Acquisition international March 2013 by AI Global Media

March 2013 / IN THIS ISSUE/

DEAL GURU:

DUE DILIGENCE AND OPERATIONAL RISK IN ALTERNATIVE INVESTMENTS:

Five leading practices to maximise divestment success.

A panel of expert firms and fund managers discuss the impact of Operational Due Diligence.

DEFEATING ALL ODDS — Burgan Bank’s 2012 Performance. / 12 www. ACQUISITION-INTL .com

NAVIGATING INDIRECT TAXES:

Leading experts in the field give a deeper understanding of indirect taxes.

Healthcare Technology — Acquisition International speaks to PwC to examine the changes to the Healthcare industry over the past year and discussing the outlook for 2013. / 23 2013 Shipping & Maritime Predictions — Wang Jing & Co discuss environmental regulation and change in the industry. / 27

CONTENTS:

March 2013

Editors Comment This month saw the release of a damning US Senate report, which sheds light on JPMorgan Chase & Co’s management. The report by the Senate subcommittee on investigations details a series of failures at the bank, including hidden accounts and incorrectly valued trades to minimise losses.

CONTENTS — March 2013

The report alleges that the bank misled investors, fought with and hid information from regulators, ignored a head trader’s concerns, and attempted to side step rules while dealing with growing losses in a derivatives portfolio. The inquiry comes after JP Morgan’s own internal investigation earlier this year, and provides the first look into the emails and discussions within the bank related to the infamous Whale trade. It focuses on the JP Morgan chief investment office, which accounted for as much as one-sixth of the bank’s assets in 2012. The report also lays blame on the bank’s regulator, the Office of the Comptroller of the Currency, recommending reformation of regulators’ oversight of derivatives. It also concludes that Jamie Dimon, JP Morgan CEO, was aware of the sustained trading losses when he dismissed the incident in April 2012. “While we have repeatedly acknowledged mistakes, our senior management acted in good faith and never had any intent to mislead anyone,” a spokeswoman for JP Morgan said. “We cooperated fully with the Subcommittee’s staff and welcome the opportunity to respond to the Senate’s questions. We know we have made many mistakes related to the CIO matter, and we have already identified many of the issues cited in the report. We have taken significant steps to remediate these issues and to learn from them.” This month we examine Burgan Bank’s performance in 2012, investigate cross-border business crime and discuss the role of the forensic account in cases of corporate fraud. 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 - DEFEATING ALL ODDS – BURGAN BANK’S 2012 PERFORMANCE: /12 Burgan Bank’s solid performance has helped position it as one of the most diversified financial group’s across the Middle East & North African region.

NEWS: /04

The Latest News Stories From Around The World.

DEAL GURU: /11

Five Leading Practices to Maximise Divestment Success

HEALTHCARE TECHNOLOGY: /23 What is the Outlook for the Healthcare Industry in 2013.

DOING BUSINESS IN...: /34 A.I’s guide to doing business around the world.

DEAL DIARY: /82 @acquisition-int

ACQUISITION INTERNATIONAL

The Latest M&A From Around The World.

6/ Hedge Funds News 8/ Appointments 14/ Legal Awards 16/ Hedge Fund Awards 17/ Resolving M&A Disputes in Arbitration 20/ Managing High-Risk Litigation 21/ Antitrust Litigation 25/ Global Real Estate Indicators 26/ Logistics and Transportation 27/ 2013 Shipping & Maritime Predictions 28/ The Specialisation of the Oil & Gas Industry 30/ Doing Business in Slovakia 37/ Cross Border M&A in Southeast Asia 39/ Bangladesh: The Next Hotspot for Investment 42/ Driving Investment in Ghana 45/ Malta: Attracting Trade & Maintaining Competition 48/ Middle Market M&A 49/ Bringing Foreign Direct Investment 52/ Doing Business in 2013 56/ Insolvency: Don’t Just Wait for Recovery 57/ Corporate Fraud & the Forensic Accountant 59/ Intellectual Property 63/ Resolving Commercial Disputes Through Mediation 67/ Due Diligence and Operational Risk in Alternative Investments 70/ Craig Fund Consultancy 71/ Navigating Indirect Taxes 74/ Cross-Border Business Crime 77/ Relocating Expertise 80/ Meet the Experts

