68 63 50 31 19 13 6 0 0 0

The top segments being targeted within the healthcare industry have been competitive so far this year. In fact, the top two divisions of the sector had results just USD 32 million apart by value. Biotechnology, pharmaceuticals and life sciences accounted for USD 28,233 million of deal-making, followed by personal, leisure and business services, which was valued at USD 28,201 million. The computer, IT and internet services sector came third with USD 16,302 million. Others which saw significant results included wholesaling (USD 5,654 million) and public administration (USD 5,105 million). The biotechnology, pharmaceuticals and life sciences sectorâ&#x20AC;&#x2122;s impressive showing is hardly surprising; of the top ten deals for the year to date, seven involved targets in this industry. A similar result is noticeable between 2006 and the present day; personal, leisure and business services topped the rankings with USD 454,530 million, slightly ahead of biotechnology, pharmaceuticals and life sciences, which totalled USD 419,346 million. To sum up, the healthcare industry has given investors plenty of reasons to be optimistic. Investment appears to be on the up and certain sectors in particular have received considerable injections. The first five months of 2013 have already surpassed the levels reached in all six monthly periods in the last few years and the industry is taking steps in the right direction if there is to be any hope of it recapturing any of the former glory achieved in 2007 and 2009.

ACQUISITION INTERNATIONAL

SECTOR TALK:

Breakdown of Number and Aggregate Value (mil USD) of Healthcare Deals by Sector: 2013 YTD (as at 01 June 2013) Target Sector

Number of deals

Aggregate deal value (mil USD)

42% 28% 6% 9% 7% 1% 3% 1% 1% 2%

36% 33% 11% 9% 5% 2% 2% 1% 0% 1%

Breakdown of Number and Aggregate Value of Healthcare Deals Globally by Sector: 2013 YTD (as at 01 June 2013) 45%

42%

40% 36% 35%

33%

30%

28%

25% 20% 15% 11% 9%

10%

9% 7%

0% Personal, Leisure & Biotechnology, Business Services Pharmaceuticals and Life Sciences

Wholesaling

Industrial, Electric & Public Electronic Administration, Machinery Education, Health Social Services Number of deals

"Deal value Deal type mil USD" 1.

15,800

1,850

1,782

958

938

Deal sub-type

Deal status Last deal Target name status date

Acquisition Public takeover; Pending 100% Recommended bid Acquisition Pending 100%

Computer, IT and Internet services

Chemicals, Transport, Freight, Petroleum, Rubber Storage & Travel & Plastic Services

Food & Tobacco Manufacturing

Target business description

Acquiror name

Biological products manufacturer and developer, Life science industry software developer 28/02/2013 Agila Specialties Pvt Injectables manufacturer and Ltd; Agila Specialties wholesaler Asia Pte Ltd Minority Exit - Partial, Completed 15/02/2013 HCA Holdings Inc. Diagnostic and imaging centres, stake 11% Secondary offer hospital and physical therapist offices operator holding company Acquisition Public takeover; Pending 22/01/2013 MAP PharmaceutiRespiratory and CNS disease treat100% Recommended cals Inc. ments developer bid Acquisition Exit; Public Completed 31/01/2013 Pronova BioPharma Marine Omega-3 fatty acids manu100% takeover ASA facturer and wholesaler

Thermo Fisher Scientific Inc.

523

Acquisition Exit 100%

480

462

450

Acquisition Recommended Pending 24/04/2013 Prolor Biotech Inc. 100% bid; Public takeover Minority Completed 15/03/2013 AstraZeneca plc stake 1% Acquisition Exit Completed 21/02/2013 Verinata Health Inc. 100%

British United Provident Association Ltd, The Opko Health Inc.

10. 364

Minority stake 6%

Follow-on offer Announced 15/01/2013 Onyx Pharmaceuticals Inc.

ACQUISITION INTERNATIONAL

Others

Aggregate deal value (mil USD)

15/04/2013 Life Technologies Corporation

Completed 11/04/2013 Lux Med Sp zoo

2% 0%

Diagnostic centre operator Biotechnology protein manufacturer, researcher and developer

Mylan Inc.

Allergan Inc. BASF AS

Biopharmaceuticals developer and manufacturer Fetal chromosomal abnormaliIllumina Inc. ties diagnostic test developer and manufacturer Cancer-related pharmaceuticals research and development services

Vendor name

Strides Arcolab Ltd Kohlberg Kravis Roberts & Company LP; Bain Capital LLC; Shareholders

Kistefos AS; Odin Forvaltning AS; Management; Herkules Capital AS; Board of Directors Mid Europa Partners LLP

Alloy Ventures Inc.; Sutter Hill Ventures; MDV Management Company LLC; Shareholders

June 2013 /

2013 INTERNATIONAL FUND AWARDS:

Private Equity Law Firm of the Year – India - Trilegal

INTERNATIONAL FUND AWARDS Private Equity Law Firm of the Year – India

Dealing with a Downtrend -----------------------------------------------------------------------Kosturi Ghosh and Yogesh Singh are partners in the private equity practice of Trilegal. ------------------------------------------------------------------------

The India growth story has in the recent past witnessed a slowdown largely on account of global market factors and executive inaction. As sources indicate, for the quarter ended March 2013 (Q1 2013), the volume of Private Equity (PE) investments have dipped to approximately $929 million across 66 deals, compared to $2,101 million invested across 117 deals in the corresponding period in 2012. This accounts for the most dismal of performances in the last 15 quarters and forecasts a rather gloomy immediate future. However, true to the jigsaw that India continues to offer, there is some positive news to help the flip side. Industries continue to stabilise and this can be further evinced from the sizeable exits that PE firms have obtained from as many as 23 Indian companies (seven of them representing complete exits and the remainder being partial ones) including the D. E. Shaw Group’s exit from Amar Ujala Publications Limited and Lazard Australia Private Equity’s indirect sale of stake in Unibic India, albeit with a haircut. Further, the capital markets are seeing a return of the Foreign Institutional Investors in a rather encouraging manner and the Bombay Stock Exchange’s Sensex rising to the 20,000 mark once again from the lows of 2008.

/ June 2013

On the investment side, Banking, Financial Services and Insurance (BFSI) have emerged as clear winners amongst other sectors, attracting $248 million across eight reported investments. Through Q1 2013, The Real Estate sector has continued to interest financial investors with Blackstone emerging as the top player in the segment. Venture Capital (VC) transactions accounted for 55% of investments (in volume) during Q1 2013 compared to 46% a year ago, indicating a revived interest in start-ups and early phases. Kosturi Ghosh, Partner in the Private Equity practice group of Trilegal feels, “Historically, Indian laws have presented foreign investors with uncertainties of sorts and regulatory reforms too have mostly been on a choked trajectory. But the reality of the matter is that the Indian consumption story has trumped the regulatory maze of India. While the consumption story remains intact, what seems to have caused a change in the PE community mindset has been the treatment of exits from a taxation standpoint.” Recent changes in the tax regime For over a decade now, there have been discussions surrounding the capital gains tax exemption accorded under the Double Taxation Avoidance Agreement (DTAA) between India and Mauritius.

PE investors have in the past preferred the Mauritius route for investing into India for this reason. However, in recent times, they have expressed anguish with tax authorities attempting to bring investments from Mauritius within the letter of the Indian Income Tax law. “This really has nothing to do with the on-going battle with Vodafone, as many people might think”, says Ms. Ghosh who goes on to clarify that the Vodafone dispute was more in the context of capital gains taxation on indirect transfers (i.e., transfer of shares of a foreign holding entity which indirectly resulted in the transfer of assets in India). The Supreme Court of India eventually held in Vodafone that such transfers were not subject to taxation in India. In an unfortunate move, the GoI subsequently brought about a retrospective amendment to the Indian Income Tax laws to extend the claws of capital gains taxation even to transfer of shares of a foreign entity undertaken overseas, where such transactions derived value ‘substantially’ from assets in India. These amendments attempted to muddy the perception of ability to use DTAA benefits (such as those under the India - Mauritius DTAA) which mostly overrode the Indian Income Tax laws. “Therefore, it needs to be understood that in Vodafone, the transferor entity was situated in Cayman Island (with whom India does not have a DTAA), therefore the question of DTAA benefits does

ACQUISITION INTERNATIONAL

2013 INTERNATIONAL FUND AWARDS:

Private Equity Law Firm of the Year – India - Trilegal

not arise. The indirect transfer issue is a separate one and is not relevant to PE investments from Mauritius”, she sums up. Throwing light on recent concerns with respect to India bound investments from Mauritius, Ms. Ghosh further remarks, “There have been attempts on the GoI’s part to bring sale proceeds from share transfers by foreign investors (using the Mauritius route) within the domestic tax net. This, despite the Supreme Court categorically ruling in Azadi Bachao Andolan that a Tax Residency Certificate (TRC) obtained under applicable foreign laws would be sufficient to avail DTAA benefits. The Government subsequently came up with a format for the TRC which was to be obtained from foreign jurisdictions, which by itself opened a separate can of worms since foreign jurisdictions invariably issued TRCs in various formats. As a result of all this, in recent transactions, purchasers have insisted on exhaustive tax indemnities from PE firms sometimes even up to 7 years, which outruns the lifecycle of the fund itself. The government’s casual approach on this issue is not helping India’s case by any measure.” Supporting Ms. Ghosh’s views, Mr. Yogesh Singh, Partner in the Corporate practice group of Trilegal states, “To add to investor woes the draft Finance Bill, 2013 (Finance Bill) also proposed a provision that a TRC would be a necessary but not sufficient condition for obtaining tax treaty benefits. This caused widespread consternation amongst the investor community as uncertainty prevailed over the extent of evidence that was required to be furnished for obtaining the DTAA benefits.” However, Mr. Singh is quick to update us on certain new turnarounds. He adds, “The GoI is probably having a rethink on this. The provision that a TRC alone would not suffice for obtaining treaty benefits has been dropped from the Finance Bill after deliberations in the Parliament. The GoI has also done away with its decision of prescribing formats for TRC. These changes have been welcomed by the investor community, at large. The Finance

ACQUISITION INTERNATIONAL

Minister in one of his recent public addresses also clarified that TRC would be conclusive evidence for establishing the tax residency for purposes of extending benefits under the DTAA. One needs to wait and see how things play out.” On the introduction of the General Anti-Avoidance Rules (GAAR) in the Indian Income Tax Act, which is aimed at clamping impermissible avoidance arrangements (i.e; arrangements which are intended to avoid tax without any commercial validity, including transactions routed through tax exempt jurisdictions without any significant commercial justification), Mr. Singh says, “The first draft of the GAAR was met with poor reception as it provided excessive discretion to the tax authorities. Based on feedbacks received from interested parties, the GoI initially deferred implementation of GAAR and subsequently referred the matter for further recommendations of an Expert Committee (EC), which suggested various amendments aimed at making the GAAR provisions fairer and more predictable in its application and more tolerant of genuine tax planning initiatives. The GoI has by and large accepted the recommendations of the EC, including a key recommendation that GAAR will apply only to such arrangements whose ‘main purpose’ (and not ‘one of the main purposes’) is to obtain tax benefit”, and goes on to add, “Much to the relief of foreign investors, the operation of GAAR has been deferred till 1 April 2016 on recommendations of the EC”. About Trilegal Trilegal is one of India’s leading law firms with offices in four of India’s major cities - Mumbai, New Delhi, Bangalore and Hyderabad and a winner of the “Private Equity and Venture Capital Law Firm of the Year” award in India Business Law Journal’s 2012 Indian Law Firm Awards. Ms. Ghosh feels that the firm’s experience, responsiveness and adaptability have helped Trilegal win the awards this year. Trilegal’s PE group encompasses an entire range of services provided to PE funds, including funds

formation, funds structuring, primary and secondary investments and exits by way of trade sales and initial public offerings. In addition to advising on fund structures and PE investments, Trilegal also advises on exit strategies including restructurings, share purchases and options, and enabling listing. Trilegal’s PE team also has significant experience in advising PE investors in enforcing their contractual rights in contentious settlements or through litigation. Ms. Ghosh believes Trilegal differentiates itself from competition by bringing to the table sector specific regulatory expertise which not only helps the client understand the myriad of legal complexities in investing in a given sector but also adds perspective to the commercial and business negotiation of an investment and also its exit. Trilegal has in the recent past represented PE majors such as Morgan Stanley, Goldman Sachs, Farallon, The D. E. Shaw Group, Khazanah Nasional and SAIF Partners. Trilegal’s impressive client roster includes the world’s top PE firms, a diverse range of international funds and institutional investors and domestic funds. Disclaimer: The contents of this article are intended for informational purposes only and do not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein.

Company: Trilegal Name: Kosturi Ghosh Email: kosturi.ghosh@trilegal.com Web: www.trilegal.com Address: The Residency, 7th Floor, 133/1, Residency Road, Bangalore 560 025, India Telephone: +91 80 4343 4603

June 2013 /

SECTOR SPOTLIGHT:

AUSTRALIA Australia: Life Beyond the Boom

Life Beyond the Boom

l Despite on-going economic turbulence across the globe, Australia boasts a record twenty one consecutive years of growth, the best of any developed economy over the past two decades! Australia has been one of the main beneficiaries of the global commodity markets boom, and this, coupled with the right policy framework has allowed the country to ride out the financial crisis much more effectively than others. But as the peak of the resource boom passes, how will Australia reposition itself and maximise its other assets? The country has one of the world’s best educated and skilled workforces, strong economic, political and social institutions and geographical proximity to some of the world’s most dynamic economies; how can these be combined to help the economy survive and thrive? -----------------------------------------------------------------------Peter Do is the managing partner of Doconade Legal & Migration, a specialist immigration law firm based in Australia. -----------------------------------------------------------------------Doconade Legal & Migration has a background in corporate consultancy and immigration law specialising in work visa and business and investment visas. The firm has operated from its Australian base since 2009. The firm recently expanded into the Asia-Pacific region working into Hong Kong, Singapore, Malaysia, China and Vietnam. “We are both lawyers and registered migration agents who can give both legal advice on corporate structures, estate planning and any other general legal advice relating to business,” said Mr Do. “As registered migration agents, we are able to give important immigration advice pertaining to a client’s personal or business needs. We also have the added advantage of working globally with firms across the Asia-Pacific region to work collaboratively to ensure client’s needs are met.” Mr Do stated that the current business environment in Australia remains one of opportunity. He noted that interest rates are low, the economy is strong so there is opportunity all around for those entrepreneurs willing to take a risk. “There is no better time to start investing in Australia that right now,” he enthused. -----------------------------------------------------------------------Ivan Gustavino is Managing Director of Atrico Pty Ltd. ------------------------------------------------------------------------

Managing Director, Ivan Gustavino, provides a brief professional history of the firm “Atrico was founded in 1995 primarily to provide technology deal focused transaction support services. Over the years, Atrico evolved as a technology focused corporate advisory firm specialising in providing strategic growth and transaction advice to technology companies. Atrico’s market focus is on information communications & software, natural resources, healthcare, and other general technologies.” Mr Gustavino explains what he believes gives the firm the competitive edge in the industry. “This is really a combination of our key employees all having technology company operational experience, our accumulated technology company transaction experience, and our deep global industry networks.” With regards to Australia, Mr Gustavino describes the current business environment, along with the country’s key strengths. “The country’s economic powerhouse, the resources industry, has gone into a bit of a capital expansion

/ June 2013

“Australia is well known for stable government, a very steady economy, world class health and education systems. These all combine to make Australia a very attractive destination to live and operate business. “The growth Australia has continued to enjoy despite the global GFC makes it the envy of much of the world.” Discussing the sectors with the greatest opportunities for investors, Mr Do highlighted property as a particularly good investment. With the new significant investor visa (SIV) which was brought in at the end of 2012, he believes that buying real estate in Australia remains a very viable path towards securing permanent residency in Australia.

systems that Australia already has in place to allow for quick sustained growth. Rather than view the emerging economies in the Asia Pacific Region as competition, we can view it as an opportunity for collaborative work together to improve the quality of life of over 2 Billion people that make up the Asia Pacific Rim.” Mr Do concluded with a prediction for 2013: “A change in government (if it occurs) will ensure greater and more attractive investment opportunities for those looking to relocate Downunder. Watch this space”

As the peak of the resource boom passes, Mr Do believes that Australia has a great opportunity to invest in education and technology to become “a nation less reliant on resources and more so on quality products and services”. Mr Do does not believe that the high Australian dollar and increasing competition from emerging economies will have a significant impact on the country’s appeal as an investment destination. “The high Australian dollar is a reflection of its strong economic status and continued growth compared to much of the rest of the world,” he opined. “The emerging economies of the Asia-Pacific region simply do not have the established

hiatus,” he states. “This has had an effect on a lot of businesses that ride on the back of the boom bust cycle. We get this impression from industry sources that this hiatus is likely to continue for another 9 months, but that the industry will resume expansion at that point as global demand fundamentals for minerals look quite good. “Fundamentally, Australia is a resource industry nation couple with an innovative frontier mentality. The happy offshoot of this is that it is also a major centre for innovation in resources technology. As Australian resources companies spread around the world, so too do the companies that service them. And while the resources boom must inevitably end, this just feeds the” shed-growth-shed” cycle that leads to new start-ups and innovation.” Mr Gustavino believes that Australia will start to lose its appeal as an investment destination as the AUD becomes more expensive and competition increases from emerging economies in the Asia Pacific region. He comments: “The AUD has recently weakened due to lower commodity prices and interest rate cuts. For resources projects, Australia remains relatively well positioned due to its stability and the quality of its resources.

Company: Doconade Legal & Migration Name: Peter Do (Managing Partner) Email: mail@doconade.com.au Web: www.doconade.com.au Address: Adelaide, South Australia Telephone: +61 8 7226 2764

“For 2013, the most likely scenario for the resources industry seems to be low growth for the rest of the year, with a resumption of investment activity in mid to late 2014. Other sectors may see more growth with positive economic news out of the USA and (hopefully) Europe. Both of these seem relatively likely given that the tide of macroeconomic policy sentiment seems to be turning against austerity and back to the conventional wisdom of Keynesian thinking.”

Technology Company Advisors

Company: Atrico Pty Ltd Name: Ivan Gustavino Email: ivan@atrico.com.au Web: www.atrico.com.au Address: Level 3, 89 St Georges Terrace, Perth, WA, 6000, Australia Telephone: +61 8 9226 4390

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Bambrick Legal: Australia’s economy set to flourish with skilled immigrants

BAMBRICK LEGAL Australia’s economy set to flourish with skilled immigrants

The Skill Stream of Australia’s Migration Program is specifically designed to target migrants who have skills or outstanding abilities that will contribute to the Australian economy and consists of four main categories under this program: •

• •

•

-----------------------------------------------------------------------Bambrick Legal is an Australian commercial law firm providing specialist legal services, in particular, tax controversy, estate and succession planning and migration/ citizenship law. -----------------------------------------------------------------------Bambrick Legal’s core values embody the practice of law with excellence, providing quality legal services in a cost and time effective manner. Bambrick Legal services clients both nationally and internationally. With extensive commercial legal experience, we are perfectly positioned to provide comprehensive, relevant advice to our clients. There are endless pitfalls that many new migrants fail to adequately plan for; in fact, many migration agents also fail to take these into consideration for their clients. Issues such as taxation, health insurance, business and commercial structuring, along with asset protection strategies, all need to be assessed and provided for appropriately in the transition for new migrants. Although Australia is still a very popular destination for migrants, it must be understood that the process of migration can be complicated and time consuming. It is imperative that applicants work with a Registered Migration Agent in order to achieve their migration goals. Bambrick Legal are registered Migration Agents. This means that our clients have confidence in knowing that we have the most up to date and comprehensive information available. We recognise that only through a comprehensive understanding of the Commonwealth jurisdiction with all its intricacies, can we provide sound, well structured, fully informed immigration advice to clients. In providing robust comprehensive advice, centred around one of our core values of ‘managing our client’s risk’, we combine both our migration experience with our commercial knowledge to look holistically at our client’s position – not just immediate, but also into the future. We are able to structure our clients’ business needs in order to minimise taxation, protect them and their assets, and to ensure compliance with the many Government and other like bodies’, rules and regulations.

ACQUISITION INTERNATIONAL

The team at Bambrick Legal understands and values the significant economic contribution of migrants to Australia. Reports of Australian migration programs suggest that migrants contribute $1.6 billion in the first year after arrival and $15.4 billion over the first ten years to the economy. Even in the face of the Global Financial Crisis (‘GFC’), business leaders, both nationally and abroad, recognise that migration continues to be beneficial for business in the private and public sectors, and consider migration to be a major driver of the country’s economy. There has been a significant popularity increase for the temporary business subclass 457 (long stay) visa. The 457 visa allows applicants an avenue into Australia for up to a period of 4 years with the potential for applicants to secure permanent residency in Australia. From 2010 to 2011, approximately 9 out of 10 people that were granted a permanent employer sponsored visa, were people who had originally entered Australia as temporary skilled workers (on 457 visas). There is a continuing strong demand for skilled workers from outside Australia, in both the public health and mining sectors. Recent indicators suggest that there is also an increasing demand for workers with skills in restaurant management and chefs, particularly with skills in global cuisine. Bambrick Legal works closely with both the sponsor and the applicant throughout the entire application process. When working with business sponsors, Bambrick Legal seeks to establish their overseas skilled employment requirements. In doing so, they are able to work within the legal framework to determine and advise on the most appropriate, costeffective visa application facility combined with business and personal legal requirements for all parties. Bambrick Legal’s focused, open minded team understand each person’s story is special. Our commitment to understanding our client’s unique situation, both from their migration status to personal and business requirements, allows us to provide cost effective and user friendly advice within a legal framework tailored to suit individual needs.

General skilled migration (‘GSM’) - for skilled workers who do not have an employer sponsoring them. Migrants are selected on the basis of their nominated occupation, age, skills, qualifications, English language ability and employability; Employer nomination – for those who have an employer willing to sponsor them; Business skills migration and significant investment - to encourage successful business people to develop new business in Australia or significant investment into the economy; and Distinguished talent – a small category for ‘distinguished individuals’ with special or unique talents of benefit to Australia, such as sports people, musicians, artists and designers.

Australia’s permanent migration program further provides for over 60 skilled visa subclasses, each with their own strict criteria that must be satisfied, in the lead up to permanent residency. Recent policy changes to the skilled migration category highlight the relationship between immigration and the labour market needs of the Australian economy. In the wake of the GFC, Australia’s migration program was not only reduced, but also reformed, to ensure that migrants to Australia meet the specific needs of the economy and fill gaps in the labour market where they currently exist. Bambrick Legal’s core value of ‘managing our client’s risk’ provides the backdrop for being a law firm that can be relied on to ensure that their clients are provided with up-to-date, clear, precise and efficient advice. Being both solicitors and migration agents, Bambrick Legal tailors its advice so that its clients have no need to look any further in order to provide for a smooth transition into Australia. Only from a qualified MARA Registered Agent and commercial legal practitioner, can you expect to receive the most comprehensive, robust advice and strategies that not only meet expectations but exceed them. With more and more skilled migrants coming from Europe, Bambrick Legal also have staff who are fluent in Italian who can effectively communicate without language being a barrier. The team at Bambrick Legal are well positioned to provide you with all of your immigration and business needs.

Company: Bambrick Legal Name: Suzi Cengarle Email: suzi@bambricklegal.com.au Web: www.bambricklegal.com.au Address: Suite 12, 15 Fullarton Road, Kent Town South Australia 5067 Telephone: (08) 8362 5269

June 2013 /

SECTOR SPOTLIGHT:

A Brighter Future for Germany’s Economy

A BRIGHTER FUTURE FOR GERMANY’S ECONOMY l Currently ranked third in the world for business sophistication Germany is an attractive location for foreign investment. Even with the slowdown on economic growth in Europe, Germany is inching closer to becoming one of the top five economies in the world. The country grew at 0.1% in Q1 of 2013 and is furthermore expected to increase GDP growth throughout the year. Germany is highly regarded for its ability to produce a broad range of goods and services and is slowly becoming one the most innovative countries in the world; as a result foreign investors have always looked at Germany for business opportunities. German Economy Minister Philipp Roesler said in a statement, “There is every reason to look to the future with optimism. The German economy is picking up again and is successfully leaving an economic weak phase behind it”. German growth will be driven by domestic demand this year and next, the ministry said. Entwined in this very global economy, the success of Germany cannot be determined purely by its own performance and the on-going European crisis demonstrates the wider challenges that the country faces.

-----------------------------------------------------------------------Dr Mark Odenbach is the co-founder and co-CEO of Barber Odenbach, a German boutique business law firm that runs a high-tech business model. -----------------------------------------------------------------------“In the short time since Barber Odenbach’s founding in 2010, the firm has proven success with advising internationally active venture capitalists, entrepreneurs, and SMEs on the legal and tax implications of German market activities,” said Dr Odenbach. “Our competitive advantage is through differentiating ourselves through specialisation and efficiency and through making international ventures and multi-national SMEs a priority.” Dr Odenbach stated that Germany is a leading economy in terms of global competitiveness and GDP, adding that the portfolio of medium-sized businesses throughout Germany is impressive. “Berlin is the nation’s capital and its political and cultural centre,” he commented. “Berlin is experiencing growth in the IT sector, in fashion and in tourism. Northern Germany is a hub for international trade and logistics. Hamburg’s container port is the second largest in Europe. The media, maritime, aircraft industries (including Airbus and Lufthansa

/ June 2013

Technik), and clean tech industries plus a thriving tourism sector make the Hamburg area economically well-diversified. Frankfurt is the country’s financial centre. The southern and western parts of the country are strong in manufacturing.”

“Germany is already a top destination for sustainable foreign direct investment and is continually attracting more ventures and FDI through the quality of its economy,” he observed.

According to Dr Odenbach, the main pull factors for foreign investors are the world class logistics, infrastructure, productivity, engineering excellence, production standards, and stable labour costs. He stated that great opportunities can lie in marketing and sales in the world’s largest single market – the EU – whose core is Germany.

In conclusion, Dr Odenbach stated that Germany is ensuring continued growth through a high-tech strategy; however he predicts “little growth in 2013 because of the European debt crisis”.

“There are also great M&A opportunities for those who wish to include German technological expertise into their corporate portfolio,” he added. Discussing the main challenges currently faced by the country, Dr Odenbach highlighted a shortage of skilled workers, adding that the latest statistics show that new immigrants are better educated than the average German. While Germany is not in competition with other European countries, Dr Odenbach noted that Germany may look to trade more with Northern Europe and non-European countries in order to distance it from the crisis states in Europe.

Company: Barber Odenbach Name: Dr. Mark Odenbach Email: mo@barberodenbach.com Web: www.barberodenbach.com Address: Heidenkampsweg 51, D - 20097 Hamburg Telephone: +49 40 555 66 3000

ACQUISITION INTERNATIONAL

DEEP & FAR

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

www.deepnfar.com.tw

SECTOR SPOTLIGHT:

Committing to the Future: The Cayman Islands

COMMITTING TO THE FUTURE The Cayman Islands

l The Cayman Islands is demonstrating its commitment to the future by creating long-lasting partnerships and adhering to new international standards in regulation and transparency. With the OECD setting new global standards, the region is not alone in terms of adapting to change, but it is very much a leader as less progressive global financial centres are looking to the Cayman Islands to lead the way. Acquisition International speaks with the region’s leading legal and financial minds to discuss their predictions about the economic outlook and advise our readers how best to profit from both existing and new investments. -----------------------------------------------------------------------Rolf Lindsay joined Walkers in 2005 and is a partner in the firm’s Global Investment Funds Group, based in the Cayman Islands. His practice focuses primarily on private equity funds and their activities, and encompasses the structuring of fund sponsor vehicles, the formation of alternative investment funds and the consummation of transactions undertaken by them. ------------------------------------------------------------------------

Walkers focuses principally on corporate and international finance law with an emphasis on investment funds, private equity and capital markets and structured finance. Our firm delivers clear, concise and practical advice based on an in-depth knowledge of the legal, regulatory and commercial environment in the British Virgin Islands, the Cayman Islands, Ireland and Jersey. Whatever the rhetoric in the popular press: regulators in the developed world now understand that the Cayman Islands is not the opaque villain of popular legend. The robust anti-money laundering legislation that has been in place in Cayman for many years is far more stringent than in many onshore financial centers, and any analysis of the international co-operative agreements in place demonstrates why jurisdictions such as the Cayman -----------------------------------------------------------------------Margot MacInnis is the Managing Director of the Cayman Islands office of KRyS Global. -----------------------------------------------------------------------Ms MacInnis believes that the Cayman Islands has been proactive with regard to changes and developments in the legislation to keep it current with shifts and trends in the industry and to keep it attractive as a jurisdiction of choice. Recently, the Cayman Islands Monetary Authority (“CIMA”) conducted a consultation exercise on corporate governance in which it put forward proposals that are intended to enhance and clarify corporate governance standards and provide greater transparency in the financial services markets. “The exercise ran concurrently with a corporate governance industry survey,” explained Ms MacInnis. “Based on the results of the consultative process, CIMA will be amending its Statement of Guidance of Corporate Governance (“SOG”), and one of the proposals is to have the SOG apply to all financial services entities in Cayman and not just CIMA licensees.” Ms MacInnis also highlighted that the Cayman Islands government has also continued to receive very positive feedback for its commitment with regard to enhancing transparency in the exchange of tax information. This is evidenced by a recent applaud by the OECD for putting in place “Streamlined, efficient and responsive procedures to facilitate the exchange of information for tax purposes”.

20 / June 2013

Islands are so highly regarded by international bodies such as the OECD, FATF and IMF. The shift in the discussion to the real issues of transparency, regulatory cooperation and the management of systemic risk has been welcomed. Whilst private actions remain unequivocally private, the commitment of the Cayman authorities to transparency and to the exchange of information for tax and regulatory purposes is genuine: Cayman has agreed to join the G5 pilot scheme for multilateral automatic exchange of tax information, the Cayman government has executed over 30 Tax Information Exchange Agreements; and the Cayman Islands Monetary Authority (CIMA) recently announced a bold new initiative to enhance the jurisdiction’s corporate governance regulatory framework. These are just recent developments that are part of Cayman’s long history of regulatory transparency. For more than a decade, Cayman has been actively involved in the OECD’s work on standards for the exchange of information for tax purposes and has played a significant role in the OECD’s Global Forum in this regard.

“In April 2013, a review carried out by Global Forum, the world’s largest international tax body with 119 member jurisdictions committed to implementing its standards, also found that the Cayman’s exchange process is very well organised for handling requests, and that the jurisdiction is well resourced, with knowledgeable personnel, in this area,” she continued. “This type of feedback is expected to correct the misperception about Cayman that still persists in certain other parts of the world and enhance Cayman’s ability to continue to attract good and responsible businesses.”

From a private equity standpoint, the Cayman Islands offer a well-developed legal structure under a flexible statutory regime and within a common law system renowned for its sensible approach to commercial disputes. Affording investors the ability to raise capital efficiently in a tax neutral environment, and to structure complex acquisition vehicles with infinite flexibility, the benefits to investors and the jurisdictions in which they deploy their capital are significant.

Company: Walkers Name: Rolf Lindsay Email: rolf.lindsay@walkersglobal.com Web: www.walkersglobal.com Address: 190 Elgin Avenue, George Town, Grand Cayman, KY1 9001, Cayman Islands Telephone: +1 345 914 6307

legal proceedings in the US, Canada, UK, Russia, Israel, and China, amongst others. We have successfully sought and been granted foreign recognition in Ireland, Canada and the US on a number of our matters. The Fairfield Sentry Limited case in which we are the liquidators, is now regarded as the most authoritative Chapter 15 recognition decision in the US, being the only case that has been decide by a US Court of Appeal,” she concluded.

Discussing the company’s ability to help investors, Ms MacInnis stated that “KRyS Global has the expertise and experience to assist investors who find themselves as victims of complicated frauds, as unpaid creditors in failed investment funds to find the true financial situation and recover the funds due to them”. “Our experience, creativity and track record in pursuing assets in cross-border scenarios enables us to maximise the returns to these investors through the employment of various tools including international litigation, recognition and enforcement mechanisms,” she continued. “The firm also has access to state-of-the-art technology and tools to investigate fraud and recover assets. “The majority of our matters are of a multi-jurisdictional nature, leading us to conduct investigations and pursue

Company: KRyS Global Name: Margot MacInnis Email: margot.macinnis@krys-global.com Web: www.krys-global.com Address: Governors Square, Building 6, 2nd Floor, 23 Lime Tree Bay Avenue, PO Box 31237, Grand Cayman, KY1-1205 Grand Cayman, Cayman Islands Telephone: +1 345 947 4700

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Committing to the Future: The Cayman Islands

Aircraft Registry in the Cayman Islands -----------------------------------------------------------------------The Civil Aviation Authority of the Cayman Islands (CAACI) is headed by Director- General, P. H. Richard Smith who has over 36 years of experience in the aviation industry, in both the private and public sectors. ------------------------------------------------------------------------

Under his guidance, the Cayman Islands Aircraft Registry remains the registry of choice for many owners and management companies for various reasons. CAACI continues to maintain a reputation of providing a safe, stable and credible flag for registration of business/corporate and personal aircraft. CAACI prides itself on the high standards of client service that is offered to its clientele globally. Affording flexibility in the scheduling and location of aircraft surveys, , working to timeframes best suitable for their clients and being available to answer questions or advise on technical issues are among the benefits and advantages of being associated with the CI Aircraft Registry. In addition, the CAACI has partnered with leading legal and financial firms that conduct business in the Cayman Islands to be able to offer its clientele a ‘one-stop’ shop approach. Clients find that they are able to facilitate the registration of their aircraft or other assets, financial structures, legal arrangements, mortgage registration and securitization of assets by taking advantage of the relationships that exist between the CAACI and their legal business partners Standards are rigid and specifications must meet the exact requirements in order to be qualified for the registry; just one of the benefits that keeps the register

highly respected and recognized throughout the business aviation industry internationally. Acceptance of owners to the registry is predicated upon global and local AntiMoney Laundering Regulations and standards ensuring that only eligible person(s) and companies are accepted via a stringent due diligence screening process resulting in the retention of a reputable client base. There is also excellent protection for a financier’s interest through a dual registration system such as the Cayman Islands Mortgage Register and the ability to register on the International Register, with local Cape Town Legislation enacted in the Cayman Islands. Corporate ownership: A majority of the CAACI registry client base are owners of corporations who prefer the ease of travel between international destinations, with relative anonymity, which is afforded to Cayman Islands registered aircraft. The clientele also enjoy personalised service from each division of the CAACI and are assured of fast and efficient service for provision of required documents or responses to queries regarding the aircraft’s operation.

Access 24-7-365: - CAACI has launched a new electronic data management system ‘VP-C Online’ to manage all registry applications, certificates and authorizations electronically. The new system will make it easier for clients to apply for the various approvals that are required for both initial aircraft registration and for continuing airworthiness including the renewal of documents. It is designed to streamline processes within the CAACI and allow more efficient service provisioning to clients. Authorized users will be able to utilize online smart forms for submission of applications including electronic submission of all supporting documentation required by the specific application. The custom designed, intuitive user screens will also provide clients online access to their certificates at their convenience

Reduced tax liability: The Cayman Islands are renowned as a leading offshore jurisdiction, achieved through its tax neutral environment within which a highly developed legal system based on English legal principles flourishes. Applicants to the registry are encouraged to work with one of the local legal and financial partner firms who are versed in aircraft registration and who can provide legal advice pertinent to clients’ individual circumstance.

Company: Civil Aviation Authority of the Cayman Islands Name: Nicoela (Nikki) McCoy Email: nikki.mccoy@caacayman.com Web: www.caacayman.com Address: Unit 2 Cayman Grand Harbour, KY1-1003 Grand Cayman, Cayman Islands Telephone: +345 949 7811

Cayman Islands Independent Directors & Corporate Governance from Summit Management At Summit, we offer qualified and experienced independent directors to investment structures from our offices in the Cayman Islands. Our directors are Accredited Directors under the Institute of Chartered Secretaries Directors Education and Accreditation Program and are well placed to ensure that the principles of good corporate governance are adopted. We understand the requirements for experienced independent directors and have a proven record of providing stakeholder based solutions. Summit Management Limited holds a Company Managers License and is regulated by the Cayman Islands Monetary Authority. Summit Management Limitet Suite #3-213 Governors Square 23 Lime Tree Bay Avenue PO Box 32311 Grand Cayman KY1-1209 Cayman Islands

Telephone:

+1 345 945 7676

Facsimile:

+1 345 946 3101

David Egglishaw Director Tel: +1 345 926 4020 Email: david.egglishaw@sml.ky

John Cullinane Director Tel: +1 345 916 6001 Email: john.cullinane@sml.ky

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Web: www.sml.ky

June 2013 /

A M S T ER D A M ∙ A MER S FOOR T W W W. M E N D . N L

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

SECTOR SPOTLIGHT:

GIBRALTAR

Gibraltar: Defying Global Trends

Defying Global Trends

l When choosing an offshore location it’s hard to look beyond self-sufficient Gibraltar; an economy largely based on financial services, shipping, online gaming and tourism, it is increasingly recognised as a well-regulated finance centre within the European Union. Gibraltar’s economy has bucked local and global trends and has grown steadily in recent years. Employment is almost at 100% and GDP is around £1.137 billion at present; the government is predicting it will grow to 1.65 billion by 2014/15 - figures that most governments can only dream of quoting. So what is the region doing right? Is it as simple as favourable tax rates, EU passporting rights, and international accessibility? How can other jurisdictions learn from the model of Gibraltar? And what opportunities present that continue to attract global investment? Doing business in Gibraltar requires extensive knowledge of the local economy which can only come from experienced professionals, with this in mind we invite the region’s leading legal and financial minds to discuss their predictions about the investment climate, business practices and opportunities and advise our readers how best to profit from both existing and new investments, whatever industry they may be in. Acquisition International speaks to Brett Dale Bridge, Business Development Consultant for Europa Trust Company Ltd, for his take on the country’s business environment.

-----------------------------------------------------------------------Mr Bridge is based in London, England. His expertise is in the field of psychology. -----------------------------------------------------------------------“I use these interpersonal skills to help Europa Trust Company enhance the relationship with its existing clients and further develop their client base,” he commented. For almost 28 years Europa Trust Company has been providing bespoke company and fiduciary services to individuals, families, businesses and intermediaries, Worldwide from Gibraltar. The company is able to create and manage on a daily basis simple or complex corporate and trust structures. Additional business services are delivered to clients in virtually any global jurisdiction. Being based in Gibraltar, Europa Trust Company promotes Gibraltar structures. Mr Bridge explained that Gibraltar is a popular financial destination for an ecletic mix of international executives, authors, sportsmen, corporations, individuals, celebrities, families and many others, who want to achieve their financial and business objectives. “The client demographic covers all four corners of the globe and their business and investment interests are likewise spread across the globe, and managed from Gibraltar,” he

ACQUISITION INTERNATIONAL

observed. “The Jurisdiction is able to offer bespoke company and fiduciary services at competitive professional rates. Gibraltar’s Trust and Company Managers can deliver and manage simple or complex corporate and trust structures, on a daily basis, in virtually any jurisdiction.” Mr Bridge highlighted Gibraltar’s political stability, robust commercial and professional infrastructures, and supportive regulator as contributing factors to its attractiveness as a financial jurisdiction. He noted that, as part of the European Union, Gibraltar provides easy access to the EU financial markets and as such is subject to its directives and regulations. The most popular products or services offered by Gibraltar are Trust & Company formation and management (i.e. Special Purpose Vehicles – SPVs), banking, insurance and reinsurance, captives, fund management and fund administration, investment services, experienced investor funds, and maritime services. “New Islamic products, e-gaming and hedge funds are likely to play a more important role in the future securing Gibraltar ahead of its competitors,” added Mr Bridge. “Gibraltar is often referred to as the gateway for Europe and Africa.

“Gibraltar is not seen by authorities or business counterparts as some ‘exotic’ island in the middle of a vast ocean serving as a convenient jurisdiction for tax avoidance. It is a responsible, progressive and competitive international financial centre with a stable government, established infrastructure and British legal system,” he concluded.

Company: Europa Trust Company Ltd Name: Brett Dale Bridge B.A Psych, PGCE, B.A.(hons) Email: info@europa.gi Web: www.europa.gi Address: Watergardens 6, Suite 24, Gibraltar, GX11 1AA Telephone: +350 200 79013

June 2013 /

SECTOR SPOTLIGHT:

INDIA India: Experienced, Growing and Welcoming Investment

Experienced, Growing and Welcoming Investment l Amongst the successful BRIC nations, India has been recognised for many years as a location for foreign investment; supported by a wealth of experience it sets an excellent example to emerging economies. Despite recent challenges, the forthcoming year is expected to take a positive turn and overall economic growth is expected to achieve 6.4%. Following several quarters of decline, the export industry returned to growth at the start of 2013 and has a bright future ahead. Prime Minister’s Economic Advisory panel Chairman C Rangarajan said the Indian economy is expected to grow at a faster rate. With such high expectations, many now see India as a more sustainable choice when compared with other regions. Nouriel Roubini, one of Wall Street’s most closely followed economists has expressed confidence in the economy’s growth model, especially compared to China. He has no doubts that India stands at a point of advantage when it comes to exports of services, even over economies including China and European countries. With this mind it is no surprise that many countries are now looking to India for investment opportunities. Acquisition International speaks with Justin Bharucha and Vishnu Dutt. U., Partners at Bharucha & Partners, to discuss current investment opportunities and pull factors which are bringing foreign direct investment into the region

According to Mr Bharucha, the prevailing sentiment in India is one of circumspection. While the Central Government promised long overdue reforms, particularly in areas such as indirect taxation, company law and land acquisition, he noted that few have fructified. Further, the RBI Monetary Policy Statement for 2013-14 reiterates the point “…that investment sentiment remains inhibited owing to subdued business confidence…”. “The growth in the Indian economy is expected to be around 5%, the lowest in a decade,” commented Mr Bharucha. “In addition, FDI as a percentage of GDP has also not been encouraging, with volume and size of M&A and private equity transactions reducing. The silver lining has been the markedly increased FII investment particularly in the fourth quarter of Fiscal 2013. “The uncertain political and regulatory environment continues to dampen business sentiment.” Mr Dutt stated that a stable political and regulatory regime will go a long way in re-affirming the confidence of investors. However, he noted that doing business in India is sometimes cumbersome, which is highlighted by the country’s ranking on the transparency international index which remains a cause of significant concern. “A single window clearance mechanism could prove an effective solution to ensuring strict enforcement of anti-

24 / June 2013

corruption policies and also to combat the tedious task of compliance with several fragmented state level legislations in India,” he observed.

“Of course, India goes to the polls in the second half of 2014 and the process of legislative reform will likely pause at that time,” he concluded.

India’s baseline GDP growth in Fiscal 2014 is projected to be 5.7% which is expected to be significantly higher than developed economies. Mr Bharucha highlighted that the Government has been encouraging private sector investments in almost every infrastructure unit through the ‘Public Private Partnership’ programme (PPP) in an effort to address the infrastructure deficit. PPPs enable the Government to consolidate private sector efficiency and technology with stable governance, financial support and assurance against social, environmental and political risks. “The Government continues to take steps to streamline and remove roadblocks to investment,” he observed. “Illustratively, the recent proposals in the Companies Bill, 2012 passed in the lower house of the parliament, provides for a foreign company to be a transferee under a court approved scheme of merger and also provides a possibility for squeezing out public shareholders. The Cabinet has also approved the Insurance Laws (Amendment) Bill, 2008, which proposes to inter alia increase foreign investment limits in private sector insurance companies from 26% to 49% and permit foreign reinsurers to open branches in India.

Company: Bharucha & Partners Web: www.bharucha.in Address: Hague Building, 9, S. S. Ram Gulam Marg, Ballard Estate, Mumbai 400 001 Telephone: +91 22 6132 3900 Name: Justin Bharucha Email: justin.bharucha@bharucha.in Name: Vishnu Dutt. U. Email: vishnu.dutt@bharucha.in

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

MALAYSIA

Malaysia: Continued Growth for 2013

Continued Growth for 2013

l In spite of the present challenging global environment the Malaysian economy is projected to grow progressively in 2013. Last year the economy grew by 5.6% and this high growth is expected to continue into 2013 supported by strong domestic demand and a better global outlook. With improvements made on the export front and private investment; Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said “The continued investment activity, especially in high value-added and productive sectors, is expected to improve Malaysia’s competitiveness, sustain demand for exports, and improve our capacity in terms of imports for investment activity.” Performance in 2012 has proven that there is clear overall faith in improving this year’s economic development with all sectors expected to perform well. Exports from Malaysia, a key producer of electronics, oil and palm oil could rise 1.8% in 2013 as shipments of higher value manufactured products grow. CIMB Investment Bank Bhd economic research head Lee Heng Guie said “robust private investment growth and public spending would continue to fuel total investment growth.” Malaysia’s economy is flourishing; the country’s competitive cost of doing business and open policies such as the allowance of 100% foreign equity holdings makes it attractive for business expansion and ideal for foreign investment. However, as with any country there are still challenges to be faced, the central bank said Malaysia’s stock market benchmark is the only one in Southeast Asia to be down this year. Acquisition International examines the current investment opportunities and pull factors which are bringing foreign direct investment into the region in conjunction with Sathish Ramachandran, Partner at Messrs. Deol & Gill.

-----------------------------------------------------------------------Sathish Ramachandran is a Partner at Deol & Gill, Advocates & Solicitors in Kuala Lumpur, Malaysia. -----------------------------------------------------------------------Mr Ramachandran qualified as a Barrister from Middle Temple, England, and was called to the Bar in Malaysia in 1994. Deol & Gill, established in 1999, is a client focused law firm that emphasises building lasting relationships with its clients. The firm’s services are targeted to help clients achieve their goals quickly and effectively in a proactive and approachable manner having regard to commercial practices. “We provide a combination of experience and specialise legal advice and continually endeavour to provide an effective and qualitative standard of work and to deliver prompt and efficient personal service to each of our clients,” said Mr Ramachandran. “We are able to offer fully integrated legal services rooted in the strengths of our team members and our strategic alliances. “The cornerstone of our operations is in building long term and productive relationships with each of our clients. In today’s ever evolving economy, we recognise that mere legal skills are insufficient to meet the requirements of clients. Synergised with our legal expertise is commercial awareness which enhances our ability to relate to clients’ business needs.”