March 2013 /

NEWS:

from around the world

M&A Professionals Expect To Perform More Deals in 2013 According to a survey conducted by KPMG LLP, the U.S. audit, tax and advisory firm, merger and acquisitions (M&A), private equity and tax professionals from the technology, financial services and healthcare sectors, among others, expect an increase in their companies’ or clients’ deal activity in 2013 compared to 2012. Of the more than 400 survey respondents, 60% said that they would do more deals this year than last year. The simpler financing terms associated with smaller deals, as compared to both large transactions and the megadeals, will drive middle-market M&A activity in the balance of 2013, according to 24% of the poll population. However, 49% of respondents felt that collectively, simpler financing terms, fewer risks and integration challenges, as well as the less complexity of due diligence that’s needed for deals valued under

$250 million, will serve as the catalyst for a deal market dominated by middle-market activity in 2013. In fact, 22% of survey respondents indicated that in 2013 thus far, the deal market is already experiencing a high volume of middle-market activity; they also acknowledged favourable credit terms (11%) and elevated levels of cash on corporate balance sheets (8%) as driving the recent deals in the marketplace. Corporate buyers have the advantage in the M&A space over private equity buyers (6%) halfway through the first quarter of 2013. “The underlying fundamentals in the deal market are improving, with the combination of a stabilizing U.S. economy, favourable credit terms, open debt markets, and high cash balances paving the way

for an increase in M&A volume this year,” said Dan Tiemann, Americas lead for KPMG’s Transactions & Restructuring practice. “As a result, companies may be highly motivated to execute transactions that drive their growth agendas, including deals that allow for business transformation and optimize new operating models.” When asked what effects new regulations might have on their ability to do deals in 2013, 21% of the poll population stated that they will cause integration challenges during the M&A process and in post-deal phases for their companies and clients. 18% cited that new regulations have temporarily delayed their ability to do deals, followed by 7% who have delayed M&A activity indefinitely; however, another 7% cited they will actively pursue deals because of new regulation.

GCP Capital Partners sells interests in Acrisure to Genstar Capital Based in Grand Rapids, Michigan, Acrisure is the 50th largest privately owned retail insurance agency in the United States. The company was co-founded in 2005 by CEO Greg Williams to acquire independent insurance agencies across the Midwest and since then has completed 26 acquisitions. The sale was a successful outcome for GCP following its $20 million investment in Acrisure in 2010 in order to support the company’s acquisition growth plan. Mr Williams said, “I am very pleased with the partnership we developed with GCP and the confidence they demonstrated in our team over the course of their investment. Having initially built Acrisure with primarily individual and personal capital, GCP was our first institutional capital partner. We are grateful for GCP’s strategic

guidance and hands-on involvement, which allowed us to grow our sales and operating infrastructure more rapidly and to position Acrisure today to enter its next phase of growth with its new investment partner.” Boris Gutin, a Managing Director at GCP Capital, said, “Greg Williams is a highly capable manager and leader who has built an exceptionally strong team and culture at Acrisure. There are a limited number of insurance brokerage platforms in the U.S. that have grown to a significant scale. Since our investment three years ago, we have worked closely with Acrisure’s management to achieve its growth plans and create a strong operating platform through complementary acquisitions, organic growth and development of key sales and

management talent. Through these efforts, Acrisure has become a leading retail insurance platform in the Midwest, and we believe the company is capable of continuing to generate substantial future growth.” Robert Niehaus, Chairman of GCP Capital, said, “Our investment strategy is to partner with strong management teams in industries having long-term growth prospects and a high degree of fragmentation. GCP has completed seven investments in the insurance industry. We evaluated a large number of insurance brokerage platforms before choosing to back Greg and his team at Acrisure. We are delighted to have provided support to management over the last several years as Acrisure significantly grew its earnings and to have completed a successful realization for our investors.”

L&G reports record sales in 2012 • UK protection sales up 30% to £56m (Q3 2011: £43m) • US protection sales up 33% to £24m (Q3 2011: £18m) • Individual annuity sales up 10% to £350m (Q3 2011: £319m) • Auto Enrolment accelerating flows to pensions, Q3 net inflows £429m • LGIM international net inflows £5.6bn (Q3 YTD 2011: £1.9bn) • Total operational cash £702m, operational cash from divisions up £25m to £686m (Q3 YTD 2011: £661m) • Net cash generation up £15m to £616m (Q3 YTD 2011: £601m)

/ March 2013

Nigel Wilson, Group Chief Executive, said: “Legal & General delivered record sales in Q3 and YTD, as we continue to see attractive opportunities for growth in each of our markets. Our UK and US Protection franchises increased sales by 30% over the same quarter last year. Success with Auto-enrolment has led to transfers of related schemes, and net pension inflows of £0.4bn in Q3. The international expansion of LGIM is accelerating, with £5.6bn net inflows YTD from international clients. We have invested £900m to date in socially and economically beneficial infrastructure projects in the UK.

the evolution of our business; our aim now is to translate strong operating performance into strong earnings growth. “Global economies are undergoing profound structural changes. We have the solutions to meet gaps emerging from public and private deleveraging and the ambition to strengthen further our reach in protection, retirement solutions, fund management and infrastructure finance. Our businesses can grow, delivering more value for society, customers and shareholders.”

“Legal & General has delivered sustainable growth in cash and dividends. We are starting to accelerate

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NEWS:

from around the world

Principal Global Investors Acquires Liongate Capital Management Stake Principal Global Investors, LLC, a leading global asset manager and a member of the Principal Financial Group® (NYSE:PFG), has agreed to acquire a 55% stake in Liongate Capital Management (Liongate), a global alternative investment boutique based in London and New York focused on managing portfolios of hedge funds. Founded in 2003, Liongate has approximately US $2.1 billion1 in assets under management across a range of commingled funds and dedicated client portfolios. Its client base includes many of the world’s leading pension funds, insurance companies and sovereign wealth funds. Liongate is recognized for its dynamic approach to asset allocation and managed hedge solutions, which have delivered strong, long-term risk-adjusted returns to its blue-chip investor base. The transaction will strengthen The Principal’s alternative investment capabilities, deepen its pool of investment talent, and help extend its product

offerings into customized multi-asset and hedge fund solutions. “With its strong reputation and focused investment expertise, Liongate is a welcome addition to our multi-boutique investment management structure,” said Jim McCaughan, chief executive officer of Principal Global Investors. “The partnership will enhance our capabilities in alternative investments, which is an area where client demand continues to grow. Very few institutional investment firms have this level of expertise in hedge fund investing.” Being affiliated with a global investment management leader, Liongate will benefit from access to The Principal’s global footprint and strong distribution networks, as well as its product development expertise and best-practice support infrastructure. “Our clients increasingly want hedged solutions over their entire portfolios, and not just on an

‘alternatives’ side plate. The operational synergies and economies of scale will enhance our client resources globally, enabling Liongate to focus on consistent, risk-adjusted client performance. The Principal gets what we want to do, and our personal chemistry is strong, so that is why we decided to work together,” said Randall Dillard, chief investment officer and co-founder of Liongate. The Liongate partners will retain a 45% share and will manage Liongate within their current roles. The partners are reinvesting a significant share of their consideration into existing Liongate investment strategies. The transaction is expected to close in the second quarter of 2013, pending regulatory approval. The Principal estimates the acquisition will be slightly accretive in the first year. Sandler O’Neill + Partners advised The Principal on the transaction and Fenchurch Advisory Partners advised Liongate.

Genstar Capital Acquires Acrisure Genstar Capital, LLC, a middle market private equity firm that focuses on investments in selected segments of the insurance and financial services, software, life sciences, healthcare, and industrial technology industries, has acquired Acrisure, a leading retail insurance brokerage organisation. Based in Grand Rapids, Michigan, Acrisure is the 50th largest privately owned insurance agency in the United States whose product lines include property & casualty, employee benefits and related third party administrator services, human resource outsourcing, loss & claims management, surety bonding and personal lines coverage. The company was co-founded in 2005 by CEO Greg Williams to acquire independent insurance agencies across

the Midwest and since then has completed 26 acquisitions. Mr. Williams said: “I am pleased to be partnering with the team at Genstar who bring a proven track record of growing and building a company like ours in the insurance industry. We have a shared vision to continue Acrisure’s growth both organically and through strategic acquisitions and Genstar is the ideal partner who brings additional resources and valuable expertise as we acquire strategic add-on opportunities and accelerate the growth of the Acrisure portfolio.” J. Ryan Clark, a Managing Director at Genstar, as well as Tony Salewski and David Golde of Genstar will join the Acrisure Board of Directors. In addition,