ACQUISITION INTERNATIONAL

Mr Ramachandran describes the current business environment in Malaysia as “robust, competitive and investor friendly”. He noted that English is widely spoken and the country has a common law system which originated in England and has evolved over the past five decades.

investments, our economic output will improve,” predicted Mr Ramachandran. “Malaysia has built a successful model to date based on domestic direct investment but we are a country of only 28.5 million people and we need to integrate more closely with the global economy.

“Our inbound investment policies are very attractive and designed to facilitate doing business with minimal disruption,” he added.

“Malaysia is among the most exciting destinations in Asia for tourists, being blessed with a multi-ethnic, multireligious, multi-lingual population. Malaysia is only an airline ticket away and ‘Malaysia is Truly Asia. 2014 is Visit Malaysia Year,” he concluded.

According to Ramachandran, the country is positioned very favourably to attract more foreign investment, noting its positive and proactive approach. He believes that the greatest opportunities for investors lie in: Primary Commodities and Natural Resources; Petroleum and Gas; Manufacturing; and Tourism and Hospitality. In order to maintain growth and boost the stock market benchmark, Malaysia’s government is continuing to develop and manage the country’s talent pool, including welcoming international talent. To overcome the fragile global economy, the government is focusing on Malaysia’s competitive advantage in the upstream and downstream plantations sector (i.e. oil palm and palm oil). It is also encouraging Shariah Compliant products and services, which avoid purely speculative and non-productive trading and investment. “As Malaysia opens its borders, especially in the services sector, to non-citizens and to inbound foreign direct

DEOL&GILL

Advocates & Solicitors, Malaysia

Company: Deol & Gill Name: Sathish Ramachandran Email: sathish@deolgill.com Address: Suite 19-03-03, 3rd Floor, PNB Damansara, No. 19 Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia Telephone: +603-20959980

June 2013 /

SECTOR SPOTLIGHT:

Mozambique: Attracting Growth and International Investment in 2013

MOZAMBIQUE Attracting Growth and International Investment in 2013

l Following 20 years of sustained growth Mozambique is now amongst the world’s fastest growing economies. The country’s economy is currently growing at 7% and is expected to expand by 8% in 2013 supported by increasing investments and strong exports. Mozambique is increasingly attracting interest from international investors due to its discovery of natural gas and cooking coal. Its strategic location in East Africa provides the country with easy access to resource economies such as China, India, Japan, Korea and Thailand. Mozambique is a true example of a successful transition from war to peace to economic growth. The country’s continued success makes it an ideal location for foreign investment, so much in fact Ireland’s Minister Joe Costello recently visited the country and expressed his eagerness to strengthen economic links between Ireland and Mozambique. Large international companies have already been operating projects in power generation, resources mining and processing in recent years. The country also has enormous potential in other areas such as tourism with over 2000km of tropical coastline overlooking the Indian Ocean. On a whole Mozambique is on a resource boom having the ability to exit aid dependency within 15 years. Acquisition International speaks with Hollard Moçambique Companhia de Seguros, SARL to learn more about the firm and the services it offers in Mozambique.

Getting to know Hollard Mozambique

-----------------------------------------------------------------------Since opening its doors in 2001, Hollard Mozambique Companhia de Seguros SARL has established itself as a prominent player in the Mozambican insurance market along with life insurance subsidiary, Hollard Vida, which was started under a separate operating license in 2008. -----------------------------------------------------------------------Together with their insurance partners, Hollard Mozambique and Hollard Vida provide insurance solutions for corporate, commercial and private clients, including commercial, industrial and personal insurance options such as fire, motor, liability, construction and engineering, marine, accident, funeral and obligatory workers’ compensation. The companies have established an extensive, full-service branch network in key provincial cities over the past 10 years, with the Hollard Mozambique head office in Maputo, southern Mozambique, as well as branches in Nampula, in the north, Tete in the West and Beira in the East. They also

26 / June 2013

have a large network of agents at all the key border posts, which offer, among other products, the compulsory foreign vehicle third party liability policies now known as Hollsure. In line with the Hollard Group global strategy, Hollard Mozambique is involved in research and development focused on products for low-income market segments, covering: • •

•

Mobile insurance – Developing insurance products for distribution through mobile money facilities. Micro-credit insurance – Micro-credit life insurance products distributed through micro-finance distribution partners. Agricultural insurance – Exploration projects aimed at developing insurance products for small-holder farmers in Mozambique, including research into Weather Index Insurance.

Company: Hollard Moçambique Companhia de Seguros, SARL Name: Henri Mittermayer Web: www.hollard.co.mz Address: Av. Sociedade de Geografia, no 269, Edifício Hollard, Maputo, C.P. 428, Maputo – Moçambique Telephone: +25 8 21 357 700

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

A Positive Outlook on Nigeria’s Economy for 2013

A POSITIVE OUTLOOK ON NIGERIA’S ECONOMY FOR 2013 l Nigeria’s economy is set to strengthen in 2013 with the IMF predicting over 7% growth. Reports form KPMG stated that the total financial value of merges and acquisitions in Nigeria surged by an impressive 379% to $7.415 billion in comparison to the $1.548 billion recorded in 2011. The oil and gas sector is doing exceptionally well accounting for 77% of the total value driven by local and foreign companies seeking to acquire upstream oil and gas assets of international oil companies. Nigeria is seen as an ideal location for foreign investment; the country is at an economic boom, and international companies are already investing in well performing industries such as oil and gas, China being the most recent. Performance in other sectors has been rather positive with real gross domestic product growth rising to 6.3% and this figure is further expected to increase throughout 2013. Economists expect Nigeria, already the continent’s most populous nation and largest oil producer, to overtake South Africa in terms of gross domestic product (GDP) over the next several years, theoretically making it Africa’s biggest economy. Strategist at Standard Bank Samir Gadio said: “The rebasing of national accounts will result in a meaningful increase in nominal GDP”. Acquisition International speaks to leading Nigerian experts to get their opinion on the country’s future. -----------------------------------------------------------------------Shina Atilola is the Group Head of Strategy & Communications at Sterling Bank Plc. -----------------------------------------------------------------------Sterling Bank Plc is a full service commercial bank in Nigeria with an asset base of $4 billion (N645 billion) and over 2,600 professional employees. Today, with a capital base of more than N45 billion, over 150 business offices complemented by 3,800 alternative delivery channels nationwide, Sterling Bank has grown into a major financial solutions provider and justifiably prides itself as “The one-customer Bank” that celebrates every customer as a unique individual. Group Head of Strategy and Communications, Shina Atilola, describes the current business environment in Nigeria. “Though challenging, the business environment in Nigeria has improved significantly over the years. Despite being ranked 131 out of 185 by the ‘Ease of Doing Business Report 2013’, the country is still among 17 African economies that have improved the most since 2005. To encourage investors, the Nigerian government has offered various incentives for potential foreign investors like lower tax, 100 per cent ownership of their businesses and in some cases, land amongst others. “Also worthy of note is the reduction in the cost of business registration recently approved by the government from N50,000 to N15,000 ($100) to encourage business ownership and investment in the Nigerian economy”. -----------------------------------------------------------------------Dr Olisa Agbakoba is Senior Partner at the law firm of Olisa Agbakoba & Associates, incorporating the multi sector law group and human rights law service. -----------------------------------------------------------------------Olisa Agbakoba& Associates (OA&A) was established in 1953 and has progressed to a multi sector law firm. The firm is a leader in Nigeria specialising in Commercial Litigation, Maritime & Shipping, Insolvency, Corporate and Commercial, Arbitration, Alternative Dispute Resolution, Legislative and Public Advocacy. OA&A played a pivotal role in the passage of the Coastal and Inland Shipping (Cabotage) Act of 2003 which basically established a broad framework for the development of Nigeria’s shipping industry. OA&A has wide experience in general legal practice and development law. OA&A presently leads the Debt restructure and Resolution practice in Nigeria. The Firm has participated in the restructure and recovery of over N200 billion for Asset Management Corporation of Nigeria (AMCON), Nigeria’s “Bad Bank”.

“Furthermore, various reforms have been executed; while others are ongoing to ensure macroeconomic stability and growth in the economy. It is evident that these have started yielding results.” Shina continues to explain what makes Nigeria such a favourable destination for foreign investment. “The Nigerian economy is one of the fastest growing in the world and the second biggest black African economy. Nigeria has enormous resources, most of which are yet to be fully exploited. They include mineral, agricultural and human resources that are quite attractive to discerning investors. “Also, Nigeria offers the largest market in Sub-Saharan Africa, with an estimated population of over 160million as officially declared by the government. This market is largely skewed towards the youth who make up over 60% of the population coupled with a growing middle class. The Nigerian market potential also stretches into the growing West African sub-region. “The country has a dynamic private sector; which has assured greater responsibilities under the new increasingly deregulated economic environment. “Furthermore, exchange control regulations have been liberalized to ensure free flow of international finance as there is now unrestricted movement of investment capital and satisfaction to its clients. OA&A takes pride in the understanding of local business laws with international comparative experience. Our senior level contacts within the commercial and governance institutions underpin our legal advisory expertise.” Dr Agbakoba continues to explain where the greatest opportunities lie within the country: “The financial services sector will always be attractive. With the introduction of AMCON (Asset Management corporation of Nigeria), the banking sector in particular and financial systems in general has been rescued from collapse. The nationalized banks have been put up for sale. “Agriculture is set to become a major sector due to current reforms that seeks to transform rthe sector from development based to commercial based system. With an estimated 70 million farmers and over 250 million hectares of arable land and other natural resources, there has been a surge in the number of investors from South Africa, China, India and Israel making investment enquiries.

The Senior Partner serves as chairperson of the legal subcommittee of Financial Systems Strategy 2020, an initiative of the Central Bank of Nigeria that supports financial sector reforms.

“Nigeria represents ‘N’ in the most attractive emerging economies ‘MINTS’ and investment opportunities in non-oil extractive sector like mining and manufacturing. The Ministry of solid minerals development recently reviewed mining regulations to remove constraints relating to licensing.

Dr Agbakoba explains what he believes gives the firm the competitive edge: “We are driven by a philosophy that is based on providing legal solutions to clients. OA&A adopts flexible tools and mixed strategies to deliver solutions

“Another key sector is power. The power sector is set to overtake oil and gas as a major investment option due to renewed efforts at privatising the sector. The government has targeted power generation of 18,000MW by 2016 and

ACQUISITION INTERNATIONAL

apart from various attractive incentives put in place by the government.” There are plans in place to maintain the country’s growth, as Shina comments: “There are a number of economic plans like the Vision 2020 which is aimed at ensuring that Nigeria stands side by side with its emerging economies counterparts. Also, there are various economic reforms that have been implemented and are ongoing like the power sector reform, the financial sector reform, the telecommunications sector reform and the agric sector reforms to deepen the country’s economic base.”

Company: Sterling Bank Name: Shina Atilola Email: shina.atilola@sterlingbankng.com Web: www.sterlingbankng.com Address: 20 Marina , Lagos Telephone: 234-1-4613152 40,000 MW by 2020. Opportunities abound in generation and distribution. “The Real Estate sector is another investment haven. The housing deficit in Nigeria is over 25 million. The Nigerian government is currently seeking to establish legislation, regulations, and rules relating to titling, securitization and public private partnership to engineer growth. The maritime sector should witness a major boom due to the proposed Petroleum Industry Bill that will drive massive reforms.” The Senior Partner of OA&A currently serves as the Vice Chairperson of Presidential Committee on Maritime Sector, and expects the introduction of massive reforms in this sector in Nigeria.

Company: Olisa Agbakoba & Associates Name: Dr Olisa Agbakoba Email: olisa@agbakoba-associates.com Web: www.agbakoba-associates.com Address: Maritime Complex, 34 Creek Road P.O. Box 3169, Apapa, Lagos, Nigeria Telephone: 234-1-2790915-6, 7750985, 7756435

June 2013 /

SECTOR SPOTLIGHT:

Driving UK Investments in Oman

DRIVING UK INVESTMENTS IN OMAN l Oman’s economy is undoubtedly performing well; GDP grew by a welcoming 8.3% in 2012 and is further expected to increase throughout 2013. The current success of Oman’s economy makes it an ideal location for foreign investment, so much in fact the relationship between the United Kingdom and Oman has strengthened and this relationship was further established with Oman’s recent visit from The Prince of Wales. The UK already has several companies supporting the economic development of Oman and both nations are committed to enhancing these relations and boosting cooperation in several fields such as trade, investment, education and health. However, as with any country there are certain challenges to overcome, with surrounding cities such as Dubai and Abu Dhabi performing exceptionally well, what will set aside Oman from its competitors? In conjunction with some of Oman’s leading professionals this feature aims to examine the current investment opportunities and pull factors which are bringing foreign direct investment into the region. We’ll be discussing Oman’s ability to attract more foreign investment and its plans to maintain growth; finally we’ll look at how Oman plans to differentiate itself from competitors in surrounding regions. Acquisition International speaks to Mukhtar Hasan, the chairman of Al Barij International LLC, to get his views on Oman’s economy and the impact of UK investment. -----------------------------------------------------------------------George Mathew is the managing partner of George Mathew & Co., Chartered Accountants. -----------------------------------------------------------------------“Oman has made great headway and has witnessed tremendous economic growth, stability and prosperity over the past four decades under the wise and enlightened leadership of His Majesty Sultan Qaboos Bin Said,” began Mr Mathew. He stated that Oman’s business environment is dependent to a great extent on Oman’s oil reserves, which are responsible for Oman’s modern and expansive infrastructure. Oman also has substantial gas reserves. “The Omani economy continues to grow rapidly,” he continued. “The 8th Five-Year Development Plan (published in 2011) aims to attain average economic growth rates of not less than 3% (in fixed price terms) and to raise the investment to RO 30 billion (US$80 billion), an increase of 113% over the previous plan period.” Mr Mathew highlighted the following as key pull factors for foreign investors: zero personal tax; a very low rate of corporate tax; tax incentives given to companies in various sectors; a modern infrastructure; a stable government; and financial and monetary stability. -----------------------------------------------------------------------Mukhtar Hasan is a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW) and holds a Corporate Finance qualification issued jointly by ICAEW together with the Securities Investment Institute and the Chartered Accountants Institute of Canada. Mr Hasan is the chairman of Al Barij International LLC, which is a private equity, venture capital and corporate finance firm specialising in corporate turnarounds. ------------------------------------------------------------------------

Mr Hasan has served on the Board of several Omani public companies. He is currently the Chairman of Muscat Thread Mills, Managing Director of Gulf Mushroom Products Company and Vice Chairman of Oman Dental College. Mr Hasan is on the board of the ABA, an IB World school in Muscat and is also a member of the advisory board of ICAEW Middle East. Al Barij and its principal have extensive experience and a successful track record with private equity and venture capital investments and turnarounds in Oman. Full details are available on the company website: www.albarij.com. Oman is the 32nd most competitive country in the 2012/13 World Economic Forum’s Global Competitiveness Index. This ranking places the Sultanate in the top 25 percentile of the world’s economies.

28 / June 2013

“Oman’s oil revenues in the 2011-2015 period are forecast to be approximately RO 25.5 billion (US$66.3 billion), which is a 101% increase over comparable revenues in the previous plan period (2006-2010),” he commented. “Other government revenues in the 2011 – 2015 period are forecast to be approximately RO 12 billion (US$31.2 billion), which is a 109% increase over comparable revenues in the 20062010 period.”

include new sea ports, airports, roads, a national railway network, industrial zones and special economic zones. “The government is diversifying the economy and is seeking foreign investment specifically in the areas of information technology, tourism, water, electricity and higher education. Oman is expected to maintain a steady and continuous growth of the economy in 2013,” he concluded.

With the Free Trade Agreement signed between Oman and the US, citizens of the US or US owned companies can set up 100% US owned companies (in certain sectors) in the Sultanate of Oman. Mr Mathew stated that sectors such as the Hotel industry are expected to see 60% growth. “Support services for the Oil & Gas sector also has great investment opportunities,” he opined. “Petroleum, agriculture and fishing are the major industries of Oman. The government is diversifying the economy in a well planned manner. “Against the backdrop of the global economic situation, the government of Oman is committed to public spending and all planned projects are going ahead as scheduled. A number of large infrastructure and development projects are now under planning, implementation or construction stage. These

“Its open economy offers international investors an attractive and safe location. Moreover, the Sultanate’s institutions, legal framework, tax systems and stock market regulation are some of the best in the world,” said Mr Hasan. “Political as well as trade and investment relations between UK and Oman are deep and long in history based on mutual strategic interests. UK is the largest single investor in Oman with leading UK companies operating in the country such as BP and BG Group. There is large scope for new investors with many more opportunities. The Oman market is noted for its stability and openness to British investors and is a highly attractive option for companies looking to enter the wider Gulf market.” Other than the obvious oil and gas sector, Mr Hasan highlighted the significant opportunities Oman offers in precision engineering; education; health; tourism; food; utilities (both renewable and non-renewable) in terms of electricity and water. He also noted the services sector which includes law, accounting and financial services. Oman offers various investment incentives to attract Foreign Direct Investment (FDI). The legal framework

Company: George Mathew & Co Name: George Mathew Email: gmandco@omantel.net.om Web: www.gmc-om.com Address: P.O. Box 1488, P.C 114, 7th floor, Building No. 37, Muttrah Business District, Muscat, Sultanate of Oman Telephone: +968 24795995, 24708626

allows foreigners to own up to 70% shareholding (100% in some cases). “Oman offers tax concessions, no foreign exchange controls, first class infrastructure, cost effective utilities, political stability, strategic location, duty concessions, modern banking and transport, a well regulated stock market and many more attractive incentives in their various Free Zones located in the country,” concluded Mr Hasan.

Company: Al Barij International LLC Name: Mukhtar Hasan Email: Mukhtar@albarij.com Web: www.albarij.com Address: PO Box 117, PC 116, Sultanate of Oman Telephone: (968) 2456 3023

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SECTOR SPOTLIGHT:

South Africa: Leading the Way in Foreign Direct Investment

SOUTH AFRICA Leading the Way in Foreign Direct Investment

l As growth in other economies has slowed with the on-going economic turbulence, investors have turned to their attentions to emerging markets and economies to provide them with higher return rates. The African global share of FDI grew from 3.2% in 2007 to 5.6% in 2012 and there is growing interest and activity from International and domestic PE houses and fund managers looking to capitalise on these growth opportunities. Sub-Saharan Africa has grown faster in the five years since 2008 than in the years before the crisis. South Africa has benefitted from this success and for some time now has been seen as the economic powerhouse of Africa, with an abundant supply of resources and a well-developed infrastructure. It has excellent financial, legal, communications, transport and energy sectors as well as a first-rate stock exchange. South Africa’s economy presents foreign investors with an abundance of opportunities across many industry sectors. Acquisition International speaks to experts in the region to learn more. -----------------------------------------------------------------------The MJF GROUP provides Business Advisory Serviceand Support to the CEO, under the banner of MJF Group (Business Support to the CEO). ------------------------------------------------------------------------

Dr Michael J Freestone runs this, with 25 years of business advisory and support services experience including business strategy, business planning and marketing planning, business diagnostics assessments and reviews and is a balanced scorecard a certified Kaplan and Norton Balanced Scorecard Graduate. . He has assisted many companies in re-aligning their vision and achieving their goals and objectives. The MJF GROUP also offers: 1. A sales forecasting service, 2. Balance sheet restructuring, 3. Tax consulting. 4. Sales and operational expenditure advice. 5. Risk management analysis. 6. Accounting systems and procedures development, 7. Company law and corporate governance services. 8. Behavioural and Personality Profiling and Analysis -----------------------------------------------------------------------Pieter de Wet is the Head of Research at Novare Equity Partners. -----------------------------------------------------------------------Despite concerns that the momentum of economic growth in Africa would not be sustained, not least due to the apparent slowdown in the resource boom, funds continue to flow into projects across the continent - proving the sceptics wrong. Foreign direct investment (FDI) into sub-Saharan Africa has grown strongly since 2000. Although took place from a low base, indicative of growing appetite on the part of international investors is that Africa’s share of global FDI escalated from 2.7% in 2007 to 5.6% in 2012. The listed markets in most countries across the continent are still relatively undeveloped and illiquid compared to their developed peers. With the exception of South Africa, and to a lesser extent Kenya and Nigeria, markets are too small to absorb the large quantities of money that investors are willing to deploy into the region. As a result, direct investments are the order of the day. Interestingly, it is not only developed countries that are investing in Africa. According to a 2012 study by Ernst and Young, South Africa, with 235 FDI projects, was the African country with the highest number of projects on the continent, second only to India’s 237.

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He is also qualified as an International Financial Reporting Standards (IFRS) Consultant, which is useful as he is an authorised Accounting Officer and Independent Review Officer approved by CIPC and SARS. Dr Freestone holds 4 degrees and 2 Diplomas at Honours level: 1. B.Comm. (University of Natal) 2. B.Comm Hons. (University of Natal) 3. MBA.(Wales Cardiff) 4. DBA (New York) (which he passed Summa Cum laude with a Distinction in Business Finance. 5. Diploma with Chartered Institute of Business Management (CIBM). 6. Diploma Chartered Institute of Secretaries and Administrators(CIS). Majoring in Corporate Governance. He holds Membership with: • The Institute of Directors (IOD) • Institute for Independent Business (IIB); • The South Africa Institute of Tax Practitioners, • Commissioner of Oaths and is a • SARS Tax Practitioner.

He is a Fellow of: • The Institute of Chartered Secretaries & Administrators; • The Chartered Institute of Business Management Dr Freestone has held positions as: • Financial Director, • COO, • Executive Director, • Managing Director and • CEO for two listed companies.

Company: The MJF Group Name: Dr Michael J Freestone Email: info@mjfgroup.biz Web: www.mjfgroup.biz Address: P.O. Box 449, Halfway House. 1685 Telephone: +27112387858

This is mainly due to South African multinationals like Shoprite and Standard Bank looking for higher growth in markets outside of their well-served home market. Shoprite, for example, recently raised R8 billion in additional funding, a major portion of which has been earmarked for further expansion into Africa. The relaxation of South Africa’s investment guidelines under Regulation 28 of the Pension Funds Act, allowing an additional 5% allocation towards investments in the rest of the continent, has also led to pension funds realising the continent’s potential. Again, direct investments appear to be the favoured route. However, the longer term nature of private equity investments is a good fit for South African pension funds in search of real yields. Graphics: Flows into sub-Saharan Africa (US Dollars) GDP based on purchasing power parity per capita

Company: Novare Equity Partners Pty Ltd Name: Pieter de Wet Email: pieter@novare.com Web: www.novareequitypartners.com Address: PO Box 4742, Tygervalley, 7536, S.Africa Tel: +27 (0) 21 914 7730 Fax: +27 (0) 21 9147733

June 2013 /

SECTOR SPOTLIGHT: The New Rising Stars

THE NEW RISING STARS l For so long now the world’s leading entrepreneurs and business professionals have turned to the BRIC nations in order to take advantage of overseas growth, however with countries such as Brazil, Russia, India and China no longer necessarily providing the best investment opportunities, many are turning to the ‘rising stars’ of the emerging world, such as Angola, Peru, the Philippines and Zambia. Acquisition International speaks to leading business, legal and financial professionals to discuss the benefits of investing in a new ‘rising star’ location.

Angola

-----------------------------------------------------------------------Mauro Mota Veiga is Partner of Mota Veiga Advogados, Angolan Law firm that was established in Association with the Portuguese law firm MC&A. ------------------------------------------------------------------------

MVA is a client-focused international legal practice, created in association with MC&A, a Portuguese law firm with an association with Dentons, one of the biggest law firms in the world, delivering quality and value and assisting all range of clients in their businesses.

“Angola has come a long way since gaining independence from Portugal in 1975,” states Mauro, describing the current business environment in Angola. “The country has transformed from an agriculturebased economy to one of sub-Saharan Africa’s major oil and mineral producers, thanks to the onset of stability in 2002 after a 27-year civil war. This, along with the commodity boom in recent years (mainly in oil) has attracted significant inward investment despite the country’s huge infrastructure deficit.”

Partner, Mauro Mota Veiga, explains what gives the firm the competitive edge.

Mauro attributes Angola’s impressive economic growth rate to its oil sector, stating “Oil production and its supporting activities contribute about half of the nation’s gross domestic product and 90 per cent of exports.”

“The Association with the Portuguese law firm MC&A, and consequently with Dentons, provides MVA an advantage over local and global competitor since MVA can assist international clients in Angola with high level quality Lawyers and multicultural teams, if necessary.”

Numerous challenges remain for the country, explains Mauro. “Angola needs to upgrade its electricity transmission and distribution infrastructure, expand its urban water-supply system, improve efficiency at the Port of Luanda, and make policy and regulatory adjustments across the board.”

30 / June 2013

Mauro has predictions for the future: “The oil sector in continue to be one of the top sectors in Angola. With more oil production coming on stream, lifting output towards 1.9m b/d this year, and LNG exports commencing, GDP growth is expected to move into double figures.”

Company: Mota Veiga Advogados – In Association with MC&A Name: Mauro Mota Veiga Email: mmv@legalmca.com Web: www.legalmca.com Address: Rua Rainha Ginga, n.º 187, Edifício Rainha Ginga - Piso Intermédio, Luanda Telephone: +244 925327648

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SECTOR SPOTLIGHT: The New Rising Stars

Philippines

-----------------------------------------------------------------------Anthony B. Peralta is Senior Partner at Cochingyan & Peralta Law Offices. -----------------------------------------------------------------------Cochingyan & Peralta Law Offices is a law firm which caters predominantly to a multinational clientele. The firms’ main focus is in providing a multi-specialist approach to issues that confront an international business organization in the Philippines. It specialises in assisting foreign companies with cross border transactions and inbound investment in all its legal requirements to set up shop in the country. Senior Partner, Anthony Peralta, comments: “The extremely volatile business environment prevailing in Asia, particularly in the Philippines, has presented new challenges and opportunities for entrepreneurs as well as investors. Now more than ever, managers and investors alike have come to require and demand individualized representation of the highest quality from their legal counsel.” Peralta continues to explain what he feels gives Cochingyan & Peralta the advantage over the competition. “We specialise in representing technology-oriented companies, at all stages of their growth, as well as investment and venture fund companies that support and finance such companies. Our goal is to treat each and every one of our clients as

Philippines

-----------------------------------------------------------------------Martin Ignacio D. Mijares is a Partner at Salvador & Associates, Attorneys-at-Law. -----------------------------------------------------------------------Salvador & Associates (S&A) is a business law firm in the Philippines established in 2003 by experts in tax and commercial law. A significant part of S&A’s practice involves and is focused on tax practice, which includes: tax advisory, compliance, planning, and structuring services; as well as tax advocacy and litigation services, rendered in favour of a diverse clientele, including multinational and Top 500 companies in the Philippines. S&A also has a vast commercial law practice comprising of special projects, such as mergers and acquisitions, corporate reorganizations, initial public offerings, and the structuring and financing of investments. S&A’s other practice areas include litigation, labour and employment, immigration, and intellectual property. As S&A is widely recognised as the top go-to law firm for tax and corporate legal services in the Philippines, Martin believes that this gives the firm the edge over local and global competitors. “S&A is one of the biggest tax advocacy service providers in the country. From the representation of various clients coming from different industries involving a wide

Peru

-----------------------------------------------------------------------Sandra Orihuela is the founding partner of Orihuela Abogados | Attorneys at Law. ------------------------------------------------------------------------

Peru is a multi-metallic country that has one of the world’s largest mining reserves. It is the third world producer of copper, silver, zinc, and tin; and within Latin America, is the largest producer of gold, zinc, tin and lead. During 2012 Peru welcomed approximately US$ 8.5 Billion in mining related investments to be used in infrastructure, production and exploration works. The estimated overall investment portfolio in mining is nearly $55 Billion and is comprised of 47 main mining projects. Orihuela Abogados | Attorneys at Law has been and remains at the forefront of foreign investment in the mining industry in Peru. A legal boutique based out of Lima and Miami, with primarily foreign-based clients investing in Peru, Orihuela is an international-minded law firm made up of multijurisdictional lawyers who

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business partners, to combine top rate professional skills and solid business judgment in order to play an active role in ensuring our client’s success.

a business environment where the rule of law prevails has made the Philippines the preferred area of investment in the ASEAN region.

“We put the interest of our clients and their business before our own. Regardless of title or position, we work for the firm and use our different talents to maximize quality, efficiency and productivity. Our objective is to help clients meet their business needs by providing the highest quality legal services on a value-added, cost-effective basis. The strength of our client roster and endurance of our client relationships attest to our success at meeting that objective.

“The continued influx of foreign investments will provide sufficient jobs to its pool of skilled and educated workers. The presence of an absorptive local market will ensure the sustainability of growth in the long run as long as export markets will be available and expanded.”

“Most of all, we give our clients the confidence that can only be derived from years of experience in our areas of expertise and personalized attention that their business requires.”

Cochingyan & Peralta Law Offices

Mr Peralta describes the current business environment in the Philippines as “exciting, promising and secure” and adds: “The infrastructure is in place for any global company to open its doors in the Philippines and take advantage of the many opportunities and incentives provided by our Department of Trade and Industry. With the upgrade to investment status given by Fitch, Standard and Poor and the Japan Credit Rating Agency, foreign investments are pouring in at breakneck speed.” Mr Peralta attributes the country’s impressive growth to the new direction of Pres. Aquino to fight corruption and provide range of tax issues, S&A’s experience in tax advocacy is the most robust in the legal field. In addition, S&A’s tax research resources and materials are the most up to date owing to its on-line research facilities (local and foreign) and daily dealings with tax and court authorities. As such, S&A has developed the expertise in tax and corporate law to assist and advise clients in domestic and global transactions.” Furthermore, S&A is exclusively TAXAND Philippines. As part of TAXAND, a global organization of over 2,000 leading tax advisors, S&A can provide its clients access to high quality, integrated, and independent tax advice in and across nearly 50 countries. Martin describes the current Philippine business environment as having robust economic growth, a thriving housing market, flourishing tourism industry, and a surging stock market, and he attributes the country’s impressive growth to “good governance by the present administration under President Noynoy Aquino: there have been increasing government reforms; anticorruption programs; local and foreign investment incentives; increased government spending, especially in infrastructure; higher private spending as a result of the increasing remittance of overseas foreign workers; and growing international confidence on the local investment climate (e.g., the investment grade upgrade by Fitch and S&P).” Despite its growth the Philippines faces certain challenges as it becomes more established in terms of foreign investment. “There should be more and continued government reforms

focus on international business transactions in Peru, with extensive experience in mining. The legal team has a through knowledge of the legal regulations and the environmental, social and political factors affecting mining and other industries in Peru, and a broad base of contacts in the mining industry worldwide. Sandra Orihuela, the founding partner of the firm, has been continuously recognized by leading and reputable ranking organizations such as Chambers and Partners as a leading lawyer in Latin America and in the U.S., where she obtained her law degree. She has been praised by her clients for her solid understanding of complex cross-border transactions, her intellect and for the impeccable response and efficiency of her legal team. This may be due to the fact that she has the advantage of being dual qualified as an attorney in both the United States and Peru, and has been trained and gained expertise at legal powerhouse Baker & McKenzie and in-house at a large multinational. Adding to the equation are the firm’s efforts at international branding by participating as an exhibitor at large multi-country events such as the Prospectors

Company: Cochingyan & Peralta Law Offices Name: Antnony B. Peralta Email: anthonyperalta@cochingyanperalta.com Web: www.cochingyanperalta.com Address: 12th Floor, 139 Corporate Center. 139 Valero Street, Salcedo Village, Makati City 1227, PHILIPPINES Telephone: +632 8173081 (e.g., streamlining more government processes, including setting up a business presence; better tax administration; stronger and more serious anti-corruption programs, and easing of restrictions on foreign ownership in vital industries),” states Martin. “There should also be increased and focused government spending in infrastructure; and the government should also intensify its efforts on employment generation to alleviate poverty. To ensure that growth is sustainable and to boost employment rates, the government should offer more training to semi-skilled and unskilled workers.”

Company: Salvador & Associates, Attorneys-at-Law Name: Martin Ignacio D. Mijares Email: mdmijares@salvadorlaw.com Web: www.salvadorlaw.com / www.taxand.com Address: 8th Floor, Tower One and Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City Telephone: Direct line: +(632) 511.1206 Trunk line: +(632) 811-2500 Mobile: +(63) 917.840.9040 and Development Association yearly meeting in Toronto which this year attracted over 30,000 attendees. As Peru maintains a leading position as a new rising star not only due to being an attractive worldwide destination for mining investment but as one of the top economies in Latin America, well position firms such as Orihuela will continue to share the country’s spotlight.

Company: Orihuela Abogados | Attorneys at Law Name: Sandra Orihuela Email: sog@orihuelalegal.com Web: www.orihuelalegal.com Address: Av. Republica de Panamá 3570, Oficina 1102 - Lima 27, Peru Telephone: (+511) 221-6132

June 2013 /

SECTOR SPOTLIGHT: The New Rising Stars

OTHER EXPERTS IN THIS AREA

Ituna Partners Company: Ituna Partners Name: John Mubanga Mulwila Email: jmmulwila@gmail.com Telephone: +260 977781435

OTHER EXPERTS IN THIS AREA

Ysakar Legal Practitioners Company: Ysakar Legal Practitioners Name: Ysakar Chikwa Stephen Chibwe Email: chikwac@gmail.com Telephone: +260 211236872

Zambia

-----------------------------------------------------------------------Jason Kazilimani is Senior Partner at KPMG based in Zambia. Here, he talks about recent regulations in the country. -----------------------------------------------------------------------KPMG in Zambia can provide an informed perspective on issues faced by the Zambian business community. Mr Kazilimani comments: “Building on our proud history in Zambia, dating back to 1954, the Firm has established a new KPMG entity – with new ownership, new leadership and a new sense of purpose. Our commitment is to deliver quality service, on time, every time.” Countries which were seen by the West to have all the wrong features (low per capita GDP, poor infrastructure, supposedly under-developed financial markets, huge populations, different political systems) are now dazzling stars in the (almost) post-crisis world. Mr Kazilimani highlights recent regulations to the Bank of Zambia (responsible for the monitoring of balance of payments), outlining the Statutory Instrument No. 32 of 2013. Regulations apply to • A financial service provider licensed under the Banking and Financial services Act; • An importer of goods or services exceeding ten thousand United States dollars or the equivalent in foreign • currency; • An exporter of goods or services exceeding ten thousand United States dollars or the equivalent in foreign • currency; • A financial service provider designated under the National Payment Systems Act; and • Any transfer or receipt of money in foreign currency into or out of Zambia exceeding five thousand United • States dollars or equivalent in foreign currency.

Transactions to be monitored 1. In relation to outflows, the Bank of Zambia shall monitor: • The value of any imported goods; • The value of any imported services, including management services;

32 / June 2013

Any amounts remitted out of Zambia whether unrequited (gratuitous) or otherwise; The amounts if any deposited abroad but generated by a person resident in Zambia from the supply of goods produced or services rendered in Zambia; Loans granted to non-residents; Trade credits from non-residents; Investments made in the form of debt equity and debt securities outside Zambia by persons resident in Zambia.

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2. In relation to inflows, the Bank of Zambia shall monitor: • The value of goods or services exported out of Zambia; • Profits or dividends received in respect of investments abroad; • Borrowings from non-residents; • Investments in the form of equity from abroad; • Investments in the form of debt securities from abroad; and • Receipts of both principal and interest on loans to nonresidents

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• • • •

3. In relation to international transactions, the Bank of Zambia shall monitor: • The value of imported or exported manufacturing services or goods to or from non residents; • The net cost effect of telecommunication services; • The value of international transport, courier and postal services; • The value of international accommodation and other hospitality services to or from non residents; and • International money transfers into and out of Zambia. Obligations of affected parties To comply with the provisions of this statutory instrument, the following are some of the obligations of the affected persons: • An exporter, importer or foreign investor shall open and maintain a foreign currency denominated account with a financial service provider for the purposes of these regulations; • A foreign investor who acquires incentives under the ZDA Act shall deposit the pledged capital into the accountreferred to in above; • All exports to be declared on the export proceeds monitoring form in form 1 set out in the schedule and the proceeds thereof to be remitted into the foreign currency account within 60 days of export;

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Foreign exchange remittances in excess of ten thousand United States dollars for accounts holders and five thousand United States dollars for non account holders to complete form II; Remittances of foreign exchange to be supported with customs clearance for imported goods or evidence of provision of services; Remittances exceeding the sum of ten thousand United States dollars to be made via electronic transfer and those exceeding one hundred thousand United States dollars to be made via an irrevocable letter of credit; All payments of dividends, royalties, management fees, technical fees, commissions, consultancy fees and imports exceeding one hundred thousand United States dollars to be and such payments shall be accompanied by prescribed documentation under Section 11 of the Statutory Instrument; Any acquisition of a foreign exchange loan or letter of credit from a non resident lender to report the borrowing to the Bank of Zambia with supporting documentation prescribed under Section 12 of the Statutory Instrument; Private external debt contracted before the effective date of this Statutory Instrument to be registered; No over the counter withdrawals in excess of five thousand United States dollars for account holders and in excess of one thousand United States dollars for non account holders for financial service providers; and Foreign exchange bureaus or money remittance service providers shall limited transaction to the value of one thousand United States dollars per person per day and shall not exceed five thousand United States dollars per person per month.

Company: KPMG Name: Jason Kazilimani Email: jkazilimani@kpmg.com Web: www.kpmg.com Telephone: 0211 372 900

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Pitfalls and Potential: Navigating Emerging Markets

PITFALLS AND POTENTIAL Navigating Emerging Markets

l The market outcomes of 2012 maintained confidence in the long-term economic progress of emerging economies. Spurred on by international stimulus projects, investments, M&A and funds looking to raise new capital, 2012 was a good year. Whilst some are beginning to fear the ‘sudden stop’ of western investment, especially as stimulus plans reach the end of their lifespan; 2013 is actually predicted to deliver even more, particularly in the 3rd and 4th quarters. According to a survey by the EMPEA, three-quarters of pension funds, asset managers and other sources of private equity funding are looking to increase their exposure to emerging markets in the next two years. Doing business, buying, selling and raising funds in these economies is not without its complications but with broad exposure to emerging markets being necessary for sustained real returns on capital, there is a huge demand for help in navigating the area. Morris Rozario, Executive Director at Ernst & Young, discusses the pitfalls and potential of investing in the MENA region.

The MENA economic and business outlook - Qatar plans to invest $140b in state of the art infrastructure and games facilities for FIFA World Cup 2022. -

Oman’s FTZ Authority plans to invest over $450m, to extend free trade zones across the country to attract foreign investment and diversify its oil-reliant economy. Saudi Arabia the largest economy in the Middle East is expected to go through a period of accelerated growth, with construction projects estimated at $629 billion and a further $500 billion of investment planned in energy, transportation, education and healthcare.

Most MENA countries are also striving to increase foreign direct investment to support their ambitious economic and infrastructure development plans.

As the leading provider for tax services in MENA, Ernst & Young supports clients with experienced tax professionals in country in all MENA countries.

To attract foreign direct investment most countries are implementing fiscal and tax measures that create provide an attractive investment climate with

Tax advisory services provided by Ernst & Young MENA tax professionals include assistance with the analytical review and planning of operating structures and arrangements, substantiation of related party transactions and tax health checks to ensure that clients get it right from the start.

Low corporate tax rates (Qatar 10%, Oman 12%, Iraq and Kuwait 15%, Egypt and Saudi 20%) economic free zones in Oman, Qatar, UAE which provide considerable fiscal and tax benefits and relief extensive double tax treaty networks which enable tax certainty and provide tax benefits the absence of broad based indirect taxes like VAT in almost all countries

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- GCC countries are expected to achieve growth in excess of 5%, driven by high oil prices and government infrastructure spending.

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Pitfalls and challenges

The 34,000 km GCC rail network will make the region one of the world’s fastest growing markets for rail business, with projects worth over $156b.

34 / June 2013

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Navigating fiscal and tax challenges in MENA

The vibrant economic and business outlook in MENA which continues to present a plethora of business opportunity can be well surmised from the following:

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tax authorities considering changes in tax policy and implementing more stringent compliance enforcement processes, with increasing scrutiny of cross border transactions and related party transactions. Tax authorities in Egypt, Saudi, Oman and Qatar are also introducing definitive transfer pricing regulations. Enforcement of broader and more subjective interpretation of tax laws in a number of countries including Kuwait, Saudi and Iraq Greater emphasis on enforcement of withholding tax laws with scrutiny of WHT compliance and use of pay and claim regulations.

The positive fiscal and tax landscape in MENA

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UAE is fast becoming a global business hub with planned investments in airport supply and services worth over US$110b.

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The Arab Spring has brought about paradigm changes to the political and social landscapes in MENA. As a consequence of the fiscal pressures to boost public finances and meet increase spending on social subsidies, the tax landscape in MENA is also undergoing considerable change with

Company: Ernst & Young Name: Morris Rozario Email: morris.rozario@om.ey.com Web: www.ey.com Address: Ernst & Young Building, P.O. Box 1750, P.C. 112, Ruwi, Oman Telephone: +968 24 559 563

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Corporate Immigration: Issues and Challenges in the Current Economy

CORPORATE IMMIGRATION Issues and Challenges in the Current Economy

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

Mr Morcos stated that Sabelberg Morcos Lawyers’s international standing has never been more significant. In October 2012, the firm established strong and unique alliances with top tier law firms in China as well as strong rapport with Australian and Chinese government officials. Sabelberg Morcos Lawyers has now launched a new venture that is the only one of its kind in Australia. “‘The China Project’ is a new chapter of our firm,” commented Mr Morcos. “The project is based on our commitment to strong cultural understanding, closer economic ties, and a longterm investment in the world’s largest growing economy. And it’s our commitment to leading the way in foreign direct investment, corporate migration and commercial law in China that means we are already starring in Asia’s rise.”

and services; increasing the production of goods and services in Australia; introducing new and/or improved technology; increasing competition and commercial activity; developing links with international markets; and bringing business migrants to Australia based on nominations by state and territory governments. “This new visa significant investor visa stream expedites Australian permanent residency via an Australian active investment of $5m AUD + by an applicant,” he added.

“Therefore, we are anticipating that employers may need to demonstrate they are not nominating positions where a genuine shortage does not exist. The English language requirements for certain positions will be raised and the enforceability of existing training requirements for businesses that use the program will be strengthened,” he concluded.

Discussing the impact of the global economic challenges, Mr Morcos stated that it has given further incentive and emphasis for the Australian federal government to attract viable investors into Australia.

In January Sabelberg Morcos Lawyers opened its doors in one of China’s fastest growing cities, Nanjing, and recently signed up additional China bases in both Beijing and Zhengzhou. The firm also has offices in both Melbourne and Sydney.

“Recently the Australian Prime Minister released a White Paper on foreign investment into Australia,” he noted. “Furthermore, the Victorian State Government held the largest ever super trade mission into China held by an international State Government.”

Late last year, the Australian Department of Immigration and Citizenship introduced the provisional and permanent Business Innovation and Investment visa streams. Mr Morcos explained that these seek to expand the country’s economy by: creating jobs; increasing the export of Australian goods

Looking ahead, Mr Morcos highlighted that the Australian government will legislate changes to the temporary workers visa (Subclass 457), where there has been recent Parliamentary conjecture that work priority should be afforded to local Australian talent rather than businesses capitalising on the

ACQUISITION INTERNATIONAL

incentive of foreign workers who are accepting much lower incomes.

Company: Sabelberg Morcos Lawyers Name: Jimmy Morcos Email: jmorcos@sabelbergs.com.au Web: www.sabelbergs.com.au Address: Level 5 (West) 224-236 Queen Street, Melbourne, Victoria, Australia 3000 Telephone: +61396704033

June 2013 /

SECTOR SPOTLIGHT:

Corporate Governance as a Strategic Tool

CORPORATE GOVERNANCE AS A STRATEGIC TOOL l The global economic crisis has brought to the fore the pertinence of corporate governance issues in industrialised, emerging and developing economies alike. As part of an effort to minimise future economic problems, policymakers and regulators are increasingly making changes to corporate governance practices in order to enhance transparency, get greater director accountability, and give shareholders more say in certain boardroom decisions. Integrity has become a critical consideration and there are considerable external pressures from investors, shareholders and even international governments, which are making waves on the decisions that are reached in the boardroom. Good corporate governance, if implemented effectively, can be a strategic asset that can help a company’s overall performance and those that take these issues seriously tend to reap the rewards. Whilst members of the board may excel in the day-to-day running of the business, they are not often informed enough to design and implement an effective framework; hence the onus is typically placed upon external advisory firms. Acquisition International speaks to the experts to learn more.

-----------------------------------------------------------------------Recent events and scandals involving the financial market have had a negative impact on companies that have lost the confidence of their shareholders. -----------------------------------------------------------------------A large and often unspoken of slice of investors affected and on which the impact was greater were the retail investors who, in many cases, saw their savings go up in smoke. Of course we are faced with a particular situation, but in most cases the risk is still high due to governance and risk management procedures that are often inadequate and annual general meeting resolutions with little consideration to the smaller shareholders, who certainly cannot benefit from the professional support available to large institutional investors. This leads to situations such as the assembly of the Monte dei Paschi in March 2008, when the proposed capital increase to partially finance the purchase of Antonveneta was approved by 99% of members, probably largely unaware of the future consequences that are appearing now. It’s a simple fact that active participation in the corporate life of a company for a small shareholder is still hindered by factors often insurmountable. Individual weight doesn’t matter; the cost of voting is still high, reduced responsiveness to market fluctuations, information asymmetries and lack of access to professional tools such as analysis and support.

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Finally, however, someone has decided to give a voice to the retail investors who can now take advantage of professional support at an affordable cost for everyone. ProxyCensus Ltd has developed a new application - “MyShares” (currently available on iTunes for ipad & iphone and Google play for Android) - which allows shareholders to access information of shareholders’ meetings. The application provides information on dividends and agenda of the meetings and also thanks to the collaboration of Manifest “the proxy voting agency”, an independent corporate governance and proxy voting specialist, shareholders can receive a contentious item meeting analysis on all the agenda items up for shareholder scrutiny. For each meeting called by a company (eligible for index inclusion on the London Stock Exchange main market) , the application will send a notification message. The shareholder concerned can then immediately see, from their Smartphone or tablet, all the details of the meeting: date, place, time, record date (i.e. a date by which you need to be a shareholder to vote), the official meeting notice. Another message will then alert the user of the availability of the analysis carried out by Manifest. In addition to the shareholders the tool is also addressed also to issuers who have the ability to send press releases directly to their shareholders.