John Addeo, retired CEO of Genstar’s former portfolio company, Confie Seguros, will also join the Acrisure Board. Mr. Clark said: “Greg is a highly successful and capable leader who has built Acrisure into one of the leading insurance agencies in the Midwest. We were attracted by the company’s historically strong performance, both organically and through acquisitions, its broad set of capabilities, and the high quality of the management team and local agency partners. By working with Greg and his team we believe we have an opportunity to leverage Genstar’s extensive insurance executive network to accelerate growth and expand the company’s footprint nationally.”

Fidelity Investments and BlackRock, Inc. (BLK) Announce Groundbreaking ETF Strategic Alliance Fidelity Investments® and BlackRock, Inc. announced today a long-term strategic alliance that provides extensive collaboration across Fidelity’s distribution and asset management organizations with BlackRock and its leading ETF provider, iShares, to deliver significant value to investors across a range of ETF initiatives. This partnership will give millions of Fidelity customers increased and improved access to a broad selection of passive ETF solutions provided by iShares, the world’s largest and most diverse ETF manufacturer1. “Through this groundbreaking alliance between two financial services leaders, we will leverage our complementary strengths to deliver leading ETF

ACQUISITION INTERNATIONAL

products and research that are unmatched to more than 10 million Fidelity customers,” said Kathleen A. Murphy, president of Personal Investing at Fidelity Investments. As part of this unique manufacturing and distribution partnership with iShares, Fidelity will more than double its current successful online commissionfree ETF offerings and will create new ETF portfolio strategies using iShares as components within its managed account offering (Portfolio Advisory Services). In addition, as part of Fidelity’s growing sector-based business strategy, the company has established a strategic relationship with BlackRock

whereby the firm will help support Fidelity’s future passive sector investment management efforts. “We are thrilled to be joining with Fidelity to create an ETF manufacturing and distribution powerhouse,” said Mark Wiedman, global head of iShares at BlackRock. “This long-term partnership will enable millions of investors to maximize the value of ETF investing.” Both companies will support this strategic alliance with personnel focused on successfully delivering iShares ETFs to Fidelity customers through their respective retail and advisor networks.

March 2013 /

FUND NEWS:

from around the world

First Trust launches new ETF First Trust Advisors L.P. (“First Trust”), a provider of more than 200 investment products, many of which offer transparency, tax efficiency and a rules-based approach to stock selection, has launched a new actively managed exchange-traded fund (“ETF”), the First Trust High Yield Long/Short ETF The First Trust High Yield Long/Short ETF (“the Fund”) seeks to provide current income by investing primarily in a diversified portfolio of below-investment-grade or unrated high-yield debt securities, including U.S. and non-U.S. corporate debt obligations, bank loans and convertible bonds. Its secondary objective is to generate capital appreciation. Since the historical correlation of performance between high-yield securities and traditional fixed-income, including investmentgrade corporate bonds and Treasury securities, is low, First Trust believes the addition of high-yield securities to a well-diversified portfolio has the potential to enhance overall return and provide diversification benefits while potentially decreasing portfolio volatility. The Fund`s investment approach includes a long/ short strategy designed to capitalise on investment opportunities in various market environments. Under normal market conditions, the Fund`s Portfolio Managers intend to maintain long and short positions in securities, and consequently may take short positions in U.S. Treasury securities and/ or corporate debt obligations which may be rated investment-grade or considered to be high-yield

securities. The ability to maintain short Treasury positions allows the Portfolio Managers to potentially isolate a portion of the interest-rate risk from the credit risk inherent in the high-yield securities in the Fund`s portfolio. The Portfolio Managers believe that credit fundamentals within high-yield remain strong as a result of the ongoing, albeit modest, economic recovery, relatively strong corporate cash flow generation on the part of issuers and low corporate defaults within the high-yield market. “At a time when investors are growing concerned about the potential fallout from increasing interest rates on their fixed income portfolios, First Trust is offering investors the opportunity to potentially capitalize on the strength of the high-yield bond market and U.S. corporate credit fundamentals while mitigating a portion of the interest-rate risk,” said William Housey, CFA, Senior Vice President and Senior Portfolio Manager at First Trust, who serves as one of the Fund`s Portfolio Managers. “By combining a rigorous credit selection process with this Fund`s long/short strategy, First Trust`s experienced leveraged finance investment team believes it can help investors achieve higher risk-adjusted returns in many different market conditions.” In addition to potentially mitigating risk, the long/short strategy may enhance returns via the implementation of the “carry trade,” a process whereby a borrowed security is sold and the short seller profits by using the proceeds to purchase another security with a higher interest rate. The

Portfolio Managers can unwind the Treasury short positions at any time, and intend to layer in short sales on high-yield debt securities when they believe corporate defaults may increase. In times of unusual or adverse market, economic, regulatory or political conditions, the Fund may not be able, fully or partially, to implement its short selling strategy. Short selling creates special risks which could result in increased volatility of returns. There is no guarantee that any leveraging strategy the Fund employs will be successful during any period in which it is employed. “The historically low interest rates in today`s market present difficulties for investors seeking income, but we believe this Fund offers a long-term solution within a risk-managed framework for highyield investors,” said Mr. Housey. “Active portfolio management and alternative investment strategies, particularly this Fund`s approach to reducing interest-rate risk by adding senior loans and a short Treasury position, may help investors obtain enhanced returns from fixed-income investments in the wake of increasing interest rates.” Along with Mr. Housey, the Fund`s Portfolio Managers include Scott D. Fries, CFA, Senior Vice President and Portfolio Manager; Peter Fasone, CFA, Vice President and Portfolio Manager; and Vice Presidents and Fixed Income Portfolio Managers Todd Larson, CFA, and Eric Maisel, CFA.

HEDGE FUNDS GAIN IN FEBRUARY AS U.S. EQUITIES APPROACH RECORD LEVEL Hedge funds posted gains in February as broad U.S. equity indexes approached record levels and the U.S. dollar surged against most major currencies, weathering renewed investor concerns on the European banking and sovereign debt crisis following the results of the Italian elections. The HFRI Fund Weighted Composite Index posted a gain of +0.14 per cent for the month, the 8th gain in the last nine months, led by Relative Value Arbitrage and Equity Hedge strategies, according to data released today by HFR, the established global leader in the indexation, analysis and research of the hedge fund industry. Funds of Hedge Funds performed in-line with the overall industry, as the HFRI Fund of Funds Index gained +0.13 per cent in February. Fixed income-based Relative Value Arbitrage (RVA) strategies led February gains as yields declined and credit spreads remained tight, with the HFRI Relative Value Arbitrage Index posting a gain of +0.7 per cent. Strong and consistent gains in RVA have continued to attract investor capital through yearend 2012, as RVA surpassed Equity Hedge as the largest area of hedge fund capital. The gain for RVA is the 9th consecutive monthly increase and extends

/ March 2013

an impressive period since the start of the Financial Crisis through which RVA has posted positive performance in 43 of the past 50 months. Credit Multi-Strategies led RVA sub-strategy performance, with the HFRI Relative Value: Multi-Strategy Index posting a gain of +1.5 per cent. Building on a strong January gain of +3.3 per cent, Equity Hedge funds also contributed to industry gains in February, with the HFRI Equity Hedge Index gaining +0.5 per cent as U.S. equities approached record levels. Event Driven strategies also posted gains as the active corporate M&A environment accelerated with contributions from transactions in Heinz, Liberty Global/Virgin Media, Comcast/NBC Universal, and more. The HFRI Event Driven Index gained +0.1 per cent for the month, HFR / Page 2 marking its 9th consecutive monthly gain, with contributions from Special Situations and Credit and Arbitrage positioning. Macro strategies detracted from industry performance, with the HFRI Macro Index posting a decline of -0.7 per cent. Quantitative, trendfollowing CTA strategies led sub-strategy declines,