Shareholder Associations can also make use of the Apps push service and immediately make available documents relating to their activities. We are facing a real revolution which also offers small investors a chance to have immediate access to all the information concerning meetings and access to expert analysis with ease that, until recently was reserved only for large investors, funds and banks. Myshares will finally give shareholders an informed assessment appropriately to defend their rights and investment.

Company: Proxycensus Ltd Name: Miguel Carrasco Email: m.carrasco@proxycensus.com Web: www.proxycensus.com Address: Suite B, 29 Harley Street, W1G 9QR, London, United Kingdom Telephone: +44 207 193 0461

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SECTOR SPOTLIGHT:

Corporate Governance as a Strategic Tool

-----------------------------------------------------------------------Carlos Lucena is Co-founder, Managing Partner and Head of the Corporate Law group of Telles de Abreu e Associados, based in Oporto, Portugal. -----------------------------------------------------------------------“Telles de Abreu e Associados – Sociedade de Advogados, R.L.” (TAA) is a medium-size law firm with offices both in Oporto and Lisbon, which has been providing legal services to both national and international Clients since its incorporation, more than twenty years ago. TAA is proud to provide its Clients with first-class legal services and assistance in practically all branches of law, with special focus in the areas of Corporate Law, Competition Law, Labour Law, Tax Law and Litigation, practice areas in which Telles de Abreu has gained vast experience and recognition from its Clients. The long-standing presence in its areas of practice places TAA in a comfortable situation in the market. Its boutique like office and tailor made legal services are the reason why its clients resort to its legal advice, and why TAA has an advantage against other well established law firms. Hence, TAA finds it important to accompany the emerging trends in the market, providing up-to-date services to its clients. That is why, since 2008, Corporate Governance has been an important focus of our legal practice. This subject has been gradually emerging as a key business concept in

-----------------------------------------------------------------------Luigi Macchi di Cellere is one of the founders of Macchi di Cellere Gangemi, based in Italy. -----------------------------------------------------------------------Italian law firm Macchi di Cellere Gangemi was founded in 1986 by Luigi Macchi di Cellere and Bruno Gangemi both senior partners. Explaining more about corporate governance and the Italian system, Mr Macchi di Cellere says: “It constitutes an ever increasing important aspect in the life of a company both for the greater involvement of the various stakeholders in the business, as well as for the ever increasing complex structures that the various corporate groups assume, following the phenomenon of the globalisation of business. “The Italian system contains specific regulations concerning corporate groups, with the consequence that particular rules of conduct appliying to the directors of both the controlling and the controlled entities.” He continues to explain what gives the firm the competitive edge. “Personally, the long experience matured in assisting companies and multinational groups belonging to countries

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European countries since the beginning of the crisis, which revealed severe shortcomings in corporate governance. When most needed, existing standards failed to provide the balance that companies need in order to cultivate sound business practices. This revealed the importance of corporate governance, as the system of rules and codes of conduct relating to the management and control of companies - which is vital to all organizations regardless of their size or structure.

educational institutions to support corporate governance reform, and (iii) working with regulatory institutions and the government to improve corporate governance laws, regulations, good practices, codes and listing requirements, based on acquired practical expertise. A good law firm must be ready to provide its clients such support.

Also, company internationalization has been imposing further integration of rules and principles in the pursuit of greater transparency and harmonization. The Portuguese legal system has not overlooked this issue, since it is already equipped with solutions that adequately address problems associated with corporate governance, namely through the creation of the Portuguese Corporate Governance Institute, which drafted a Corporate Governance Code promoting good practices based on highly significant issues raised directly by companies. For 2013, one can expect that the role played by law firms will be increasingly important, focusing on delivering targeted corporate governance support to more clients for even better results, namely by (i) assessing a firm’s corporate governance practices and providing advice on how to improve them; (ii) building capacity of local companies and

with different cultures, traditions and juridical systems; in particular having lived, studied and worked extensively in various countries in addition to Italy, including the US, New Zealand and Argentina.” Mr Macchi di Cellere talks about recent emerging trends. “I have noticed a transition from protecting the position of the shareholders to an increasing care for the interests of all the stakeholders involved and an extension of the areas of responsibilities of the companies,” he explains.

Company: Telles de Abreu e Associados Name: Carlos Lucena Web: www.tellesabreu.com Address: Rua da Restauração, 348 4050-501 Porto Telephone: + 351 22 030 88 00 Fax: + 351 22 030 88 00 Address: Avenida António de Aguiar, 15, 5E 1050-012 Lisboa Telephone: + 351 22 030 88 00 Fax: + 351 22 030 88 00

“Furthermore a regulation has already come into force which prohibits an accumulation of roles in the financial sector. Those who occupy a role in the management, supervisory and control bodies, as well as officials heading companies or groups of companies operating in the credit, insurance and financial markets cannot assume or exercise roles in competing companies or group of companies. “These regulations will contribute to determine a renewal and a re-definition of various boards in line with the evolutions at EU level.”

“This tendency is confirmed by the increasing role of independent directors and the proliferation of autodiscipline codes.” With regards to corporate governance in the latter half of 2013, Mr Macchi di Cellere states: “In 2013 a regulation introducing quotas per gender in the Board of Directors of listed companies will come into force (the regulation is applicable at the first renewal of the BoD after 12 August 2012), with the consequence that 1/3 of the Board of Directors’ members shall belong to the least represented gender. For the first term the quota provided for the least represented gender is 1/5 of the members.

Company: Macchi di Cellere Gangemi Name: Luigi Macchi di Cellere Email: l.macchi@macchi-gangemi.com Web: www.macchi-gangemi.com Telephone: + 39 06 362141

June 2013 /

SECTOR SPOTLIGHT: Merger Control Reform

MERGER CONTROL REFORM

l As many business owners are acutely aware, the preparation of merger control notifications to the appropriate authority in respect of M&A transactions requires a considerable amount of effort by in-house teams and external legal and financial advisers. This effort results in significant costs both in professional fees and management time. In recent years there has been a global overhaul of the rules and regulations that govern the merger control process and this reform has had an impact on the ease of doing business and investor appetite in various countries around the world. Many of the changes have focussed on simplifying the law and this has been welcome news for businesses as it reduces the workload and costs involved in seeking clearance for transactions which require notification, but do not raise competition law issues. Another driving force behind regulatory changes has been the growth in the number of multi-jurisdiction merger reviews; many antitrust authorities have increasingly cooperated with counterpart agencies both bilaterally and through multilateral organizations, to promote cooperation and convergence toward sound merger review policies and practices internationally. Acquisition International speaks to Samir Gandhi at AZB & Partners to analyse how reform has altered the merger control landscape. -----------------------------------------------------------------------Samir Gandhi is a partner at AZB & Partners’ New Delhi office, where he deals with a range of competition, antitrust, international trade and WTO issues. Who’sWhoLegal 2013 lists him as a leading competition practitioner in India, and Who’sWhoLegal 2010 as a leading trade and customs practitioner. -----------------------------------------------------------------------AZB & Partners is closely associated with the development and practice of competition law in India. They participated in the consultation process leading up to the framing of merger control regulations under the Competition Act 2002 (‘CA02’). They have since interacted closely with the Ministry of Corporate Affairs, Government of India (‘MCA’) and the Competition Commission of India (‘CCI’), India’s competition regulator. The firm’s lawyers have also acted as counsel to the CCI in its early litigation to overcome the initial roadblocks to its functioning.

The Indian merger control regime is governed by the CA02, merger regulations and several MCA notifications. The regime is a mandatory one and ‘combinations’ (i.e. acquisitions, mergers or amalgamations) require CCI approval if the parties to the combinations fulfill certain monetary thresholds: (see table below... There are several exemptions from this requirement to notify the CCI, including a de minimis exemption for acquisitions below certain asset/turnover thresholds, and others exempting certain types of combinations such as acquisitions of shares/ voting rights/assets of 25% or less. The latter are set out in Schedule I of the merger regulations. Schedule I has been amended frequently, most recently on 4 April 2013. Notably, the amendments exempted certain ‘creeping acquisitions’, broadened the scope of exemption for intra-group mergers and limited that for intra-group

INDIA ENTITY

ASSETS

Parties Group

INR 15,000 million INR 60,000 million

WORLDWIDE ENTITY

ASSETS

Parties

US$750 million INCLUDING assets of at least INR 7,500 million in India US$3,000 million INCLUDING assets of at least INR 7,500 million in India

Group

38 / June 2013

TURNOVER

or or

acquisitions. The measure of ‘control’ is paramount to the amendments, with certain exemptions being conditional on the acquisition/change in control. Being a new regime, questions remain on many critical issues. For example, much confusion has arisen due to the purported exemption for offshore combinations with insignificant local nexus to India. The CCI’s decisional practice has shown that it is in fact unlikely to allow offshore transactions the benefit of this exemption if the parties cross the prescribed asset/ turnover thresholds. The Indian merger control regime will undergo significant change in 2013. The Competition (Amendment) Bill 2012, currently awaiting approval from the Indian Parliament, seeks to introduce sector-specific asset/turnover thresholds – allowing the CCI to monitor sensitive industries like pharmaceuticals. It remains to be seen whether such supervision would outweigh any uncertainty this may create.

INR 45,000 million INR 180,000 million TURNOVER

US$2,250 million INCLUDING turnover in India of more than INR 22,500 million US$9,000 million INCLUDING turnover in India of more than INR 22,500 million

Company: AZB & Partners Name: Samir Gandhi Email: samir.gandhi@azbpartners.com Web: www.azbpartners.com Address: Express Towers, 23rd Floor, Nariman Point, Mumbai 400 021, India Telephone: + 91 22 6639 6880

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SECTOR SPOTLIGHT:

Folio Corporate Services Limited: Principles of Good Corporate Governance

FOLIO CORPORATE SERVICES LIMITED Principles of Good Corporate Governance

-----------------------------------------------------------------------Calum McKenzie is the Director of Folio Corporate Services Limited. -----------------------------------------------------------------------“Each individual director owes duties to the company to inform himself about its affairs and to join with his codirectors in supervising and controlling them. A proper degree of delegation and division of responsibility is permissible and often necessary, but total abrogation of responsibility is not. A board of directors must not permit one individual to dominate them and use them” - (Jones J) Weavering Macro Fixed Income Fund Limited (in liquidation) v Peterson and Ekstrom 2011 (“Weavering”). The circumstances, commentary and findings in Weavering put corporate governance front and centre in the financial services arena. Despite this there appears to be a continued reticence on the part of principals or sponsors when it comes to appointing professional independent directors rather than ‘amateurs’ with a direct or personal connection to a company. In Weavering, the directors were found guilty of willful default and were deemed to have subordinated their judgment to that of the investment manager. Thus they were deemed to have breached their duty of care, skill and diligence. As opposed to a breach of their fiduciary duties of loyalty, honesty and good faith. The commentary and judgment set-out in Weavering has led to certain principles of good corporate governance, both theoretical and practical, being adopted. In reality it means that principals and sponsors should review the composition of their boards and consider more fully the benefits professional independent directors can bring. The following is a brief summary of what we consider to be the main practical points to be drawn from Weavering which if considered can be of assistance to both directors and principals considering the appointment of professional independent directors; • Skill Any director accepting a position should be satisfied they have the skills, experience and knowledge to fulfill their obligations (notwithstanding that for certain vehicles such as funds, the directors will outsource most of the day to day functions or operations). If the company in question operates in a specialist field such as a hedge fund or captive insurance

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company, then directors with specific knowledge of the relevant field can add substance and value. It should be noted however simply because a director has specialist knowledge, it does not mean he should seek to overtly interfere with the specialist operations, e.g. a director should not seek to be a pseudo-investment manager. The director should perform a “high level supervisory role” making sure that the company, its structure and its operations (contracts, service agreements etc.) are in line with industry standards. • Application Directors must exercise independent judgment and should not become an automaton or subordinate their judgment. A director must apply their own mind and judgment based on circumstances and not merely rely on explanations or information provided by connected or related parties. • Communication & Board Meetings Directors should educate themselves about the business of the company and each director should acquire and maintain a sufficient knowledge and understanding of the company’s business to enable them properly to discharge their duties as directors. This is a continuous process on the part of the director and it is where tailored regimes and methodologies specific to the mandate will add value for all concerned. Regular substantive board meetings need to take place, with a proposed agenda circulated and agreed upon prior to a meeting. Meetings should not be a matter of going through the motions as such meetings are pointless and add no value. Substance will be achieved through having the relevant matters at hand (as per the pre-agreed and circulated agenda) dealt with. This is where the knowledge and involvement of the mandate by the director is key and where each director can aim to add substantive value in an effective manner. • Crisis management In times of a crisis the correct course of action for a director is not to retreat into a shell and do nothing or indeed resign and attempt to distance themselves from the crisis. A director should research, consider and if necessary or appropriate debate matters in a logical and reasoned manner then apply their knowledge and understanding of the mandate and the circumstances to create an effective or optimum resolution for all concerned. • Indemnities Be it one entrenched in the constitutional documents of a company or a separate agreement, an indemnity

is intended to protect conscientious, well meaning directors from frivolous actions. Not those who have no intention of fulfilling their obligations from the outset. Principals and potential directors should use this as the basis to discuss and agree the requirements of each party, set expectations of the other and establish, agree and understand the scope of the work to be carried out by service providers and third parties. • Recordkeeping In line with current industry best practices and policies, recordkeeping by directors is now of paramount importance. As professional independent directors will usually be supported and assisted by professionally qualified and experienced staff, they will have sufficient resources to follow industry best practices and will be able to demonstrate how they have applied their minds to the decisions they have taken. • Fees Fees payable to directors should be commensurate such that directors have sufficient time and scope to discharge their obligations and responsibilities. In summary, principals and stakeholders should view an experienced and professional independent board, employing the findings of Weavering, along with established good corporate governance principles, as an added protection mechanism. In practical terms, stakeholders should demand constant vigilance and the application of considerable professionalism, time and expertise from directors in the discharge of their duties. For stakeholders using this professional approach can surely only be viewed as a positive development.

Company: Folio Corporate Services Limited Name: Calum McKenzie Email: calum@folioadmin.com Web: www.folioadmin.com Address: Folio Chambers, PO Box 800, Road Town, Tortola, VG1110, British Virgin Islands Telephone: +1 284 494 7065

June 2013 /

SECTOR SPOTLIGHT:

Exploring the Captive Insurance Industry

EXPLORING THE CAPTIVE INSURANCE INDUSTRY l Generally speaking, the captive insurance industry is enjoying a period of growth as the number of regions, firms and individuals with captive ambitions has increased. The number of jurisdictions with captive legislation on their books has grown, as have the total number of captives, and the levels of premiums written. It comes as no surprise that demand has increased; after all captive insurance companies provide a variety of financial and business benefits for many multinational enterprises wanting to insure risks. Many Fortune 500 companies own captive insurance firms – both on and offshore. The number of licensed jurisdictions is expanding so there are many choices when it comes to selecting a domicile; previously offshore centres had greater freedoms and for many were considered more attractive, however thanks to regulatory adaptions, onshore locations now also have greater flexibility so the playing field is much more level. This feature aims to thoroughly examine current industry issues and opportunities and we invite the leading providers of captive services (including captive managers, solicitors, accountants, actuaries, asset managers, and other organisations) to draw on your expertise and provide critical advice. Acquisition International looks at the solutions, opportunities and expertise available in various locations.

-----------------------------------------------------------------------Paul B Shimomoto is a Director and Shareholder of Char Hamilton Yoshida & Shimomoto. He is an attorney at law licensed to practice in Hawaii and the District of Columbia. -----------------------------------------------------------------------“Our firm has been representing captive insurance companies and their owners for nearly 30 years,” said Mr Shimomoto. “The attorneys in our Captive Insurance Section are well-versed in all aspects of forming, operating and liquidating all forms of captive insurance companies (single-parent captives, cell captives, association/group captives and risk retention groups). Among other things, we assist our clients with formations, conversions, mergers, complex liquidations, reinsurance trust transactions, commutations and novations, policy drafting and redomestications.” Char Hamilton Yoshida & Shimomoto represents captive insurance companies that have chosen to domicile in the State of Hawaii. However, the firm is also able to represent captive insurance companies domiciled in the District of Colombia. The firm’s clients represent a vast array of core industries including but not limited to: manufacturing; construction; banking and finance; healthcare; technology; life sciences; retail; pharmaceutical and transportation. Mr Shimomoto stated that Hawaii’s captive insurance laws are amongst the most favourable and flexible in the world, and that its regulators are experienced and dedicated to supporting the captive insurance industry in Hawaii.

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“Hawaii’s captive insurance companies also benefit from a unique “business-friendly” partnership that exists between governmental authorities and the private sector,” he explained. “Regulatory officials are keen to work with captive insurance companies to achieve their desired goals and objectives.” Mr Shimomoto noted that captives have proven to be beneficial to companies of all sizes. Historically, it was believed that captives only benefited “large”, Fortune 500/Global 500 and publicly traded companies. However, experience has shown that captives can provide important and critical solutions to the “small” and “middle” markets just the same.

of their parent companies,” he observed. “That said, captives can be very nimble structures that allow for much-needed flexibility when such factors present themselves. Education is the key to captive growth, according to Mr Shimomoto; not just in Hawaii, but globally.” He concluded: “With more captive domiciles forming, the dialogue regarding captive insurance structures is increasing, and companies are beginning to better understand what captives are and how they can provide value and benefit to their parent companies and affiliates. The small to mid-size company market, as a whole, needs to be better educated on how captives can benefit them.”

“Captives are formed largely for client-specific reasons,” he explained. “Among other things, captives have been formed to establish or enhance loss control measures at the parent level; to centralise risk management strategy across an entire organisations; provide unique commercial coverage that is unavailable in the traditional market; and to provide insurance coverage to affiliates and/or business partners.” Discussing the impact of the global economic crisis, increasing regulation and technological developments, Mr Shimomoto described the captive industry as “just like any other industry”. He believes that these factors have an effect on the captive industry in much the same way as they would any other industry. “By their nature, captive insurance companies are generally affected by the same factors that affect the core business(es)

Company: Char Hamilton Yoshida & Shimomoto Name: Paul B Shimomoto Email: pbs@charhamilton.com Web: www.charhamilton.com Address: 737 Bishop Street, Suite 2100 Telephone: 808-524-3800

June 2013 /

SECTOR SPOTLIGHT:

Implementing an Effective Anti-Money Laundering System

IMPLEMENTING AN EFFECTIVE ANTI-MONEY LAUNDERING SYSTEM l The investigation and prosecution of money laundering has changed dramatically in recent years. In 2012 record-breaking fines issued by regulators worldwide dominated the financial services landscape, a trend which looks set to continue through 2013 if regulators identify further failings in firms’ compliance with money laundering, sanctions and tax requirements. Although financial institutions have had anti-money laundering (AML) and economic crime control programs for some time, many still do not have sustainable, cost-effective processes in place. Senior executives and board members are increasingly seeking to build integrated, risk-based and efficient AML compliance control programs. Financial services firms are well advised to ensure cultural changes towards compliance-driven objectives are made as a key priority if they wish to avoid their reputation being tarnished by potential scandals. Those who find themselves unexpectedly caught up in money laundering investigations whether as witnesses or suspects will need to seek the advice of those in the know to help implement detection and compliance initiatives. Acquisition International looks into the key issues in AML policy and compliance with commentary from experts in the field.

-----------------------------------------------------------------------Richard Parlour is the Principal of Financial Markets Law International. ------------------------------------------------------------------------

Financial Markets Law International is a law firm specialising in advanced AML solutions. Financial institutions have had AML programmes for years, but familiarity has caused complacency. Western recession and CFO cost cutting has built up a powder keg of risk. Inappropriate due diligence is needlessly denying opportunity. We re-engineer your risk and compliance systems to minimise your exposure, avoid missed opportunity and secure maximum effectiveness, with our 5 Forces Model. We have been involved in the UK’s leading example of AML compliance turnaround. We have unearthed the true elements of finance deals enabling better negotiation and price discovery. Our deep due diligence on buyers and sellers alike has identified further opportunities, averted disaster and unnecessary litigation. Our due diligence network covers 140 jurisdictions. We have worked with governments and act as expert witnesses. The underlying issue is that most financial institutions hate compliance, with a vengeance. They see cost, not benefit.

42 / June 2013

They see business prevention, not business opportunity. They attend training, but cannot remember key messages. In a dwindling corporate finance market, participants are increasingly cutting corners. Due diligence rarely gets past basic documents or the first page of Google. Small wonder the media is full of banks receiving massive fines and reputational damage. Opportunities are also being lost in high growth countries through inappropriate due diligence. Regulators are getting tougher. Of a decade of FSA fines, one third occurred in the last 12 months. The new FCA is continuing this crusade. Criminal threats are also increasing. Cyber crime now equates to drug trafficking. Crooks have rarely been more of a threat, financial institutions rarely more vulnerable. What is the point of running a business without a fully functioning deterrence system? It’s as vital as locking up your house every day. So we have created a unique integrated solution. Our initial healthcheck pinpoints your key risks. Our 5 Forces Model gets to the real cause and builds effective defences, without strangling your business so as to miss out on opportunity. The way we align your AML function to your business model creates profit. Our deep due diligence gives you security. Accelerated learning techniques embed your new system.

Our full model typically gets you great results in 9-12 months. We work for those who want their systems to work long term, minimise their risk, avoid missed opportunities, and increase profitability. If you want to avoid the pain, break out of the rut and are up for success, your time is now.

Company: Financial Markets Law International Name: Richard Parlour Email: rp@fmli.co.uk Web: www.fmli.co.uk Address: Netherley House, 18 Watford Road, St. Albans, Herts AL1 2AJ, United Kingdom Telephone: +44 1727 845897

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SECTOR SPOTLIGHT:

Implementing an Effective Anti-Money Laundering System -----------------------------------------------------------------------Benedict Wong is the President & CEO of Total Credit & Risk Management Group. -----------------------------------------------------------------------Benedict Wong founded Total Credit & Risk Management Group (“GCS Hong Kong”) jointly with Neil Wood (GCS Group Chairman) in 1987. During the past 25 years of dedication to the credit, collection and risk management industry as a whole, he has contributed to various articles, industry newsletters and appeared in several television interviews for local and international media. He has also been a guest speaker at numerous conferences in Europe, Asia and USA, where he has spoken on topics concerning credit, collection and risk management. Mr Wong is currently serving as GCS Group’s Regional Director – Asia; Chairman of ASIAGATE Group, since 2011; and Fellow and Executive Committee of the Hong Kong Credit & Collection Management Association (HKCCMA). Mr Wong formerly served as ACA International’s Director of International Unit (Asia-Pacific) 1999-2001, Chairman of International Unit (Asia Pacific) 2001-2003; and Chairman of Hong Kong Credit & Collection Management Association (HKCCMA) 2000-2010. He is an active member of the World Investigators Network (WIN), World Association of Private Investigators (WAPI),

National Association of Legal Investigators, Inc. (NALI) & World Association of Detectives, Inc. (WAD). “Since 1987, we have been at the forefront of providing global credit and risk management services (including AML consulting) with a focus on Greater China (Hong Kong, China, Taiwan and Macau) and the Asia-Pacific region,” said Mr Wong. Mr Wong explained that the main factors to consider when implementing an anti-money laundering system include the identification of risk-based suspicious activity monitoring scenarios, determination of current limits for scenarios identified and the implementation of a customised policy which needs to be integrated with the institution’s internal structure. Discussing compliance programs, Mr Wong stated that the firm can ensure effective implementation of the Federal Financial Institutions Examination Council (FFIEC) BSA/ AML manual, which have the Four Key Pillars of an AML program clearly defined. “One of the Four Key Pillars is the appointment of a BSA Compliance officer, who is responsible for managing communication with regulatory authorities for all AMLrelated issues and reporting, and has a direct line of communication into the Board of Directors and Senior Management,” he explained.

When performing money laundering vulnerability assessments, compliance program evaluations and gap analyses, etc, the firm analysis the existing customer base and its transactions activities to enable effective limit-setting of particular scenarios. “We perform in-depth analysis to identify current limits, based on customer segment and the risk level exhibited. We will develop a methodology that will allow institutions to formally document these actions so that they can be shared with regulators to exhibit due diligence,” he concluded.

Company: Total Credit & Risk Management Group Name: Benedict Wong Email: inquiry@totalcredit.hk Web: www.totalcredit.hk Address: Suite 501, 5/F, Hung To Centre, 94-96 How Ming St, Kwun Tong, Kowloon, Hong Kong Telephone: (852) 28506682

GeyerGorey LLP, Meet FormerFedsCompliance™ that continues to preserve the attorney client privilege. According to Gorey, compliance-related issues have limited the ability of many companies to do business in Africa, Asia and the Middle East. He anticipates that the new compliance product will ferret out and flag problems at all levels of an organization and the timeliness and effectiveness of mitigation responses will then be measured, tracked and benchmarked for client organizations. Geyer added that the reports that the new compliance tool will produce will allow a company, in the event a problem is identified, to document its compliance efforts, to mitigate any harm and to self-report the conduct, if GeyerGorey determines it is warranted.

-----------------------------------------------------------------------Washington, D.C.-based GeyerGorey (GeyerGorey.com) focuses its compliance efforts on firms that are active in Africa, Asia and the Middle East because, as partner Hays Gorey says, “Let’s face it, these are the areas of the world in which compliance issues are most likely to arise.” ------------------------------------------------------------------------

Bradford Geyer, who recently presented a three-day procurement fraud symposium to a group of 50 Tanzanian regulators, government officials, and contractors in Dubai, said his firm of 10 former federal prosecutors expects to continue to devote “significant resources to the development, maintenance, communication and enforcement of a customized Business Code of Conduct for businesses, covering anti-bribery compliance policies, internal control procedures and other compliance related policies.” While most compliance programs focus on mitigating risk on the “sell” side of operations, according to Geyer, a former federal prosecutor, GeyerGorey pays especially close attention to a company’s “buy” side having developed its “Procurement Review Initiative” that for decades has helped the U.S. government ferret out waste, shrinkage, seller’s conspiracies and conflicts of interest that substantially increase an organization’s costs.

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GeyerGorey was recently named by FormerFeds LLC to beta test its new compliance assessment system, still in development. (See FormerFedsCompliance.com). FormerFeds LLC expects its program will become the gold standard of the compliance world as the scope, efficiency and programmability of the system is recognized by firms facing compliance risks on a daily basis. Former American enforcers (a/k/a “FormerFeds”) have been heavily involved in the design of the system. Beta testing is expected to continue for several months, with final release in late Summer to early Fall. According to representatives at FormerFedsCompliance™, the new compliance product incorporates the following key features: • centralized, whole-business risk and compliance assessment, tracking, and visibility all protected by the attorney client privilege • easy configuration to meet any regulatory environment in any market sector • cost-effective, low-risk, pay-as-you-go pricing Separately, and also sometimes as part of a client’s compliance program, GeyerGorey LLP will conduct timely internal investigations of any potential violations and recommend corrective actions, if necessary, in a way

Company: GeyerGorey LLP Name: Brad Geyer Email: info@geyergorey.com Web: www.geyergorey.com Address: 1776 “I” Street, NW, 9th Floor, Washington DC 20006 Telephone: +1 202-644-8766

Company: FormerFeds LLC Web: www.formerfeds.Com Address: Suite 303, 141 i Route 130 South, Cinnaminson, NJ 08077 Telephone: +1 (856) 291-0881

June 2013 /

SECTOR SPOTLIGHT:

Avoiding and Resolving Disputes in the Aviation Industry

AVOIDING AND RESOLVING DISPUTES IN THE AVIATION INDUSTRY l In an ever-evolving and increasingly globalised world many industry sectors are presented with a host of challenges and opportunities to those working within it. Aviation is one of the worldâ&#x20AC;&#x2122;s most highly regulated industries and the plethora of such regulations, if not understood and properly dealt with, can have a dramatic effect on those working within the industry. Business disputes are likely to arise from time to time and can present a time consuming, often costly and unwelcomed matter to deal with especially if not handled properly. Senior executives working within the industry are well advised to consult specialised professionals with the experience and knowledge required in order to avoid disputes arising from the off and to assist in resolving disagreements before they get out of hand. Acquisition International discusses the key issues with experts in aviation disputes.

-----------------------------------------------------------------------With 80 Partners and approximately 390 legal staff, A&L Goodbody offers a unique breadth and depth of experience across every facet of Irish law for the corporate sector. -----------------------------------------------------------------------The Convention on International Interests in Mobile Equipment as supplemented by the Aircraft Protocol (the Cape Town Convention or Convention) which came into effect in 2006 is generally viewed as one of the most successful international treaties to date. As the Cape Town Convention is, in an international context, relatively new, its provisions have been largely untested in the courts. That said, there have been some recent groundbreaking cases brought before the Irish courts by parties seeking to enforce their rights against those who fraudulently or otherwise register interests on the International Registry without an entitlement to do so under the Convention. The refusal to discharge an interest on the International Registry places a cloud on title, potentially reduces the value of the asset, delays sale and gives rise to significant additional costs to the owner. Accordingly, the aviation world is watching with great interest to ascertain whether the Convention in practice works to resolve issues in an effective, cost efficient and speedy manner. A decision of the Irish Commercial Court on 13 May 2013 in the case brought by TransFin-M, Ltd against Stream Aero Investments S.A. answered this question in the affirmative. Article 44 of the Convention provides that only the Irish High Court has jurisdiction to grant an order against the Registrar

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of the International Registry under the Convention. The Registrar is currently Aviareto Limited, an Irish company. Even where an interest is not governed by the Convention but has nevertheless been registered on the International Registry, the Irish Courts have exclusive jurisdiction to make orders directing the Registrar to amend the Registry. In such proceedings the Registrar is not involved in, or required to be concerned with, the determination of the merits of the substantive dispute. Its role is limited to implementing the court order to, for example, discharge a registration where the defendant has refused to do so within a certain timeframe. The Registrar will only intervene in such a manner on foot of a binding court order from the Irish High Court. In a matter of approximately 5 weeks from the date the TransFin-M, Ltd proceedings were filed, the Irish High Court upheld its jurisdiction to make the order and granted an order requiring that the defendant discharge the relevant registration within a certain timeframe (usually 21 days) and, if the interest is not discharged within the required time, directed that the Registrar effect the discharge. A&L Goodbody are currently advising on a number of potential cases where parties are seeking an order from the Irish High Court in circumstances where the holder of the registered right on the International Registry is refusing to co-operate to discharge such registration. The approach by the Irish High

Court is to be welcomed as it allows an owner of an aircraft object to enforce its rights quickly and efficiently thereby maintaining the value of the aircraft object and upholding the integrity of the International Registry system. It is also to be anticipated that it will act as a deterrent to others who would seek to mis-use the International Registry system in this way as costs were awarded against the defendant. Ireland plays a vital role in the aircraft finance and leasing industry and it is therefore appropriate that Ireland is leading the way and is at the centre of this development relating to the Cape Town Convention.

Company: A&L Goodbody Name: Marie Oâ&#x20AC;&#x2122;Brien Email: mobrien@algoodbody.com Web: www.algoodbody.com Address: North Wall Quay, IFSC, Dublin 1, Ireland Telephone: +353 1 6492000

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SECTOR SPOTLIGHT:

Avoiding and Resolving Disputes in the Aviation Industry -----------------------------------------------------------------------José Manuel Batlle is an Attorney at Castillo y Castillo Law Firm in Santo Domingo, Dominican Republic. -----------------------------------------------------------------------Assisting clients with identifying their needs, structuring their goals, solving their problems and successfully completing their projects on time has been at the heart of Castillo y Castillo Law Firm’s service since it was established in 1933. The firm works with its clients to foster lasting relationships, based on trust, loyalty and reliability. Its impressive client list of domestic businesses and banks, and international companies and financial institutions highlights the exemplary service and real understanding that the firm brings to each client relationship. Castillo y Castillo’s attorneys provide tailored advice on the full range of legal services, including commercial and corporate law, mergers and acquisitions, intellectual and industrial property, real estate, aviation and maritime, foreign investment and overseas investment, telecommunications, energy and environment, immigration and labour law, litigation, business and project development, import/export, trade and business-specific impact analysis concerning the Caribbean Free Trade Agreement (CAFTA). The firm is consistently ranked amongst the region’s leading attorneys for its teamwork, high levels of client service, -----------------------------------------------------------------------Established in 2011, Clasis Law is a full service Indian law firm with international presence. We are regarded as specialists in the aviation sector and with extensive experience within the aviation and aerospace industry. Our partners have advised on all aspects of aviation including, structuring and providing end-to-end solutions in aviation financing (both corporate and commercial jets) and PDP financing transactions, general aviation regulatory advice, aviation infrastructure, aviation claims, aviation disputes etc. -----------------------------------------------------------------------Our typical client includes overseas financiers, leasing companies and regional Indian airline companies. We have advised a number of major leasing companies, manufacturers, banks, financial institutions, airlines, business jet operators, companies, MROs and aviation related associations across jurisdictions. We work in association with experts across the world to provide clients with seamless legal support at all levels. We have extensive operations globally with access to over 100 dedicated aviation lawyers through our associated offices, well conversant in over 35 languages based in multiple jurisdictions. This consortium approach benefits clients who have access to both Indian and international knowledge & capability as a one stop shop and access to high quality services irrespective their location, which is unparalleled in -----------------------------------------------------------------------Idris Faro, Managing partner of Idris Faro & Co., arbitrators, barristers and solicitors of the Supreme Court of Nigeria. He was called to the Nigerian bar in year 2002 and has practiced law rigorously since then. He has garnered experience over a decade ago in commercial, corporate and aviation litigation. In the course of his practice, he has handled several matters in court both as airline solicitor and customer solicitor. ------------------------------------------------------------------------

A real client is one who is willing to seek and pay for the advice of a solicitor or aggrieved by the act of the other contracting party which constitutes a breach of their agreement and willing to redress the breach. He is ready to avail himself of the service of a solicitor experienced in aviation practice. Aviation practice is a specialized practice and thus highly competitive. Continuous research and updating one’s knowledge of the applicable legislations and conventions is vital to success in this field just like any other field. We handle client’s case with the highest sense of professionalism and this of course yields positive returns.

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responsiveness and excellent attention to detail. It represents major international airlines such as British Airways, Orbest, Copa Airlines and American Airlines, amongst others. “Castillo y Castillo’s strong track record of advising the aviation industry demonstrates the firm’s expertise and technical knowledge in this sector,” enthused Mr Batlle. According to Mr Batlle, the key skill required of professionals dealing with aviation disputes is to be knowledgeable of the laws and regulations encompassing the aviation industry, in order to identify workable solutions and provide hands-on implementation.

Given that aviation liabilities are normalised by international protocols, Mr Batlle believes that the main challenge in these types of disputes is to provide a solution in compliance with the regulations of both international treaties and Dominican law. In conclusion, Mr Batlle strongly suggests that clients “draw on the experience of a legal adviser with in-depth knowledge of the laws and regulations relevant to the aviation sector, as experts in this sector are best placed to navigate the complexities of the aviation industry.”

“Clients benefit from our in-depth knowledge of domestic and international aviation laws and regulations and from our significant experience advising on general aviation transactions including regulatory advice, licensing and public policy.” He added that it is imperative to be abreast of all the international treaties pertaining to the industry, including: Warsaw Convention; Montreal Convention; and Tokyo Convention, amongst others. “Castillo y Castillo´s attorneys advise on the specific commercial issues that arise in the airline business, including aircraft finance, registration, establishment, passenger and cargo claims and litigation.”

Company: Castillo y Castillo Name: José Manuel Batlle Email: j.batlle@castillo.com.do Web: www.castillo.com.do Address: Av. Lope de Vega No. 4. Santo Domingo, Dominican Republic Telephone: +1 809-562-3344

the industry giving us a clear edge over both the local and global competitors.

bodies governing the aviation industry in India, expert local advice is key to avoiding or resolving any dispute.

Specialised industry and regulatory knowledge, awareness of global practices and understanding of the business requirements are the key skills required of the professionals when dealing with or avoiding disputes within the aviation industry.

Recently the Indian aviation sector has been opened for foreign direct investments. Being one of the fastest growing aviation markets globally, this liberalisation has attracted a number of clients across jurisdictions. We have had to educate the clients of the nuances of the Indian aviation industry and specially in order to guide clients in structuring their transaction and setting realistic timelines.

Major challenges faced by clients in the Indian aviation industry are the lack of knowledge of the aviation industry itself and applicable laws including Indian and English laws. In addition to this, the lack of experience with Indian courts, financial institutions and regulatory bodies make it difficult for clients to set realistic timelines. With a team of specialists who have been experienced both locally and internationally, we are able to provide a thorough advice to our clients. Merging knowledge of global practices with the local know-how, the firm provide the clients with advice keeping in mind their business requirements. Prospective clients need to be aware of the complex network of the local regulatory bodies and should seek expert advice from the initial level of a transaction, so as to avoid any disputes or complexities later. With multiple regulatory

A solicitor must first and foremost possess a sound knowledge of the applicable statutes and conventions regulating aviation business. This puts you in good stead to be able to deal with aviation disputes. Furthermore, you must also have a deep understanding of human behaviour to be able to deal with or avoid disputes in aviation industry. Often times, disputes could be averted by courteous behaviour and quick simple apology. You also need to understand some technical terms in the industry and also be persuasive in style. Our advice helps in resolving issues that may arise within this sector by ensuring that the wronged or injured party is restored back to his previous position or paid compensation for what he has lost. We are poised to providing high quality service to our clients by rendering legal advice. Needless to say that most aviation disputes are caused by airlines. We can help prevent disputes by drafting clear contracts for airlines and rendering periodic high quality advice. Airlines should also make the safety and comfort

Company: Clasis Law Name: Vineet Aneja / Sumeet Lall Email: vineet.aneja@clasislaw.com sumeet.lall@clasislaw.com Web: www.clasislaw.com Address: 14th Floor, Dr Gopal Das Bhawan, 28 Barakhamba Road, New Delhi, India Telephone: +1 809-562-3344 of their passengers and luggage their paramount interest. Should this be done, they will have minimal or no disputes to resolve at all. There have not been any recent changes in regulation affecting the way we work. Prospective clients will surely be happy availing themselves of our services.

Company: Idris Faro & Co. Name: Idris Faro Email: farojuris@idrisfaroandco.com Web: www.idrisfaroandco.com Address: Suite J147, Road 5, Ikota Shopping Complex, VGC, Lekki, Lagos, Nigeria Telephone: +234-1-8972756; +234(0)8034052624

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SECTOR SPOTLIGHT:

Avoiding and Resolving Disputes in the Aviation Industry -----------------------------------------------------------------------Robert S. Span is a partner in the law firm of Steinbrecher & Span LLP. -----------------------------------------------------------------------Steinbrecher & Span LLP represents corporate clients in all types of business litigation and regulatory matters. The firm has particular expertise in aviation law. The firm’s clients range from Fortune 100 companies to middle-market companies. It has represented most of the major US air carriers and industry trade associations. Robert Span specialises in complex business and employment litigation, with a particular emphasis on aviation-related matters. For thirty years, Mr Span has represented major airlines and Airlines For America in a variety of litigation, contract, and regulatory matters. He is particularly experienced in issues concerning the economics of the aviation industry, the airline/airport relationship, federal and local regulation of airlines and airports, and airline labour and employment. A representative sampling of his experience includes representing airlines: • In negotiations for new operating agreements at Kennedy and LaGuardia Airports • In the successful constitutional challenge to the New York State Passenger Bill of Rights

• • • • • • • • •

In appellate challenges to FAA and DOT regulations Concerning advice on airports rates and charges In litigation and negotiations concerning landing fees and terminal rents at Los Angeles International Airport In litigation over property tax payments relating to landing fees at San Francisco International Airport and San Diego Airport On construction and environmental issues In litigation concerning access to John Wayne Airport (SNA) and Long Beach Airport (LGB) In connection with airport access, noise variances, frequent flyer programs and consumer class actions In arbitrations under the Railway Labour Act In Bankruptcy Code Section 1113 Hearings

Mr Span is the Chair-Elect of the ABA Forum on Air and Space Law, and is a past President of the Association of Business Trial Lawyers. He received his A.B. degree, Phi Beta Kappa, in 1967 from Dartmouth College and his J.D. degree in 1971 from Yale Law School. Mr Span stated that the most important attributes of professionals dealing with disputes in the aviation industry are a deep knowledge of the economics and business issues within the industry, and the ability to spot potential problems and deal with them before they become disputes.

In order to prevent disputes arising in the first place, Mr Span believes that consultation with experienced legal professionals before entering into agreements or taking steps that might put the enterprise at risk is key. In conclusion, Mr Span summed up the firm’s strengths in resolving issues in the aviation sector: “We have the experience, knowledge, and contacts throughout the sector to be able to advise at the highest levels.”

Steinbrecher & Span LLP

Company: Steinbrecher & Span LLP Name: Robert S. Span Email: rspan@steinbrecherspan.com Web: www.steinbrecherspan.com Address: 445 South Figueroa Street, Suite 2230, Los Angeles, California, 90071 USA Telephone: 213-891-1400

OTHER EXPERTS IN THIS AREA

Langbehn & Cosentino Company: Langbehn & Cosentino Name: Eduardo Cosentino Email: etcosentino@langbehnycosentino.com.ar Web: www.langbehnycosentino.com.ar Address: Esmeralda 320, 7º piso “A”, C1343ABH - Buenos Aires, Argentina Telephone: +54 11 4326-0507

-----------------------------------------------------------------------Tito Isaac is the Managing Partner of Tito Isaac & Co LLP. Justin Chan is a partner with the firm, and Ho Seng Giap is a Senior Associate. -----------------------------------------------------------------------Tito Isaac & Co LLP was established on 2nd August 1999 and has grown into a medium sized practice, comprising: two consultants; five partners; three senior associates; two associates; and two practice trainees. The firm also has no less than 25 support staff. Tito Isaac & Co LLP caters to most aspects of legal practice and, apart from having a general civil and criminal litigation team, the firm also has specialised departments to deal with insurance, corporate and conveyancing matters. The firm’s clients come from all walks of life, from blue collar workers to multinational companies, banks, financial institutions and aircraft leasing entities. Mr Isaac believes that the firm distinguishes itself through its dedicated team of advocates and solicitors to deal with the client’s particular needs, augmented by a well-versed and experienced team of support staff. He also highlighted the firm’s language capabilities (aside from English) as being particularly useful in assisting and communicating with clients in the region. Collectively, the firm’s lawyers and staff are conversant in Mandarin, Malay/ Indonesian, Tamil, Burmese and Tagalog.

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According to Mr Chan, the key skill required of professionals when dealing with disputes in the aviation industry is a thorough understanding of the matter at hand, especially when handling face-to-face negotiations amongst parties. “Where the parties are foreign (i.e. non-Singaporean), a basic working knowledge of that other country’s cultures and styles of business dealings would also be vital,” he added.

“This is all the more pertinent in cases where possession or ownership of aircraft is in dispute, for litigation may potentially put a curb on the utility of those aircraft (till adjudication is achieved) and which in turn may affect the commercial viability of the parties involved, as well as “innocent” passengers/consumers not involved in the parties’ dispute,” concluded Mr Isaac.

Discussing the main challenges associated with these types of disputes, Mr Ho stated that quite often, as with other industries, disputes arise over contractual provisions. “It is not surprising to find certain dealings between parties to have taken place only orally and not reduced into writing, which in turn may have a bearing on the strict legal rights of the parties involved,” he explained. “The best practices would of course be to have all business dealings recorded in writing; however, regard also must be had to the sensitivities, customs and practices of any overseas parties.” While the firm’s approach to resolving issues in the aviation sector depends heavily on the exact nature and scope of the dispute, as a general guide it will typically advise clients to make attempts at amicable resolution of these disputes and only turn to litigation as a last resort.

Company: Tito Isaac & Co LLP Name: Tito Isaac / Justin Chan / Ho Seng Giap Email: isaaclaw@singnet.com.sg Web: www.law-isaac.com Address: 20 Circular Road, Singapore 049376 Telephone: +65 6533 0288 Fax: +65 6533 8802

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SECTOR SPOTLIGHT:

Resolving Financial Services Disputes

RESOLVING FINANCIAL SERVICES DISPUTES l Disputes are costly, time consuming and damaging to the bottom line. When it comes to getting a resolution the stakes are high and the risks are great, and most clients want speed, efficiency and minimal reputational risk. Acquisition International speaks to experts in dispute resolution to learn more about the key issues in Financial Services disputes and equality disputes in the workplace. -----------------------------------------------------------------------Louise Hobbs is a Partner at Signet Partners LLP, an employment law firm in the City of London. The firm works with employers to ensure their business objectives in areas such as acquisitions, disposals and outsourcing as well as day-to-day operations are met within the employment law framework. It also specialises in finding solutions to problems which arise in the workplace, such as discrimination issues. Signet Partners LLP is authorised and regulated by the Solicitors Regulation Authority. ------------------------------------------------------------------------

Of 28,550 discrimination claims issued in Great Britain in the twelve months to 31 March 2012, only 3,382 reached a full merits Tribunal hearing. Of those, only 742 were successful (2.6%). During the period the median award in a sex discrimination claim, the most common type of discrimination dispute, was £6,746. However, what these statistics do not disclose is what is happening in the vast majority of cases where proceedings are not issued, or where the proceedings which have been issued do not reach a final hearing. In most of these cases the dispute is resolved or settled by the parties. This reflects the fact that it is rarely a win for an employer or for an employee to reach a Tribunal hearing. Employers and employees often share the same objective of desiring resolution. There are sound business and management reasons for this: the cost of litigation (and the general rule that costs cannot be recovered, save in limited circumstances); the investment of time required to run the case; the reputational damage associated on both sides with such litigation; and the desire to preserve relationships. It is rarely that any client defines as an objective the desire to have their day in court. -----------------------------------------------------------------------Dr Nagla Nassar is a Partner at NassarLaw. ------------------------------------------------------------------------

NassarLaw was established in 1855 and developed into a full service business law firm with an international orientation with emphasis on projects whether relating to banking deals , private equity or otherwise. The firm over the years has passed its inherited experience from one generation to another and our lawyers have the legislative history and tricks at hand which allows them to provide creative solutions for a novel situation; a trait the firm is well known for. In the financial arena we are very active in advising projects and our strength is project financing with recourse or none recourse base. We have handled, and have experience with, a multiple of financial instruments and the know-how to mix different kind of finance. For instance, under progress is 423,200,000US Dollars finance involving a mixture of syndicated loans and Islamic lease purchase? On previous occasions the firm participated in skouk issuance. These Islamic instruments are on the rise as a result of recent political developments in the Middle

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The employee has two other problems to contend with. The first is that there is not a level playing field to start with: unlike the employer, the employee pays his or her legal fees out of net income, and cannot recover the VAT, and the introduction of application and hearing fees payable by a claimant is a further disincentive. The second problem the employee has is that any award may be limited. A successful employee can recover actual losses plus an award for injury to feelings. In this market actual losses may be a significant sum (assuming they don’t remain employed by the employer), but as soon as the employee obtains another job on an equivalent package his or her losses stop flowing. An assessment has to be made early on of the likelihood of obtaining alternative employment. The employee may also claim an award for injury to feelings of between approximately £1,000 and £6,600 in a less serious case, rising to a maximum of £33,000 in the most serious of cases. However legal fees are likely in many cases to exceed any such award, and there is always litigation risk. For these reasons alternative forms of dispute resolution are often explored, resulting in compromise agreements or ACAS settlements being agreed. At a more formal level mediation can be used to resolve a dispute which has become more entrenched. Our experience is that a compromise agreement is the most flexible tool for dispute resolution, and can deliver outcomes which are beyond the power of an Employment Tribunal in a discreet and cost effective way.

East and the endorsement of Islamic governments. For purpose of concluding such amalgamated deals our lawyers have to develop not only their negotiation skills and their knowledge of different instruments and systems but has to possess the ability of being innovative and the finesse of ironing out differences to reach a harmonized solution. The same trend of complying with Islamic requirements applies to the other segments of the financial sector which are equally affected by the recent developments in the area; for instance the Islamic lease purchase is on the rise as opposed to leverages and other techniques. The susceptibility of this sector to disputes is not to be discounted especially in view of the hard economic realities. To defeat a dispute a widely used technique is to attack the underlying transaction in respect of which the finance was concluded. This approach requires solid knowledge of M&As and contracts which are a long standing practice of the firm. In this respect we have a long trail of transactions the most recent of which is a Chinese acquisition in the oil sector.

The most effective method of dispute resolution is a resolution sought and achieved before a dispute reaches the lawyers, and certainly before the parties meet each other outside the door of the Employment Tribunal. A well run business, with open communications, a clear anti-discrimination policy enforced and respected at the highest levels of management, a clear grievance procedure and a culture which tolerates difference, is likely to be able to react in a way which encourages dispute resolution from the start. The most effective tool in any negotiation of settlement are the parties themselves, at an early stage, before attitudes have become entrenched and an employee has become disaffected. The earlier a party’s objective can be identified the easier it becomes to address potential forms of resolution.

Company: Signet Partners LLP Name: Louise Hobbs Email: lh@signetlegal.com Web: www.signetlegal.com Address: 21 Whitefriars Street London EC4Y 8JJ Telephone: +44 (0)203 077 7021

Normally the firm M&As team would be working on three or four deals in parallel and they have the experience to handle M&As in relation to different economic activities be it industrial, retail, real estate or other. The firm possess a wide experience in both financial and M&As and contract transactions which distinguish it and enhance its ability to provide the right solutions for potential problem.

Company: NassarLaw Name: Dr Nagla Nassar Email: nagla@nassarlaw.org info@nassarlaw.org Web: www.nassarlaw.org Address: 39, Kasr El-Nil Street, Cairo 11211 - Egypt Telephone: +2 (02) 2393 3706 / 2393 3710 Fax: +20223933918

June 2013 /

SECTOR SPOTLIGHT:

Resolving Transfer Pricing Disputes

RESOLVING TRANSFER PRICING DISPUTES l The increasingly integrated nature of the global economy and the on-going importance of Multinational Enterprises (MNEs) mean that questions of transfer pricing are some of the most significant tax issues that MNEs and tax administrations have to manage. Transfer pricing (TP) enforcement has risen as a priority for tax authorities around the world over recent years. Continued growth in the number and reach of multinational businesses has created a complex web of cross-border commercial transactions, and the world’s tax authorities want to ensure they tax their rightful share of the income. It is important for taxpayers to have an effective strategy for responding to transfer pricing inquiries that can lead to tax adjustments, penalties, interest charges, and even negative publicity. TP inquiries can be extremely time consuming and involve a commitment of resources for assembling paperwork, preparing responses to inquiries, and negotiating with tax authorities. There are however a variety of options available to help taxpayers overcome TP challenges, business executives are well advised to seek the advice of those in the know in understanding their obligations and in order to avoid penalties or bad publicity. Acquisition International speaks to leading transfer pricing experts to discuss resolving and avoiding transfer pricing related disputes, TP audit exposure, and the implementation of effective strategies for dealing with TP queries.

-----------------------------------------------------------------------Rafał Sadowski is Director of the Transfer Pricing Group at Deloitte in Poland. Tomasz Adamski is Senior Manager of the Transfer Pricing Group. -----------------------------------------------------------------------For many years Polish Tax Authorities (PTA) were focused on two aspects of related party transactions: the benefit test for headquarter services and the level of tax profits in production and distribution transactions. However, in recent years we observe a significant shift from this approach. Currently – in addition to those two topics – PTA also focuses on: • Verification of implementation vs. initial design in limited risk structures • Intercompany financial transactions • Business justification of IP licensing transactions Stages of potential dispute It is strongly advisable to make every effort to resolve a potential transfer pricing dispute during its first “potential” stage – transfer pricing design and documentation. At the second stage – tax audit – one should not expect a friendly discussion with tax inspectors. Any inconsistency or misapplication will be used to challenge taxpayer’s position. Also the Tax Chamber, the appeal body of PTA, will disagree with tax inspectors only if their methodology is clearly inconsistent with regulations or taxpayer presents a coherent and strong transfer pricing documentation demonstrating arm’s length level of transfer prices. The Tax Chamber is in practice the last body who accepts technical arguments during transfer pricing dispute. At the Tax Courts additional technical reasoning is usually not admitted and the court focuses on consistence of audit results with regulations which in transfer pricing cases (where there is often no clear

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line between the correct and wrong) works in favor of PTA. Often, courts see the dispute as a result of taxpayer’s inability to provide sound reasoning supporting its position, and not as a result of PTA’s unjustified approach.

Agreement Procedure (MAP) proceedings. At the end of the first quarter this year, there were 36 MAPs in progress (2 related to transfer pricing) and the number of proceedings initiated under the Arbitrage Convention was 18.

Dispute risk mitigation Individual Tax Interpretation (ITI) issued by PTA protects taxpayers from tax adjustments and is perceived as a straightforward method of tax dispute mitigation. However, PTA continuously refuse to issue ITI on transfer pricing questions and refer taxpayers to Advance Pricing Agreement(APA) procedure as the proper one for transfer pricing cases. Unilateral (involving PTA only), bilateral and multilateral APAs are available; the maximum period is five years with a possibility of prolongation. At the end of the first quarter of this year the total number of APAs signed was 27. Although APA gives the highest level of transfer pricing dispute risk mitigation, the complexity of procedure was perceived as the most essential factor discouraging taxpayers. However, it is worth noting that the speed of APA proceedings significantly increases on the year to year basis and comes close to statutory deadlines which are 6, 12 and 18 months (respectively for unilateral, bilateral and multilateral agreements). High pressure on tax base erosion issue and aggressive approach to transfer pricing structures adopted by tax authorities in many European countries lead to significant increase of double taxation cases involving Polish enterprises. This is reflected by the number of Mutual

Company: Deloitte Poland Web: www.deloitte.com/pl Address: Al. Jana Pawła II 19, Warsaw 00-854, Poland Telephone: +48 22 511 08 11 Name: Rafał Sadowski Email: rsadowski@deloitteCE.com Name: Tomasz Adamski Email: tadamski@deloitteCE.com

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving Transfer Pricing Disputes

The two executives have witnessed emerging trends within the last 12 months, as they explain: “Following the international trend, the Romanian tax authorities have enhanced their TP audits. As a result, the amount of additional income taxes levied by the tax authorities in the recent years has been on an increasing trend.” “During transfer pricing audits, we have also observed the shift from verifying formal aspects of the transfer pricing documentation to challenging the pricing methodologies or the overall position of the taxpayer subject to TP audit.”

-----------------------------------------------------------------------Dan Badin, Tax Partner, and Ciprian Gavriliu, Senior Tax Manager in Transfer Pricing Services, both work for Deloitte Tax in Romania. -----------------------------------------------------------------------Deloitte in Romania provides a full range of tax services, through its specialists having in-depth knowledge of tax rules and regulations, as well as of the market environment. The firm has a team of 12 fully-dedicated specialists working on transfer pricing issues for various multinational companies. Tax Partner, Dan Badin, explains what gives the firm the competitive edge: “Our main advantage over competitors in the transfer pricing area is represented by the quality of our deliverables, which has been acknowledged and recommended by our clients and the Romanian tax authorities.” “The high quality of our work and our capacity to provide tailor-made solutions to our clients have been recognized through the award “Central Europe Transfer Pricing Firm of the Year”, granted by International Tax Review in 2012.” -----------------------------------------------------------------------Jaime Abraham Rincón Ospina is one of the founding partners of EQUM Ltda. Currently, Mr Rincón leads the Financial Tax Consulting team and co-leads the Transfer Pricing team, with Angela Liliana Sánchez Rojas, who is also a partner with the firm. ------------------------------------------------------------------------

Jaime Abraham Rincón Ospina is one of the founding partners of EQUM Ltda. Currently, Mr Rincón leads the Financial Tax Consulting team and co-leads the Transfer Pricing team, with Angela Liliana Sánchez Rojas, who is also a partner with the firm. Mr Rincón explained that Transfer pricing rules have been in force for around 10 years in Colombia. However, somehow, he noted that it is a “new matter” in Colombia, and consequently it is new not only for the tax authorities but also for the taxpayers and advisors. “Nowadays, the Colombian tax administration has been working hard in having all of its teams highly trained in transfer pricing matters,” he commented. “Therefore, the DIAN (Colombia Tax Authority) has grown and substantially improved their auditing capacity, and consequently, the tax audits regarding transfer pricing have increased and are more rigorous, exhaustive and accurate, which implies that the defence of the taxpayer arguments must also be supported with strong technical arguments.” As a firm, EQUM has already been involved in transfer pricing disputes. Mr Rincón and Mrs Sánchez noted that, since this is a new matter in the Colombian legal framework, the cases that must be decided by judges are just beginning to reach that stage. “One of the challenges would be to have those cases being decided by judges that are not necessarily trained in the transfer pricing matters,” he observed. “Our way to

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Senior Tax Manager, Ciprian Gavriliu, comments on the firm’s ability to assist senior executives on transfer pricing issues on both international and local issues. “Our team comprises of specialists who have the practical and theoretical expertise necessary in order to assist multinationals on transfer pricing issues on international as well as local issues,” he says. “Our assistance is recommended by the economic and fiscal knowledge of our team and by the broad experience that we have gained by assisting a significant number of international clients in dealing with issues in this area before and/or during a TP audit. During the aforementioned TP inspections, we have also gained a significant experience in dealing with the tax authorities.” “Our affiliation to a strong network of offices that can provide cross-border assistance represents an important advantage within the international projects.”

overcome the challenges intends to discuss with technical arguments that allow us to support the informative return and supporting documentation. A good investment in the preliminary stages of the transfer pricing matters would prevent the advance of disputes. “In fact, we already have been in preliminary discussions with the tax authorities and when explaining our positions, we have been successful in the sense that once the position is explained there have not been further developments as an official dispute, so the issue is concluded in anticipation. Also, in cases that are already in a judicial stage, our proposal is to request a third party expert to submit an opinion about the matter and have this considered as part of the evidence within the process, that may help the judges in a decision of technical matters.”

Dan Badin comments on how the firm can assist prospective clients in identifying where transfer pricing audit exposure exists within their business. “Deloitte is specialised in providing assistance services in order to identify and/or mitigate the transfer pricing exposure of our clients. In this regard, we provide such services before a TP audit (e.g. assistance in applying for an APA, preparation of benchmark studies for new intra-group transactions) or during an inspection (e.g. preparation of transfer pricing documentation, review of exposure, consultancy services).”

Company: Deloitte Tax SRL (Romania) Name: Dan Badin Email: dbadin@deloittece.com Web: www.deloitte.com Address: America House, 4-8 Nicolae Titulescu Road, Sector 1, Bucharest, 011141, Romania Telephone: + 40 21 207 53 92

regulations have included changes in some aspects such as deadlines for filing of transfer pricing official statements, as well as technical studies. “In Colombia specifically, there has been a recent tax amendment (L.1607/2012) which included modifications to the transfer pricing regime, such as: (i) related parties assessment criteria, (ii) unification of methods to make them more concise, (iii) penalties, among others. The implementation of the new rules would imply additional adjustments to issues that must be considered when analysing a transfer pricing matter,” he concluded.

Discussing emerging trends, Mr Rincón and Mrs Sánchez highlighted the special training in technical matters of the Colombia Tax Authority (DIAN), which has implied a focus on more accurate discussions in cases of transfer pricing disputes. “On the first years of transfer pricing rules in Colombia, the disputes were based on formal aspects more than a deep analysis on the issues involved,” he continued. “Also the approach of the Tax Authorities now is more conciliatory and intends to go further to understand the taxpayer position, before trying to impose a penalty without analysing the grounds. “On the other hand, Colombia is in the process of becoming part of the OECD and that implies that our country is willing to be aligned with the interpretation of the transfer pricing matters given by that entity.” Mr Rincón and Mrs Sánchez stated that Latin America has witnessed a transformation in the tax regulations. These

Company: Equm Consultoría Legal y Tributaria Ltda Web: www.equm.com.co Address: Carrera 9 A No. 99-02 office 403 Citibank building, Bogotá, Colombia Telephone: 57+1+6182625 Name: Jaime Abraham Rincón Ospina Email: jaime.rincon@equm.com.co Name: Ángela Liliana Sánchez Rojas Email: angela.sanchez@equm.com.co

June 2013 /

SECTOR SPOTLIGHT:

Resolving Transfer Pricing Disputes Emi Cristea / Shutterstock.com

Cherie explains what gives the firm the competitive advantage. “I believe the following key factors provides TP Services with a distinct competitive edge: “Balance in perspective - Clients value the balance of technical transfer pricing know-how together with the practical perspective provided by TP Services GmbH, which is reflected in our background in both consulting and inhouse environments. “International network - The firm is part of a global network of transfer pricing specialists – the Altus Alliance – which provides access to up-to-the-minute localised expertise for regional and global transfer pricing issues. “High quality service – We work with our clients to manage transfer pricing risks in a practical, effective and cost conscious manner. Focusing on outstanding personalised service, we take the time to understand our clients’ business, motivations and transfer pricing needs to ensure they are getting the best service.”

“The nature of tax audit investigations in the transfer pricing area continue to mature,” comments Cherie regarding emerging trends she has witnessed within the last 12 months in the industry. “Many tax authorities are not merely accepting a carefully prepared transfer pricing study at face value, and instead are asking more probing questions to delve deeper into a company’s transfer pricing issues. In particular, transfer pricing issues surrounding intangible assets, transfers of risks, business restructuring, service transactions and intercompany finance transactions continue to attract significant focus. “With transfer pricing issues coming to the forefront of public debate as highlighted by recent discussions of international tax issues surrounding Google, Starbucks and Amazon among others, it is becoming evident that public perception in this area can materially affect a group’s reputation in the marketplace. In this light, transfer pricing is becoming a corporate governance issue for many companies, as well as a reputational concern.”

Cherie continues to explain key considerations when dealing with transfer pricing related issues in an audit context.

-----------------------------------------------------------------------Cherie Lehman is Founder and Managing Director for TP Services GmbH. -----------------------------------------------------------------------Founder and Managing Director of TP Services GmbH, Cherie Lehman, has over 13 years’ experience in the field of transfer pricing and has worked in the European, North American and Asia Pacific regions, both within “Big 4” consulting environments as well as leading global transfer pricing efforts within large multinational organisations. Cherie now owns and operates a niche transfer pricing boutique firm based in Zurich, Switzerland.

“Companies should be aware of their transfer pricing risks in the jurisdictions in which they operate and be prepared to address them with tax authorities when they come under review,” she states. “When dealing with transfer pricing disputes, companies should endeavour to maintain a good relationship with the local tax audit teams. Companies should be cooperative and address queries in a timely manner to ensure they retain a “good taxpayer” reputation, while also ensuring they do not provide more, or do more, than is warranted or expected under the situation. Both company and tax authority time and resources are limited and this should be taken into consideration on both sides when dealing with transfer pricing related disputes.”

Company: TP Services GmbH Name: Cherie Lehman Email: cherie@globaltpservices.com Web: www.globaltpservices.com Address: Eidmattstrasse 51, 8032 Zurich, Switzerland Telephone: +41 79 678 6560

PwC’s Tax Controversy and Dispute Resolution (TCDR) Network -----------------------------------------------------------------------David Swenson is a principal at PricewaterhouseCoopers, LLP (PwC) and is resident in the Washington, D.C. office. -----------------------------------------------------------------------David is the Global Leader of PwC’s Tax Controversy and Dispute Resolution (TCDR) Network, which includes 650+ tax controversy professionals located across 45 countries in PwC member firms. Following a prominent legal career spanning almost three decades, David brought to PwC a wealth of experience in advising multinational corporations on international tax matters. David joined PwC from one of the world’s largest international law firms, where he served as an international tax partner for more than 20 years, specializing in tax controversy and litigation, and transfer pricing. Cross-border tax disputes in general, and transfer pricing audits and controversies in particular, are increasing rapidly around the world. OECD statistics released in April 2013 show a dramatic surge in tax disputes worldwide over the past five years. For the most recent reporting year (2011), the OECD statistics show a substantial increase in new (and pending) Mutual Agreement Procedure (MAP) cases, providing clear evidence of a significant rise in international tax controversies around the world. As a result, the global system for resolving cross-border tax disputes continues under pressure, with few prospects for immediate relief. The current OECD Base Erosion and Profit Shifting initiative, as well as the related tax planning debate, are adding to this turbulent environment. It appears clear that these forces, among others, will trigger aggressive enforcement actions

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by countries worldwide - leading to a further surge in international tax audits and disputes. Nations throughout the world have an acute need to raise large amounts of revenue to fund a variety of short-term and long-term obligations - from infrastructure projects and defense initiatives to social programs. Governments must encourage voluntary taxpayer compliance and simultaneously develop tools to ensure compliance through constructive engagements, reporting and documentation requirements, as well as enhanced enforcement activities. Governments are adding resources to audits and other enforcement initiatives and are supporting greater training and education of tax auditors and inspectors. These steps will inevitably lead to further audits in both developed and emerging countries worldwide. MNCs need to develop coordinated approaches to audits and disputes around the globe, adopt preventative measures (such as pre-filing rulings and cooperative relationships with appropriate revenue authorities), and leverage historic and new alternative dispute resolution techniques to achieve optimal results. PwC’s Global TCDR Network provides services to assist taxpayers in their efforts to pursue a variety of measures aimed at proactively preventing, efficiently managing, and favorably resolving tax audits and disputes throughout the world, drawing upon our years of experience in this area from across our established global network of tax professionals. Our TCDR services include assistance and advice in the areas

of tax audit management, dispute resolution alternatives, global strategic planning of tax audits and disputes, and tax risk identification, evaluation, management, and disclosure. Our professionals combine deep technical understanding, local knowledge, and constructive engagement with government officials to assist taxpayers across the various stages of the international tax dispute life cycle. Our Global TCDR Network strives to assist taxpayers with a broad range of tax dispute matters, delivering real time, local country guidance, broad tax controversy experience, and global perspective to reach timely and successful results.

Company: PwC’s Tax Controversy and Dispute Resolution Network Name: C. David Swenson, Global Leader, TCDR Network Email: david.swenson@us.pwc.com Web: www.pwc.com/taxcontroversy Address: 1301 K Street, NW, Washington, D.C. 20005 Telephone: +1 202 414 4650

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SECTOR SPOTLIGHT:

Employment Litigation: Resolving Workplace Disputes

EMPLOYMENT LITIGATION

Resolving Workplace Disputes legislation relating to moral and sexual harassment and discrimination. Timidly but surely we see an increase in harassment and discrimination cases as this legislation and the rights and remedies it offers to employees becomes increasingly known to the latter and their counsels. Following a decision by the Belgian Constitutional Court differences between blue-collar workers and white-collar employees (and not only those related to notice periods) must be lifted before 8 July 2013. Should the Government fail to come with a comprehensive solution before that date, blue-collar workers will be able to trigger litigation claiming rights identical to those of the white-collar employees in terms of, among others, termination, pensions, guaranteed salary in case of sickness.

-----------------------------------------------------------------------The employment team at Altius has expert knowledge in employment litigation, assisting its clients in numerous cases before the Belgian employment tribunals and courts. Since Brussels attracts a substantial number of foreign workers, the EU-legislation on applicable law or on coordination of the social security systems often comes into play. -----------------------------------------------------------------------This vast experience enables the team to identify tendencies in the field of litigation. Employment litigation differs from other litigation in the sense (i) that employment law is a technical matter, (ii) that employment tribunal and courts are composed of 1 professional judge and 2 laymen (one representing the employer’s side and the other the trade union’s side) which calls for a different approach when drafting written submissions and pleading cases, (iii) that and counsels to employers do not only have other lawyers as opponents but also trade union representatives which are not bound by the bar rules, which calls for caution in terms of confidentiality. Litigating on the length of notice: new rules The bulk of employment litigation in Belgium regards disputes relating to the end of employment and in particular the length of the notice period or the amount of the indemnity in lieu of notice. This is a result of the law which stipulates that for employees earning more than 32.254 EUR gross per year the parties need to come to an agreement. Failing to do so the courts will decide on what is a “reasonable” notice period/indemnity in lieu of notice. Needless to say that the parties often have different views on the subject resulting in a vast amount of case law. Mathematical formulas developed by practioners based on parameters such as the age, length of service and remuneration, come in handy to give an indication of an appropriate notice period/indemnity in lieu of notice but do not bind the courts. This, however, is (almost) past history. New termination rules have been introduced for all employment contracts concluded after 1 January 2012. These new rules provide

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for a fixed number of days as notice, which vary taking into account the length of service of the employee. Without going too much into detail the system boils down to granting approximately 1 month per year of length of service of the employee. Litigation over the exact number of months an employee is entitled to as a notice period/indemnity in lieu of notice should now, at least for employment contracts entered into after 1 January 2012, end, only leaving the parties to litigate over the elements of remuneration to be taken into account when calculating an indemnity in lieu. Moreover, we have seen tribunals and courts applying these new rules also to cases relating to employment contracts concluded before 1 January 2012. It can be anticipated that over the years courts will abandon the “ancient” method of approximate mathematical formulas and apply the “fixed notice”-rules to all employment contract, regardless of their date of entry. Motivation of dismissal and litigation As a rule there is no obligation for the employer to motivate a dismissal decision under Belgian law. However, many exceptions exist to this general rule. For a start, it does not apply to blue-collar workers for whom a dismissal decision needs to be motivated by either the blue-collar worker’s competence or conduct or by some business necessity. In addition a wide range of employees benefit from a protection against dismissal which in most cases obliges the employer (i) to motivate his decision and proof reasons of dismissal which have nothing to do with the reason for protection (e.g. pregnant employees, trade union delegate) and (ii) in some cases even to obtain a prior authorization after having followed a procedure. By reference to EU-legislation and European case law it can be anticipated that there will be an increased pressure also in Belgium to evolve towards a general obligation to motivate dismissal decisions. This in its turn will result in litigation on the reasons invoked for termination. Other grounds for litigation As in other EU-countries, Belgium put in place protective

Changes in the organisation of the courts Employment tribunals and courts have been working without a substantial backlog. This caused the Belgian legislator to also entrust them with proceedings relating to debt mediation, which impacted on the delay within which ordinary employment litigation is handled nowadays. On average litigation lasts for more than 1 year now and this delay tends to become longer and longer. Conclusion Given the specificity of employment litigation, employment lawyers mostly litigate themselves, not leaving it to the litigation department. It can be anticipated that in the coming years the nature of litigation will change (i.e. becoming more complex) and delays for obtaining a decision will increase.

Company: ALTIUS Name: Sylvie Dubois Email: Sylvie.dubois@altius.com Name: Sven Demeulemeester Email: Sven.demeulemeester@altius.com Name: Philippe De Wulf Email: Philippe.dewulf@altius.com Web: www.altius.com Address: Tour & Taxis Building, Havenlaan 86C B.414 Avenue du Port, B-1000 Brussels Telephone: +32 2 426 14 14

June 2013 /

SECTOR SPOTLIGHT:

Avoiding & Resolving Construction Disputes

AVOIDING & RESOLVING CONSTRUCTION DISPUTES l Construction has, historically, been the first industry to enter and the last to exit recession; with this in mind, recently published figures do not come as a surprise and many experts are not predicting growth until 2014. The construction industry has definitely been one of the biggest victims of the financial crisis and the continued fragility of the global economy has led to renewed slowdowns in emerging and developed markets. Construction is intrinsically tied to the overall health of the global economy so it is vital that capital invested in the industry supports growth; unfortunately, despite the introduction of new legislation, all too often projects become embroiled in costly disputes and payment problems. These disputes cost the industry millions of dollars every year and are becoming increasingly complex. Acquisition International speaks to some of the leading experts to share their top tips on avoiding these problems before they become a reality.

A Window into the UAE: Strategies to Avoid & Resolve Construction Disputes -----------------------------------------------------------------------Leonora Riesenburg is a senior associate and advocate in Projects & Construction (Disputes & Dispute Resolution) at Galadari Advocates. ------------------------------------------------------------------------

Avoiding construction disputes At a basic level the contracting scene is led by conflicting party interests, which in turn informs adopted procurement processes. These are generally Employer driven and centered on the re-allocation of risk away from the ultimate client. Concepts of pain-gain sharing are largely foreign. Unbalanced, uncertain or incomplete agreements are an endless cause of contention; not least given that under local law it is implied that parties are to perform a contract in a manner consistent with its contents and with requirements of good faith. Obtaining a more balance contract is not always easy, not least in an Employer driven market which is not in itself conducive to the negotiation of contracts. An obvious way to manage risk at the outset is to sign up to an existing form of contract which is suitable for the works in question and with which all parties are familiar. More fully considered conditions of particular application, which would typically be the subject of some negotiation, can be agreed in addition to suit. Room for legal argument on questions of interpretation or an inquiry into the parties’ intention should be limited; neither issues being easily decipherable in a market where pre-contractual negotiations are often informal and unrecorded. The value of record keeping cannot be understated. An appreciation of operated industry wide customs and practices can be instructive. Customs and practices operated between traders, whether general or particular, are binding in UAE law. Actual facts may be established by reference

to custom, if these are of long duration and continuing or prevalent. Addressing inadequacies in contractual administration, to include failure to operate contractual mechanisms up and down the chain as may be agreed for interim awards or extensions of time claims and associated cost claims to name a few, is equally central to dispute avoidance. Where considered steps are taken to narrow potential future disputes or differences as and when they arise, any balance issues will be more easily settled at arm’s length. It is extraordinary how many parties still sign up to the UAE law blindly. The UAE Civil Law houses standalone laws governing minimum rights and responsibilities of employers, contractors and consultants engaged in “Muqawala” contracts or contracts for works or services; some having mandatory application.

International players will typically insist on a seemingly more neutral forum. More complex construction disputes are categorically the subject of both ad hoc and institutional international arbitration; albeit typically subject to the local laws and more often than not local seats. Interestingly, there has recently been a reversal in the adopted trend, with parties seeking to avoid often lengthy and costly arbitration proceedings by reverting back to more traditional court litigation. This has resulted in parallel proceedings in both forums, intended to frustrate the arbitration proceedings. Emerging trends New legislative developments in the UAE, to include most notably an awaited arbitration law, and the further regulation of both public and private procurement and green building, to name a few, are likely to inform trends going forward.

The cost of prevention will most certainly always thwart the cost of cure. Getting legal and contractual advice upfront can stave off potentially staggering financial losses. Resolving construction disputes Typically UAE construction contracts will be FIDIC based and tiered dispute resolution methods apply before formal proceedings can be commended. In practice, referral of disputes for engineer determinations and amicable settlement initiatives tend to be symbolic measures. An insurmountable difficulty lies in the fact that the Engineer will be commissioned by the Employer. Where the ultimate client is UAE based, the general trend is for disputes to be ultimately administered by the local Courts.

Company: Galadari Advocates & Legal Consultants Name: Leonora Riesenburg Email: info@galadarilaw.com Web: www.galadarilaw.com Address: P.O. Box 7992, Dubai - U.A.E. Telephone: (+971 4) 3937700

Window into Canada - Dispute Avoidance -----------------------------------------------------------------------Arbitrator, mediator and infrastructure project neutral, Donald Marston is the founder and principal of Marston International ADR. A long-time advocate of the advisability of avoiding litigation of disputes, he has more than 12 years experience chairing dispute resolution boards (“DRBs”) on infrastructure projects in Canada and eastern Europe. -----------------------------------------------------------------------A lawyer and a professional engineer, Don’s law career includes more than 30 years practising with Osler, Hoskin & Harcourt LLP, a major Canadian law firm. His engineering career includes experience in both the steel and construction industries. No longer practising as a lawyer, Don now devotes his professional practice exclusively to ADR. The first Canadian to be elected a Fellow of the American College of Construction Lawyers, Don has also been a Fellow of the Canadian College of Construction Lawyers since its

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founding.. His arbitration association panel memberships include the International Panel of Arbitrators of the American Association of Arbitrators/ICDR, the Panel of Arbitrators of the Hong Kong International Arbitration Centre, and the Kuala Lumpur Regional Centre for Arbitration. A former Chair of the International Projects Committee of the International Bar Association (“IBA”), he is also a former Council Member of the IBA’s Business Law section, a former member of the Board of Governors of the American College of Construction Lawyers, and a former Chair of the Construction Law Section of the Canadian Bar Association (Ontario). Don points out that the use of dispute resolution boards in Canada is still in its infancy, but their frequency is improving and their typical success more than speaks for itself. Canadian municipalities, corporate participants, developers and

contractors can benefit greatly by appropriately implementing DRB’s on a wide variety of infrastructure projects...

Marston International ADR Company: Marston International ADR Name: Don Marston Email: don.marston@gmail.com Web: www.marstonADR.com Telephone: +1 416 970 5069

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SECTOR SPOTLIGHT:

Avoiding & Resolving Construction Disputes -----------------------------------------------------------------------Andrew Jones is a partner in the Construction practice at Dentons, specialising in dispute resolution of particularly heavyweight building and engineering works. ------------------------------------------------------------------------

Mr Jones observed that the construction industry continues to contend with a prolonged period of uncertainty and financial pressure and as a result the prospect of disputes arising remains high. In addition to the increase in disputes, he noted that insolvency also remains a significant issue for the construction industry. “No one in the industry can afford to be complacent when it comes to monitoring the financial health of the parties it is dealing with,” he advised. “When considering a potential dispute, it is also important in the current market to consider the financial solvency of your opponent. Pursuing expensive dispute resolution proceedings will be futile if your opponent has no resources to compensate you even if you are successful.” The UK construction industry continues to be confronted with challenging market conditions, and Mr Jones stated that legal advice needs to be combined with practical commercial solutions in order to formulate a strategy that will achieve a party’s objectives. -----------------------------------------------------------------------Roberto Hernández-García is the managing partner of COMAD, S.C., a Mexican law firm with relevant experience in public and private construction projects; public procurement and government matters, dispute resolution in those areas, and compliance in those areas. -----------------------------------------------------------------------Mr Hernández-García stated that it is vital that construction lawyers do not stay waiting at their desk. “Since construction is a live animal that moves and changes every day, the construction lawyer cannot sit and wait for things to happen, since things are happening indeed (for good or for bad),” he commented. “Therefore a construction lawyer has to ask, be proactive and not let bad things happen since in the construction industry there is a vice of going ahead with the project, without thinking of the legal or contractual efforts of their actions.” Mr Hernández-García beleives that claims for extra and additional works are the most common causes of disputes in Mexico. He noted that owners often request things that are not documented, and contractors usually do things without the permission of the contractor and without documentation, and at the same time. Other relevant causes of disputes include defective execution or defective design. -----------------------------------------------------------------------James Newland is a partner in the international law firm Seyfarth Shaw, LLP. -----------------------------------------------------------------------Mr Newland explained that construction-related legal services, as with most contemporary practices, are driven by specialisation. He noted that clients look to practitioners that understand their business line, the construction process, and how to marshal the documents and claims to bring a return on investment. “Construction disputes and contract drafting and negotiation involve both highly complex technical issues, i.e., how will the project be constructed, as well as a keen awareness of how disputes are resolved through the various tier-levels (the chain of privity among the employer, contractor and subcontractors,” he commented.

“Whether to pursue or defend a claim is a commercial decision and this decision should not be undertaken without first thoroughly assessing the risks to the business,” he continued. “Careful investigation is key in order to fully appreciate the strengths and weaknesses of your case and your opponent’s case before any formal steps in the proceedings are taken.” Mr Jones highlighted the fact that disputes are costly and time consuming and will divert resources away from the business for significant period. These are costs that business can ill afford in the current economic climate. “The key to minimising risk and exposure for a business is to take steps to ensure that potential disputes and issues do not escalate,” he explained. “Key areas of risk should be highlighted in the contract from the outset and should be monitored and managed as the project progresses. The ability to react swiftly to issues as and when these arise is essential. Therefore, ensure there is a reporting structure in place to inform senior management of issues in a timely manner.” Once a potential problem has been identified, Mr Jones stated that a clear strategy should be put in place to

“Ultimately, whether a claim or defence should be pursued will depend on a number of factors including the strength of the claim, the resources available, the quality of a party’s records, the terms of the contract and the financial resources available,” he concluded.

Company: Dentons UKMEA LLP Name: Andrew Jones Email: andrew.jones@dentons.com Web: www.dentons.com

The main process by which COMAD, S.C identifies potential risks is called “communication and documentation”.

and added that the Wal Mart case, related to construction, has raised important red flags for the market.

“The most risky situation in the construction process is to ‘suppose’ or ‘presume’,” he noted. “Owners and Contractors have to give notice and document things that are happening on site in order to prevent risks or face problems. Taking care of this, I would say is around 80% of limiting risks.”

Mr Hernández-García concluded: “Mexico is a great country with lots of business opportunities. In the infrastructure, construction and public procurement sector it is necessary to get the right guidance from the right people. We have been recognised for many years for being serious and professional and that is what we give every day to our clients.”

Mr Hernández-García stated that every project requires different procurement routes and contract structures to be successful. He highlighted a problem in the sector: the use of “model contracts” without being critical of them. “I am not an enemy of model contracts, but an enemy of the way they are used,” he explained. “It is like a tuxedo for your wedding. You cannot use the same on that is in the store, without making those arrangements that make you see like you are and feel great. It is necessary to analyse the need, talk a lot with the client, and finally give a concrete solution adapted to its needs.” An important trend highlighted by Mr Hernández-García is the re-evaluation of public works contracts and the development of Public Private Partnerships in Mexico. He also noted a trend towards responsibility on the compliance side,

Company: COMAD, S.C. Name: Roberto Hernández García Email: rhernandez@comad.com.mx Web: www.comad-lawyers.com Address: Febo 29. Mexico DF. 03940, Mexico Telephone: (52)(55) 5661373; 56621864

a mechanism to drive, or in some cases recover, the profit and margin,” he added.

contractors will focus their attention back to the arbitration of disputes as opposed to litigation.

In order to identify potential risks, on the owner/employer side, the firm looks at the potential for asymmetrical risk management given that the architects and engineers may work to a standard of care whereas the contractor claims are based on strict contract interpretation.

“But in so doing, I predict they will craft the rules and procedures of the arbitration to follow international arbitration protocols. That is to say, domestically, we saw arbitration procedures enlarged to mimic domestic litigation. I think most would agree that the cost of doing so was a negative attribute that did not necessarily translate into a commensurate return or investment, not, for the skilled practitioner, markedly different results,” he concluded.

“In such cases, the dispute provisions, such as arbitration, are paramount so that the owner/employer can, if desired, resolve the dispute with the contractor and the architect/ engineer in one dispute resolution proceeding,” he observed. On the contractor side, the firm looks at cash flow and change order management as well as the disputes proceedings.

Today, Seyfarth Shaw sees many disputes driven by the harsh economic climate. Mr Newland attributes this to the existence of more tenuous contracting entities which are under stress from the tightening of credit and bonding conditions.

He continued: “As with the owner/employer, the contractors may prefer, depending on the circumstances, to hold one dispute resolution proceeding among the subcontractors and the owner/employer to avoid conflicting results that may occur in the event of separate proceedings.”

“To make matters worse, there are fewer projects to let which drives economic competition to increasing low levels of margin. Given this climate, there is a focus on claims as

Looking ahead in 2013 and the following years, Mr Newland anticipates that, on the domestic front, seasoned practitioners, sophisticated project owners and savvy

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deal with it. It is also very important to ensure that a robust document retention policy is implemented and adhered to on every project. If a dispute arises, accurate contemporaneous records will be crucial in order to evidence a claim or defence.

Company: Seyfarth Shaw, LLP Name: James R. Newland Jr., Esq., AIA Email: jnewland@seyfarth.com Address: 975 F Street, NW, Washington, DC 20004 Telephone: (202) 828-3550

June 2013 /

SECTOR SPOTLIGHT:

Arbitrating Disputes in Cross-Border Transactions

ARBITRATING DISPUTES IN CROSS-BORDER TRANSACTIONS l Commercial dispute resolution experts are privy to some of the world’s most sensitive and complex legal cases. Avoiding litigation is a primary goal for many companies who find themselves embroiled in corporate disputes, largely to avoid the publicity, reputational damage and costs involved. Where possible, arbitration is a great option, which allows disputes to be settled privately and in the most appropriate manner. Cross-border transactions have mushroomed in recent years and have been one of the key driving forces in an otherwise struggling global economy. One side effect of this growth has been the simultaneous increase in the number of cross-border disputes. Commercial arbitration has gained wide-spread acceptance among the international business community for its flexibility and efficiency in resolving conflicts between transnational parties through the use of one or more arbitrators rather than through the courts. Foreign court judgements can often be hard to enforce so perhaps one of the biggest benefits provided by international arbitration is the ability to enforce an arbitral award in more than 140 countries, most of which are involved in significant international trade and economic transactions. But as we all know, cross-border often equals complication! Acquisition International examines some of the challenges associated with arbitrating disputes in cross-border transactions with commentary from experts in the field. -----------------------------------------------------------------------Simon Nesbitt and Julianne Hughes-Jennett are both based in Hogan Lovells’ London office. Mr Nesbitt is a Partner and Co-Leader of the firm’s Global International Arbitration practice, and Ms Hughes-Jennett is Of Counsel in the International Arbitration practice. -----------------------------------------------------------------------“In our experience, arbitration appeals to corporations from all sectors and is increasingly the dispute resolution method of choice for cross-border M&A disputes,” says Mr Nesbitt. “One key reason for this is that arbitral awards can be enforced internationally far more widely than domestic court judgments. The confidentiality of the process is also a major selling point.” Discussing strategies that can be implemented to help eliminate risks, Ms Hughes-Jennett explains that drafting the dispute resolution clause (arbitration agreement) is one of the key steps in any cross-border transaction. “The arbitration clause is all too often treated as a minor boilerplate provision. However, extreme care should be taken to prepare an unambiguous and binding agreement to refer disputes to arbitration, so as to ensure enforceability of the arbitration clause,” she advises. “This should include consideration of the chosen arbitral institution’s rules, whether it is in a party’s interest to retain a unilateral right to resort to court litigation in the alternative (and whether such a unilateral right is legally enforceable in any relevant jurisdictions), whether to include a clause providing for negotiations or a formal mediation process as a prearbitration step and the ‘seat’ of the arbitration.

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“Where the transaction can be said to amount to an ‘investment’, it may also be appropriate to consider the availability of bilateral investment treaty protection when structuring the transaction,” she adds.

“We expect to see an increasing number of disputes emerging in the coming years given current economic conditions,” she concludes.

Mr Nesbitt says that one of the key advantages of the arbitral process is its flexibility and the fact that the parties can structure a process that is tailor-made to the dispute at hand. He believes that there is no “one size fits all” approach to arbitration – the nature of the particular dispute will inform the structure of the arbitration. “Is the dispute fact-heavy? Is it particularly technical? Is it a multi-party dispute and/ or could it give rise to parallel arbitrations? Issues such as these will also inform the selection of the arbitrators,” he explains. “It is also possible to create a bespoke procedural framework and timetable, for example with respect to bifurcation of the proceedings (into separate phases dealing with the merits of the claim and quantum of damages), production of documents, the approach to witnesses of fact and experts, written submissions, and the structure of the hearing itself. In the interests of efficiency, hearings sometimes proceed on the basis of a ‘chess clock’ which allocates each party a fixed amount of the available hearing time for their advocacy.” Finally, Ms Hughes-Jennett notes that there has been a rapid growth in the uptake of arbitration for cross-border disputes in the last decade, and the firm expects this trend to continue.

Company: Hogan Lovells Web: www.hoganlovells.com Address: Atlantic House, Holborn Viaduct, London EC1A 2FG Telephone: +44 20 7296 2000 Name: Simon Nesbitt Email: simon.nesbitt@hoganlovells.com Name: Julianne Hughes-Jennett Email: julianne.hughes-jennett@hoganlovells.com

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SECTOR SPOTLIGHT:

Arbitrating Disputes in Cross-Border Transactions -----------------------------------------------------------------------Stefan Stade, a French and German lawyer, is a member of ArteJURIS, a Strasbourg based law-firm with a large cross-border practice involving foreign companies with their interests in France and Germany. -----------------------------------------------------------------------According to Mr Stade, good arbitration means that the parties feel that they and their case have been understood and treated fairly. He stated that this helps acceptance of the award, even by the defeated party, and avoids difficulties if enforcement of the award becomes necessary. The specific skills required of professionals in these disputes include a high understanding of each party’s cultural and legal background, their native languages (as translations may be good but are rarely perfect), as well as good knowledge of the businesses involved. Discussing the frequency with which M&A disputes are settled by arbitration, Mr Stade noted that it is only partly a question of the specific case, but also one of the parties’ advisers. They may have backgrounds in a jurisdictional environment, as is the case for many French lawyers, or from a consensual environment, such as most German lawyers – this can have an impact on the chances of an amicable settlement avoiding arbitration. -----------------------------------------------------------------------Oliver Bolthausen, LL.M. (USA), FCIArb (UK) is a Managing Partner at BridgehouseLaw in Munich. -----------------------------------------------------------------------BridgehouseLaw represents international clients in German courts as well as in national and international arbitration proceedings. Mr Oliver Bolthausen is a listed arbitrator for various international organizations and comes highly recommended as both an Arbitrator and Business Mediator. He was the youngest German lawyer awarded the Fellow status with the Chartered Institute of Arbitrators in London, which demonstrates his accomplishment in the practice of arbitration. “The main challenges associated with arbitrating disputes in cross-border transactions are the taking of evidence, mainly discovery, and assuring the efficiency and enforceability of a proceeding,” explains Bolthausen. “The more prominent or sensitive a deal is, the more likely that an ADR approach will be utilised”. “Disputes are often an unavoidable consequence of doing business,” states Bolthausen, and explains what strategies can be implemented to help eliminate risks. “It is important that both the transaction team and the management are aware of and understand all contractual risks. It is also -----------------------------------------------------------------------Dr Baharul Islam is a Professor of Corporate Law, Arbitration and Conflict Resolution at the Government of India’s Indian Institute of Management, Kashipur. -----------------------------------------------------------------------According to Dr Islam, one of the major issues in crossborder arbitration is the complications in enforcement of foreign country judgments or arbitration decisions. Furthermore, the window for interim relief is significantly more complicated. “It needs new sets of rules for granting interim relief and an agreement between the parties to accept some special procedures,” he opined. “This becomes more crucial in cases where arbitration seems to be useless without some interim protection. Finally, in arbitration cases involving multiple parties it is a challenge to bring in a third party from outside of the arbitration agreement. It becomes tougher to mitigate when one party has different arbitration contracts in place with the other parties involved.” Dr Islam noted that, in general, a small number of M&A disputes are settled through arbitration compared to the number of settlements by courts. However, in the last few years the number of settlements by arbitration in M&A disputes is gradually increasing due to a number of conducive national and international legal frameworks, such as the UNCITRAL Model, being put in place.

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“Notwithstanding that, any good M&A agreement should contend a well drafted arbitration clause; most disputes merit a prior and serious attempt of amicable settlement,” observed Mr Stade. “ADR is one solution, as well as a contractual provision for such an attempt before arbitration, a condition which should afterwards be strictly controlled by the arbitration court, which otherwise shall reject the submitted demand as inadmissible at that stage.” For business facing risks and disputes in cross-border commercial transactions, Mr Stade believes that the first factor to consider is a good contract which takes into account the company’s and its counterparts’ cultural and legal backgrounds, and anticipates future disputes. Contracts submitted to a continental law order do not need to be extremely voluminous; rather, they should be as clear as possible so that even a non-legal expert, e.g. a CEO or CFO, can clearly understand and use them as a guideline for their future behaviour. “Then, even with such a fine contract, external advice shall be demanded as soon as the first difficulties arise,” he observed. “In particular, in cross-border situations independent advice which can better oversee the possible options and issues better than the client is strongly recommended.

important, especially in cross-border transactions, that companies have a way to manage disputes internally, and possibly before they arise, such as organizational steps, communication and document retention policies.” Bolthausen continues to describe the best way to structure a resolution. “In most cases, the resolution follows the instructions of the contract and later, the negotiations - at which point the structure of the resolution is often underestimated and rushed at the last minute. To properly structure dispute resolution clauses one needs to understand how litigation, arbitration and mediation works; understand implications of seat, language, applicable law, and understand ad hoc, institutional and taking of evidence rules just to name a few. After substantial analysis, the clause can be well-negotiated and structured.” Selecting an arbitrator is often a tricky business however Bolthausen has some advice to offer. “In my view, you should consider the time an arbitrator has available for a given case. You might choose the most exceptional expert or lawyer, but if he does not have or take the time to roll up his sleeves and work hard, you might lose all the positive effect.”