with the HFRI Macro: Systematic Diversified CTA Index posting a decline of -1.1 per cent, with negative contributions from long commodity and short equity positions. Currency-focused, Discretionary Macro and Emerging Markets had positive contributions to Macro performance; the HFRI Emerging Markets Index posted a gain of +0.2 per cent. “A resurgence of investor risk appetite and optimism drove hedge fund performance gains across credit, equity and arbitrage strategies, and enabled over $100 Billion in financing to be raised for M&A transactions,” stated Kenneth J. Heinz, President of HFR. “With equity markets near alltime highs, investors are actively allocating to the hedge fund industry for a number of reasons, including expectations for an end to quantitative easing, historically tight credit markets, opportunities in macro currency strategies and the potential for destabilizing developments in Syria and Iran. Hedge fund investors are positioning to participate in continued equity market gains but also to insulate their portfolios from equity or credit market weakness, rising yields or macro-political uncertainty.”

ACQUISITION INTERNATIONAL

FUND NEWS:

from around the world

SGGG FEXSERV Chooses Linedata for Maltese Fund Admin Solution Linedata, the global solutions provider dedicated to the investment management and credit industries, today announced that fund administrator SGGG FEXSERV has selected Linedata Mshare transfer agency solution to support its expanding business in Malta and complement its proprietary systems. This is Linedata’s fifth Maltese client. SGGG FEXSERV has been established in Malta since 2008. Taking advantage of Malta’s position as a growing administrative center, the company has increased its client base of alternative investment funds to a wide extent requiring an enhanced transfer agency system in order to allow a wider range of scenarios, reflecting the diverse needs of alternative managers. It also wanted a solution ready to meet changing industry and regulatory requirements where continuous product investment was important.

Linedata Mshare met these requirements. SGGG FEXSERV’s COO Lawrence Buttigieg explains: “We are constantly looking to increase our efficiency. In servicing the alternative investment market, there are as many approaches to equalization and performance fee calculations as there are clients. With Linedata Mshare we will have no limitations on clients’ requests that we can service. The automation in setting up different scenarios is key. In addition, we will free ourselves from time spent managing and upgrading a proprietary system in the knowledge that Linedata will do this for us.” As Malta establishes itself as a center of fund administration expertise, Linedata’s commitment to the island was also pivotal. Lawrence Buttigieg comments, “Most established transfer agency systems have similar functionality. What singled

Linedata out is its commitment to our local market with an established presence in Malta. We are a boutique style operation, and differentiate ourselves by providing high quality client service delivered from qualified professionals; service is something we understand very well and we feel that Linedata is in a position to provide us with good support.” “I’m very pleased to welcome SGGG FEXSERV to Linedata’s growing number of Maltese clients,” said Adrian Andrews, Linedata’s Managing Director for Northern Europe. “Malta is a key area for us with its highly skilled workforce. Linedata delivers to the market a range of alternative and institutional investment software platforms to meet any fund administration need plus a commitment to service and to developing our presence here in Malta.”

Funds of Hedge Funds Start 2013 with Strong Returns Funds of hedge funds post returns of 2.10% in January 2013, representing the sixth positive return in the last seven months Preqin’s February edition of Hedge Fund Spotlight shows that 2013 has seen further positive performance for funds of hedge funds, with these vehicles generating returns of 2.10% in January 2013. In 2012, funds of hedge funds generated returns of 4.63%, with those in the top performance quartile posting net returns in excess of 7%, and the most successful vehicle making gains of more than 24%. Despite this improvement, returns for funds of hedge funds remain low over the longer term, with the annualized returns of funds of hedge funds over the last three and five years standing at 1.79% and -0.25% respectively. There has also been a significant decline in the total assets under management of fund of hedge

funds managers from a peak of an aggregate $1.2tn in 2008 to a total of $810bn as of February 2013. However, funds of hedge funds manage a significant 35% of the hedge fund industry’s total assets under management, which stood at $2.3tn as of December 2012.

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• Other Key Facts: • 65% of investors include funds of hedge funds as part of their hedge fund allocation. • 12% of fund of hedge funds investors interviewed plan to increase their allocation to funds of hedge funds in 2013, with an additional 53% planning to maintain their exposure over the coming year. • Of the 35% of investors interviewed by Preqin that are considering or planning to reduce their exposure to funds of hedge funds, 54% are doing so due to performance concerns. • Investors in funds of hedge funds tend to be newer entrants into the hedge fund asset class,

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with an average year of first investment of 2006 compared to 2003 for direct-only investors. The overall volatility of returns posted by funds of hedge funds during 2011 and 2012 was low at 3% to 5%, compared to a high of 7.6% for singlemanager funds and 18.6% for the S&P 500. Funds of hedge funds primarily targeting exposure to North America posted higher returns than Europe-focused funds in 11 out of 12 months in 2012. North America is the only region to have seen an increase over the last year in the assets under management of fund of hedge fund managers, from $485bn in December 2011 to $508bn in December 2012. Europe-based fund of fund managers saw a decline from $375bn to $280bn over the same time period. Annual fund of hedge fund launches fell from 142 in 2010 to 79 in 2011 and to 59 in 2012; this represents the lowest level since 2000.

Octopus announces further investment into Metrasens Octopus today announced that it has made a further investment into Metrasens, the award-winning technology company that manufactures detection products for a number of security and healthcare markets across the world. Octopus first invested into the company in 2009.

highly-sensitive, quickly deployable and portable detection solutions. Metrasens has also developed a product for use in the healthcare market. Through its Ferroguard® brand of MRI safety systems, Metrasens is able to protect patients, staff and equipment in MRI suites across the world.

Headquartered in Great Malvern in the UK, and with offices in Lisle, Illinois, USA, Metrasens has designed the most portable full body scan system available worldwide. This is being used in prisons, police operations, police custody suites, embassies, hotels and other commercial venues that require

Luke Hakes, a Principal on the Ventures team at Octopus, said: “Metrasens has an impressive team behind it that is taking the business from strength to strength as it continues to increase its global footprint. The opportunity for it to build on its existing market share is significant and we look

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forward to continuing to work with the team to support the business through this next stage of development.” Octopus is joined in this latest round of funding by C5 Partners, a new investment company focused on the safety and security technologies sector. Commenting on the successful fundraising, Dr Simon Goodyear, founder and CEO of Metrasens, said: “This is a very exciting stage in the growth of Metrasens, the investment from C5 and Octopus will enable us to accelerate our ambitious plans for growth.”

March 2013 /

APPOINTMENTS:

from around the world

New Director General of the Guernsey Financial Services Commission New Director General of the Guernsey Financial Services Commission The Guernsey Financial Services Commission has announced that William Mason will be appointed the Director General upon Nik van Leuven’s retirement. William Mason will join the Commission from the position of Head of Risk at the Central Bank of Ireland, where he has led the development and implementation of its PRISM supervisory methodology. Most recently he has been working with the European Central Bank helping it plan for the Eurozone’s proposed Banking Union. Before that Mr Mason worked for the UK Financial Services Authority, joining shortly before the financial crisis, and led teams supervising a range of credit institutions, insurers and investment firms throughout the financial crisis. Prior to becoming a financial regulator, Mr Mason worked as a strategy consultant and latterly at the

UK Cabinet Office where he helped write Regulation – Less is More, a report to the Prime Minister. His other publications include: Freedom for Public Services; The Costs of Regulation; and PRISM Explained – Implementing Risk Based Supervision. Commission Chairman Cees Schrauwers, who led the selection process, said: “There was substantial interest in the role and the search for the right candidate has been rigorous. The Commission appointed a UK executive search company, Hanson Green, and a long list of 16 was drawn up from applicants arising from a candidate pool of some 150 people, with 4 making the final interview shortlist. “The recruitment specialist consulted widely with representatives of Guernsey’s financial services industry and other relevant parties before commencing with the process.” The nomination panel comprised Mr Schrauwers, two Commissioners, and Commerce and Employment

Minister Deputy Kevin Stewart, while final interviews were conducted by all the Commissioners. Mr Schrauwers said that Mr Mason’s career history and track record made him an excellent candidate for the role. Mr Mason will take up his post within the next few months. Mr Mason said: “Guernsey is a mature and highly regarded financial services jurisdiction. I very much look forward to leading the Commission at a time when global financial services and markets continue to face many pressures and challenges. My wife and I are much looking forward to making our home on the Island, and moving there as soon as practicable.” Nik van Leuven said: “I have come to know William recently through our consulting him on the PRISM project being undertaken for the Central Bank of Ireland. I am certain his knowledge and experience will be of great value to the Commission in these times of threat and change.”