When assisting companies facing risks and disputes in cross-border commercial transactions, the Government of India’s Indian Institute of Management, Kashipur can offer ‘tailor-made’ arbitration procedures that parties may adopt to expedite the resolution process by setting some pre-determined parameters such as the maximum number of witnesses. “We also offer the business in-country legal expertise (say, laws related to India) and place them in the global context to mitigate the challenges of enforcement in cross-border awards,” added Dr Islam. To eliminate risks, Dr Islam stated that “a complete legal diagnosis of the arbitration clauses is necessary in the context of national laws and relevant applicable international laws and conventions in the countries involved”. He continued: “This exercise is very useful to avoid risks of unenforceable settlements in cross-border disputes.” Discussing the best way to structure the resolution, Dr Islam recommended making the resolution stand a ‘trial’ contest as if it is challenged in court and see that it becomes a legally binding decision which can be enforced under national laws. He noted that cross-fertilising the resolution with prior settlements in courts is a way to achieve this.

“Finally, if action is needed, external and independent advice becomes crucial to choose the best option, which often means favouring negotiation as far as is reasonable, whilst at the same time preparing the best case if arbitrating becomes unavoidable,” he concluded. Concerning arbitration places, Mr. Stade thinks that the European Court of Arbitration based in Strasbourg is a nice alternative to the well established places like the ICC in Paris or the Chamber of Commerce in Zurich.

Company: arteJURIS Name: Stefan Stade Email: stefan.stade@artejuris.eu Web: www.artejuris.eu Address: 6, Avenue de la Marseillaise, F-67000 Strasbourg Telephone: +33-3-67102025

With regards to arbitration in cross-border transaction disputes for 2013, Bolthausen has predictions. “In Germany, the importance of ADR is growing and this growth is driven by traditions and choice of law issues. Although we have a relatively new mediation law, the DIS rules (including fast track proceedings) are especially well thought through. Germany is becoming quite the hub for international disputes.”

Company: BridgehouseLaw Name: Oliver Bolthausen, LL.M. (USA), FCIArb (UK) Email: oliver.bolthausen@bridgehouselaw.de Web: www.bridgehouselaw.de Address: Prinzregentenstr. 78, 81675 München, Germany Telephone: +49 (0)89 206029960

In conclusion, Dr Islam stated that the Government of India’s Indian Institute of Managemen, Kashipur selects an arbitrator based on his legal expertise in both a national and international context. “While we highlight the international exposure in the process, we do emphasise a strong grounding of the arbitrator in national legal system (India), lest the parties face trouble at a later stage with the local courts.”

Company: Indian Institution of Management Kashipur Name: Dr K M Baharul Islam Email: bislam@iimakshipur.ac.in Web: www.iimakshipur.ac.in Address: Bazpur Road, Kashipur 244713 (Uttarakhand) India Telephone: + 91 83928 11111, +91 5947 262177

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SECTOR SPOTLIGHT:

COPYRIGHT INFRINGEMENT AND PROTECTION l Copyrights are put in place to protect what is often seen a company’s most critical business assets. Today’s digital economy and the evolving laws governing copyrights and the internet pose significant challenges and unique opportunities for copyright owners, as well as third parties. Copyright laws are constantly updating to protect individuals and businesses against copyright theft and potential infringements. It is important for individuals and businesses alike to seek the advice from the right copyright professionals who have the depth of experience and broad resource base to help prospective clients protect and enhance the value of copyrighted works and defend against claims of infringement. Copyright infringement can have adverse effects on the future of your business. Senior executives need to ensure they are protected against this devastating form of intellectual property theft. Acquisition International speaks to the experts to discuss the key issues.

-----------------------------------------------------------------------Selcuk Akkas is the Founder of Akkas & Associates. -----------------------------------------------------------------------Akkas & Associates Turkish Law Firm offers clients a customer-focused and cost-effective legal services alternative to larger business law firms. Our firm prides itself on our attentive and personal approach to every client. We work closely with our clients to discover and implement the customized legal solutions that best meet their needs. Akkas & Associates handles commercial transactions and disputes with the same dedication and intensity whether our client is a Fortune 500 company or a privately held small business. Akkas & Associates is a relatively young law firm, but one with an impressive and respected history. We began from the efforts and dreams of one lawyer, Selcuk Akkas, who was soon joined by his colleague and former civil judge Lutfullah Kervankiran. Together they and many other talented individuals built an organization around collaboration and

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mutual respect, and on absolute dedication to providing clients with value. That Akkas & Associates today is one of Istanbul’s largest law firms testifies to the strength of their vision. Akkas & Associates regularly represents clients in such areas as corporate law, company formation, litigation, intellectual property law, labor and employment law, real estate law, and bankruptcy & debt recovery. The firm’s corporate clients include Fortune 500 companies, multinational corporations, and a wide range of publicly traded corporations and closely held businesses. We carry with us the progressive, entrepreneurial spirit that has always animated our firm. We’ve always worked differently than other firms. We are committed to remaining forward-thinking and preparing for the dynamically changing world of business law.

Company: Akkas & Associates Name: Selcuk Akkas Email: sakkas@akkaslaw.com Web: www.akkaslaw.com Address: Eski Uskudar Yolu Cad. Ozis A Blok No:21/6 Atasehir, Istanbul 34752 Turkey Telephone: +90 (216) 469 63 63

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SECTOR SPOTLIGHT:

Copyright Infringement and Protection -----------------------------------------------------------------------Roberto Arochi is founding partner of the Mexican Intellectual Property law firm Arochi, Marroquin & Lindner (AM&L), which has offices in Mexico City and Barcelona. Arochi, Marroquín & Lindner, S.C. was established in 1994. -----------------------------------------------------------------------The firm is fortunate to have had Fortune 100 and Global 250 corporations from a broad range of industries among its clients from the inception but it also values its smaller international and local clients. It has enjoyed consistent growth and is now a firm of approximately one hundred thirty people with more than forty-five attorneys and technical professionals. AM&L is a law firm specializing in intellectual property and related matters. It handles all aspects of trademark, copyright (authors’ rights), patent, trade secret and unfair competition law and practice. It counsels clients on acquiring and maintaining intellectual property (IP), as well as IP portfolio management and transactions. In addition, the Firm has extensive and demonstrated experience in litigation, with attorneys that are not afraid to pursue results in administrative, civil and criminal court proceedings or anti-counterfeiting and anti-piracy investigations and actions. If the interests of the clients indicate that alternative dispute resolution is appropriate, its lawyers are also skilled as mediators, arbitrators and negotiators. When IP rights -----------------------------------------------------------------------Ludwig Ng is one of the founders and now senior partner of ONC Lawyers. -----------------------------------------------------------------------ONC Lawyers is one of the largest domestic law firms of Hong Kong with more than 30 lawyers and 100 members of legally-qualified and supporting staff. It is designated by Asialaw Profiles as one of the “highly recommended” law firms in Hong Kong. Copyright law in Hong Kong not only protects literary, artistic and musical works. Engineering drawings of consumer products are also protected as a type of artistic work. In fact, a lot of copyright infringement cases were concerned about the engineering drawings of consumer goods such as electrical and electronic appliances. Hong Kong is a trading and logistics hub where a lot of consumer products are marketed and distributed to countries all over the world. It is typical for consumer products designed by European brands in Europe to be produced in China and distributed through Hong Kong. A person who without the licence of the copyright owner does any of the acts restricted by copyright commits infringement of the copyright subsisting in the drawings. -----------------------------------------------------------------------Jacy Whittaker is partner and senior litigator at Bahamian firm Parris Whittaker. ------------------------------------------------------------------------

Specialising in Copyright Law at Parris Whittaker, Jacy Whittaker tells us a little more about his background. “I have many years’ experience in handling all aspects of copyright litigation, including cases involving intellectual property disputes, trademarks and trade names. My clients have included sole traders, small enterprises and major corporations, both domestic and foreign registered, and in addition to copyright law I handle all aspects of corporate, commercial and finance law.” Jacy explains what he believes gives Parris Whittaker the edge over its competition. “My practice combines a vigorous and energetic advocacy style with an in-depth knowledge of ever-changing copyright legislation. I am exceptionally driven by a desire to secure a positive outcome on behalf of my clients, as evidenced by my successfully pursuing copyright infringements in many areas of business across all media platforms, including website content.”

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are multinational, the Firm manages its clients’ needs by calling on a carefully selected network of firms located throughout the world. The Firm’s commitment to its clients means that besides excellent legal skill, its attorneys study their industries and learn about their businesses. AM&L speaks the language of business with clear and concise advice and counsel.

On April, 2013, an amendment bill for the Federal Copyright Law was recently voted by the Mexican House of Deputies and the Senate. This amendment bill is not in force yet. The bill mainly covers INDA’s attributions to conduct inspections in order to investigate about possible copyright infringements and the possibility to sue for damages when copyrights are violated, without beginning an administrative infringement proceeding as it has been stated in Mexican case law.

Arochi, Marroquín & Lindner has expertise and extensive experience in copyright law and authors’ rights. The Firm is equally comfortable with traditional copyright subject matter such as art, literary and musical works and newer subjects of protection such as computer software, new media, social networks or special rights including titles, names of fictional characters or groups. The Firm is well versed in the proceedings of the National Copyright Institute (Instituto Nacional del Derecho de Autor, INDA) and its attorneys are experienced in INDA hearings. Roberto Arochi has been called as expert witness in civil and criminal copyright cases. Mr. Arochi is an arbitrator of INDA. AM&L also handles negotiations, agreements, contracts, licenses and assignments related to copyrighted works.

Such infringing acts include the making of a copy in three dimensions (the consumer product) of a two-dimensional work (the engineering drawings of the consumer product), and the importing into or exporting from Hong Kong of such infringing copies. When commencing copyright infringement legal proceedings against the infringer, the plaintiff needs to prove subsistence of copyright and ownership in the original artistic work. Therefore the plaintiff has to file with the Court affidavit evidence to prove the “originality” and ownership. This sometimes may cause problem to the plaintiff if the drawings were prepared many years ago and may have been misplaced or lost. Such problem can be avoided if the copyright owner has registered a corresponding design deriving from artistic work with the Hong Kong Designs Registry. The registration of the design is prima facie evidence of the subsistence of the right and the ownership without further proof and without production of any original. There is also an added benefit if such a corresponding design is registered, i.e. the duration of copyright protection is 25 years from the end of the calendar year in which the articles incorporating a design are first marketed, while the duration

Recent changes in legislation have affected the way the firm works, and Jacy explains further: “A recent significant change in legislation relating to copyright has been the Enterprise and Regulatory Reform Act, which was passed by the UK government earlier this year. The Act is intended to reduce restrictions on reproducing ‘orphaned works’ which have no traceable authors. However, there are widespread concerns that the Act will allow companies to seek out and use images (for example those shared on social media sites like Instagram) for commercial purposes. This may have serious implications for individuals in the Bahamas as well as overseas. Artists, designers and photographers concerned by the implications of the Enterprise and Regulatory Reform Act should seek expert legal advice.” Jacy has predictions for the latter half of 2013, relating to copyright infringement and protection from it, as he explains: “Due to today’s constant technological advances, where new ways to publish material are constantly developed, new legal questions regarding intellectual property will continue to be asked –and many of these will become test cases for the courts.

Company: Arochi, Marroquin & Lindner Name: Roberto Arochi Email: rarochi@aml.com.mx Web: www.aml.com.mx Address: Insurgentes Sur 1605- Piso 20, Col. San José Insurgentes, 03900 México D.F. Telephone: (52 55) 41.70.20.50 ext: 2089

is reduced to only 15 years if no corresponding design has been registered. Given such significant advantages, it is advisable to register a design corresponding to the artistic works. As Hong Kong is a member of the Paris Convention, the applicant can claim priority right, by filing the design application in Hong Kong within 6 months from the priority date.

Company: ONC Lawyers Name: Ludwig NG Email: ludwig.ng@onc.hk Web: www.onc.hk Address: 14-15/F, The Bank of East Asia Building, 10 Des Voeux Road Central, Hong Kong Telephone: + 852 2810 1212

It is crucial that clients should seek legal advice from a litigator who combines a rigorous understanding of the current legislative framework as it relates to copyright - and who is constantly seeking to keep ahead of current trends.”

Company: Parris Whittaker Name: Jacy Whittaker Email: jw@parriswhittaker.com Web: www.parriswhittaker.com Address: Suite 10, Seventeen Centre, Bank Lane, P.O. Box F43018, Freeport, Grand Bahama, The Bahamas Telephone: +1 242 352 6110

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SECTOR SPOTLIGHT:

Managing Collective Redundancies

MANAGING COLLECTIVE REDUNDANCIES l As economic recovery continues to falter, collective redundancies, and disputes in relation to redundancies, are unfortunately not an uncommon occurrence. In the current climate even the strongest of businesses may need to consider redundancies or workforce restructuring. When it comes to collective redundancies, it is vital to follow the correct procedure. With a raft of legislation and case law governing the redundancy process, the legal challenges for employers when downsizing or reorganising their workforce have never been greater. Employers need to ensure that they are familiar with current regulation and are abreast of recent amendements in legislation, for this they need to seek the advice of those in the know. Acquisition International discusses the current issues with leading experts in the field.

-----------------------------------------------------------------------Anne Morel is a Partner at Bonn Steichen & Partners and head of the Employment Law practice. -----------------------------------------------------------------------Bonn Steichen & Partners is an independent full-service law firm based in Luxembourg. “As a leading Luxembourg law firm, we offer our clients a wealth of knowledge and experience in all aspects of Luxembourg law, including Employment law,” said Ms Morel. “Our pragmatic and result-oriented approach enables us to counsel on both routine and non-routine issues relating to labour and employment law matters.” Ms Morel advises clients on a broad variety of restructuring and labour-related matters such as corporate restructuring, transfers of undertakings, including sale of businesses and outsourcing or collective redundancies. Ms Morel stated that handling redundancies effectively involves making sure that the legal information and consultation requirements are complied with. “In that respect, it is essential for the employers to be as well informed as possible on the applicable law and good employment practices generally,” she observed. “With careful planning and assistance, employers can make sure this procedure is efficiently handled.

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“The key challenge in handling mass redundancies is to (i) ensure that the legal prior information and consultation requirements are properly carried out, and (ii) manage the negotiation process in an efficient manner within the legal timeframe. Advance preparation is essential in this respect.” Ms Morel explained that failure to comply with the requirements set out in the Labour Code renders and dismissal null and void, if it has been notified (i) before the redundancy plan is signed by the parties, or (ii) before the signature of the minutes drafted by the National Conciliation Committee in respect of the non-conciliation of the parties, if the parties failed to reach an agreement during the negotiations and the conciliation process. “The dismissed employees may refer the matter to the President of the Labour Court within 15 days of the dismissal, requesting an order declaring the dismissal void and ordering the continuance of the employment contract, or alternatively claim compensation for damages,” she continued. “Moreover, the failure to comply with the legal information and consultation requirements is a criminal offence.”

Ms Morel noted that there have been no recent changes in regulation applicable to collective redundancies. “However, on 25th February 2013, the government deposited a draft bill (n° 6545) regarding the reform of social dialogue in undertakings. The draft bill changes significantly the structure of social dialogue within undertakings and the attributions of the staff delegation,” she concluded.

Company: BONN STEICHEN & PARTNERS Name: Anne MOREL Email: amorel@bsp.lu Web: www.bsp.lu Address: 2, Rue Peternelchen, L-2370 Howald-Luxembourg Telephone: 00352 26025-1

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SECTOR SPOTLIGHT:

Managing Collective Redundancies on the law relating to making large scale redundancies, particularly in the context of company sales, mergers and acquisitions. In the UK, there are prescriptive rules applicable when an organisation is considering making 20 or more employees redundant from one establishment within a period of 90 days or less. These include consultation periods of up to 45 days before any redundancy takes effect. Failure to comply with these rules can result in costly claims from employees for unfair dismissal and “protective awards” of up to 90 days pay per employee.

-----------------------------------------------------------------------Morrisons Solicitors LLP is a leading regional practice in the UK based in London and the South East. Joanne Kavanagh, Head of Employment, and the employment team are ranked in the Legal 500 and Chambers & Partners directories, highlighting their considerable expertise and resources and rated for their ‘economic advice’. -----------------------------------------------------------------------Morrisons can assist with all legal aspects of a commercial acquisition. The team has experience of advising businesses

Very often, when acquiring the seller’s business, buyers take on its employees too. In this situation, together with liability to pay for any compensation awards that might arise from the seller’s default, including any failure to comply with its obligations where making collective redundancies prior to the transfer, the seller and buyer must inform and consult with affected employees in good time before a transfer. Failure to do so can lead to awards of up to 13 weeks’ pay per employee which may be apportioned by the UK tribunals between seller and buyer. Given the complicated rules that apply to large scale redundancies and the potential transfer of liability for a failure to comply with those rules from seller to buyer, it is imperative organisations take expert legal advice prior to any acquisition in the UK.

The employment team can advise sellers and buyers on whether the rules apply or can be avoided, limiting the risk of claims, and practical advice on how best to project manage large scale redundancies. This may include negotiating for the buyer to participate in pre transfer consultation so no mistakes are made and for consultation to start early enough for compliance with minimum consultation periods so that the first dismissals can take place no later than the acquisition date. If you require further information about any employment law aspect of a sale, merger or acquisition in the UK contact Joanne on 01737 854573 or email joanne.kavanagh@morrlaw.com

Company: Morrisons Solicitors LLP Name: Joanne Kavanagh Email: joanne.kavanagh@morrlaw.com Web: www.morrlaw.com

The Challenge of Downsizing in Indonesia -----------------------------------------------------------------------Richard Emmerson is a Senior Foreign Legal Advisor at SSEK. -----------------------------------------------------------------------Labor law in Indonesia is decidedly pro-employee and termination of employment has always been complicated since the termination-at-will concept is not recognized. This is especially true for collective redundancies, which became even more complicated with a recent Constitutional Court decision. The 2003 Manpower Law allows for mass redundancies where a company closes due to losses suffered for a continuous period of two years or force majeure (Article 164(1)), or for efficiency reasons (Article 164(3)). Terminated employees are entitled to severance pay, service pay, and compensation, with the exact payout depending on length of service. The severance pay component is doubled in the case of mass redundancy under Article 164(3). Employers long used Article 164(3) to justify a partial downsizing for reasons of efficiency. The article specifically

refers to the closing down of an employer’s operations for efficiency reasons, but employers and officials also read that to include closing down a part of the operations.

in their terms and conditions of employment but it is unclear whether such a provision will be enforced by the courts.

However, Indonesia’s Constitutional Court in 2012 ruled on a case involving a plant that closed, terminated its entire workforce, and then reopened. The Court said Article 164(3) allowed for mass redundancies only when the company had been permanently closed. The implication is that if Article 164(3) can only be invoked for a permanent plant closing, then it follows that it cannot be invoked for a partial closing (i.e., downsizing part of the workforce). There are no other provisions in the Manpower Law that allow for downsizing a part of the workforce for reasons of efficiency, leaving employers with no legal basis for the practice. Employers are well advised to include a provision permitting downsizing a part of the workforce for reasons of efficiency

Company: Soewito Suhardiman Eddymurthy Kardono (SSEK) Name: Richard Emmerson Email: richardemmerson@ssek.com Web: www.ssek.com Address: Mayapada Tower, 14th Floor, Jl. Jend. Sudirman Kav. 28, Jakarta, 12920, Indonesia Telephone: +62 21 304 16700

Redundancy According to Norwegian Law -----------------------------------------------------------------------Johan Hveding is a Partner at Grette. -----------------------------------------------------------------------Dismissals related to necessary downsizing must be objectively justifiable, cf. The Working Environment Act (aml.) § 15-7. Upon termination of minimum 10 employees within 30 days (“mass redundancy”), it follows Norwegian law that an employer “as soon as possible” initiates discussions with the employee representatives in order to avoid dismissals or reduce the number of dismissed employees. If the company has no employee representatives, they should be elected by the employees. The Labour and Welfare Administration (NAV) shall receive a written notice of the redundancy, and layoffs will only take effect 30 days after informing NAV. In the event of a review by a court of the dismissals objectivity, emphasis is placed on whether the employee representatives were involved. Therefore, discussion meetings should be held and the following issues should be dealt with; - -

The reason for redundancy. The selection circuit: which employees will compete for the continuing positions. Employers may limit the selection circuit to parts of the company, if there are reasonable grounds.

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- - - -

Selection criteria: objective criteria based on case law for the selection of the employees who may be made redundant (e.g. qualifications, seniority, sick leave). Quality ensuring proper application of the selection criteria: Verify that the employer possesses accurate information about the employees. Action plans for those affected, including severance pay or similar (severance pay is not required). Further progress schedule.

Purchase of consultancy services or contracted labour is not considered a “new-employment”. If the duties of the people of the workforce redundancies are continued in another company (“business transfers”), they may - following the circumstances - have legal right to continue their work in the other company.

The employer is obliged to consider whether other available work exists that may be suitable for employees that may be made redundant. If redundancies are not resolved by providing other suitable work or severance payments, those employees considered made redundant shall have individual consultation meetings. The employer must make a final weighing of interests before a decision of termination is made. Notice of termination is to be handed over in person or sent by registered mail. The notice period will start from the first day of the following month. Employees who are dismissed have preferential rights for “new-employments” up to 12 months from the expiry of the notice period, if they are qualified for the position.

Company: Grette Name: Johan Hveding Email: johv@grette.no Web: www.grette.no Address: Filipstad Brygge 2, P.O. Box 1397 Vika, N-0114 Oslo, Norway Telephone: +(47) 22 34 00 00

June 2013 /

SECTOR SPOTLIGHT:

The Importance of Anti-Corruption Due Diligence in Corporate Transactions

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

-----------------------------------------------------------------------Christopher E. Burkett is an Associate at Baker & McKenzie LLP. ------------------------------------------------------------------------

International corruption investigations by Canadian authorities are on the rise, and as the list of the RCMP’s International Anti-Corruption Unit’s case docket reaches 35, Canadian companies are becoming increasingly aware of the implications, both to reputation and bottom line, that can arise when they run afoul of Canada’s Corruption of Foreign Public Officials Act (CFPOA). The most recent CFPOA conviction involved Griffith’s Energy International Inc. (GEI), a private, Calgary-based, oil and gas company. Upon conviction in January 2013, GEI was fined CDN $10.35 million on a single count of bribery, and faced days of headline news arising from payment of US $2 million to the spouse of a Chadian government official in attempt to secure the rights to exploration in that country. The GEI case presents a range of important lessons for Canadian companies doing business abroad. First, blind reliance on the assurances of external counsel offers little protection if illicit corruption activities are uncovered. Corporations must recognize the need for competent

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legal service providers well-versed and knowledgeable in all applicable laws, in particular anti-bribery compliance. This is particularly so in high risk industries such as oil and gas exploration. Second, while GEI self-reported and appears to have been fully cooperative with authorities, the company was still charged criminally. Presently, there is no deferred prosecution option available in Canada (as opposed to the U.S. and U.K.). That said, GEI’s voluntary disclosure was considered by the sentencing judge as a factor in GEI’s favour in his determination of the appropriate fine. Lastly, it is critical for external counsel to thoroughly identify, investigate, and resolve any red flags that may arise out of third-party consulting agreements before proceeding with these types of transactions. Canadian companies that operate globally must ensure that five essential elements of compliance are in place: the program is founded upon strong leadership, a proper risk assessment is completed, standards and controls are developed and implemented, training and communication protocols are rolled-out, and the program is properly monitored, audited, and updated as necessary.

With compliance investigations in Canada in the headlines, the case of GEI is evidence that corporate clients require sound and competent legal advice, and comprehensive internal compliance policies to reduce the chances of corrupt practices taking place. Co-Authors – Ken Jull and Matt Saunders.

Company: Baker & McKenzie LLP Name: Christopher E. Burkett Email: christopher.burkett@bakermckenzie.com Web: www.bakermckenzie.com Address: Brookfield Place, Suite 2100, 181 Bay Street, P.O. Box 874, Toronto, Ontario, Canada M5J 2T3 Telephone: +1 (416) 865-2305

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SECTOR SPOTLIGHT:

The Importance of Anti-Corruption Due Diligence in Corporate Transactions -----------------------------------------------------------------------Gönenç Gürkaynak, LLM, Esq. is a Partner and Ç. Olgu Kama, LLM is a senior Associate at ELİG, Attorneys-at-Law. ------------------------------------------------------------------------

The recent proliferation of international covenants and national legislation with extraterritorial reach on combatting corruption and bribery created a global legal regime of anti-corruption. In addition to U.S. Foreign Corrupt Practices Act (FCPA) enacted on 1977, whose enforcement required the creation of such a global infrastructure, recently enacted legislation like the UK Bribery Act and the amendment of The Russian Federal Law No. 273 on Combating Corruption constitute the significant pieces of this global puzzle. Turkey started to play its part in the international arena of anti-corruption at the end of 90s, concentrating, at first, on the signature and ratification of the international covenants (most notably the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions), and later on efforts to reform its anti-corruption -----------------------------------------------------------------------Anita C. Esslinger is a Partner at Bryan Cave. ------------------------------------------------------------------------

Bryan Cave, an international law firm, regularly represents multinational organisations that seek to acquire companies with operations worldwide. These are often in developing countries that present a higher risk of corruption, although recent cases have shown that even targets in more developed and apparently lower risk jurisdictions can present corruption issues. Anti-corruption laws have proliferated – all the OECD member countries have implemented laws prohibiting the bribery of foreign officials. The UK’s Bribery Act 2010 is particularly broad, prohibiting both public and private bribery. It has also introduced a strict liability offence even for non-UK companies that “do business” in the UK if they fail to prevent bribery by persons that perform services for them anywhere in the world – unless such companies have adequate procedures in place aimed at preventing such bribery. Enforcement of these laws has increased everywhere (with the United States as a leading enforcer, including of non-US companies). In addition to serious criminal -----------------------------------------------------------------------Jon Rydberg is CEO of Orchid Advisors. He talks to AI Magazine about anti-corruption due diligence and the vital role it plays in corporate transactions. -----------------------------------------------------------------------Jon Rydberg is an experienced Chief Compliance Officer, Chief Audit Executive and Business Consulting partner having served multiple small to large cap organizations. Previously, he served as Chief Compliance Officer and Vice President, Internal Audit for a major firearms manufacturer and worked for other global organizations including, but not limited to United Technologies Corporation, Ernst & Young LLP, and Protiviti Consulting. “Orchid Advisors was founded by a career audit, compliance and consulting executive who spent many years serving international organizations in Big-4 public accounting,” explains Jon, regarding how the firm can help those looking to embark in corporate transactions. “Our methodology is based on the same exact principles but we are sized appropriately to offer greater flexibility and focus on client matters.” Jon has a wealth of experience in the industry, having consulted on matters related to Anti-Corruption, including but not limited to the Foreign Corrupt Practices Act (FCPA), the UK Bribery Act and corporate Ethics. He has played a critical role in a US DOJ and SEC FCPA investigation and

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legislation. Most significant amendments made to the domestic legislation include, the amendments made (i) to the Law No. 5326 on Misdemeanors on 2009 and (ii) to the Turkish Criminal Code on 2012 which increase corporate liability for crimes related to corruption. In an environment, where the national laws of individual states are being enforced extraterritorially and the sanctions to be imposed on breaching actions have the potential to constitute severe impact on activities of multi-national corporations, the anticorruption due diligence becomes increasingly vital for the survival of businesses. We, as ELİG, Attorneys-at-Law, have a significant amount of experience in connection with Turkish corporate compliance issues under the OECD, FCPA, the UK Bribery Act, and under the mandatory provisions of Turkish law on anti-corruption and has collaborated with numerous internal investigations, and, provided over 90 FCPA trainings and helped clients adopt and implement policies/guidelines of detecting and ensuring full corporate compliance in Turkey.

and civil penalties, violation of such laws can result in debarment from bidding for or performing public contracts. Investigative journalism emphasises the serious reputational consequences that can result from violations and allegations of violations of corruption laws. Violations of these laws can have a serious impact on the ability of a company to do business and on the value of the business to be acquired. Problems in these areas can be deal breakers. Those in charge of deals in a company are often not sensitive to the risks or the complexity of these laws. Because of the serious consequences and the increasing focus on this area, Bryan Cave includes detailed anti-corruption questions in preliminary due diligence questionnaires, including with respect to how goods and services may be marketed through third parties, and involves our specialist lawyers in assessing anti-corruption risks in acquisition transactions. Interest in anti-corruption issues is not going away and this will be an issue for some time to come. It is important to obtain proper advice and to conduct adequate due diligence in any acquisition.

Company: ELİG, Attorneys-at-Law Web: www.elig.com Address: Çitlenbik Sokak No:12, Yıldız Mahallesi, Beşiktaş, 34349 Istanbul, Turkey Telephone: +90 212 327 17 24 Name: Gönenç Gürkaynak Email: gonenc.gurkaynak@elig.com Name: Ç. Olgu Kama, Senior Associate Email: olgu.kama@elig.com

Anita Esslinger is a partner in the London office of the international law firm Bryan Cave LLP and is co-leader of the firm’s global Anti-Bribery/Corruption Team (www.bryancave.com/gact). Bryan Cave has offices in the United States, the United Kingdom, Europe and Asia.

Company: Bryan Cave Name: Anita C. Esslinger Email: anita.esslinger@bryancave.com Web: www.bryancave.com Address: 88 Wood Street, London EC2V 7AJ Telephone: +44 (0) 20 3207 1100

has implemented corporate anti-corruption programs from the group up. Jon holds a Secret Clearance and is also a MBA, CMA, CIA, PMP and CPIM.

compliance assessment, an organizational paradigm shift, or sustainable and compliant business operations enabled by best-in-class technology, then Orchid Advisers can help.”

Jon explains how vital thorough anti-corruption due diligence in corporate transactions is, and what impact inadequate due diligence can have.

On a final note, Jon adds a few words of wisdom: “You don’t know what you don’t know. Your organization may be “ethical” by culture, but, do you have a tangible compliance program whose components can be defined and called upon if charged by the government?”

“Understanding the compliance and ethics culture of the organization is critical, regardless of the regulatory environment,” he states. “Processes and systems are easy to change, culture takes years and can be very difficult. “It becomes even more importance once you add the regulatory component. Non-compliance can lead to fines and penalties from the UK Serious Fraud Office, the US Department of Justice and the Securities and Exchange Commission, depending on your circumstances. Over the last 5 years companies have been subject to over $1B in fines related to Anti-Corruption. That is a financial liability you have to factor in to your purchase price.” As operational experts focused on proactive solutions, Jon believes that Orchid has the competitive edge in its field. “We connect the dots between Legal, Operations and Regulators. If clients seek a full anti-corruption

Company: Orchid Advisors Name: Jon Rydberg Email: jrydberg@ochidadvisors.com Web: www.orchidadvisors.com Address: 100 Pearl Street, 14th Floor, Hartford, CT, 06103 Telephone: 855-ORCHID-0

June 2013 /

SECTOR SPOTLIGHT:

The Importance of Anti-Corruption Due Diligence in Corporate Transactions

-----------------------------------------------------------------------Sheikh Tariq Abdullah is Former president of the Supreme Court Bar and former Chairman of the Lawyers Association. He now practises law in the Law Offices of Sheikh Tariq Abdullah. -----------------------------------------------------------------------Sheikh Tariq Abdullah provides a brief history of the firm: “The family firm was established by Sheikh Mohammed Abdullah in Aden in 1927 and is continued by sons Tariq and Farooq and by the grand children Khalid and Reem. All of whom studied law in England. “At present the Law offices of Sheikh Tariq Abdullah in Aden work in close association with Khalid Abdullah of Sheikh Mohammad Abdullah Sons in Sanaa.” Tariq believes that the firm has the competitive edge due to it being able to provide full legal services to the international community in ever field of law in Yemen. “Yemen is a country where corruption is prevalent to such a degree that it affects almost every business and profession,” explains Tariq. “It is a system, a way of life. It is difficult to envisage as to how corporates get things done without

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indulging in it one way or other. To campaign against it is just like shouting in the wilderness. Bribery and corruption are among the main factors that are hindering economic and social development in the country.”

regulations, are introduced for the first time to implement the existing legislation effectively. “Fighting against corruption and efforts to curb bribery is an uphill task.”

In a country such as Yemen, thorough anti-corruption due diligence in corporate transactions is of utmost importance. “It is the common poor man and the middle class who are primarily suffering from corruption within and by the companies,” comments Tariq. “An individual loses his incentive to work honestly and hard. Anti-corruption due diligence in corporate transactions helps in lessening the sufferings of the common man. “Inadequate due diligence renders the transaction costlier in turn making the cost of the retail goods higher for the purchaser.” Tariq has predictions for the remainder of 2013 relating to anti-corruption and anti-bribery issues. “The present regulation is good, but the problem that we are facing is poor implementation,” he explains. “It is likely that in the next 12 months subsidiary legislation i.e implementing

Company: Law offices of Sheikh Tariq Abdullah Name: Sheikh Tariq Abdullah Email: relevantaden@btinternet.com; Tariq2@btinternet.com Web: www.yemenlaw-relevant.com Address: Sabeel Street, Crater, ADEN, Yemen Telephone: + 967 2 259 062

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SECTOR SPOTLIGHT:

Cygnet Cloud, Control Your Greatest Needs Efficiently Today!

CYGNET CLOUD Control Your Greatest Needs Efficiently Today!

Cygnet Cloud, our front line product, is a Cloud enabled document/file management system. In short it is browser based and allows for seamless 24/7 access, management and control of ALL documents/files whether the documents originate from a hard or soft copy source. The structured nature of the File Plan, based on 20 years industry experience, coupled to the strong indexing rules and its user friendly interface provide unmatched efficiency gains to an organisation.

to maintain an organisation wide profile because users are unable or unwilling to source the most recent set of company defined templates. Every document template is accessible within than 2/3 clicks. Document versioning capabilities, including easy rollback, ensure that all users have access to the most recent document. Powerful reporting tools which can be used to view user activity and document history. Work Flow tools to ensure that project documentation flows freely throughout the organisation regardless of time zone or personnel availability. Full text search on all documents stored in Cygnet ECM

Offers short time Return On Investment – While off-the-shelf solutions are typically quick to implement and relatively low risk, they can can be inflexible to change compared with programmable, custom solutions. Cygnet Cloud combines the best of both worlds; by incorporating extensive configuration capabilities into a solutions that is essentially off-the-shelf, Cygnet Cloud customers realise immense value in a very short time scale.

2. Integrate Cygnet Cloud enabled Email Management System (EMS) with the DMS to provide up to 6 hours efficiency gain per user per week. This ensures that front line users have in one source all the necessary information to deal with their daily tasks. This includes: • Capture of all incoming and outgoing emails automatically from all sources including mobile devices. • Contact management. This can either be used as the front line CRM tool or can support an organisations primary CRM program. You can even integrate VoIP systems.

This means that only the resources needed are used and paid for, and when those resources are reaching a maximum, they can be expanded to specification with the push of a button. Rather than having to purchase cost ineffective in-house machinery, which is outdated after the first six months. The efficiency gains are that there is no down-time on your Cloud, it is backed up on a back up which it switches to would anything happen to the original Cloud server, thus keeping your documents and data available at all times.

•

• •

In addition to the efficiency gains from operations, Cygnet Cloud also provides very effective and secure off-site backup and disaster recovery support. The backup schedule is defined in consultation with the customer and their wishes. In general terms Cygnet usually tackles implementation on a modular basis. This approach, based on experience, prevents “change overload” and project abandonment. We generally tackle items in the following chunks, some of these are worked on in parallel; 1. Online Document Management System (DMS) with clear defined FilePlan and Indexing rules. These rules are built from 20 years industry experience and supplemented with the organisations own unique input. Which includes: • Front end invoice processing module which incorporates scanning an invoice and following to automatic accounts processing and authorisation work flow. • Front end scanning tools which can be combined with third party accounting programs to enable automatic indexing and processing of invoices and bank statements. Imagine no more manual input of invoices to accounting programs and at the same time have these invoices filed and indexed correctly so that they are accessible by all. • Front end scanning tools which will allow for the automatic indexing of common documents such as signed POA’s, Articles of Association, Trade register documents, Share certificates, tax assessments and more standardised documents whether these are scanned or arrive by email. • Document creation tools based on the organisations own set of standard documents. No more struggling

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•

3. A fully functional calendar that will not only provides for multiple agendas but will allow for the scheduling of specific tasks for work-groups to ensure that essential requirements of the corporate management industry are met. Real benefits from Cygnet Cloud services: Failsafe security & Business continuity – Data and document security is paramount. Cygnet tightly controls internal and external user access to ensure total privacy and integrity. Cygnet does this by using the latest developed Security Sockets Layer (SSL) which is used by secure Internet banking systems to fully encrypt all data communications during transmissions. Cygnet Cloud supports disaster recovery planning and strengthens an organisations IT resilience, thereby safeguarding mission critical document, records and emails.

Efficiency and scalability are two of the reasons that Cloud computing is becoming a fundamental component in the supply chain of many organizations. (Source: KPMG – Tax in the cloud.)

Besides all of the listed features of what Cygnet Cloud can do for an organisation and the real time benefits that are a direct result of implementation, Cygnet Cloud is a Software as a Service (SaaS) and therefore will be able to provide support and assistance at any time. For any additional information please contact us.

Company: Cygnet Technology Name: Glen Schley, Director Email: info@cygnet-ecm.com Web: www.cygnet-ecm.com Telephone: +31 10 286 19 22

June 2013 /

SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist

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

OTHER EXPERTS IN THIS AREA

WoodRock & Co. Company: México Global Alliance Name: Miguel Cantu Perez Email: miguel.cantu@mxga.mx Web: www.mxga.mx Address: Av. Roble N° 300 Suite L 608, Col. Valle del Campestre, San Pedro Garza Garcia, N.L., C.P.66220, México Telephone: +52 (81) 8100 9818

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Company: WoodRock & Co. Name: John P. Dennis, III, Managing Partner Email: Jdennis@woodrock.com Web: www.woodrock.com Address: 4265 San Felipe, Suite 600, Houston, Texas 77027, USA Telephone: +1 832 615 8250

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SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist -----------------------------------------------------------------------Calvin Hughes is Founder, CEO and Managing Director of Paladin CMS Advisors. -----------------------------------------------------------------------Founded in 1990, Paladin CMS (“Capital Markets Strategy”) is a corporate financial advisory and management consulting firm located in western Canada and serving a very wide spectrum of industry sectors. Paladin CMS offers full M&A advisory expertise, global marketing presence, and management consulting services, including: business valuations, management buyouts, ESOP’s, strategic planning, proformas and financial modeling and governance support. Founder, CEO and Managing Director, Mr Calvin Hughes, is an accredited member of the Alliance of Merger and Acquisitions Advisors, a global network of intermediaries and thought leaders working in the lower-middle market around the world. Mr Hughes explains more about the Canadian market: “Canada is well known as a safe place for business investment due to its strong economy, skilled and educated labour force, and proximity to the United States, legal, financial and regulatory framework,” he states. “Western Canada, in particular, is globally renowned for its natural resource riches and growing economy, most notably, its energy industry with the Canadian Oil Sands, ranking number 3 in world for proven oil reserves.” -----------------------------------------------------------------------Jean-Pierre Blumberg is the Co-Head of Global M&A at Linklaters. ------------------------------------------------------------------------

The top foreign acquirers in Canada are China 39%, USA 20% and Switzerland 12% (by transaction volume in 2012). “Driven by a quest for secure natural resources, China’s national oil companies have lead the way for continued investment by China’s private investors, who are expected to follow in their footsteps seeking opportunity in energy service businesses, amongst others,” continues Mr Hughes. “Investment by non-state owned Chinese companies saw an enormous leap in 2012. Foreign acquisitions of Canadian companies under CDN$344 million do not require Canadian government scrutiny and required regulatory approvals. This opens the lower-middle market by easing transaction costs and lowering risk for qualified foreign acquirers.” Apart from the focus on energy-related investments, more Chinese private investors are looking to expand and diversify their investments and Mr Hughes believes that ideal Canadian acquisition targets are those companies with established domestic and foreign markets, including China, USA, and other major world markets. “Evidence of these trends are shown by Paladin’s present sell-side clients with mandates to market their businesses in China, Asia, USA and Europe,” he says. “With the push by the Chinese government for increased outward investment and inward trade, there exist a growing number of small and medium enterprises looking to the international market for opportunity. This sector is less experienced in global markets and is looking to trusted intermediaries to reduce risk.”

For the last 25 years the firm has been involved in

most of the landmark transactions and litigations that shaped the Belgian economy. These transactions include one of the first hostile take-over bids in Europe (De Benedetti on the Société Générale de Belgique in 1987), the consolidation of the sugar industry (Südzucker – Raffinerie Tirlemontoise) the shipping industry (Exmar-CMB), the beer industry (from Interbrew to ABInbev), the financial sector (the formation of Fortis, ING and KBC), the energy sector (the formation of the Suez group in Belgium) as well as landmark IPO’s (Interbrew / Agfa-Gevaert / Belgacom / Umicore) and privatisations (ASLKCGER / the Belgian Post). After the financial crisis the firm has been engaged in all major bank restructuring and recapitalisation transactions (Fortis / Dexia / KBC). More recent transactions include the public to private transaction of Omega Pharma, the sale of Gryson to Japan Tabacco and the acquisition of Spano by Unilin. The firm is currently engaged as issuers counsel for the IPO of bPost (the Belgian Post) which is the first IPO on the Belgian Stock Exchange since nearly four years.

-----------------------------------------------------------------------Ian Morton is a Partner at HM Clipper Capital, a private equity firm headquartered in California. ------------------------------------------------------------------------

Mr. Morton goes on to explain how the firm has witnessed an increase in the demand for its services in relation to crossborder M&A.

Linklaters in Belgium (with offices in Antwerp and Brussels) comprises 25 Partners, 10 Counsels, 2 Of Counsels and about 100 Associates, with a support staff of more than 130, including practice support lawyers, information officers and paralegals. The firm’s lawyers are members of the Brussels or Antwerp Bars. Most lawyers in the firm have combined their Belgian education with postgraduate studies in the US, in the UK or at other foreign universities. English is the internal working language of the firm. Linklaters is an established law firm in Belgium since more than forty years (previously known as De Bandt van Hecke Lagae) and is recognised as one of the leading law firms in the market.

HM Clipper Capital is a global private equity firm based in California with additional offices in China and Taiwan. The firm’s Asian offices are staffed with full-time industry operating professionals who help HM Clipper’s U.S. portfolio companies build and leverage wholly owned sourcing, engineering, manufacturing, sales and distribution capabilities throughout Asia and around the world where appropriate. Partner Ian Morton comments on what gives HM Clipper an edge over local and global competitors. “HM Clipper’s onthe-ground Asia-based operating professionals, and the firm’s extensive experience over the past 20 years helping middle market companies globalize their operations, both serve as important competitive advantages.” “Middle market companies that effectively establish Asiabased operations can typically both accelerate revenue growth by accessing fast growing local markets as well as lower global operating costs by leveraging certain comparative advantages offered by wholly owned engineering, manufacturing and sourcing capabilities.”

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“Many large Fortune 1000 companies have spent significant resources over the past number of years globalizing their businesses, particularly in Asia. These companies are now demanding that many of their specialized U.S. suppliers and partners globalize their operational footprints as well. The impetus to globalize for middle market companies is not only a competitive cost issue, but also driven by significant revenue growth opportunities in international markets for companies that provide high quality, complex products with timely delivery, rapid customization, and real-time local interaction.” Middle market companies in particular face many challenges when trying to successfully execute an Asia-focused globalization strategy, including the lack of global resources, local relationship networks and relevant international business experience. However, HM Clipper believes that its ability to perform detailed cross-border industry, company and operational analysis and take a hands-on role in helping its portfolio companies build their own operations in Asia are important differentiators of the firm’s global strategy. Mr. Morton predicts that ongoing developments in China’s economy will affect future cross-border activities in Asia.

With regards to the future, Paladin expects to see more joint ventures and innovative deal structures as awareness and trade expands and resources continue to attract foreign Canadian investment. “Canada has many strong points and there is a wealth of opportunity for foreign investors in western Canada by acquiring platform investments and assembling lower middle market add-ons (typically TEV’s - $5mm to $100mm). Outstanding results are likely for foreign investors willing to learn about the western Canadian marketplace.”

Company: Paladin CMS Advisors Name: Calvin Hughes Email: chughes@paladincms.com Web: www.paladincms.com Address: Ste. 500, 5940 Macleod Trail SW, Calgary AB Canada T2H 2G4 Telephone: +1 403 258 2481

Company: Linklaters LLP Name: Jean-Pierre Blumberg Email: jean-pierre.blumberg@linklaters.com Web: www.linklaters.com Address: Brussels: Rue Brederode 13, 1000 Brussels, Belgium Telephone: (32-2) 501 94 11 Fax: (32-2) 501 94 94 Address: Antwerp: Graanmarkt 2, 2000 Antwerp, Belgium Telephone: (32-3) 203 62 62 Fax: (32-3) 203 62 34

“We believe that the emergence of a sizeable and more affluent middle class in China, as well as the increasing importance of domestic consumption in the overall economy, will be an important theme in 2013 and beyond. As China’s affluent consumer class expands, there will be opportunities for well positioned companies to supply higher quality goods and services to more sophisticated local customers.”

Company: HM Clipper Capital Name: Ian Morton Email: contact@hmclipper.com Web: www.hmclipper.com Address: 1000 Marina Boulevard, Suite 105 Brisbane, CA 94005 Telephone: +1 650 827 5431

June 2013 /

SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist -----------------------------------------------------------------------Srinath (Sri) Geedipalli is a Director at Simanor LLC, headquartered in New York City. -----------------------------------------------------------------------Simanor is a business advisory firm serving clients in India and the US. Simanor professionals have a rich background and deep expertise in M&A, strategy, finance and operations in both countries across diverse industries. Apart from understanding the strategic and operational challenges at the local level, Mr Geedipalli believes that a cross-border specialist should appreciate the macro factors necessitating companies to move across national borders. “The specialist has to masterfully navigate the transactional, legal and regulatory aspects to successfully execute the deal for the clients,” he opined. Discussing demand for Simanor’s services in relation to cross-border M&A, Mr Geedipalli noted that the firm works with companies based in both the US and India, both of which are currently in different stages of the economic recovery cycle. “Although the level of M&A activity is still below par, we certainly see renewed interest from clients that went dormant at the onset of the global financial crisis,” he commented. Mr Geedipalli classifies the main challenges faced in crossborder deals into pre-deal and post-deal. Some of the former include creating a convincing thesis for combining with a foreign entity, disparities in currency, accounting, culture, -----------------------------------------------------------------------Mario Zepponi is a Principal of Zepponi & Company, the largest U.S. based mergers and acquisitions advisory firm dedicated exclusively to the global wine industry. -----------------------------------------------------------------------Zepponi & Company provides strategic counsel to the wine industry by identifying and anticipating trends in valuation, transaction structure, wine sourcing and the broader marketplace environment. For Mr Zepponi, a cross-border M&A specialist must possess the ability to grasp the global wine market, properly evaluate where the best opportunities lie, and have extensive expertise in the industry. Furthermore, a specialist must be able to identify the needs of a prospective buyer based upon their existing production, sales and distribution infrastructure. “There are many layers to the wine industry,” said Mr Zepponi. “A deep knowledge of these layers is the difference between identifying an investment that will be immediately profitable or one that is a longer-term project. Whether it is a lifestyle investment or a tactical move to secure distribution in the United States for a foreign brand, an investor must be well-informed prior to making their investment decision.” Zepponi & Company has received numerous inquiries from foreign investors who are interested in the United States market. Mr Zepponi noted that, in 2011, the United States surpassed France as the top country in total wine consumption. However, the United States ranked very low when wine consumption was measured on a per capita basis.

legal and regulatory hurdles etc. Post-deal challenges often relate to integration issues around management vision, culture, technologies etc.

“Additionally the deal participants and their counsel are now able to effectively and efficiently communicate using the latest advances in digital technologies.”

To mitigate the risks associate with entering new markets, Mr Geedipalli stated that companies should calibrate the risk/reward quotient at the outset before embarking on a cross-border deal.

Looking ahead, Mr Geedipalli believes that M&A is finally recovering and “gradually inching towards normalcy”.

“Notwithstanding the market potential, they should be acutely aware of the aforementioned challenges,” he advised. “While risk dampens the enthusiasm of many CEOs, having the right combination of internal and external advisors along the way could increase the chances of deal success.” Mr Geedipalli observed that deals in the US-India corridor have traditionally been in the services, technology, pharmaceutical and light manufacturing industries. While these sectors continue to attract interest, the firm has recently seen robust activity in the consumer goods, food & agriculture, media, financial services and commodity sectors. Commenting on the impact of technological improvements on cross-border deals, Mr Geedipalli stated that they have helped lower the barriers of time zones, language, culture and business practices. “The emergence of global deal-sharing platforms and professional networks has vastly increased the ability to find potential suitors across borders,” he explained. “Thus, foreign investors view the U.S. market as the global “low water” mark in terms of wine consumption and market growth opportunities,” he added. Mr Zepponi observed that international investors looking for opportunity in California tend to view Napa as the prime choice. However, inconsistencies between what these investors want and what they can realistically obtain becomes a challenge. “These investors sometimes end up finding a better opportunity elsewhere due to valuation or strategic fit considerations,” he explained. “Access to the market is the overriding factor which drives international winery investment decisions, therefore, items such as sales and marketing infrastructure and management expertise are critical considerations in a potential transaction.” Further challenges exist for companies entering new markets, and Mr Zepponi stated that a lack of understanding of the wine industry and its three-tiered channels for distribution present enormous risks for unwary foreign investors. “A foreign investor can mitigate these risks by selecting a knowledgeable financial advisor, in addition to specialised wine sourcing and sales and marketing consultants,” he advised. Mr Zepponi explained that, overall, the undercurrent of good news in 2012 was the continued surge in wine consumption -----------------------------------------------------------------------Richard Green is the Co-Director of the Eastern Division of Coldwell Banker Commercial M&A, located in Naples, Florida. The firm has a Western Division located in Salt Lake City, Utah, and is the largest Commercial Real Estate Company in the World. ------------------------------------------------------------------------

“Encouragingly, more buyers and sellers are now finding partners across borders and hence cross-border will account for a bigger proportion of deals done compared to only a few years ago,” he concluded.

Company: Simanor LLC Name: Srinath Geedipalli Email: sgeedipalli@simanor.com Web: www.simanor.com Address: 1501 Broadway, 12th Floor, New York, NY 10036, USA Telephone: +1 646 340 2040

in the U.S., despite the weaker consumption trends when the U.S. market is evaluated on a per capita basis. “The implications of this positive trend are helping to establish additional investment activity in the United States. We foresee a measured increase in transaction activity by publicly-traded companies, with more aggressive activity coming from the domestic and foreign private wine sectors. Also, wine sourcing has become a more common international topic and with it will come greater transaction activity for vineyard acquisitions,” he concluded.

Company: Zepponi & Company Name: Mario Zepponi Email: mario@zepponi.com Web: www.zepponi.com Address: 200 Fourth Street, Suite 300, Santa Rosa, CA 95401 Telephone: + 1 707-542-7500

expressing the most interest in the Florida Market. However, this has now shifted to Middle Eastern countries and India. Looking ahead, Mr Green anticipates cross-border M&A will continue to grow in 2013.

Mr Green’s background is from the corporate world, with 40 years as a SVP of Corporate Development where he acquired over 40 companies in four years. Mr Green stated that Coldwell Banker Commercial’s key advantage is its familiarity with the Florida market. The firm has recently witnessed an increase in the demand for its services in relation to cross-border M&A. According to Mr Green, the main challenge faced in cross-border deals is getting clear communications. He recommends that companies entering new markets utilise the services of experienced M&A professionals to mitigate the associated risks. Discussing investment levels, Mr Green stated that England and Germany were previously the countries

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Company: Coldwell Banker Commercial M&A Name: Richard Green Email: rgreen@cbcworldwide.com Web: www.cbc-ma.com Address: 4851 Tamiami Trail North Ste 100 Naples, Florida 34102 Telephone: +1 239-216-4905; cell: +1 239 272 6515

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Ship Registration

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

-----------------------------------------------------------------------Michelle Otero Valdes is a Partner of CHALOS & CO PC, an international law firm with offices in New York, Houston, Miami, Athens and Cyprus. ------------------------------------------------------------------------

Ms. Valdés is Board Certified by the Florida Bar in Admiralty and Maritime Law and is currently the Chair of the Admiralty and Maritime Law Board Certification Committee for The Florida Bar, which qualifies Ms. Valdés as an expert in admiralty and maritime law issues. Ms. Valdes explains the two main benefits of U.S. documentation and the responsibilities of the flag state. “It admits vessels into certain restricted trades, such as coastwise trade and the fisheries; and also allows owners to take advantage of various US government financing programs.” “The US Coast Guard is authorized by laws and directives to: • test individuals as to their qualifications to perform specific functions and to issue licenses and certificates attesting to their competency • issue documents to unlicensed personnel employed aboard certain vessels of the U.S. • regulate the manning of vessels, including setting requirements for the number of individuals required and the qualifications and conditions of employment via Certificates of Inspection

68 / June 2013

• maintain all records of all shipping articles with the vessel’s crew detailing wage rates, conditions of employment, and other particulars related to foreign voyages.” In this jurisdiction there are certain manning guidelines which must be adhered to, as Ms. Valdes further explains: “When a vessel is registered to operate under the U.S. flag, all officers and seventyfive (75) percent of the crew must be US Citizens. Only a U.S. Citizen may serve as master, chief engineer, radio officer, or officer in charge of a deck watch or engineering watch on a documented vessel.” “Each unlicensed seaman must be: (i) a citizen of the United States; (ii) an alien lawfully admitted to the United States for permanent residence; or (iii) a foreign national who is enrolled in the United States Merchant Marine Academy. However, not more than 25 percent of the total number of unlicensed seamen on the vessel may be aliens lawfully admitted to the United States for permanent residence.” With regards to inspection regulations the U.S. is a federal republic comprising of fifty states and a federal district, state regulation relative to inspection and regulation of vessel in the interest of safety has been permitted, to the extent that national uniformity is not required and there is no direct conflict with federal regulations already in effect. However there are key procedures and requirements for owners.

“When a vessel seeks to operate under the U.S. Flag a ‘Certificate of Documentation’ is required,” Ms. Valdes states. “The basic requirements for documentation are to demonstrate ownership of the vessel, U.S. citizenship and eligibility for the endorsement sought.” “If the vessel is new and has never been documented, ownership may be established by submission of a form which names the applicant for documentation as the person for whom the vessel was built or to whom the vessel was first transferred. If the vessel was previously owned, the applicant must present a bill of sale, or other evidence showing transfer of the vessel from the person who last documented, titled or registered the vessel, or to whom the vessel was transferred on a Builder’s Certificate or Manufacturer’s Certificate of Origin.”

Company: CHALOS & CO, P.C. Name: Michelle Otero Valdés Email: mov@chaloslaw.com Web: www.chaloslaw.com Address: 141 Almeria Avenue, Coral Gables, Florida 33134 Telephone: 305 377 3700

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Ship Registration

-----------------------------------------------------------------------Andreas Andreou is Insurance and Marketing Deputy Director at Columbia Shipmanagement Ltd, based in Cyprus. ------------------------------------------------------------------------

Mr Andreou explains more about the firm: “Mr Heinrich Schoeller set up the first ship management company in Cyprus in 1972 and founded COLUMBIA SHIPMANAGEMENT LTD in 1978. “Cyprus is a prime location for Shipmanagement due its geographical location, its comprehensive legal framework, favourable double tax treaties regime, advanced communication system and infrastructure in general, and highly educated work force. “This has facilitated Columbia’s growth into one of the world’s largest independent ship managers with three hundred staff in Cyprus and more than 13,000 employees worldwide. “Today, in conjunction with associated and affiliated offices worldwide, the company provides ship-owners with a comprehensive range of services in shipping including ship management, ship operations, chartering, newbuilding supervision, sales and purchase and other associated consultancy services.” Mr Andreou believes the firm has the edge over the competition, and comments: “Despite our size we can offer a very personal service to ship-owners, which reflects their particular needs through a costeffective, first class professional and robust system.”

“Since its founding, Columbia has been a forerunner in the promotion of quality assurance in shipping. Columbia was a founder of ISMA, now InterManager, and was an active promoter of the ISMA code, which later formed the basis for the ISM code. Quality of service has been at the core of corporate guidelines, along with safe environmentally friendly and economical management and operation of ships in full compliance with national and international legislation and industry standards and guidelines.” There are many benefits of ship registration under the local flag state, and Mr Andreou outlines just a few of them: • • • • • • •

European Union and European Monetary Union Member State One of the lowest Corporate Tax Ratse in the EU – 12.5% on profits Liberal Foreign Direct Investment Regime allowing up to 100% foreign participation Double Tax Treaties with 45 countries Bilateral Agreements of Cooperation in Merchant Shipping with 23 countries including major labour supplying countries Low Set Up and Operating Costs for companies and low ship registration costs VAT exemption for international transport services when the effective use and enjoyment of the services takes place outside the EU

“The responsibilities of the state flag are to exercise a regulatory and supervisory role over the owners and operators of ships to ensure they are properly and safely operated, in accordance with all legal

resolution and has acted as an expert in a number court and arbitration proceedings. His expertise covers general corporate/company law, banking law, finance, bankruptcy and restructuring, mining, investment, acquisitions, infrastructure projects/ project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance. LGS was founded in 1985 by Timbul Thomas Lubis, Dr Ganie and Arief Tarunakarya Surowidjojo. Since then, LGS has grown into the largest corporate transactions and corporate litigation firm in Indonesia. LGS has also obtained Lloyd’s Register Quality Assurance certifications of ISO 9001:2008 for Quality Management systems and ISO 14001:2004 for Environmental Management systems to ensure the quality of all aspects of the firm’s operations and services. -----------------------------------------------------------------------Mohamed Idwan Ganie is the Managing Partner of Lubis Ganie Surowidjojo (LGS). ------------------------------------------------------------------------

Managing Partner, Mohamed Idwan Ganie, graduated from the Faculty of Law of the University of Indonesia and holds a PhD in Law from the University of Hamburg. Dr Ganie is a Chairman of the Association of Indonesian Anti-Trust Lawyers, a member of the Regional Panel of the Singapore International Arbitration Centre (SIAC), and a fellow (FSIarb) of the Singapore Institute of Arbitrators. With more than 30 years of legal experience Dr Ganie specializes in commercial transactions and commercial litigation, including alternative dispute

ACQUISITION INTERNATIONAL

Dr Ganie explains what distinguishes LGS from local and global competitors in the firm’s areas of expertise. “One of our unique selling points is the combination of our long-standing commercial law practice and our premier litigation department that has extensive experience in dealing with commercial disputes in the context of arbitration and alternative dispute resolution as well as litigation in the Indonesian courts,” he states. “This allows our corporate transaction departments to benefit from such litigation experience, and from their own compliance work, to ensure that any transactions handled by the firm are carried out with a view to the potential for future disputes and any existing risks.”

requirements, and in a manner that promotes ships flying that flag but without imposing unnecessary bureaucratic or financial measures which may adversely discourage shipping,” he explains. “To offer sovereignty to the vessel, the ship-owner and the mortgagee banks and the professional environment that will allow the ships to trade without the obstacles that substandard flag states could create to those who use them.” Mr Andreou states that the financial crisis has not considerably affected the Cyprus registry. “Cost wise, Cyprus flag is considered as one of the most competitive registries.” “I believe that the remainder of 2013 will see stability in numbers of ships registered in Cyprus, with prospects of growth by the end of the year.”

Company: Columbia Shipmanagement Ltd Name: Capt. Dirk Fry, Managing Director Email: marketing@csmcy.com Web: www.columbia-shipmanagement.com Address: 21 Spyrou Kyprianou Ave., Yermasoyeia 4042, Limassol Telephone: +357 25 843100

Ship registration under the local flag has many benefits. “Pursuant to the new Shipping Law, passed in 2005 with the relevant aspects coming into force in 2011, vessels operating between Indonesian destinations have to register and operate under the Indonesian flag in accordance with the cabotage principle,” says Dr Ganie. “Certain exemptions exist for oil & gas vessels, while otherwise the cabotage principle has been widely applied, including to transshipment terminals.” Manning guidelines exist within LGS’ jurisdiction, and Dr Ganie embellishes upon them. “In addition to maritime regulations, a notable manning requirement, under the cabotage principle, is that vessels subject to the requirement to be registered under the Indonesian flag when operating between domestic destinations must also be manned by an Indonesian crew.”

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

June 2013 /

SECTOR SPOTLIGHT: Ship Registration

-----------------------------------------------------------------------This article is written by Lewis Moore a partner in Swinnerton Moore LLP a law firm specialising in maritime matters based in the City of London. The founding partners of the firm are Lewis Moore and Tony Swinnerton ------------------------------------------------------------------------

Lewis Moore Lewis Moore has been a practising solicitor since 1976 and specialises in ship sale and purchase, ship finance and all shipping related and contentious matters. He is an accredited CEDR mediator. Tony Swinnerton Tony Swinnerton has been a practising solicitor since 1973 specialising in arbitration and litigation of shipping, insurance and trade disputes. The firm is a boutique with detailed specialist knowledge. We are therefore able to provide advice on a personal basis at an economic cost. Registration under the UK Flag has a number of benefits:• ease of registration; • economic fees; • security for mortgagees; • the flag is on the Paris MOU and Tokyo MOU white lists resulting in reduced Port State Control Inspections; • There is 24/7 availability; Registration under the UK Flag is competitive. The principle fees are: Standard fee Basic fee for registration £124 Registering a mortgage £84 Transcript of registry £21 Transcript of closed registry £32 Deletion of vessel from register Free of charge -----------------------------------------------------------------------Dr Gordan Stanković is partner at Vukić& Partners, based in Croatia. ------------------------------------------------------------------------

Dr Stanković graduated from the University of Rijeka Faculty of Law (Croatia). He obtained LL.M. degrees in maritime law from the law faculties in Rijeka and Southampton (UK), as well as a Ph.D. degree from the Split Faculty of Law (Croatia). After a 10-year teaching career, in 1997 he joined Vukić& Partners of Rijeka, Croatia, as partner and head of Shipping and Admiralty Department. He has extensive experience in all sectors of maritime law, with a specific emphasis on shipbuilding, ship finance, ports and maritime demesne, admiralty and marine insurance. He has been involved in drafting of the recent version of the Croatian Maritime Code. He still teaches specialist courses in maritime law at the Rijeka Faculty of Maritime Studies (Croatia), as well as the law faculties in Split,Zagreb, andRijeka (Croatia). Dr Stankovic explains more about the Croatian ship registration. “Croatia does not run a flag-ofconvenience policy,” he explains. “In the commercial shipping sector (as opposed to the yachting sector), Croatian ship registers mainly harbour vessels beneficially owned by Croatian entities. Amongst the benefits of Croatian registration, perhaps the most notable one is the tonnage tax regime. The tax rate is determined by way of a sliding scale, and ranges from Kn 270,00 (EUR 36,00) per 100 NT for ships of under 1000 NT, to Kn 55,00 (EUR 7,40) per 100 NT for the tonnage above 40.000 NT. The tonnage tax status is conditional upon satisfying certain criteria, mainly concerned with safety, nationality, and manning. In addition to the tonnage tax, the Croatian Maritime Code exempts companies engaged in shipping from

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The documents required for registration are:Application to Register. Declaration of Eligibility (this document confirms that the intended owner is an individual or company domiciled within the EU or a British Overseas Territory). Builders Certificate (for new builds). Bill of Sale (for existing vessels). Copy of Certificate of Incorporation (if owner is a body corporate). Certificate of Survey for Tonnage & Measurement. International Tonnage Certificate. Deletion certificate/transcript from the current register or a written undertaking to provide one within six weeks. Copy of the ship’s current Continuous Synopsis Record. Once the documentation has been completed a “Carving and Marking” Note will be issued to confirm that the name has been clearly marked on the vessel. The Registration Certificate is then issued.

All ships must be surveyed before registration. There are no nationality restrictions except for officers on passenger ships carrying more than 300 passengers, ro-ro’s and product tankers. Wider economic problems do not appear to have affected the Registry. During early 2013 18 ships having a combined gross tonnage of 684,824 GT were registered. The Register is the 11th largest. The average age of the fleet at the end of 2012 was 19.3 years. The low cost of UK registration is attractive. Registry maintains high quality standards.

The UK Flag is ranked amongst the top 12 flags in the Flag State Performance Table.

The UK Flag State provides high levels of quality assurance. UK registered ships receive worldwide security threat level information and, where availability of assets and the nature of the threat permit protection, from the Royal Navy.

Swinnerton Moore LLP

Guidance is issued to assist owners take appropriate steps when sailing in high risk areas.

Company: Swinnerton Moore LLP Name: Lewis Moore Email: lewis@swinmoore.com Web: www.swinmoore.com Address: No OC330607, Registered Office, Cannongate House, 64 Cannon Street, London EC4N 6AE Telephone: +44 (0) 207 236 7111

Manning requirements are set out in the UK Merchant Shipping (Safe Manning, Hours of Work and Watchkeeping) Regulations 2002. The key procedures are completion of a simple set of application forms and registration of the original documents with the UK Registrar.

the duty to pay withholding tax in relation to various services connected with shipping, shipbuilding and ship finance.” The documents necessary for permanent registration of a vessel in Croatia are as follows: • Proof of ownership of the ship (Bill of Sale) • Documents proving satisfaction of the nationality requirements • Decision on the ship’s name and homeport, issued by the Ministry of Maritime Affairs • Technical Specification Certificate issued by approved organization, with the confirmation that the ship is technically eligible for registration in the Croatian Register • Call Sign Certificate • Documents proving other ship’s particulars • Deletion Certificate issued by a foreign registrar (where applicable) • Owner’s written statement assigning the responsibility for the management on the Company in the sense of the ISM Code

The

•

a ship owned by a foreign citizen residing outside Croatia or the EU, if the ship is managed or operated by a Croatian company, and provided that the owner approves the registration,

•

a ship owned by a foreign company seated outside Croatia or the EU, if the ship is managed or operated by a company seated in an EU country, and having a branch office in Croatia, and provided that the owner approves the registration,

The following yachts qualify for registration in the Croatian register of yachts: •

a yacht wholly or partially owned by a Croatian citizen or a legal entity seated in Croatia,

•

a yacht owned by a foreign citizen or a foreign company, if it spends most of the time in Croatia

The following ships qualify for registration in the Croatian register of ships: • a ship wholly or partially owned by a Croatian citizen or a legal entity seated in Croatia, •

•

a ship wholly or partially owned by an EU citizen or a legal entity seated in the EU, if the ship is managed or operated by a Croatian company, and provided the owners approves the registration, a ship wholly or partially owned by an EU citizen or a legal entity seated in the EU, provided that the ship is managed from a branch office in Croatia,

Company: Vukić & Partners Name: Dr Gordan Stanković Email: gordan.stankovic@vukic-lawfirm.hr Web: www.vukic-lawfirm.hr Address: Nikole Tesle 9, 51 000 Rijeka, Croatia Telephone: +385 51 211 600

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

A Step by Step Guide to Forming Companies

A STEP BY STEP GUIDE TO FORMING COMPANIES l As international boundaries have become less important, foreign investment flows in all directions; whether it’s on home soil or on the other side of the world, those with money to invest have a world of choice within which to capitalise on an investment. Importantly, in order to maximise the return on such opportunities, investors have to not only understand the market but understand how to trade in that environment once the initial investment has been made. This requires expertise in the initial formation process and beyond. Acquisition International speaks to leading experts to discuss the company formation process in a variety of locations.

OTHER EXPERTS IN THIS AREA

Company: Simbolon & Partners Name: Yudianta Medio Simbolon Email: yudi@simbolon-lawfirm.com Web: www.simbolon-lawfirm.com Address: Menara Bidakara I, 2nd Floor, Jl. Jend. Gatot Subroto Kav. 71-73, Jakarta Selatan 12870 - Indonesia Telephone: +62 21 83793027-28

Company: AME Consulting Group Name: Misael Flores Email: misael@ame.bz Web: www.ame.bz Address: 7 Craig Street, PO Box 322, Belize City, Belize Telephone: +501 223 4501

Company: Climate Shipping & Trading Limited Name: Ras Afful Davis Email: climshiptrd@yahoo.com Web: www.climshiptrd.com Address: Meridian Street, Main Habour Area, Tema, Ghana Business Address P.O. Box CO 3038 Tema, Ghana Telephone: +233 302941744

-----------------------------------------------------------------------Dr James Muscat Azzopardi is a Director and a founding shareholder in Credence Corporate and Advisory Services Limited, an advisory company and corporate services provider based in Malta. -----------------------------------------------------------------------Credence Corporate and Advisory Services Limited’s sister company, Credence Holdings Limited, is licensed by the Malta Financial Services Authority to provide trustee services. Apart from his role in Credence, Dr Azzopardi is also a partner in Muscat Azzopardi & Associates, a commercial law firm originally set up by his father Judge Godwin Muscat Azzopardi. According to Dr Azzopardi, setting up a company is a very straightforward process and can be competed in 24 hours. He explained that the usual due diligence documentation on the ultimate beneficial shareholders as well as the Directors of the company is required, and once the Memorandum and Articles are drawn up these are submitted to the Registry of Companies for incorporation, which usually takes one working day. “Malta offer an excellent and competitive financial services regime to companies, while being a full EU Member State and complying with all EU and OECD requirements,” said Dr Azzopardi. “Malta is not a tax haven yet offers significant

72 / June 2013

tax advantages to non-resident shareholders while being on all ‘white lists’ of fiscal regimes.” Malta’s financial services sector has grown considerably, especially since the country joined the European Union in 2004. Dr Azzopardi stated that Malta has a very stable economy and a robust banking system, which is increasingly working in the country’s favour in these uncertain times.

steadily rising through the first half of 2013, and the firm anticipates that this trend will continue for the foreseeable future. “Malta is benefiting from the general trend of moving onshore – certain clients are increasingly aware that offshore non-EU solutions may not work for all business and prefer the credibility of an onshore EU jurisdiction,” he concluded.

Dr Azzopardi stated that it is difficult to pin point the sectors seeing the most formations as companies are formed in Malta for most purposes. However, the firm is noting an increasing interest in the sectors of online gaming, online processing, asset management as well as structures that hold “luxury” assets such as yachts and planes. According to Dr Azzopardi, there are no significant challenges in terms of employing staff, gaining access to banking and legal facilities, paying taxes and trading internationally. “As long as one’s affairs are in order from a due diligence point of view anyone can obtain immediate access to banking and legal facilities, tax is very straightforward and Malta is an excellent base for international trade, due to our central geographic position, CET time zone and multilingual work force,” he commented. Credence has seen that the rate of company formations is

Company: Credence Corporate and Advisory Services Limited Name: Dr James Muscat Azzopardi Email: jamesma@credence.com.mt info@credence.com.mt Web: www.credence.com.mt Address: 35, Zachary Street, Valletta, Malta Telephone: 00356 21 252893 Mobile: 00356 9945 7373

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

A Step by Step Guide to Forming Companies

their European Headquarters. It’s not just large companies though as we have seen a lot of small IT contractors set up in Ireland so far in 2013. Back in the mid-2000’s we used to see a lot of construction companies being formed, however these are quite rare now since the property crash in Ireland!” Mr Lambe expects the strong trend for 2013 to continue and for the number of company formations in Ireland to surpass 2012 by at least 2%.

-----------------------------------------------------------------------Andrew Lambe is the Commercial Director of Company Bureau Formations Limited, located in Dublin, Ireland. -----------------------------------------------------------------------According to Mr Lambe, the company formations process in Ireland is very easy as if it is done through an experienced and licensed formation agent. “The main requirements include a minimum of two Directors – one of which should be an EU or EEA resident, otherwise the section 43 Revenue Bond is required,” he explained. “An Irish company must also have a registered office address in Ireland and also a Company Secretary. The other incidental requirements are included as part of our company formation service. The company can be registered in two-three working days from receipt of signed documentation.” Mr Lambe stated that the regulation in Ireland is very much pro-business and noted that the country was recently voted in a PWC/World Bank report as the easiest country in Europe in which to pay business taxes. He highlighted a wide range of incentives introduced by the Irish Government to encourage entrepreneurism and investment in Ireland.

“The measures include the introduction of a tax exemption for companies in their first three years of existence, excellent R&D tax credits, seed capital schemes and grants to exportlead companies to name a few,” he commented. “As well as our low corporate tax, Ireland offers an English speaking pro-business environment which is part of the Eurozone as well as one of the brightest and most educated workforces in the world.”

“Because of Ireland’s low corporate tax of 12.5% (effective rate is around 6%), there has definitely been an increase in companies setting up here and using Ireland as their corporate tax domicile since the global downturn,” he observed. “We have seen a lot of technology companies set up in Dublin in the last 12 months. Many are locating in the so called ‘Silicon Docks’ which is where Google and Facebook have

Boma noted that Nigeria is not left out in the global rise in cyber-crimes. “Liability for loss resulting from Internet fraud is governed by CBN guidelines and the contract between the parties which have proved insufficient in providing adequate protection to customers. Up to date legislation is required to better protect the banking public. Until then, Nigerian courts can be more proactive in providing comprehensive judicial precedent to govern such situations.” In order to solve these issues, Boma proposes: stiff enforcement of the CBN Cash-less economic policy; improved internet and mobile banking facilities; and clear definition of liability in the event of internet fraud.

Discussing access to banking facilities, Boma stated that the Nigerian economy is largely cash-based. There is a high cost of cash along the value chain – from the Central Bank of Nigeria and Commercial Banks to corporations and traders.

ACQUISITION INTERNATIONAL

“Should you or your client be considering Ireland as a low tax jurisidiction in which to register a new company, please don’t hesitate to get in touch. We offer a free initial consultation and will be pleased to e-mail you a free tax guide on doing business in Ireland,” he concluded.

New formations in Ireland are up around 3% so far in 2013. Mr Lambe noted that a recession tends to force the vast majority of companies to trim wastage and increase efficiencies, and corporate re-structuring is naturally an important element of this.

“Similarly, securities for credit facilities are based largely on a tangible asset; business proposals, or concept plans are not usually welcome security for credit facilities to be granted,” she added.

-----------------------------------------------------------------------Boma Ozobia is the Partner/Head of Corporate and Commercial Department in Sterling Partnership, a commercial law firm with a dynamic law practice and an energetic and professional approach to business and personal legal affairs. -----------------------------------------------------------------------Boma is a cross-border solicitor with over two decades of experience advising high value commercial transactions and foreign investment initiatives in Nigeria. She is the immediate past President of the Commonwealth Lawyers Association.

“With the banking problems and increase in corporate tax in Cyprus as well as the clampdown on many offshore jurisdictions, we are seeing a big increase in the number of enquiries from entrepreneurs and professional intermediaries who may have favoured Cyprus or offshore jurisdictions in the past.

Company: Company Bureau Formations Limited Name: Andrew Lambe Email: formations@companybureau.ie Web: www.companyformations.ie Address: The Black Church, The Mary’s Place, Dublin 7 Telephone: +353 (0) 1 6461625

process in Nigeria involves several document requirements and burdensome customs procedures. Additionally, Boma explained that having few ports in Nigeria leads to extra costs and delays in the local transportation or import or export goods. According to data collected by Doing Business, Nigeria stands at 154 in the ranking of 185 economies on the ease of trading across borders. However, Boma noted that Nigeria has about 25 Export Processing Zones (EPZ) which offer several tax incentives and relaxed exchange control measures for import and export, and industrial tools imported exclusively for mining operations in Nigeria are exempted from customs and import duties. “An administrative mechanism should be put in place which would link the regulatory agencies in this regard to provide comprehensive documentary requirement for the importation and exportation of goods,” she concluded.

Boma highlighted the issue of the multiplicity of tax legislations within Nigeria. While several tax incentives are allowed investors, she stated that it poses a challenge for them to take the benefit of it all as these incentives are spread over a number of legislations and governed by almost as many agencies individually. Another issue is the high rate of taxation, as Boma commented: “Despite tax incentives, corporate tax rates are high in Nigeria. The Nigerian corporate tax regime is rated as 155 in 185 countries rated by the World Bank.” To resolve these issues, Boma proposes the establishment of a uniform tax administration board to enable a comprehensive assessment of corporate tax liability. She also recommends that investors should obtain the services of professionals to properly administer their business books. In terms of trading internationally, the import/export

Company: Sterling Partnership Legal Practitioners Name: Boma Ozobia LL.M, MCIArb Email: boma@spnglegal.com Web: www.spnglegal.com Address: 17A Wumego Crescent, Off Christ Avenue, Lekki Phase1, Lagos, Nigeria Telephone: +234 806 3564 687 +234(01)874 4576 +234(01)874 4577

June 2013 /

SECTOR SPOTLIGHT:

A Step by Step Guide to Forming Companies Depending on the investment sector, business lines, and scale of investment capital of the project, the process of formation of a foreign invested enterprise (FIE) is carried out in different procedures.

investing in areas with difficult socio-economic conditions and projects investing in areas with specially difficult socioeconomic conditions which require a longer term, the term of allocation or lease of land shall not exceed 70 years.

Pursuant to the Law on Investment, a foreign investor investing in Vietnam for the first time must have an investment project and perform the procedures for investment registration or evaluation of investment at the State administrative body for investment in order to be issued an investment certificate. The investment certificate shall act concurrently as the business registration certificate.

Moreover, the investors which invest in preferential investment sectors and geographical areas shall be entitled to exemption from or reduction of land rent, land use fees and land use tax.

In addition to the investment support, if the investor satisfies the conditions as required by the Law on Investment, the investor may be entitled to the following incentives: (i) Tax incentives

-----------------------------------------------------------------------Since 1995, Vietnam Business law firm - VB LAW has had the privilege to represent a wide range of interests while earning the respect and loyalty of clients. With a well-diversified team of thirty experienced lawyers, consultants, and assistants located in Ho Chi Minh City and Hanoi, VB LAW offers comprehensive legal advice and innovative solutions for a wide range of customers and legal issues. -----------------------------------------------------------------------In respect of investment projects, there are three (3) major sectors on which the foreign investors focused including sectors of (i) industry of processing and production with 164 new registered projects, representing 90.2% of the total registered investment capital; (ii) wholesale, retail and repair with 49 new projects with the total investment capital of USD 1,105 billion, representing 12.4% of the total investment capital; and (iii) real estate business with the total investment capital of USD 307.05 million, representing 3.7% of the total investment capital.

(iii) Incentives for investors who invest in industrial zones, export processing zones, high-tech zones, and economic zones Based on the conditions for socio-economic development from time to time and the principles stipulated in the Law on Investment, the Government shall provide for incentives applicable to investors investing in industrial zones, export processing zones, high-tech zones and economic zones.

Tax incentives include preferential tax rates, duration of entitlement to such rates and duration of exemption from and reduction of tax. Investors shall be entitled to tax incentives with respect to the portion of income which is distributed to them from the activity of capital contribution or purchase of shares in an economic organization in accordance with the law on tax after such organization has paid in full its corporate income tax. Furthermore, the investors shall be exempt from payment of import duty on equipment, materials, means of transportation and other goods for implementation of investment projects in Vietnam. Income from activities of technology transfer applicable to projects entitled to investment incentives shall be exempt from income tax. (ii) Land use incentives The term of land use of an investment project shall not exceed 50 years; with respect to projects with a large amount of invested capital and a slow rate of capital recovery, projects

How easy is it to set up a company in your jurisdiction? Please give a brief description of the company formation process. The company formation process is relatively straightforward in Tanzania. Prior to company registration, it is advisable to request the Business Registration and Licensing Authority (BRELA) to approve and reserve the proposed company name. For company registration, a Memorandum and Articles of Association is to be submitted together with statutory form 14a specifying the first directors, company secretary and proposed registered office address in Tanzania and form 14b confirming compliance with the Companies Act, 2002. A Tanzanian company is required to have a minimum of two directors and two shareholders. Foreign ownership of companies is generally not restricted.

Company: VB LAW Name: Ngo Duy Min Email: minh.ngo@vblaw.com.vn info@vblaw.com.vn Web: www.vblaw.com.vn Address: 11 A- 11 C Phan Ke Binh Street, District 1, HCMC, Vietnam Telephone: (848) 3821 9928

Whilst steady growth is being witnessed in the mining, banking and telecommunications sectors, growth projections have been boosted substantially following significant natural gas discoveries. These discoveries have resulted in substantial investment in Tanzania, with multiple energy companies, oilfield service companies and associated support companies setting up in-country. Foreign Direct Investment is also being encouraged through Public Private Partnerships, particularly in the infrastructure, manufacturing and information and communication technology sectors.

The applicable fees for company registration are very reasonable. Registration fees for companies limited by shares are capped at TShs 300,000 (USD184) whilst filing fees amount to TShs 45,000 (USD 28 ). Stamp duty is Tshs 7,500 (USD5).

-----------------------------------------------------------------------Hon. Nimrod E. Mkono is the Managing Partner of Mkono & Co. Advocates in association with Dentons. Dr Angela Sciberras is a Partner with the firm. -----------------------------------------------------------------------Mkono & Co. is the leading law firm in Tanzania with an extensive corporate, commercial and financial practice in the East African region. The firm has a longstanding reputation for high quality representation of major public and private companies in all aspects of corporate activity, including formation, mergers and acquisitions and joint ventures. Hon. Mkono is a Fellow of the Institute of Chartered Secretaries and Administrators (UK) and a practicing Chartered Secretary in Tanzania.

74 / June 2013

A number of entities may be registered in Tanzania including the company limited by shares, the company limited by guarantee and the business name. It is also possible for a foreign company to register a branch in Tanzania by appointing a resident representative. Once a Certificate of Registration is issued, a taxpayer Identification number, business license, VAT number and National Social Security Fund number can be obtained. Has your jurisdiction witnessed a growth in formation levels? To what do you attribute this growth? Tanzania Economic Update: Spreading the Wings predicts that Tanzaniaâ&#x20AC;&#x2122;s economy will continue to grow at a rate of approximately 6.5% to 7% in the next few years

Company: Mkono & Co. Advocates Web: www.mkono.com Address: 8th Floor, Exim Tower, Ghana Avenue, P.O. Box 4369, Dar es Salaam, Tanzania Telephone: (+255 22) 211 8789 211 8790; 211 8791; 211 4664 Name: Hon. Nimrod E. Mkono Email: nimrod.mkono@mkono.com Name: Dr Angela Sciberras Email: angela.sciberras@mkono.com

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

A Step by Step Guide to Forming Companies Mr Padilla Ramos’ other outsourcing company is the first established in North-Western Mexico, helping all Mexican and foreign companies to reduce and protect their interests in Mexico, with considerable savings. The firm has been recognised several times as the best taxation law office in Mexico. Mr Ramos stated that it is fairly easy to set up a company in Mexico, specifically in Sonora. He commented: “My state: Sonora, is strategically located in the Cortez Sea and is also a U.S. border state. To set up a company in Sonora, Mexico is very simple and it takes about a month to get it done.” There are a number of fiscal benefits for foreign companies that wish to be established in Sonora, including land if the project is considerable. “Also, we do have some of the best beaches of Mexico, very beautiful and quiet, where many retired Americans and Canadians live and do business themselves,” he added.

-----------------------------------------------------------------------Daniel Padilla Ramos is a Director of Grupo Anda, a Mexican diversified company that provides legal advice in all kinds of business and personal matters in Mexico and South-Western USA. ------------------------------------------------------------------------

Daniel Padilla Ramos Law Offices was the only firm in Mexico to be selected by the U.S. Department of Justice to help the families of those Mexicans who died during the 9/11 attacks in the USA, and received an award for that work in a pro-bono program.

According to Mr. Padilla Ramos, the increase in company formation levels in Sonora can be attributed to the productivity of the state and its geographical location. He noted that mining, aerospace, health, agriculture (nuts and pecans) and regulation national and international trading businesses are seeing the most formations. “Like most of the countries worldwide, Mexican banking and taxation regulations are restricted and bureaucratic, but secured,” said Mr Padilla Ramos. “Our handwork is very cheap, support from government and banks are accessible, if a company or person fills the requirements of good standing.”

In 10 years of working in Dubai, Mr Hanafin has seen the local regulations improve dramatically. He noted that the creation of the “free trade zone” concept has allowed foreign investors to come to the UAE and fully own and control their companies. He added that the regulators in the Free Zones and in the normal Government Departments are very approachable, and in particular when discussing the possibilities of increasing FDI. “In terms of business growth, it is possible to set up a “branch” of your overseas parent company, which will help limit your outgoings during the infancy period, and this entity can be modified and changed as the company grows,” he explained. “There are also options for ‘rep offices’ and single shareholder ‘investors’ companies. “The country can offer excellent international serviced offices, or very affordable commercial office space, and it is certainly possible to be onshore with an office licensed and running in under three weeks.” -----------------------------------------------------------------------John Hanafin is the Middle East CEO for the Sovereign Group. His role currently covers the management of the firm’s existing offices in Dubai, Abu Dhabi and Bahrain, as well as the set up and implementation of new offices in the region over the next 18 months. ------------------------------------------------------------------------

Mr Hanafin stated that various types of companies can be established in the UAE, which offer different advantages and involve varying degrees of difficulty in setting up and licensing. “Some are very straight forward, and some are very complex, depending on the proposed activity,” he explained. “We have both an offshore company option and of course an onshore option.”

ACQUISITION INTERNATIONAL

In order to improve the formation process and general business environment, Mr Padilla Ramos suggested: “Lots of training to the employees, offering better working conditions and of course, trying to get a strong company to easily reach its goals.” According to Mr Padilla Ramos, the outlook for 2013 is “very, very good”. He noted that Mexico has a new President from a new party, commenting: “He is showing all the reforms our country needs, such as Brazil, F.E., people in general are very satisfied with our new government. Expectations are for the best in Mexico right now.” Mr Padilla Ramos concluded: “It is very important to create new companies in Mexico. Foreign companies should consider investing in Mexico, in any area. Government is giving all facilities about it – my firm will gladly support in this.”

Company: Grupo Anda Name: Daniel Padilla Ramos Email: danielpadilla@grupoanda.com.mx Web: www.grupoanda.com.mx Address: Gustavo Muñoz 84, Colonia Olivares, Hermosillo, Sonora, Mexico. Z.C. 83180 Telephone: (662) 215-2974 Fax: (662) 215-2977

the UAE Offshore Company. Mr Hanafin attributed this growth to the pressure on traditional offshore jurisdictions and the fragility of European banks, which has led to high volumes of new money moving to the Middle East. Mr Hanafin believes that 2013 will be the best year to date for company formations in the UAE. “Since the global crisis of 2008, the UAE economy has slowly climbed back up the mountain, and we are now seeing a more mature investor coming to a region with better regulations and more transparency in real estate. At the midway point in 2013, I can say that I can only remember 2008 as being busy. “If you are looking to set up some offshore SPV’s for holding assets, or if you are looking to expand your existing business to the Middle East, the UAE is the place to come and see,” he concluded.

Mr Hanafin noted that the UAE has seen a growth in formations on two different levels. There has been an increase in the number of “onshore” companies looking to do business in Dubai or Abu Dhabi, or simply international companies setting up onshore companies to make use of some of the 53 “very interesting” tax treaties. “Whilst the UAE is not seen as a traditional ‘tax haven’, the UAE has three options for offshore company set up,” he observed. “These are IBC’s that are designed for international business, but can also hold local shares, local property, and local bank accounts.” The two areas with the biggest increase in terms of new business in the UAE are the Free Trade Zones and

Company: Sovereign Middle East Name: John Hanafin Email: jhanafin@SovereignGroup.com Web: www.SovereignGroup.com Address: 801 Reef Tower, Jumeirah Lake Towers, P.O. Box 62201, Dubai, United Arab Emirates Telephone: +971 4 448 6010

June 2013 /

SECTOR SPOTLIGHT:

A Step by Step Guide to Forming Companies “In keeping with this purpose, we provide such sophisticated services along with a will to remain fully informed of the ever evolving legal and commercial environments, on the international level,” said Mr Hossamy.

3. The investor or his attorney should sign the contract by the Notarization Office.

The firm offers consultation and litigation services to clients seeking consultation on questions pertaining to all branches of business law.

5. The commercial registration will be presented to the interested person.

The procedure for company formation in Egypt is as follows: 1. All the documents are submitted to the operation department according to its legal status for completing and reviewing the contract with attorney from GAFI besides filling in the following applications for: • Registering the company in the commercial registry office. • Issuing the shares of the established company (Joint Stock & Partnership limited by shares co.). • Publishing in the Investment magazine.

4. Issuing the decree of the company establishing.

Mr Hossamy stated that Egypt is now encouraging foreign investors to incorporate companies and the country is facilitating all procedures. He noted that there was a growth in formation levels before the 25th January revolution, but since then growth has decreased due to the unstable political environment. The real estate and technology sectors are currently seeing the most formations. In conclusion, Mr Hossamy suggested that the company formation process and business environment in Egypt will improve once the country reaches “political stability and going further onto facilitating procedures and eliminating bureaucracy.”

The contract will be issued after completing and reviewing the data. -----------------------------------------------------------------------Bahgat El Hossamy is the owner and founder of Hossamy Law Office. -----------------------------------------------------------------------Bahgat El Hossamy is the owner and founder of Hossamy Law Office. Hossamy Law Office was founded by Bahgat H. El Hossamy B.A. of law, Cairo University – holder of a Masters degree from the International Business Institute (I.D.A.I) and former district attorney and Chief-Judge. The firm is geared towards providing dependable and highly professional legal services specialised in matters of corporate, commercial law and the various subjects that these vast branches of law involve.

The file should be handed to the operation department for: a) Calculating the fees of the concerned authorities (according to its legal status and law). b) After paying the fees according to the central paying system of Alexandria Bank – GAFI Branch and handing the receipts to the operation department , the concerned employee will finish the required procedures in behalf of the investor with: • Lawyers syndicate • Egyptian financial supervisory authority (Joint Stock & Partnership limited by share co.). • Notarization office. • Chamber of Commerce Union (for companies registered according to law no.159/1982). • Commercial Registration.

office with changes to the company details. The Companies Act stipulates that companies must appoint an auditor to prepare a financial report for each annual general meeting. However, this requirement can be waived depending on asset values and share ownership. What other steps are required in starting a business in Tonga? Other things that need to be done: acquisition of a business license, and (if a foreign investor), acquisition of a foreign investment certificate. Business license applications need to be accompanied by copies of the Company Registration Certificate, the Foreign Investment Registration Certificate (if applicable) and the appropriate fees. Sector-specific permits are required for some sectors. -----------------------------------------------------------------------Company Registration has been streamlined in Tonga. ------------------------------------------------------------------------

Registering a company is simple. • The first step: submit a name reservation application for your company (with fees). • Once approved, an application for registration is submitted (fees are higher for foreign companies). The Companies Act provides a standard constitution, however if you wish to amend it the amended constitution must be submitted at the time of the application. Foreign companies must also submit evidence of incorporation in the country of registration. • Once the application is approved, a Certificate of Incorporation is provided and the company is entered on the Tongan Register. The whole process only takes a matter of days. There is no minimum capital requirement. After incorporation, directors have a responsibility to file annual returns and update the Registrar of Companies’

76 / June 2013

Ùtaàtu & Associates can assist investors. The firm was established over 22 years ago in 1991 by Christine M. Ùtaàtu, originally an American and a licensed CPA. It is Tonga’s largest Accounting and Management Consultancy firm with the staff and expertise to provide a quality, timely and cost effective service that meets the needs of its clients. • Accounting services include preparation of financial statements, projections, and business plans. Audit services include internal and forensic audits, compliance audits and secondment to overseas auditors. • As a Registered Tax Agent, the firm handles all tax filings. • Management services encompass one-stop direct investment services including company registrations, licensing, business and employment visas, sector specific compliance requirements, company secretarial duties, and maintenance of trust accounts. • The firm is the local agent for overseas owners of

Company: Hossamy Law Office Name: Bahgat El Hossamy Email: bhossamy@hossamylaw.com Web: www.hossamylaw.com Address: 13 El Khalifa El Maamoun Street, Heliopolis, Cairo, Egypt Telephone: +202-24177277

trademarks, copyrights, patents and industrial designs, authorized to prepare registration searches, and amendments to the Official Register. The firm seeks to bring a stable, professional, and personal approach to relationships with clients, emphasizing confidentiality, honesty and integrity in all facets of life and employing excellence by using the latest technology, qualified and experienced staff and appropriate sources of information. Why invest in Tonga? The Kingdom of Tonga offers investors attributes such as political stability, and safety and security. It has an economy of strong potential with a developed financial sector and the presence of international banks; a welleducated, friendly and welcoming English-speaking people; a unique cultural heritage; rich soils and an excellent growing climate; a varied marine life and marine culture; a strategic location with good transportation and communication links to Australia, New Zealand, the United States and other South Pacific Countries.

Company: Ùtaàtu & Associates Name: Christine M. Ùtaàtu, CPA Email: cmu@utaatu.tbu.to Web: www.utaatu.com Address: Upper Floor, Falesiu ò Uesile Hall, Kapeta, P. O. Box 1573, Nukuàlofa, Tonga Telephone: +676 2 3 815

ACQUISITION INTERNATIONAL

Mkono & Co

Advocates in Association with

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

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

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

info@mkono.com

www.mkono.com

SECTOR SPOTLIGHT: 2013 Q1 Review

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

Glyn Marais Incorporated was established in 1990 and has offices in Johannesburg and Cape Town. The firm has seven partners and a total contingent of lawyers of around 22. Most of the firm’s partners are rated by Chambers and Partners and the other leading international directories of lawyers. The firm’s clients include large financial institutions, listed and unlisted companies. They are mostly active in the financial institutions, listed and unlisted companies. They are mostly active in the financial services, property, media and communications and natural resources sectors. Glyn Marais Incorporated’s practice spans the areas of corporate law (including all types of public and private transactions), banking and finance, tax, property, employment, dispute resolution and environmental law. The firm is the South African member of the Dentons Africa network, the oldest and largest network of African law firms which spans all sub-regions of Africa. -----------------------------------------------------------------------John Hanafin is the Middle East CEO for the Sovereign Group. -----------------------------------------------------------------------Firm Profile The Sovereign Group’s core business is setting up and managing companies, trusts and other compliant structures to meet the specific personal or business needs of its clients. Typically these would include tax planning, wealth management, succession planning, foreign property ownership and facilitating cross-border business. The first Sovereign office opened in Gibraltar in 1987 and the Group now has offices in over 25 international finance centres worldwide. This enables us to provide local expertise on an international scale and gives clients access to a global service from a local point of delivery. In all jurisdictions that require us to be licensed we have applied for, and been granted, the appropriate authorisations. We work with public companies, charities and professional law and accountancy firms, but the majority of our clients are individuals – expatriates, entrepreneurs, consultants, private investors and high net worth individuals and their families. First we need to understand a client’s personal and business affairs, their requirements and goals. We can then design a structure that will be functional, cost effective and fully compliant. • •

Incorporation Services Trust Services

78 / June 2013

“This enables us to act for clients on all types of corporate and commercial transactions with a crossborder dimension in Africa,” said Mr de Villiers. Recently, Glyn Marais Incorporated advised Growthpoint Property limited on its offer to acquire the property assets of Fountainhead Property Trust. This was one of the largest transactions in the country. Mr de Villiers explained that it was complex as it is the first such offer for the assets of a listed property trust and occurs in the context of a competing bid.

The ease of doing business in South Africa is improving slowly, according to Mr de Villiers. He attributed this to the introduction of the new Companies Act; however there have been many teething problems in putting the new infrastructure in place. In conclusion, he predicted slow but improving GDP growth in 2013.

The firm also advised Sanlam Emerging Markets on its acquisition of a 49% interest in a leading Malaysian insurance company. Mr de Villiers stated that deals are currently taking longer than usual to complete. They are smaller and funded mostly from own resources, although the firm is starting to see the return of bank funding. He noted that the property sector is the currently the most active and that the overall attitude regard growth and deal opportunities in the region is not very positive, though it has improved from Q1 2012.

• • • • •

Tax Planning Wealth Management Succession Planning Residency and Immigration Fund Services

Sovereign Middle East Sovereign Corporate Services JLT has been licensed in Dubai since 1998 and is now one of the largest corporate services providers operating in the Middle East. We are a registered agent for the free zones of Dubai, including Ras Al Khaimah (RAK) and Jebel Ali and have further expanded our presence in the Gulf States by opening offices in Bahrain and Abu Dhabi. Our particular areas of expertise include: • • • • • • • •

International company formation UAE Free Zone formation UAE local LLC (51% / 49%) formation Trust creation and administration Mutual Fund formation and administration Immigration and passport programmes Pension Trustees (QROPS and QNUPS) Payroll & accounting services

Notable Client Work Sovereign Corporate Services JLT assisted a leading global flight simulation firm to establish the first licensed business of its kind in the UAE. Sovereign liaised with the Department of Economic Development to secure business registration,

Company: Glyn Marais Incorporated Name: Willem de Villiers Email: wdevillers@glynmarais.co.za Web: www.glynmarais.co.za Address: 2nd Floor The Place, 1 Sandton Drive, Sandton Telephone: +27 11 286 3722

licensing and commercial protection in Dubai. The most important aspect was to ensure that the UAE operation remained under the umbrella of the global business brand in the most tax efficient way while maintaining the intellectual property of the business offshore. Sovereign also advised and assisted a publicly listed UK media firm to establish in the Dubai Media City free zone and Abu Dhabi. The UAE business setup was managed and executed effectively and swiftly by incorporating subsidiaries of the PLC to own the businesses in the UAE.

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

-----------------------------------------------------------------------Anthony Maton is a Partner in the European Office of Hausfeld & Co LLP in London. -----------------------------------------------------------------------Hausfeld & Co is a niche litigation firm specialising in claimant litigation, particularly in the competition, financial services and human rights fields. At present, Hausfeld’s practice in antitrust litigation focuses principally on followon litigation where the firm brings claims on behalf of groups of clients as follow on to regulatory decisions. Hausfeld acts for large corporations as well as smaller companies and has the largest dedicated team bringing such claims in Europe. Mr Maton describes the competition law environment in the UK for Q1 as “very exciting”. He stated that more antitrust damage actions are being brought than at any time before and London is the centre of such claim activity. “In addition, in January the Department for Business Innovation and Skills (“BIS”) published the UK government’s plans looking to reform private actions in competition law, by which we would expect to see the introduction of optout collective actions in the UK,” commented Mr Maton. “In such scenario claims will be pursued on behalf of a group of claimants unless individuals actively opt out. Redress will be provided where individual claims might not be great enough to support legal action, thus making it easier for claimants to pursue their claims. If the Government presses ahead with its proposals, pursuing stand-alone cases will be easier and simpler, in particular for SMEs.” Additionally, Mr Maton noted that the introduction of the Jackson Reforms in April has changed the way claims will be funded and has added another element to the already rich scheme of litigation funding in the Courts of England and Wales. Contingency fees have been introduced, whereby a party’s solicitor is able to accept a percentage of the damages awarded by the court as remuneration. Discussing recent trends, Mr Maton highlighted a notorious increment in the number of claims being brought to European courts regarding antitrust matters. Competition litigation is becoming a frequent issue raised by both companies and regulators which has led us to see more actions being brought by more businesses. In the same way, the number of settlement negotiations has grown significantly.

ACQUISITION INTERNATIONAL

“We have also witnessed a greater interest in the investigations carried out by regulatory bodies,” he continued. “Companies are providing assistance and getting involved in these investigations. Also, there is a new trend to provide flexible funding options to clients in order to expand the opportunities companies might have when trying to bring an action or negotiate with cartelists.” Mr Maton noted a significant recent case where, at the end of December 2012, the UK Supreme Court granted permission to appeal against the judgement of the Court of Appeal in Deustche Bahn AG v Morgan Crucible Company plc, delivered in July, concerning the time limits for bringing follow-on claims in the CAT. “By its judgement the Court of Appeal shed light on the limitation rules applicable to follow-on claims and reversed an order by the CAT striking out the claims by Deutsche Bahn and the other claimants for damages against Morgan Crucible in relation to the latter’s illegal participation in the Carbon Graphite cartel,” he explained. “Following the Court of Appeal’s judgement, the time for bringing of claims under section 47A of the Competition Act starts to run from the point at which there can be no further appeal against the infringement decision by any addressee of the Commission’s Decision.”

as a strategy to force claimants to settle. Moreover, courts judgements sometimes take longer than expected to be published as judges take their time when reaching their decision. “Such delays represent a big challenge as claimants are forced to think ahead and consider any possible scenario,” observed Mr Maton. “In addition, claimants are often persuaded not to bring actions in the CAT as it operates under very complex and strict rules which diminish its role as the competition judicial body in the United Kingdom,” he continued. “A more flexible approach to these rules will see the CAT’s role strengthen and will lead to an increase in the number of cases heard. “The European Commission has announced this year it will be publishing the results of many decisions which have taken years to complete (i.e. Google, and Auto Parts Cartel), and other important investigations which became priority in recent times (i.e. LIBOR/EURIBOR). Moreover, several settlements both in global and regional scales are expected as well as for a more frequent use of the EC Settlement Procedure which provides a fast-track mechanism for those seeking redress for breaches in competition matters,” he concluded.

Permission to appeal to the Supreme Court was initially denied to Morgan Crucible by the Court of Appeal. However, Morgan Crucible was successful in its application to the Supreme Court. Both parties have already confirmed their wish to proceed and the case is expected to be listed for a hearing within the next 12-15 months. “The Supreme Court’s judgement is highly anticipated by both claimants and defendants as the issue of how the CAT’s limitation provisions operate when some but not all addressees appeal a Commission decision remains uncertain,” added Mr Maton. “It will also have an impact on the choice of the CAT over the High Court as a forum for bringing follow-on actions.” Commenting on the main challenges faced in competition cases in Q1, Mr Maton noted that, often, defendants will delay proceedings when actions are being brought to courts

Company: Hausfeld & Co LLP Name: Antony Maton Email: amaton@hausfeldllp.com Web: http://www.hausfeldllp.co.uk/ Address: 12 Gough Square London EC4A 3DW, United Kingdom Telephone: +44 (0)20-7665-5000

June 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

Superyachts, Dispute Resolution, Maritime and Corporate / Commercial law,” states Quentin. “We continue to develop and grow, having recently added a new Aviation division.” With regard to notable deals in Q1 2013, Quentin explains that the firm’s Superyacht group were recently involved in the purchase of a 48m motor yacht, and are actively involved in other yacht sales, purchases, including work for a €200m yacht. “We have also had considerable success in the courts, including making new law in regard to wasted costs” he adds.

-----------------------------------------------------------------------Quentin Bargate is Senior Partner at Bargate Murray. -----------------------------------------------------------------------Quentin Bargate is a former partner of a major top 10 City law practice and founded Bargate Murray in 2004, then called Quentin Bargate & Co. In 2006 Quentin was joined by his former colleague and friend Andrew Murray and the firm changed its name to Bargate Murray. “The firm prides itself on its highly successful mix of outstanding client care allied to business acumen, and focus on our core practice areas: -----------------------------------------------------------------------José V Zapata L is Senior Partner at Suárez Zapata & Partners Abogados S.A.S. ------------------------------------------------------------------------

Suárez Zapata & Partners Abogados S.A.S. - Attorneys at Law - is a highly recognized Colombian specialised law firm headquartered in Bogota, which offers wideranging advisory, transactional, litigation and regulatory practice experience, and is dedicated primarily to Energy, Environmental and Natural Resources Law. It is ranked by the industry as the number one Firm in Colombia in Oil and Gas, Mining, Environmental and Public Utilities Law. It offers over 25 years of accrued legal and business knowledge and experience warrant this firm’s acrossthe-board expertise in these fields, and ensure excelling legal counseling to its diverse client base in these highly complex and regulated industries, ranging from oil and gas and power -electric- project structuring & finance as well as development and operation, to advanced litigation and arbitration. Furthermore, the Firm is leader in rendering legal services in the public utilities sector, infrastructure and

contentious disputes at cost effective rates and coupled with an unwavering commitment to client care…” “I am personally involved in other business ventures and I am a Member of the Institute of Directors, which helps ensure we remain connected to the world of business and commerce at a practical level. Bargate Murray are not “Ivory Tower” lawyers – we like to engage proactively with clients to help them solve their problems.”

The overall attitude regarding growth and deal opportunities is looking up, as Quentin explains: “The economy is beginning to turn around. Some of our practice areas, such as Dispute Resolution and Superyachts, have proved very resilient in any event.” With regards to the future, Quentin comments: “Like our clients, we remain responsive and adaptable to the economic climate, and actively work to identify the best course of action for their businesses…” “Here at Bargate Murray we offer a practical approach to our services from commercial and corporate work to

transportation. In these areas the Firm assists it clients in a wide variety of complex corporate transactions, especially mergers and acquisitions. Suarez Zapata & Partners provides wide-ranging specialized legal services in natural resources and energy, mining and environmental law, as well as business & commercial law, public utilities law, mergers and acquisitions, real estate law, project finance and infrastructure, and litigation and arbitration in order to meet and exceed its diverse client base needs and expectations. Jose explains a little more about the country’s economy. “The Colombian economy grew by 4% in 2012. Expected growth in 2013 may slowdown although evidence of intense investments in oil and gas, mining and infrastructure are clear. “Abundant deals are financed directly by foreign and local investors via capital contributions, while another important set (still lower) is structured finance with back to back arrangements abroad.

Company: Bargate Murray Name: Quentin Bargate Email: quentin@bargatemurray.com Web: www.bargatemurray.com Address: 5th Floor, 20-22 Curtain Road, London, EC2A 3NF Telephone: +44 (0) 207 375 1393

“Many projects have felt the difficulties of environmental licensing procedures as well as public consultations with communities. Measures are in place to try to mitigate the delays this has generated. “The Firm has represented over 50 of the main investors in Colombia in undertaking investments during the first quarter and expects this number to grow during the second quarter.”

Company: Suarez Zapata Partners Abogados S.A.S. Name: Jose V. Zapata L. Email: jzapata@suzalegal.com Web: www.suzalegal.com Address: calle 87 N° 10 93 Suite 302, Bogotá, Colombia Telephone: + 57 (1) 7431005

The Commercial and Corporate law department is geared to the full spectrum of the corporate and entrepreneurial client’s requirements in regard to commercial transactions and general commercial and corporate law practice. Our areas of expertise include corporate structuring, mergers and acquisitions, stock exchange, regulatory (including exchange control), private equity, black empowerment transactions, franchising and the drafting of all associated commercial agreements.

-----------------------------------------------------------------------Keith Getz is a Senior Partner at Bernadt Vukic Potash & Getz, practicing since 1980 and specialising in commercial and corporate law. -----------------------------------------------------------------------Bernadt Vukic Potash & Getz is a South African Boutique law firm based in Cape Town specialising in Corporate and Commercial law, Commercial Litigation, Property Law, Labour Law and Estate Planning. The firm has a substantial number of South African and international commercial and corporate clients, including

80 / June 2013

clients listed on the Johannesburg Stock Exchange and other exchanges internationally. The firm has extensive experience and expertise in national and international transactions at the highest levels. The firm has extensive professional networks, consultancy and referral relationships with local and international professional firms in order to provide and enhance expert related specialist services available to clients and provide seamless turn-key advice for clients. The firm works closely with international professional advisers in many international transactions.

Company: Bernadt Vukic Potash & Getz Name: Keith Getz Email: kgetz@bvpg.co.za Web: www.bvpg.co.za Address: 11th Floor, No 1 Thibault Square; Long Street; Cape Town; South Africa; 8001 Telephone: (office) +2721 405 3800; (mobile) +2782 880 2256

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

ACQUISITION INTERNATIONAL

June 2013 /

SECTOR SPOTLIGHT:

Meet The Experts - Obtaining Interim Relief In Support of International Arbitrations

MEET THE EXPERTS

Obtaining Interim Relief In Support of International Arbitrations

OTHER EXPERTS IN THIS AREA

Company: Trilegal Name: Arti Mashru Email: arti.mashru@trilegal.com Web: www.trilegal.com Address: One Indiabulls Centre, 14th Floor, Tower One, Elphinstone Road, Mumbai 400 013 India Telephone: +91 22 4079 1000 -----------------------------------------------------------------------Anthony Riem is a Partner at PCB Litigation LLP. -----------------------------------------------------------------------Over the last few years, there has been a growth in parties agreeing that should a dispute arise between them, it should be resolved by way of arbitration rather than in the Courts. There are many reasons for this, not least the confidential nature of the arbitration process and the international enforceability of arbitral awards. In agreeing to arbitrate, the parties will usually select from one of the various institutions that offer arbitral services, such as the London Court of International Arbitration or the International Chamber of Commerce. Each of these institutions has their own set of rules that the parties must follow should a dispute subsequently arise. One issue that arises is what happens if there is an immediate risk that one party may dissipate assets, destroy evidence, or cause irreparable damage to the other party’s reputation or trade. Where a claim is being brought in the Courts, judges often have the power to grant orders to protect the party at risk. For example, they can require third parties to disclose to a victim what has happened to the proceeds of the fraud or to freeze assets of the fraudster or other third party who has assisted in the commission of the fraud or to search premises to preserve property. In arbitrations, similar remedies can be granted by a court where the national law permits in support of the

82 / June 2013

arbitration process or they can be granted by an arbitral tribunal where the arbitration agreement and any applicable arbitration rules allow (subject always to the relief sought being valid under the law applicable at the seat of arbitration). By way of example, in England and Wales, section 44 of the Arbitration Act 1996, enables its Courts to grant interim relief in aid of arbitration proceedings where the arbitral tribunal has no equivalent powers or would be unable to act effectively. The section allows the Courts to grant many types of interim relief in support of arbitration proceedings including asset freezing orders, disclosure orders and anti-suit injunctions preventing a party from bringing a claim elsewhere in breach of the express provisions of an arbitration agreement. The power conferred by section 44 is even extended to cases where the seat of the arbitration is outside England and Wales or no seat has been designated or determined. There are also occasions when a party seeks to bring court proceedings in relation to a dispute which it has been agreed is to be arbitrated, often in another country. In those circumstances, a party can obtain an order preventing the court proceedings from taking place. To illustrate some of the Court orders that can be obtained on an international basis, I set out some examples PCB Litigation has obtained for its clients in support of international arbitration, including:

•

A freezing order from the English Court in support of prospective London arbitration, granted before the filing of the request for arbitration.

•

An injunction from the Cypriot Court to preserve the subject matter of prospective arbitration proceedings.

•

An order from a US Court for the issue of a subpoena against a third party to produce documents relevant to issues in a Stockholm arbitration

•

An order from the English Court staying Court proceedings in favour of Swiss arbitration.

Company: PCB Litigation LLP Name: Anthony Riem Email: ajr@pcblitigation.com Web: www.pcblitigation.com Address: 4th Floor, 90 Chancery Lane, London, WC2A 1EU, UK Telephone: +44 (0) 20 7831 2691

ACQUISITION INTERNATIONAL

DEAL DIARY:

Introduced by Zephyr/Bureau van Dijk

TMT sector

l If 2013’s results so far are any indication, the outlook for the technology, media and telecommunications (TMT) sector looks positive, as the first five months of the year have gone some way to nearing the previous six monthly period and have actually surpassed a number of other recent results, with one month still to go until the end of H1. In the year to date, 5,817 deals worth USD 253,199 million have been recorded, according to data from Zephyr, the M&A database published by Bureau van Dijk. Last year ended with some disappointment for the TMT sector after a positive result 12 months earlier. The year saw 16,455 transactions in the industry, worth a combined USD 597,976 million. This represents a 14 per cent improvement by value on the

USD 525,333 million posted in FY 2011, itself a 2 per cent increase on 2010’s total of USD 513,110 million. H2 accounted for 8,231 deals worth USD 295,163 million, while H1 had 8,224 valued at USD 212,813 million. However, results seem to be levelling

off, having risen considerably from a low of USD 163,881 million in the first half of 2009, but still well behind a high of USD 460,755 million in H1 2007.

Number and Aggregate Value (mil USD) of TMT Sector Deals Globally: 2006 - 2013 YTD (as at 1 June 2013)

6,559 6,748 7,429 6,870 6,572 5,666 6,165 6,990 6,913 6,865 7,624 7,717 8,224 8,231 5,817

Aggregate deal value (mil USD) 384,654 371,863 460,755 333,578 364,463 167,677 163,881 297,532 254,482 258,628 286,634 238,699 212,813 295,163 253,199

Number and Aggregate Value (mil USD) of TMT Sector Deals Globally: 2006 - 2013 YTD (as at 1 June 2013) 500,000

9,000

450,000

8,000

400,000

7,000

350,000

6,000

300,000 5,000 250,000 4,000 200,000 3,000

150,000

2,000

100,000

Aggregate deal value (mil USD)

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

Number of deals

Period

1,000

50,000 0

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

Indeed, 2013 seems to be off to a reasonable start. So far, 5,817 transactions with a combined value of USD 253,199 million have been recorded. By volume, this is the lowest result since the second half of 2008, but a number of high value deals have pushed values to a level close to the USD 295,163 million recorded in H2 2012 and resulted in the

period surpassing USD 212,813 million during the same timeframe in 2012. It does not appear likely that sufficient deals will be signed off in the next month to allow values to climb to the benchmark set at the end of last year, but it cannot be ruled out as yet. Deals contributing to higher values in spite of low volume include the USD 24,400 million acquisi-

Number of deals

tion of US computing giant Dell by Denali. Liberty Global also agreed to buy UK-based broadband and telecoms player Virgin Media for USD 23,300 million in the second-highest value deal of the period, followed by Comcast’s purchase of US broadcaster NBCUniversal for USD 16,700 million.

Aggregate Value (mil USD) of TMT Sector Deals by Region: 2006 - 2013 YTD (as at 1 June 2013) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013 YTD

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

352,532 192,974 90,343 16,343 52,295 24,413 12,101 10,352

290,653 248,821 159,351 31,614 38,274 16,057 10,755 9,455

224,648 106,532 140,875 14,596 14,522 2,992 14,963 5,949

143,985 113,343 157,364 12,586 14,495 9,755 5,114 4,190

178,107 97,595 115,239 45,508 56,347 7,005 3,755 8,558

184,448 114,394 140,839 19,823 45,329 14,674 3,609 1,646

215,958 94,162 134,662 11,629 21,648 10,501 11,336 4,900

153,916 44,809 31,050 12,279 5,011 2,799 1,295 1,147

North America has been the most frequently targeted region within the TMT sector so far in 2013, with USD 153,916 million invested across 2,088 transactions. This represented 61 per cent of all global investment in the industry and was followed by Western Europe,

84 / June 2013

which benefitted from USD 44,809 million across 1,677 deals, and the Far East and Central Asia (1,334 transactions worth USD 31,050 million). This pattern represents a slight change from previous years, as in all of the last five years, the latter placed second

by value, with Western Europe coming in third. Of course, there are still six months to go until the end of 2013, so the Far East and Central Asia may yet overtake its competitor.

ACQUISITION INTERNATIONAL

DEAL DIARY:

Introduced by Zephyr/Bureau van Dijk

Breakdown of TMT Sector Deals by Region: 2006 - 2013 YTD (as at 1 June 2013) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013 YTD

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

47% 26% 12% 2% 7% 3% 2% 1%

36% 31% 20% 4% 5% 2% 1% 1%

43% 20% 27% 3% 3% 1% 3% 1%

31% 25% 34% 3% 3% 2% 1% 1%

35% 19% 23% 9% 11% 1% 1% 2%

35% 22% 27% 4% 9% 3% 1% 0%

43% 19% 27% 2% 4% 2% 2% 1%

61% 18% 12% 5% 2% 1% 1% 0%

The most frequent deal type in 2013 to date has been minority stakes, which accounted for 3,347 transactions worth USD 75,717 million, although these were topped by acquisitions by value (USD 151,375 million across 2,318 deals). There were also a significant number of institutional buy-outs, with 93 worth USD 24,682 million recorded during the period. Less common were management buy-ins, mergers and demergers.

Breakdown of TMT Sector Deals by Region: 2006 - 2013 YTD (as at 1 June 2013) 100%

In conclusion, the first five months of 2013 look to be suggesting a decline on H2 2012, although this is likely to be much more pronounced in terms of volume. Additional deal-making worth USD 41,964 million would need to occur by the end of June if the industry is to reach the heights of H2 2012, but the result is by no means a disaster and has surpassed a number of recent periods by value.

3% 3%

5% 4%

90%

7% 2%

80%

12%

3% 3%

11%

4% 2%

9% 4%

12%

9% 20%

27%

70%

2% 5%

27%

34%

27%

18%

23% 60%

26% 20%

31%

50%

19% 19%

25%

40%

22%

61%

30% 20%

47%

43%

36%

35%

2010

2011

31%

43%

10% 0% 2006 Africa

2007 Middle East

Number and Aggregate Value (Mil USD) of TMT Sector Deals Globally by Type: 2013 to date (as at 1 June 2013) Values

2008 Oceania

2009

South and Central America

Eastern Europe

Far East and Central Asia

2012 Western Europe

2013 YTD North America

Breakdown of Number and Aggregate Value (Mil USD) of TMT Sector Deals Globally by Type: 2013 to date (as at 1 June 2013)

All deal structures

Number of deals Aggregate deal value (mil USD)

Deal Type

Number of deals

Aggregate deal value

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

2,318 3,347 93 35 2 15 2 7

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

40% 58% 2% 1% 0% 0 0 0%

60% 30% 10% 1% 0% 0% 0% 0%

100%

151,375 75,717 24,682 1,524 0 0 0 0

Breakdown of Number and Aggregate Value (Mil USD) of TMT Sector Deals Globally by Type: 2013 to date (as at 1 June 2013) 2%

10%

90%

MBI / MBO Merger

80% 30% 70%

Management buy-in Management buy-out

58%

Institutional buy-out

60%

Minority stake Acquisition

50% 40% 30% 20%

60% 40%

10% 0% Number of deals

ACQUISITION INTERNATIONAL

Aggregate deal value

June 2013 /

DEAL DIARY:

M&A from around the world

DEAL DIARY — Deal index

INDUSTRIAL

CONSUMER

AUSTRALIAN TRUCK AND AUTO PARTS GROUP

BLOHM + VOSS OIL TOOLS

COPEINCA

FINNAIR ENGINE SERVICE ASSETS

ROYAL COPENHAGEN

GEBR. BRINKMANN GMBH

HTC SWEDEN

PETZETAKIS AFRICA

UNIKEY INDUSTIRAL COMPONENTS

ENERGY & RESOURCES

4ENERGY

AXIS WELL TECHNOLOGY

BEAR TRACKER

BUCHANS MINERALS CORPORATION

CAN FIRST

MOOMBA-TO-ADELAIDE PIPLINE

INDUSTRIAL PROPERTY IN LAVAL

SP AUSNET LTD

SILESIA CITY CENTER MALL

REAL ESTATE

SUPPORT SERVICES

FINANCIAL SERVICES

FREEDOM FINANCE NORDIC

ALEX

HEALTHCARE FINANCE GROUP

DFLOW B.V

PACIFIC & ORIENT INSURANCE

RAE SYSTEMS

TMT

HEALTHCARE

HEALTHY SLEEP SOLUTIONS

ARKOON NETWORK SECURITY

PETERBOROUGH HOSPITAL

CABLE & WIRELESS

STAT-DIAGNOSTICA

FJORD

IT-ERNITY

KPN INFRASTRUCTURE & PROJECTS

MDS

PROCAM

SAGE CONSTRUCTION

VESSELTRACKER.COM

86 / June 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

AUSTRALIAN TRUCK AND AUTO PARTS GROUP l Metcash Limited has acquired the assets and operations of national wholesale car and truck parts business Australian Truck and Auto Parts Group (ATAP), which specialise in brake, steering and suspension products. The acquisition also includes Auto Brake Service (ABS), a national franchise network of 53 brake and steering and auto repairs specialists. The businesses and related assets and operations were acquired by Australian Automotive Distribution Pty Limited ACN 163 280 279 (AAD), a newly incorporated subsidiary of Metcash Automotive Holdings Pty Limited, which, together with the Automotive Brands Group (ABG) will be part of Metcash’s growing hardware and automotive pillar. The assets and operations being acquired currently generate annual sales of circa $90m. The acquisition by AAD is both synergistic and strategic as it strengthens the national footprint and distribution network of the enlarged automotive group, including adding warehouses in NSW and SA. The acquisition provides scope for expansion of the ABS franchise network and buying synergies. The Herbert Smith Freehills team worked closely with Metcash’s legal team. It was led by M&A partners Martin Shakinovsky and Andrew Rich. Clarendon Lawyers advised ATAP on all aspects of the disposal, including vendor due diligence, restructuring, franchising aspects and on-going leasing and consultancy arrangements between ATAP and the purchaser. The team at Clarendon Lawyers was led by founding director, Tony Symons, who was supported by senior associate, Robert Josephs and solicitors, Billy Dwyer and Alexandra Gleed.

Tony Symons

Clarendon Lawyers is a specialist Corporate/M&A firm based in Melbourne, Australia.

COPEINCA

ROYAL COPENHAGEN

l Cermaq ASA has, on certain conditions, secured future control of more than 50% of the shares in Copeinca through agreements with Copeinca ASA and major shareholders of the company. Cermaq will launch a voluntary offer for the remaining shares of the company.

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

The purpose of the transactions and intended voluntary offer is to establish Copeinca, one of the leading fishmeal and fish oil producers in Peru, as a new business unit for fish meal and fish oil in Cermaq and to ensure essential marine ingredients for the feed customers of EWOS. The combined entity will leverage on the significant competence and experience within both organizations to improve the performance and quality of different fish meal and fish oils, optimize feed formulations as well as supplying scarce raw materials to the salmon farming industry. The transaction will further support Cermaq’s vision as an integrated marine protein company. Copeinca is a publicly listed company at the Oslo Stock Exchange and is the second largest holder of Peruvian anchoveta quota with 10.7% of the north central quota. Copeinca reported total revenues in 2012 of USD 314 million and an operating profit of USD 75 million. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com

tony.symons@clarendonlawyers.com.au www.clarendonlawyers.com.au

METCASH ACQUIRES

AUSTRALIAN TRUCK & AUTO PARTS GROUP DRV Corporate Finance Legal Adviser to ATAP

CERMAQ ACQUIRES SHARES IN AND SECURES FUTURE CONTROL OF

DRV CorporateCOPEINCA Finance

Virtual Data Room Provider - Vendor Due Diligence Provider

Under Axcel’s ownership the company has undergone an extensive transformation and now stands as a Danish design icon – one with 237 years of history behind it. The successful transformation can be attributed both to strengthening the operational platform, and rationalising and renewing the product portfolio. Thanks to this, in 2011 Royal Copenhagen achieved its best results for more than a decade, with 2012 expected to be even better. “Royal Copenhagen has undergone significant change in recent years, and now enjoys bigger and completely different market opportunities than just a few years ago,” says Nikolaj Vejlsgaard, who has been the partner responsible for the investment in Royal Copenhagen at Axcel. “The operational basis is now much stronger and, at the same time, the Royal Copenhagen brand has achieved much sharper positioning. This has led to a substantial improvement in earnings for the company, which now is at the very top of the industry, despite pressure on the market as a whole because of the financial crisis. Taking this new position as its starting point, and with its global presence and long experience within the industry including ownership of strong brands such as Iittala, Raadvad and Rörstrand Fiskars will be a good match for Royal Copenhagen and able to support the ongoing strategy of international expansion,” concludes Nikolaj Vejlsgaard. Mads Ryder, CEO of Royal Copenhagen, believes the strategy has succeeded under Axcel’s ownership: “Since 2009 we’ve significantly pruned our product range, improved our supply chain and concentrated sales efforts on fewer markets. The improved sales performance is therefore a result of marked growth in sales of our current range and the prioritised markets, and we’re very happy with this. Overall, we have seen double digit growth within our core range in our two key markets Denmark and Japan as well as strong growth in Korea, Taiwan, Germany and Norway. As part of Fiskars we expect to be able to strengthen our position in new markets,” finishes Mads Ryder, who has headed up Royal Copenhagen since 2009.

AXCEL SELLS ROYAL COPENHAGEN TO FISKARS FOR EUR 66 MILLION Virtual Data Room Provider

Vendor Due Diligence Provider & Tax Adviser

Financial Adviser to the Purchaser

Legal Adviser to the Equity Provider - Legal Adviser to the Vendor Adviser to Metcash

Legal Adviser to the Purchaser Financial Adviser to the Equity Provider - Financial Adviser to the Vendor Legal Adviser to the Vendor

ACQUISITION INTERNATIONAL

June 2013 /

CONSUMER

Consumer Deals

DEAL DIARY:

Energy & Resources Deals

ENERGY & RESOURCES

4ENERGY

AXIS WELL TECHNOLOGY

BEAR TRACKER

l British Gas has led a growth funding round in innovative telecoms and data centre cooling provider 4energy.

l Elysian Capital I LP, the independent private equity fund specialising in the UK lower mid-market (Notes), has acquired in conjunction with management, Aberdeen based Axis Well Technology Ltd, the industry leading oil and gas consultancy. www.axis-wt.com

l Summit Midstream Partners, LLC (“Summit Investments”) announced today that it closed the previously announced acquisition of Bear Tracker Energy, LLC on February 15, 2013. Summit Investments owns and controls the general partner of Summit Midstream Partners, LP (NYSE: SMLP) as well as a 69.1% limited partner interest in SMLP. The acquisition was fully funded with an equity investment from Energy Capital Partners, the majority owner of Summit Investments. In conjunction with the closing, the acquired company has been renamed Meadowlark Midstream Company, LLC (“Meadowlark”).

Current investors Environmental Technologies Fund, Carbon Trust, and Catapult also participated in the financing, which totalled £7m. British Gas and the other investors now each hold a minority stake in the company. The investment will enable 4energy to accelerate its global roll-out of energy saving solutions to energy intensive data-centres and telecommunications infrastructure. British Gas will play a part in this expansion, helping its data rich customers to better manage their energy by using 4energy’s solutions. 4energy will use the proceeds to increase its activities with its blue chip UK customer base and build on its operations throughout Europe, China, India, Africa and North America. 4energy’s products and solutions reduce the cooling requirements for electronic data centre and telecommunications equipment by up to 50%. Its comprehensive management software and suite of hardware products enable customers to analyse their thermal footprints and adjust air-flows and temperature gradients. Customers can use real-time data to improve operations across a network of sites, save energy, and make space for new infrastructure by removing excess cooling equipment. “British Gas is pleased to support another innovative UK business operating in a key sector for energy efficiency,” said Phil Bentley, Managing Director of British Gas. “Data centre and telecoms energy usage is increasing rapidly, and this investment will enable us to help our customers to manage their energy more efficiently.” Taylor Wessing advised the existing investors, Environmental Technologies Fund, Carbon Trust and Catapult Venture Managers Limited, led by Simon Walker, a Partner in the Corporate Technology Group. The firm dvised Environmental Technologies Fund on their previous investment in 4Energy and have acted for them for a number of years. Coller IP advised British Gas and previously advised Environmental Technologies Fund on 4Energy’s IP.

Axis Well Technology Limited (“Axis” or the “Company”) is a leading independent provider of oil and gas consultancy services to the upstream oil and gas sector. Since establishment in 2001 by Jim Anderson, Axis has grown rapidly from its well testing focus to become an industry leader of integrated in-demand consultancy services throughout the well life cycle in well testing; well intervention; completions; petroleum engineering; oil and gas production optimisation; subsurface and project management. Based in Aberdeen, the Company is an outsourcer to predominantly independent oil and gas service companies operating in the North Sea region and increasingly around the world. In the year to January 2013, turnover reached a record £21.1m from approximately 150 employees and consultants. The transaction will enable Jim Anderson and his management team to invest in the continued growth of the business with expansion overseas together with a widening of its service offering. Calash provided an initial Red Flag Review and full Commercial Diligence on Axis Well Technology, including Service and Management Review, Market and Contract Analysis, Growth and Exit Strategy Assessment and Customer Referencing and Validation. Iain Gallow Project Manager Iain Gallow, who led the project team, stated: Calash specialises in providing Commercial Diligence to the Energy Sector using specialist industry knowledge and a deep understanding of operations provided by experienced, technical individuals who have built, grown and sold successful energy businesses. This differentiates us from our competitors, enabling us to provide our clients with the most practical and effective advice. We wish Elysian Capital every success with their acquisition.

BRITISH GAS LEADS £7M INVESTMENT IN 4ENERGY

IP Due Diligence Provider

Commercial Adviser to Elysian Capital

Meadowlark owns, operates, and is currently developing several crude oil, natural gas, and water gathering systems in the Bakken Shale Play (the “Bakken”) in North Dakota and in the Niobrara Shale Play (the “Niobrara”) in Colorado. Meadowlark’s North Dakota assets include crude oil, natural gas, and water gathering systems designed to serve producers primarily targeting crude oil production from the Bakken in Mountrail, Burke, Williams and Divide counties. Meadowlark’s Colorado assets include a natural gas gathering system and processing facility designed to handle the casing head natural gas associated with crude oil production from the Niobrara in Weld County. Meadowlark provides gathering and processing services pursuant to long-term, primarily fee-based gathering agreements with some of the most active producers operating in the Bakken and Niobrara. These agreements include long-term acreage dedications and many contain long-term minimum volume commitments. The natural gas gathering system located in Mountrail and Burke counties is currently in service while the crude oil and water gathering systems are under development and expected to commence operations in 2013. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com

SUMMIT MIDSTREAM PARTNERS, LLC ANNOUNCES CLOSING OF

DRV Corporate Finance BEAR TRACKER ACQUISITION

Legal Adviser to the Purchaser Corporate Finance, Financial and Tax Due Diligence Adviser to Elysian Capital

Virtual Data Room Provider

Legal Adviser to the Management Team

Legal Due Dilligence Provider

Legal Adviser to Elysian Capital

Commercial Due Diligence Provider Corporate Finance Adviser to the Vendor

88 / June 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

BUCHANS MINERALS CORPORATION

MOOMBA-TO-ADELAIDE PIPELINE

SP AusNet & JEMENA

l Minco PLC (the “Company” or “Minco”) has entered into a binding arrangement agreement (the “Agreement”) to complete a business combination (the “Acquisition”) with Buchans Minerals Corporation (“Buchans”). Completion of the Acquisition will create a premier base metals exploration and development company with advanced projects in established mining jurisdictions in eastern Canada, together with Minco’s existing exploration projects in Ireland and the UK.

l APA Group has sold the Moomba Adelaide Pipeline System (MAPS) to QIC Global Infrastructure (QIC) for $400.6 million.

l Linklaters and Allens have jointly advised State Grid International Development Limited, a whollyowned subsidiary of State Grid Corporation of China, on two of Australia’s largest power asset transactions. Under the terms of the two transactions, State Grid has agreed to acquire from Singapore Power International Pte Limited, the international operating arm of Singapore Power Limited, 19.9% of the stapled securities in SP AusNet, an ASX and SGX-listed entity, and a 60% interest in SP (Australia) Assets Pty Limited, which trades as Jemena.

Pursuant to the terms of the Agreement, Minco will acquire all of the outstanding common shares of Buchans that it does not already own in exchange for shares of Minco by way of a statutory scheme of arrangement on the basis of 0.826 of a Minco share for each share of Buchans (the “Exchange Ratio”). The Exchange Ratio implies an offer price of $0.053 per Buchans common share, based on the sixty day volume weighted average share prices for Buchans and Minco for the period ending April 26th 2013. Under the Arrangement, Minco will issue approximately 124,642,198 new Minco shares in exchange for Buchans shares. Upon completion of the Arrangement current Minco shareholders will hold 73.7% of the outstanding Minco shares and Buchans shareholders will hold 26.3% of the outstanding Minco shares. Minco plc was advised by Davy Stockbrokers , Dublin and CanaccordGenuity , Toronto, and on the legal side by McEvoy Partners Dublin and Steenberg Law, Toronto. Buchans Minerals Corporation was advised by NCP ( Northland ) Canada with legal work by McInnes Cooper, Halifax, Nova Scotia. McEvoy Partners acted as Irish lawyers for Minco plc on the deal, led by Edel Conway, Associate and Orlaith O’Brien, Partner. The firm has worked with the client for almost 15 years. Ms O’Brien commented: Our main role was to contribute into the Canadian information memorandum to be circulated to the shareholders of Buchans to highlight Irish company law issues and differences with the Canadian company law system. “This is a great transaction for Minco and its shareholders.

MINCO ANNOUNCES ACQUISITION OF

MINERALS CORPORATION DRVBUCHANS Corporate Finance Legal Adviser to Minco

Evans & Peck represented QIC, led by David Beckett, Principal. The primary role of the technical due diligence adviser to the buyer in relation to the acquisition of Moomba to Adelaide Pipeline (MAPS) is to highlight the technical risks to which MAPS is currently exposed given its business requirements, including an assessment as to how they might be mitigated, commented Mr Beckett. The challenge includes providing a forecast of the future remaining life of the asset and the expenditure required to maintain the asset in an operable condition. The pipeline is buried and therefore a visual inspection is not possible, the historical data regarding corrosion was limited. This presented some technical challenges requiring a combination of sound experienced judgement and analysis techniques. CQ Partners acted as Energy Adviser for the acquisition, led by Lino Fusco and Ian Tannebring and including Reza Evans, Damian Edwards and Steve Trollope. www.cqpartners.com.au lino@cqpartners.com.au ian@cqpartners.com.au reza@cqpartners.com.au The eastern Australian gas market is undergoing significant changes which are driven by the development of 6 new LNG trains in Queensland. This is proving to be a major challenge for the large gas buyers in this market and it will impact on the future demand for pipeline haulage. CQ Partners worked closely with QIC and its other advisors to assess the potential impacts of these changes and this was an important factor in the success of the acquisition, said Mr Fusco.

The matter was led by Linklaters partners Judie Ng Shortell and Thomas Ng, both based in Beijing, and Allens partners Anna Collyer and Wendy Rae, both based in Melbourne. Ms Shortell commented: “The deal involved two separate but contemporaneous transactions – the acquisition of a 19.9% interest in ASX and SGX-listed SP AusNet and the acquisition of a 60% interest in privately-held SP (Australia) Assets Pty Limited. The companies own and operate gas and electricity transmission and distribution assets in Australia, some of which are regulated. The transactions are subject to customary regulatory consents in Australia and in China, including foreign investment approval from the Treasurer of the Commonwealth of Australia and approval from the PRC’s National Development and Reform Commission. The size and complexity of the transactions required both public and private M&A input, energy sector expertise and contributions from finance, tax, employment and property specialists. The transactions showcased the quality and depth of the Linklaters and Allens teams, drawing from the combined resources at each firm to provide State Grid with the best team for the deal.”

Mark Green

PWC represented QIC Global Infrastructure on the deal, led by Andrew Weeden, Transactions Services Partner, and Graham Sorensen, Taxation Partner. PWC has advised QIC Global Infrastructure over an extended period on a number of deals including Port of Brisbane and OSU Parking. We are delighted to have made a contribution to another important transaction for QIC Global Infrastructure, said Mr Weeden.

QIC GLOBAL INFRASTRUCTURE ACQUISITION OF MOOMBA-TO-ADELAIDE PIPELINE FROM APA GROUP Financial Adviser to the Purchaser

Alan Kenworthy

Minter Ellison was specialist tax adviser to Singapore Power in this significant transaction. The team was led by partners Mark Green and Alan Kenworthy. Singapore Power has been a key client of Minter Ellison’s specialist tax practice for more than 15 years. In that time the firm has assisted the company on many of its strategic undertakings in Australia, including its acquisition of TXU Corp’s entire Australian operations in 2004 (one of Australia’s largest energy transactions at the time), the IPO of 49% of SP AusNet in 2005 and in relation to the acquisition of assets previously owned by Alinta Group in 2007. mark.green@minterellison.com alan.kenworthy@minterellison.com www.minterellison.com

STATE GRID ACQUISITON OF

SP AusNet & JAMENA DRV Corporate Finance

Tax Adviser to Singapore Power

Financial and Taxation Due Diligence Provider Adviser to Minco Advisers to Singapore Power Commercial Due Diligence Provider

Risk & Insurance Due Diligence Provider Legal Adviser to Buchans Minerals Corporation Technical/Environmental Due Diligence Provider

ACQUISITION INTERNATIONAL

June 2013 /

ENERGY & RESOURCES

Energy & Resources Deals

DEAL DIARY:

Financial Services Deals FREEDOM FINANCE NORDIC

HEALTHCARE FINANCE GROUP

l H.I.G. Europe, the European arm of global private equity firm H.I.G. Capital, has made its first Nordic investment with the acquisition of Freedom Finance Nordic, the largest prime consumer loan broker operating in Sweden, Norway and Finland. Terms of the transaction were not disclosed.

l Fifth Street Finance Corp. has entered into a definitive agreement to acquire Healthcare Finance Group, LLC (“HFG”) as a portfolio company. HFG is a specialty lender providing asset-based lending and term loan products to the healthcare industry. Since its founding, HFG has financed in excess of $21 billion in receivables.

H.I.G. Europe brings relevant experience from the more mature UK consumer finance market and will support the Company’s rapid growth trajectory to create a larger company offering a full online price comparison service, covering multiple products, from personal loans and insurance to utilities.

FINANCIAL SERVICES

Carl Harring, Managing Director at H.I.G. Europe, said: “We are delighted to have partnered with Freedom Finance, already the largest broker of its kind in all three countries and the only pan-Nordic platform. We see a huge opportunity to offer consumers a fast, trusted route to obtaining the best terms on financial products. “Freedom Finance’s customers make a substantial saving every time they use the service; it is a great customer value proposition. Freedom Finance is very well positioned to capitalise on changing Nordic behaviour as consumers are increasingly comparing products and services before buying, just like they have been doing in the UK for the last 5 -10 years. The improved service level and the sheer cost saving delivered is a winning formula.” Freedom Finance was established in Sweden in 2003. Ten years on, the Company now has a sophisticated online platform, a rich proprietary database and brings together over twenty of the largest banks and mortgage companies onto one platform in order to help the user to compare and find the best loan product.

David Ramm

Ernst & Young advised HIG in terms of financial and tax due diligence and tax structuring, led by David Ramm, Transactions partner based in Ernst & Young’s Stockholm office. Magnus Pantzar lead the tax work.

H.I.G. EUROPE ACQUISITION OF FREEDOM FINANCE NORDIC

To effect the acquisition, Fifth Street anticipates investing approximately $110 million and intends to finance the purchase with available liquidity, including operating cash and borrowings under Fifth Street’s existing credit facilities. HFG’s senior management team has an average of 24 years of healthcare finance or related industry experience and will provide continuing leadership to HFG going forward. Fifth Street expects that the HFG acquisition will be accretive to net investment income. HFG’s total outstanding loan portfolio, as of May 6, 2013, consisted of 57 loans with a value of approximately $270 million. Fifth Street believes that HFG’s niche focus in the healthcare industry offers the potential for strong asset quality and attractive yields, even during challenging economic or debt capital market conditions. HFG has a quality track record of managing credit risk since inception in 2000. “Healthcare Finance Group is the oldest, continuously operating stand-alone healthcare asset-based lender in the U.S. We believe that a strategic investment in HFG will provide exceptional opportunities to grow the company’s platform,” stated Leonard M. Tannenbaum, Fifth Street’s Chief Executive Officer, adding, “This investment fits well within Fifth Street’s successful track record for investments in the healthcare sector.” “Fifth Street is the ideal partner to take what we have built at HFG to the next level,” said Isaac Soleimani, Chairman and CEO of HFG, adding, “The combination of Fifth Street’s access to capital, entrepreneurial culture and savvy professionals, as well as HFG’s expertise, reputation and track record in the healthcare industry, will create a potent force in the marketplace that will accelerate HFG’s growth going forward. We are very excited about Fifth Street’s acquisition of HFG.”

FIFTH STREET FINANCE CORP. AGREES TO ACQUISITION OF

DRVHEALTHCARE Corporate FINANCE FinanceGROUP, LLC

PACIFIC & ORIENT INSURANCE l South African financial services group Sanlam has announced that all conditions precedent have been met to conclude the acquisition of a 49% stake in the Malaysian niche short-term insurer Pacific & Orient Insurance Co. Berhad (POI). The value of the transaction is Malaysian Ringgit (MYR) 270 million (approximately R814 million) and the effective date of the transaction is 17 May 2013. The transaction is being executed by Sanlam Emerging Markets (SEM), the business cluster responsible for Sanlam Group’s international expansion into selected emerging markets. PwC South Africa led by Cape Town based Director Tertius van Dijk acted on behalf of Sanlam Emerging Markets Proprietary Limited to perform a financial, tax, actuarial, regulatory and IT due diligence on Pacific and Orient Insurance Company Berhad. PwC South Africa worked in conjunction with PwC Malaysia to gain access to local industry, regulatory and tax expertise. Frost & Sullivan represented Sanlam Emerging Markets, led by Mark Simoncelli Global Director: Growth Implementation Solutions and supported by a Technical Lead: Sanjay Singh Vice President & Head BFS - Asia Pacific. The Delivery of the project was completed by both the Automation & Transportation and Financial Services teams, based in Malaysia. Mr Simoncelli commented: “We have been engaging and working with Sanlam for approximately a year in the build up to this project. Our focus as a Growth consulting company was to partner with Sanlam in order to deliver an in-depth market study and complete the commercial due diligence of the transaction. “The real challenge was to ensure that the right team (Industry experience and Geographic coverage) was mobilised to effectively deliver this global project. It required that the project was led from South Africa, to ensure an intimate understanding of Sanlam’s requirements, yet was delivered from Malaysia to ensure the relevance of the insight and recommendations where the deal was taking place. In order to develop the necessary insight, a three tiered approach was followed between: an in depth market study; customer research, both through primary and secondary mediums; and finally the economic modelling as part of the commercial due diligence.”

SANLAM ACQUIRES 49% STAKE IN

MALAYSIAN PACIFIC & ORIENT INSURANCE DRV Corporate Finance

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90 / June 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

Healthcare Deals

l Air Liquide continues the development of its home healthcare activity with the acquisition in Australia of a 73.3% share of Healthy Sleep Solutions. This company is a leading player in the field of diagnosis and treatment for patients with sleep disorders, notably sleep apnea. Founded in 2007 in Australia, Healthy Sleep Solutions is specialized in sleep apnea diagnosis and treatment at the patient’s home. Through its global solutions, it provides sleep apnea patients with effective Continuous Positive Airway Pressure treatment, helping them improve their quality of life. In Australia, it is estimated that around 600,000 people suffer from sleep apnea, of which only 25% have been diagnosed to date. In 2012, Healthy Sleep Solutions has taken care of over 10,000 patients in Australia with the support of a team of 15 employees and a network of 75 technicians. The company has developed a strong relationship with an extensive number of local sleep physicians, Specialists and General Practitioners. Relying on sleep diagnosis at home and in laboratories, Air Liquide will now provide in Australia complete quality care services for patients with mild to severe sleep disorders. Air Liquide intends to pursue Healthy Sleep Solutions’ development by favouring the continuity of the company’s management, led by Marjan Mikel and Stephen Newton, and by relying upon the expertise and commitment of its teams. Matthew Duggan, Director of DBW Chartered Accountants, acted for Healthy Sleep Solutions providing tax advice and transaction support. Mr Duggan commented: We have been advising Healthy Sleep since 2007 and are pleased we have been able to help Matthew Duggan the company grow from its early days as niche operator to being a major player in their market segment.

PETERBOROUGH HOSPITAL

STAT-DIAGNOSTICA

l JLIF, a FTSE 250 company with a Primary Listing on the London Stock Exchange, has acquired a 30% stake in Peterborough Hospital, its second acquisition of the year. The stake was acquired from Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN) for a total consideration of £26.7 million.

l STAT-Diagnostica has closed a Series B financing round totalling 22.1 million USD/17 million Euros, the proceeds of which will be used to complete development of the company’s Near Patient Testing diagnostic system and clinical validation of its first products. Led by new investor Kurma Life Sciences Partners, the round also drew participation from new investors Idinvest; Boehringer Ingelheim Venture Fund; and, Caixa Capital Risc, the venture capital division of “la Caixa;” as well as existing investors Ysios Capital and Axis.

LIF is a Guernsey registered closed-end investment company that has raised over £520 million in the equity market, taking its market capitalisation to in excess of £585 million. JLIF has paid its target dividend of 6% in its first two years and has created total shareholder return from launch to the end of December 2012 of 17.8%. JLIF has a portfolio of 38 low risk, operational, PPP infrastructure projects located in the UK, Continental Europe and North America. Peterborough Hospital has been fully operational since 2010 and has a long concession period to 2042, which will extend the average life of JLIFs portfolio from 19.6 years (as at 31 December 2012) to 20.1 years. The consideration paid by JLIF is in line with the current valuation methodology for similar UK health PPPprojects in JLIFs portfolio and, following this acquisition, the portfolio will comprise 38 assets. The acquisition increases the number of health sector investments worldwide to ten and is reflective of the company s confidence in the sector. David Marshall from John Laing Capital Management, Fund Manager to JLIF, said: “We are delighted to announce the acquisition of the stake in Peterborough Hospital, which is a high quality operational project. We look forward to working with our public sector partners to operate this project in an efficient manner.

Founded in 2010 and based in the Barcelona Science Park, STAT-Diagnostica develops Near Patient Testing systems that simplify and reduce time to results for the diagnosis of certain medical conditions. The company’s novel in vitro diagnostic system is a versatile, easy-to-use platform that consolidates molecular and immunoassay techniques in a single device. The first clinical applications will be directed at infectious disease detection, antibiotic resistance determination and detection of biomarkers in critically ill patients. “The Series B financing is a significant milestone that will support our preparation for a European market launch in 2015,” said Jordi Carrera, CEO and co-founder of STATDiagnostica. “Our ability to close the round is proof of the outstanding team behind the company, and demonstrates the potential of our technology in the fast growing decentralized diagnostics market.” STAT-Diagnostica’s platform not only offers multi-analyte and multi-sample capabilities, but it also reduces current diagnosis times (which can take up to several days) by providing results in less than 30 minutes. The system’s rapid performance will enable improved clinical decision making by medical practitioners, delivering better patient management with direct and indirect savings to the healthcare system. Grant Thornton acted as financial advisor for the new investors and Cuatrecasas as legal advisor. Rousaud Costas Duran acted as legal advisor for the company.

“The acquisition reflects the increasing number of investments in the JLIF portfolio sourced from non-John Laing vendors in the secondary market. JLIF has now acquired 11 such investments with a combined valuation of approximately £95 million and we remain confident of finding further such investment opportunities in the future.”

Alvaro Ortega, Regional Director, Merrill DataSite said: “Representing the client STAT Diagnostica, alongside our long-standing relationship with the world-class venture capital fund Ysios Capital, we assisted efficiently in overcoming geographical barriers and managing the due diligence process via our highly secure VDR. In the current environment, it is always difficult to raise capital, yet, this deal is a clear example of how there are still unique investment opportunities to be had.”

AUSTRALIA HOME HEALTHCARE ACQUISITION BY AIR LIQUIDE

JLIF COMPLETES ACQUISITION OF PETERBOROUGH HOSPITAL STAKE

KURMA LIFE SCIENCES BACKS €17M STAT-DIAGNOSTICA SERIES B ROUND

Tax Adviser

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Legal Adviser to the Purchaser

“The Australian tax legislation is a complex model and it was important that HSS got clear advice on the impact of the Australian tax rules on the sale of their business. To achieve the result we have is exciting and it would not have happened without great team work and the solid relationships we have with our client.

Legal Adviser to the Purchaser Financial Adviser to the Purchaser

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Cropper Parkhill & Associates ACQUISITION INTERNATIONAL

Financial Adviser to the Purchaser Legal Adviser to the Vendor

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June 2013 /

HEALTHCARE

HEALTHY SLEEP SOLUTIONS

DEAL DIARY:

Industrial Deals BLOHM + VOSS OIL TOOLS

FINNAIR ENGINE SERVICE ASSETS

GEBR BRINKMANN GMBH

l Forum Energy Technologies, Inc. (NYSE:FET) has entered into a definitive agreement to acquire Blohm + Voss Oil Tools from STAR Capital Partners Limited (STAR), a London based private equity firm. Completion of the transaction is subject to certain customary closing conditions. Further details of the transaction were not disclosed.

l GA Telesis LLC and Finnair have concluded their agreement whereby GA Telesis has acquired part of Finnair Engine Services (“FES”) and will employ 80 engine service professionals from Finnair’s existing workforce. The deal is comprised of the sale of assets and transfer of personnel to GA Telesis Engine Services Oy (“GATES”). GATES has simultaneously entered into a long-term lease of all of the engine maintenance and test cell facilities from Finnair.

l LEAX Group has signed an agreement to acquire the business of Gebr. Brinkmann GmbH in Detmold, Germany, from the first of April 2013. Brinkmann is a well-known gear and gearbox specialist manufacturer in the German industrial landscape. The history goes back to 1945 and the company has built up a broad customer base within various industry segments.

With locations in Hamburg, Germany and Willis, Texas, Blohm + Voss Oil Tools manufactures a comprehensive range of pipe handling equipment used on offshore and onshore drilling rigs. Cris Gaut, Forum’s Chairman and Chief Executive Officer, commented, “Blohm + Voss Oil Tools significantly strengthens the tubular handling offering within our Drilling Technologies product line. The Blohm + Voss brand name is well recognized in the industry and has a strong reputation for delivering high quality products to a global customer base. Blohm + Voss Oil Tools’ strength in international and offshore markets complements Forum’s strength in the North America land market. In addition, we see an opportunity to expand the market for our combined product offering by utilizing our existing global sales, distribution and service channels. We welcome all of the employees of Blohm + Voss Oil Tools to the Forum family.” Britta Hagemann, leader of the EHS Management & Sustainability Team of URS in Hamburg, and Kirsten Peteaux, an experienced Senior EHS consultant, directed a multi-national team of environmental specialists who assisted Star Capital since the acquisition of B+V in winter 2011. INDUSTRIAL

URS prepared Vendor Environmental Due Diligence Assessments to evaluate potential environmental liability issues with contaminated land from current and historical operations, as well as potential environmental non-compliance issues. The main objective was to provide a detailed but clear overview of the complex environmental situation of the former B+V sites and its effect on the current BVOT company.

FORUM ENERGY TECHNOLOGIES ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE BLOHM + VOSS OIL TOOLS

“We welcome GA Telesis to Helsinki Vantaa Airport, and are happy for the continued employment offered to the dedicated professionals who will form the core of GA Telesis Engines Services,” said Jaakko Schildt, Vice President, Technical Operations, Finnair. “We think our quality labour force, coupled with the material solutions brought by GA Telesis, will lead to an unparalleled presence in the engine maintenance industry,” he added. GA Telesis Engine Services Oy is a wholly owned subsidiary of GA Telesis, LLC. GATES will provide comprehensive repair and overhaul services for the General Electric CF6-80C2 and CFM International CFM56-5B/C jet engine models as well as repair and modification services for Pratt & Whitney PW2000 engines. Collectively these engine models constitute the greatest number of single and twinaisle jet engines in commercial airline operation. GATES has capacity to overhaul up to 200 engines per year. Grant Thornton provided due diligence to the buyer, GA Telesis, led by Jonni Leporanta, Head of Transactional Advisory. Perkins Coie LLP represented GA Telesis in the crossborder asset purchase transaction, with corporate partner David Matheson leading the team of Gina Eiben, Jeff Bock and Chris Criglow. This was Perkins Coie’s first representation of GA Telesis. Dittmar & Indrenius provided Finnish law advice relating to transaction structure and documentation including M&A, real estate and environmental matters. The team also advised in negotiating collective labour agreements with labour unions and in other employment issues.

Petteri Uoti

Juha-Pekka Mutanen, Partner, led the team and provided corporate and M&A advice. Petteri Uoti, Partner, provided labour law advice concerning the transaction and related collective labour agreement issues.

GA TELESIS ACQUISITION OF

ENGINE SERVICES ASSETS DRVFINNAIR Corporate Finance

LEAX acquires the company as part of its global expansion strategy. The factory will essentially continue with its current product range and technology and will employ some 80 people. The German business in Detmold, south-west of Hannover, will strengthen LEAX´s capabilities on gears and gearboxes. Moreover it gives LEAX increased access to the German market also for services made available by other LEAX Group companies. “Acquiring Brinkmann is of great importance for LEAX´s growth in continental Europe. The German facility opens up new possibilities for us to grow our business”, said LEAX´s President and CEO, Roger Berggren. “Our long term ambition is to grow in Germany. We want to increase the business with German companies both in Germany and globally.” TIGGES Rechtsanwälte in Düsseldorf provided legal assistance to the LEAX Group on the an asset deal. Dr Michael Tigges was responsible for the corporate-law part of the transaction, while senior partner Michael Niermann took care of the deal from an employment-law perspective; associate Marius Rosenberg assisted with the due diligence and drafting the contracts. TIGGES was instructed by a Board member of the LEAX Group AB with whom Dr Michael Tigges had already maintained business relations for many years. A focal point of the transaction, which was effected with extraordinary speed, consisted of the complex negotiations with the union and works council about the reduction of the personnel from 145 to c. 90 people. Michael Niermann’s longstanding experience in assisting with such negotiations contributed to the ability ultimately to find a solution which was acceptable to all of the parties.

LEAX ACQUIRES GERMAN COMPANY AS PART OF ITS EXPANSION

Environmental Due Diligence Provider Local Finland Counsel

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92 / June 2013

Property/Real Estate Diligence

NewSec Finland Oy ACQUISITION INTERNATIONAL

DEAL DIARY:

Industrial Deals HTC SWEDEN

PETZETAKIS AFRICA

UNIKEY INDUSTRIAL COMPONENTS

l Polaris Private Equity (“Polaris”), a leading Danish/Swedish mid-market private equity investor, has successfully acquired HTC Sweden AB (“HTC” or “the Company”), the leading global developer and manufacturer of professional floor grinding systems and floor solutions.

l In a bid to invest in the South African plastic pipe market, Marley Pipe Systems – an Aliaxis Group company – has successfully acquired the assets of Petzetakis Africa, the South African based pipe producer, which were placed into liquidation.

l Southco, Inc., a global leader in engineered access solutions, has acquired Unikey Industrial Components. With this acquisition, Southco expands its broad range of engineered access hardware solutions and extends the company’s global market presence into South America.

Headquartered in Söderköping, Sweden, HTC has been growing rapidly in recent years, driven by expansion into new geographic markets and the launch of new products. The company has 165 employees, and subsidiaries in the US, Germany, the UK and France, with coverage of an additional 60 countries through distribution partners. In 2012, the Company generated revenues of SEK 370m and EBITDA of SEK 58.5m. HTC creates value for its customers through new methods for floor preparation and floor solutions which are cheaper, sturdier, more environmentally friendly and longer-lasting compared to other options available on the market today. HTC’s strong focus on innovation has resulted in global market leadership within floor grinding machines, polished concrete (HTC SuperfloorTM) and diamond cleaning systems (TwisterTM).

Kenneth Cameron Mr Cameron commented: The South African regime on environmental law is onerous and dynamic. Yet it is different to the approach taken in Europe in many ways. Some of the key challenges in local acquisitions are attempting to ring-fence subjective concepts such as “duty of care”. Other challenges relate to defining liability risks and obligations during transitional periods in the development of South African legislation. To overcome these challenges we had to contextualise the relevant legal principles around the physical location, status and operational history of assets and then apply both experience and case law precedents in order to render a qualified indication of the actual acquisition risks to the purchaser.

Zacco, one of Europe’s largest IP firms, carried out a risk analysis of the patent portfolio for Polaris Private Equity in the deal. The analysis was made by Henrik Aurell, Senior Partner, who commented: We made a risk analysis of the patent portfolio and looked at the patent portfolio from a number of different perspectives. It is important that the investor obtains information on the legal status of the IP rights, the quality and the handling of the applications, strengths and weaknesses in the event of any infringement and whether or not the IP rights protects the existing products etc. Henrik Aurell

www.zacco.com Henrik.aurell@zacco.com

Pierre Hugo

Saintsburg Consulting is the outsourced legal adviser for Marley Pipe Systems and has been for four years. Marley appointed Senior Consultant, Pierre Hugo of Saintsburg Consulting, for its legal management requirements, in this case the Petzetakis acquisition.

Mr Hugo was responsible to formulate the legal strategy for the acquisition, get regulatory approvals, manage litigation, appoint attorneys and manage the legal costs involved. It was great working with the whole Marley team and particularly satisfying because the successful conclusion of this deal now forms the basis for shareholder’s support for the expansion of Marley’s business into the rest of Sub Saharan Africa.

Marcos Martins represented the Sellers on the deal, the individual owners of Unikey Industrial Components, led by founding partner Mr. Marcos Martins da Costa Santos . The team was comprised of César Soares Magnani (corporate partner), Ana Carolina Rovida de Oliveira (corporate department leader) and Fabricio Luis Giacomini (Junior Associate). We started the relationship with the individuals because of the transaction but are continuing to advise them in other businesses and assets restructuring, said Mr Santos. There were several challenges in completing the deal, mainly in view that the Buyer – Southco did not have previous experience with the business environment, rules and regulations of Brazil. “We assisted our client in clarifying the differences and possible alternatives to implement the deal which helped the Buyer to feel more guaranteed in relation to the unknown of moving into a foreign jurisdiction. anacarolina@marcosmartins.adv.br www.marcosmartins.adv.br PINHEIRO NETO helped Southco in the acquisition, led by Bruno Balduccini, Partner, Alessandra Carolina Rossi Martins, Associate and Amina Akram, Foreign Associate. The firm performed due diligence, drafted the agreements and help with negotiations as well as Legal Advisers of the sellers tax planning, purchased inflow and setting a local presence in addition to general consultation on doing business and labour. Mr. Balduccini commented: It was the first equity investment of Southco in Brazil and they had to quickly understand the characteristics and pitfalls of acquiring a business in Brazil. Seller were a family with no experience in M&A. They also decided to go through a restructuring prior to the sale of the business. “We really enjoyed working with Southco. They are very nice and we believe we established a friendship relationship in addition to the Lawyer Client relationship. We have contact mainly the head of Legal – Alan Eisen and Paul Brown (from the business side). Really nice people. bbalduccini@pn.com.br www.pinheironeto.com.br

POLARIS ACQUIRES HTC SWEDEN AB

MARLEY PIPE SYSTEMS ACQUIRES ASSETS OF PETZETAKIS AFRICA

SOUTHCO ACQUIRES UNIKEY INDUSTRIAL COMPONENTS

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ABG

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ACQUISITION INTERNATIONAL

Tax adviser to Marley Tax Advisor

June 2013 /

INDUSTRIAL

The team that represented Marley Pipe Systems in respect of environmental legal risks was led by Kenneth Cameron of MacRobert Incorporated. Kenneth specialises in environmental and mining law and was a director of Cameron Cross Inc.at the time.

Polaris has acquired the Company from Håkan and Gunn Thysell, who founded HTC in 1987 and have remained majority owners with a 60% stake. 3i Group and former management, who held 40%, have also sold their interest in the company to Polaris, in what is the firm’s sixth platform investment since the start of 2012.

DEAL DIARY:

Real Estate Deals CAN FIRST

INDUSTRIAL PROPERTY IN LAVAL

SILESIA CITY CENTER MALL

l Dundee Industrial REIT has entered into an agreement with CanFirst Industrial Realty Fund III LP and CanFirst Industrial Realty Fund IV LP (“CanFirst”) to acquire a portfolio of 22 industrial properties (the “Portfolio”) for approximately $151.5 million.

l BTB Real Estate Investment Trust has, after the conclusion of the due diligence process, purchased an industrial property in Laval, province of Quebec, for the purchase price of $11 million excluding closing costs. With the conclusion of this acquisition, BTB has now closed approximately $502 million worth of properties representing over 4.4 million square feet of leasable area.

l IMMOFINANZ Group has announces a large property sale in Eastern Europe: the Silesia City Center in Katowice, Poland, one of the premium standing investments owned by this Austrian real estate company, will be purchased by an international investor consortium led by Allianz. At EUR 412 million, the purchase price exceeds the respective carrying amount. The contract was signed on 27 May 2013. The transaction is subject to suspensive conditions, e.g. approval by the Polish competition authorities, and the closing is expected to take place in September 2013.

The CanFirst Portfolio comprises 1.6 million square feet of gross leasable area wholly located across the Greater Toronto Area (“GTA”) in key industrial markets and along major transportation corridors providing direct highway access. Upon completion of the acquisition of the Portfolio and the recently announced acquisition of C2C Industrial Properties Inc. (“C2C”), Dundee Industrial will own a nationally diversified portfolio totalling 15.6 million square feet of gross leasable area, reinforcing its position as Canada’s largest industrial REIT. The Portfolio comprises 1.6 million square feet of gross leasable area located entirely within the GTA. The Portfolio will provide additional scale in the GTA and further enhances the REIT’s geographic and tenant diversification. The transaction is immediately accretive to the REIT. The Portfolio has a year-one capitalization rate of 6.5%. Including property management fee income, the capitalization rate increases to 6.7%. The CanFirst Portfolio complements the REIT’s existing assets in terms of asset type and quality, as well as other key portfolio metrics. The Portfolio has a current in-place occupancy rate of 96%, a weighted average lease term of approximately 3.7 years and an average in-place rent of $5.83 per square foot. Dundee Industrial will acquire the Portfolio for a purchase price of approximately $151.5 million, equating to a value of approximately $93/square foot. Year 1 NOI is expected to be $9.9 million, resulting in a capitalization rate of 6.5%. Including property management income, the capitalization rate increases to 6.7%.

REAL ESTATE

DUNDEE INDUSTRIAL REIT TO ACQUIRE INDUSTRIAL PORTFOLIO FOR $151.5 MILLION Commercial Broker

This industrial property, dedicated to the production of medicinal products, has a leasable area of approximately 132,665 square feet. It is well situated at the intersection of Highway 15 and Highway 440, within ten minutes of Montreal’s International Airport. This property is fully-leased to Pharmetics. BTB is a real estate investment trust listed on the Toronto Stock Exchange. BTB is an important owner of properties in eastern Canada. BTB owns 67 commercial, office and industrial properties for a total of more than 4.4 million square feet. BTB’s asset value is approximately $530M. The objectives of BTB are: i) to grow its revenues from its assets to increase distributable income and therefore fund distributions; (ii) to maximize the value of its assets through dynamic management of its properties in order to sustain the long-term value of its units; and (iii) to generate cash distributions that are fiscally beneficial to unitholders. BTB offers a distribution reinvestment plan to unitholders whereby the participants may elect to have their monthly cash distribution reinvested in additional units of BTB at a price based on the weighted average price for BTB’s Units on the Toronto Stock Exchange for the five trading days immediately preceding the distribution date, discounted by 5%. Marc Rubin, Partner, led the De Grandpré Chait team advising BTB REIT (BTB Acquisition and Operating Trust) on the deal. De Grandpré Chait has a long-standing working relationship with the client. BTB REAL ESTATE INVESTMENT TRUST ANNOUNCES ACQUISITION OF

DRV Corporate Finance INDUSTRIAL BUILDING

Taxand was engaged in tax structuring of sale of Silesia shopping centre representing the seller – Immofinanz AG. Taxand’s cooperation with Immofinanz starts back in 2011. Paweł Toński, partner and head of real estate at Crido Taxand (Taxand Poland) was leading the project and coordinating work of Taxanders. Taxand was engaged in structuring of sale and post-sale distributions. On VAT the centre includes modernized buildings of coal mine which required quite an individual approach to securing seller’s and buyer’s positions. The deal is likely to be a top three Polish real estate deal in 2013 in terms of value. www.taxand.pl Paweł Toński

Dentons, lead by Elzbieta Lis, advised Immofinanz AG’s Polish subsidiary who owns the shopping center known as Silesia City Center in Katowice in its sale of the center to a consortium lead by Allianz Real Estate The team was lead by Elzbieta Lis, counsel in the Real Estate Department, and Head of the Spanish Desk at Dentons. Ms Lis commented: “One of the challenges was to find the right balance between the seller and the buyer’s expectations for such a size of a deal. This is one of the biggest single- asset sales in the last six years in Poland. My focus was on acting like a true counsel, who seeks not only the greatest protection of its client’s interest, but who wishes to achieve a successful closing of the transaction; therefore, the views of all parties to the deal were important in achieving the balance that lead to the successful signing of the preliminary agreements.”

SIGNING OF THE PRELIMINARY AGREEMENT FOR THE SALE BY IMMOFINANZ OF THE

DRVSILESIA Corporate Finance CITY CENTER IN KATOWICE

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Debt Providers

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DREAM

94 / June 2013

Property Valuer

ACQUISITION INTERNATIONAL

DEAL DIARY:

Support Services Deals DFLOW B.V

RAE SYSTEMS

l BigHand, a global leader in voice productivity for legal and healthcare professionals, has acquired its Benelux reseller dFlow B.V. The acquisition of its trusted and long-standing partner who will become BigHand B.V, is the part of a strategic increase in investment aimed at establishing the BigHand brand more extensively in mainland Europe and Scandinavia.

l Honeywell (NYSE: HON) announced a definitive agreement to acquire RAE Systems, Inc., a privately held manufacturer of fixed and portable gas and radiation detections systems, and software for $340 million. The purchase price translates to approximately thirteen times RAE Systems’ estimated 2013 earnings before interest, taxes, depreciation and amortization (EBITDA), or approximately six times on a synergy adjusted run-rate basis integrating with Honeywell’s gas portfolio. The agreement, subject to customary closing conditions, including regulatory review, is expected to close in the second quarter of 2013 and does not change Honeywell’s 2013 full-year guidance.

ALEX l Propel Equity Partners, a private equity firm focused on investing and creating value in leading consumer brands, has acquired ALEX®, a leading maker of children’s creative products. ALEX joins the POOF®-Slinky® family of brands, which includes Slinky®, POOF®, Ideal®, Scientific Explorer® and Fundex Games® on the Propel Equity Partners roster of leading toy brands. POOF-Slinky, Inc. was acquired by Propel Equity Partners in July of 2012, and Fundex Games was acquired in December of 2012. “ALEX has developed into a leading lifestyle brand for kids, presenting tremendous opportunities for expansion,” says Michael Cornell, Chairman and CEO of Propel Equity Partners. “This acquisition represents another step in our mission of bringing the most innovative and successful companies in the toy and craft industry under our umbrella.” The combined strength of the two companies, along with an emphasis on customerdevelopment and brand-building will continue to fortify the brands’ presence. Broadened distribution and intensified consumer communications will drive availability of, and desire for, ALEX products among more households across the U.S. and around the world. POOF-Slinky sells some of the most iconic brands in the toy market, including Slinky, one of the most recognizable toys in the history of the U.S. POOF-Slinky products are sold in more than 35,000 retail outlets.

The acquisition will also see increased investment from BigHand to extend its reputation for high quality client service to all its customers in Europe through local support and delivery whilst leveraging the support, services, product development and central scale of BigHand as a global group. Juul Leijnse and his team will all be remaining with the company to spearhead this strategy in Benelux and the further growth of the business. Heussen represented the vendor (all shareholders) of dFlow B.V., with whom the firm has a long-standing relationship. Frederieke M.H. Schoute, Senior Associate, led the team. Ms Schoute stated that the challenges Frederieke Schoute faced in the deal were the normal issues one usually encounters in negotiations such as price, adjustment mechanisms in price, representations & warranties, indemnities.

ALEX founders Nurit & Rick Amdur will remain with the company, while Fred Keller, President of POOF-Slinky, will take on the additional title of President of ALEX. For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com

PROPEL EQUITY PARTNERS BUYS ALEX

DRV Corporate Finance

Reinout Slot

CMS Amsterdam advised BigHand Limited on the deal, led by Reinout Slot. The team comprised Katja van Kranenburg, Martijn van der Bie, Gordon Tichelaar, Roderick Nieuwmeyer, Clair Wermers and Marlene Veenman. CMS UK has a long-standing relationship with BigHand Limited.

BigHand is a global leader in voice productivity for legal and healthcare professionals,” said Mr Slot. “dFlow B.V. is BigHand’s Benelux reseller and a trusted and long-standing partner. The acquisition is part of a strategy aimed at establishing the BigHand brand more broadly in mainland Europe and Scandinavia.

BIGHAND ACQUIRES DFLOW B.V

RAE Systems, with 2012 sales of approximately $107 million, offers a full line of personal, handheld, transportable and fixed gas, radiation and photo-ionization sensing and detection devices for the government, oil and gas, industrial and emergency response sectors for use in a wide range of personal, plant safety and regulatory compliance applications. Their products are used in more than 120 countries by many of the world’s leading corporations and government agencies, as well as numerous city and state entities in the U.S. “RAE Systems is a pioneer in the gas detection industry with unrivalled technologies,” said Mark Levy, president and CEO of Honeywell Life Safety. “Their strong presence in hazardous material, first responder, and government complements our existing business very well, and their expertise in photo-ionization detection, wireless, and radiation detection represent terrific opportunities to expand our reach. RAE Systems’ geographic, manufacturing and distribution footprint, especially in high-growth countries like China, will help to make our already-strong gas detection portfolio an even greater global franchise in a very good industry. RAE Systems is a very compelling strategic fit for Honeywell.” For more than 15 years Intralinks® has been serving the M&A community with the industry’s leading virtual data room, Intralinks Dealspace™. Today, Intralinks continues our history of innovation to give deal professionals the tools they need to help them manage the full M&A lifecycle - to get more deals done, faster. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com

HONEYWELL ACQUIRES RAE SYSTEMS, A LEADING GLOBAL GAS DETECTION COMPANY

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ARKOON NETWORK SECURITY

CABLE & WIRELESS

l Cassidian CyberSecurity signed an agreement to become the main shareholder of Arkoon Network Security, one of the recognised major European players in network security, information systems protection and data confidentiality.

l Batelco Group, the regional telecommunications operator headquartered in Bahrain, has finalised its recent acquisition of various companies from Cable & Wireless Communications (CWC), which comprise its Monaco and Islands Division.

Following the acquisition of Netasq on 16 November 2012, the acquisition of Arkoon Network Security represents a new strategic step in the creation of the European industrial base for cyber-security products and solutions. The extended portfolio constitutes a firm foundation for guaranteeing the security of IT networks for governments, critical infrastructures and strategic industries.

Batelco’s Group Chief Executive Shaikh Mohamed bin Isa Al Khalifa and CWC announced that, following the agreement entered into with CWC on 2 Dec 2012, all necessary regulatory approvals and conditions precedent have now been satisfied and ownership of specific companies has now been transferred to Batelco, effective today.

Jean-Michel Orozco, CEO of Cassidian CyberSecurity, said: “A global cyber-security offering must necessarily rely on an extensive range of products and solutions in order to meet the needs of our customers. The combination of Cassidian CyberSecurity, Netasq and Arkoon Network Security has created an industrial player with an international dimension, supplying trusted European solutions for guaranteeing the security of information systems”. STC Partners represented the majority shareholders: ACE Management, Siparex, Initiative & Finance, Ventech et BNP Paribas, representing 83% of the Capital. The team was led by Frédéric Frédéric Bucher Bucher, partner and part of the Corporate Legal Team. Mr Bucher stated that the challenges included the sale of a listed company and many sellers with various interests. We found room for a common interest of the sellers, he commented. www.stcpartners.fr www.dupire-associes.com CASSIDIAN CYBERSECURITY ACQUISITION OF ARKOON NETWORK SECURITY

Batelco has acquired the entire CWC interest in Dhiraagu (Maldives), Sure Channel Islands and Isle of Man and CWC operations in Falkland Islands, St Helena, Ascension and Diego Garcia (“SADG”). Batelco also acquired 25% shareholding in Compagnie Monégasque de Communications SAM (“CMC”), which holds CWC’s 55% interest in Monaco Telecom. Total consideration paid for these assets was $570m. CIIM, operating through the ‘Sure’ brand, offers telephony services to the Channel Islands and Isle of Man. It is the leading full service operator in Guernsey with market-leading positions in fixed-voice, mobile and broadband services. Dhiraagu is the market leading telecom operator in the Maldives offering mobile, broadband and fixed voice services. Batelco will hold a 52% stake in Dhiraagu, a listed company, with the remaining shares being held by the Maldives Government and the public. SADG offers services to Diego Garcia and three British foreign territories in the South Atlantic: St. Helena, Ascension and the Falklands. Monaco Telecom is the only full services telecommunications operator in the Principality. Monaco Telecom also owns 36.75% of Roshan, a leading mobile telecommunications operator in Afghanistan. In addition, Batelco and CWC have entered into put and call arrangements in relation to CWC’s remaining 75% interest in CMC in line with previously announced terms and conditions.

BATELCO COMPLETES MAJOR ACQUISITION

OF CABLEco-advisors & WIRELESS COMMUNICATIONS Financial

FJORD l Accenture (NYSE:ACN) has completed its acquisition of Fjord, a London-based global service design consultancy that specialises in creating wide-ranging digital experiences and services for consumers – including new ways to shop, better ways to communicate and collaborate, and innovative ways to manage their health – across platforms including smart devices, tablets and PCs. The acquisition was first announced May 7. Accenture is a global management consulting, technology services and outsourcing company, with approximately 261,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. The acquisition expands the digital and marketing capabilities Accenture offers its clients through its marketing-focused Accenture Interactive group. It further enhances Accenture Interactive’s ability to help chief marketing officers and digital leaders create distinctive customer experiences and bring them to market with speed. Fjord’s design capabilities will complement the business strategy, data analytics, technology and marketing operations services offered through Accenture Interactive. “Adding Fjord’s mobility and design capabilities to the services provided by Accenture Interactive will allow us to deliver engaging and relevant customer experiences powered by scalable, industrialized marketing technology and operations,” said Brian Whipple, global managing director of Accenture Interactive. “In today’s environment of digital disruption and heightened consumer expectations, the battle is for consumer engagement, and Accenture and Fjord together will offer a deep blend of skills and expertise to help clients deliver innovative experiences that bridge marketing, commerce and service.”

ACCENTURE COMPLETES ACQUISITION OF FJORD

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IT-ERNITY l GMT Communications Partners (“GMT”), the European media and communications focused private equity group, together with Veronis Suhler Stevenson (“VSS”), a private equity firm that invests in the information, education, media, marketing and business services industries in North America and Europe, have teamed up with Management to provide growth capital to IT-Ernity, a provider of business critical managed services and shared hosting for SMEs in the Netherlands. Founded in 2002 by its Managing Director, Sebastiaan de Koning, and R&D Manager Tom Pfeifer, IT-Ernity offers a comprehensive catalogue of standardised fully managed solutions, including system administration, protection, security, application management and other outsourcing services. Through the shared services and connectivity categories, the company offers shared hosting, domain registration and secure infrastructure connectivity through xDSL and fibre. Since 2008, the Company has increased in scale through fourteen acquisitions, strengthening its existing customer base and services portfolio. IT-Ernity deploys its services through a sophisticated flexible cloud server infrastructure and dedicated high-end servers, which are housed in state-of-the-art data centre facilities. The company serves a diverse and growing customer base of over 40,000 customers, including a significant amount of cloud and managed services customers, primarily in the SME market. Richard Hall, Chief Executive and founder of CloudOrigin, led the IT and Operational Due Diligence for the transaction. CloudOrigin has worked with GMT on a series of technology deals across Europe and was delighted to advise Veronis for the first time. Richard Hall

KPN INFRASTRUCTURE & PROJECTS l SPIE, the leading independent European technical service provider in the area of energy and communication, has signed an agreement for the acquisition by SPIE Nederland of IS&P (infrastructure services & projects) from KPN Group. With over 600 employees based in Zoetermeer, Houten, Apeldoorn, Eindhoven, Rotterdam and Assen, IS&P has a turnover of more than 100 million euros annually. The takeover of IS&P enables SPIE Nederland, in combination with its existing activities and recent takeover of Gebr. Van der Donk, to offer a global service in the area of digital connectivity. Lei Ummels, CEO of SPIE Nederland declared “This acquisition satisfies SPIE’s wish for a balanced presence in the industry, infrastructure and commercial real estate markets in the Netherlands. The technological know -how and the customer portfolio complement SPIE Nederland’s current activities. IS&P w ill form the basis of a new division within SPIE Nederland: SPIE-ICS (SPIE Integrated Connectivity Solutions)”. John van Vianen, director of KPN Business segment, said “We found SPIE to be a good takeover partner for our business unit IS&P. IS&P w ill be able to develop a far broader spectrum within SPIE and thereby continue to offer high quality services to KPN customers in the future. This sale of the infrastructure activities fits in with our strategy of focussing increasingly on the core activities of KPN Business segment, enabling us to provide our customers with total IT solutions in collaboration with selected partners”. This takeover is subject to the approval of the NMA and to the positive advice of the Works Councils of IS&P and SPIE Nederland.

MDS l Imperial Holdings has acquired 49% of MDS, a leading logistics provider in Nigeria, for a cash consideration of $26 million. All conditions precedent have been fulfilled and the transaction is therefore unconditional. The transaction gives the Imperial group entry into the logistics sector of the fastgrowing Nigerian FMCG, telecommunications and pharmaceutical industries. MDS, a wholly owned subsidiary of UAC of Nigeria, a company listed on the Nigerian Stock Exchange, offers warehousing and distribution solutions through a network of 50 distribution centres by linking companies with their customers in over 600 cities and villages across Nigeria. This announcement follows Imperial’s acquisition, in January 2013, of Imperial Health Sciences, formerly RTT Health Sciences, one of Africa’s leading pharmaceutical and healthcare supply chain service providers. Imperial Health Sciences specialises in multi-channel solutions for delivering essential medicines and consumer health products in South Africa, and to Namibia, Botswana, Mozambique, Zimbabwe, Zambia, Kenya, Tanzania, Malawi, Uganda, Ethiopia, Rwanda, Ghana, Cote d’Ivoire and Nigeria. Broll Valuations and Advisory Services was appointed by Andrew Hood from Imperial Properties. The team was led by Roger Hunting (Director) and Justin Weiner (Professional Associated Valuer). Previously, the firm represented Imperial Properties in Mozambique and Namibia – SubSaharan Africa. Mr Hunting commented: We undertook a due diligence for Imperial Properties on property valuations prepared for MDS by a Nigerian firm of valuers. The purpose of the due diligence being to inspect certain property assets held by MDS and to comment on the veracity of the valuation methodology and the values reported as part of the total due diligence assignment.

Mr Hall commented: We helped GMT develop their investment thesis from an early stage, recognising IT-Ernity as a market leader using process innovation to achieve growth with strong margins. Working to an aggressive schedule CloudOrigin performed IT DD hand in hand with the Commercial DD provider to fully understand market drivers and identify growth requirement for operations, including detailed review of IT-Ernity datacentre providers and analysis of high value cloud computing service opportunities. We then briefed the banking partners early in the process and clearly explained IT-Ernity market position and strengths in a segment often obscured by hyperbole. www.CloudOrigin.com

Mazars Transaction Services was responsible for the Financial Due Diligence on behalf of Spie Nederland. The team consisted of Jos Raben (Partner), Bas den Ouden (Senior Manager) and Jasper Rodewijk (Manager). This team was also involved in the acquisition of Gebr. van der Donk by Spie Nederland Jos Raben earlier this year. We were able to convert our knowledge into opportunities for Spie Nederland, said Mr Raben. http://www.mazars.nl/Startpagina/Onze-expertise/ Advies/Due-Diligence

IT-ERNITY RECEIVES GROWTH FINANCING

SPIE ANNOUNCES THE SIGNING FOR THE TAKEOVER OF IS&P UNIT FROM KPN

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“The greatest challenge faced was the geographic diversity of locations visited. We were based in Lagos and flew to Abuja, Port Harcourt, Enugu and Onitsha. Transport within Nigeria and the logistics and time available added to the challenge. We undertook a sample of 8 out of 10 cities which we identified. Undertook due diligence of imperial Properties valued for MDS and UAC group.

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PROCAM MBO l Procam Television has completed a management buy – out of the business led by the existing management team.

Valerie Whalley

RW Blears acted as legal advisers to Foresight Group, the equity provider on this transaction, led by Valerie Whalley, Partner. The firm has a longstanding relationship with Foresight Group, having recently acted on two other MBOs for the company. RW Blears specialises in providing legal advice to EIS Funds and Venture Capital Trusts. www. blears.com

Corporate partner Jonathan Leigh-Hunt and associate Fran Spooner advised management on the MBO of Procam TV, a leading broadcast hire facilities business. The MBO was backed by Foresight Group, NatWest and RBS Invoice Finance, and the management buy-out team was led by current managing director, John Brennan, with other existing senior staff. Clive Jones, a former CEO of Carlton Television, has been appointed as Chairman. Smith & Williamson Corporate Finance advised the shareholders on the sale of Procam to Foresight and the management team. The deal was led by Brian Livingston, Head of Mergers & Acquisitions, and Tim Moore, Director, with support from Simon Beavis, Manager. Smith & Williamson worked with the Company for more than 18 months on this project, introducing both the equity and debt finance providers. Smith & Williamson also played a significant part in structuring a transaction which enabled Procam’s founder to complete the process of stepping back from the business and enabling management to take control going forward. Marsden Clark Corporate Finance was the adviser to the Management team that undertook the MBO. Jim Clark led the transaction on behalf of Marsden Clark, with support from Philip Marsden. Marsden Clark have worked very closely with the Management team throughout Jim Clark the transaction, ensuing the equity and other investment terms were appropriate, and that all investors were fully bought in to Procam’s growth plans and financial projections. The business did not have a full time FD at the beginning of the process, so Jim Clark worked alongside Helen Cardrick (the new FD and co-investor) to ensure the financials were realistic and would stand up to due diligence.

SAGE CONSTRUCTION MBO

VESSELTRACKER.COM

l The Baronsmead VCTs have announced an investment in Eque2 Limited (formerly Sage Construction), a construction related Enterprise Resource Planning (ERP) software provider.

l Genscape has acquired Vesseltracker.com GmbH. This acquisition significantly expands Genscape’s network of proprietary real-time energy monitors to deliver the next era in oceangoing fleet analytics and customized reporting.

The investment will enable the management buyout of Sage Construction from Sage plc.

GSK Stockmann + Kollegen, led by Corporate Partner Michael Stobbe, advised DMG Information, Inc. (DMGI), the holding company for the Daily Mail and General Trust plc (DMGT) electronic information and data provision business, on the acquisition of the leading German maritime data provider vesseltracker.com GmbH.

Over the last five years, Sage Construction has operated as a business unit within Sage (UK) Limited’s MidMarket Division. The software caters for businesses of all sizes, across construction, house building, and onshore & offshore services, allowing builders, contractors, architects, engineers and planners to accurately manage cost and processes during a construction project. From its offices in Manchester, Farnham and Glasgow, Sage Construction has been successfully developing, implementing and supporting construction and contracting software for medium to very large companies with products such as Sage ERP Intuita, Sage ERP EVision, Sage Estimating, Sage Housebuilding, Sage 50 Construction and Sage 200 Construction. The management team is led by Wes Simons who will continue his role as CEO. Richard Beaton has been appointed as Chairman. Richard has previously worked with ISIS as Chairman of portfolio companies Boldon James, a secure messaging provider bought by QinetiQ in 2007, and library and resource management provider MLS, which was recently sold to Capita Plc. Bridge Insurance worked with both ISIS, the private equity investor, and Clearwater, who were lead advisory team, having built up a working relationship over many years. The team was led by Gavin Ruben, Director, who commented: For any businesses coming out of a group there are always important insurance challenges. For an advisory business the key protections include past and future liability in respect of Professional Advice and Contract Novation. A comprehensive programme of insurance was successfully negotiated and put in place for deal close for the new company Eque2 Ltd.

GSK advised DMGI and Genscape on all aspects of the acquisition, especially share purchase agreement structuring and negotiations, tax and corporate structuring, due diligence, management services agreements, intellectual property and information technology matters as well as regulatory aspects. In recent years, GSK already advised DMGI and its European environmental/property information division Landmark Information on the acquisitions of the German property information data providers Inframation AG and on-Geo GmbH. www.gsk.de FRANKEN ∙ RECHTSANWÄLTE represented the individual persons on sellers´ side, amongst them the two founders of vesseltracker.com, Carsten Bullemer and Ralf Paahsen. The team was led by Carl Franken, a certified specialist solicitor in commercial and corporate law. Carl Franken is the legal counsel of vesseltracker.com and the founders since the foundation of the company. This longterm relationship helped to deal with the typically sensitive questions and challenges of founders selling the enterprise they built up in the past. Carl.Franken@franken-rechtsanwaelte.de dlp Steuerberater-Sozietät hosted the due diligence and provided the buyer (Genscape) with all information that was required by them and approved by the seller who was and is the firm’s client for tax and accounting services in Germany since the foundation of vesseltracker.com a couple of years ago. The team was lead by Christian Ladehoff, Steuerberater/ Wirtschaftsprüfer (tax-advisor and CPA), a partner in the tax & accounting firm. He commented: “Challenges in explaining the accounting techniques used in Germany compared to US GAAP have been overcome by several conference calls. Different ideas on the amount of a specific purchase price component could be overcome by mediation.” www.dlp-tax.de / Ladehoff@dlp-tax.de

“We look forward to working with ISIS and Clearwater again in the near future.

Parklane Capital acted as financial advisor to one of the founders of vesseltracker.com. The team was led by Jens Nolden – Managing Partner at Parklane Capital M&A Advisors, based in Hamburg/ Germany.

FORESIGHT BACKS PROCAM MBO

ISIS BACKS SAGE CONSTRUCTION MBO

GENSCAPE ACQUISITION OF VESSELTRACKER.COM GMBH

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