Regions Bank Names Head of Private Wealth Management Arbuthnot Latham Announces Further Senior Appointment A further senior appointment has been announced by Arbuthnot Latham & Co., Limited, the independent private bank. Dan Saxby has been appointed as Director, Private Banking and his role will include engagement with High Net Worth (HNW) individuals within the City and predominately within the legal, accountancy and financial professions. Dan has worked at the highest levels in a senior capacity for over twenty-four years where he has managed the wealth of HNW individuals in the City and where over the years he has built an impressive

client-base of professionals. Dan joins Arbuthnot Latham from Coutts & Co where he was an Executive Director and Wealth Manager. This is the latest in a series of new appointments at Arbuthnot Latham in recent months and form part of the on-going enhancement of the private banking and wealth management services provided by the Bank. Dan takes up his role with immediate effect. Welcoming Dan’s appointment, James Fleming, Chief Executive of Arbuthnot Latham, said: “Dan Saxby brings a vast amount of experience to his new role as Director, Private Banking, experience that has been gained at the highest levels.

“Dan will be looking to build on the excellent networking skills that he developed previously and which he will put to good use in engaging with HNW individuals in the City who work predominantly in the legal, accountancy and financial professions. “I am delighted that Arbuthnot Latham has been able to attract the calibre of Dan Saxby to join our team and look forward to working with him.” Commenting on his appointment, Dan Saxby, said: “I am delighted to be joining Arbuthnot Latham. At a time when market conditions remain very challenging for the major banks it is fantastic to join an established, yet vibrant and ambitious independent private bank.”

Appointment of new Director General of the Guernsey Financial Services Commission William Mason will be appointed the Director General upon Nik van Leuven’s retirement. William Mason will join the Commission from the position of Head of Risk at the Central Bank of Ireland, where he has led the development and implementation of its PRISM supervisory methodology. Most recently he has been working with the European Central Bank helping it plan for the Eurozone’s proposed Banking Union. Before that Mr Mason worked for the UK Financial Services Authority, joining shortly before the financial crisis, and led teams supervising a range of credit institutions, insurers and investment firms throughout the financial crisis.

/ March 2013

Prior to becoming a financial regulator, Mr Mason worked as a strategy consultant and latterly at the UK Cabinet Office where he helped write Regulation – Less is More, a report to the Prime Minister. His other publications include: Freedom for Public Services; The Costs of Regulation; and PRISM Explained – Implementing Risk Based Supervision.

applicants arising from a candidate pool of some 150 people, with 4 making the final interview shortlist.

Commission Chairman Cees Schrauwers, who led the selection process, said: “There was substantial interest in the role and the search for the right candidate has been rigorous. The Commission appointed a UK executive search company, Hanson Green, and a long list of 16 was drawn up from

The nomination panel comprised Mr Schrauwers, two Commissioners, and Commerce and Employment Minister Deputy Kevin Stewart, while final interviews were conducted by all the Commissioners.

“The recruitment specialist consulted widely with representatives of Guernsey’s financial services industry and other relevant parties before commencing with the process.”

ACQUISITION INTERNATIONAL

APPOINTMENTS:

from around the world

Alger Hires International Portfolio Management Team Fred Alger Management, Inc. (Alger), a leading asset management firm, has added a well respected and experienced international team to the organisation. Pedro Marcal, Senior Vice President and Portfolio Manager, and Ajoy Reddi and Warren Zhang, CFA, Vice Presidents and Analysts, will further expand Alger’s investment abilities in international equity markets. Pedro Marcal has 24 years of investment experience and was most recently International Portfolio Manager, EAFE Core Growth/Pacific Rim, at Allianz Global Investors. While at Allianz, and its predecessor Nicholas. Applegate Capital Management, Pedro focused on international equities including developed and emerging markets. He helped develop many of the firm’s emerging markets products before moving on to global and developed international equity portfolios. Pedro earned his B.A. from University of California at San Diego and his M.B.A. from UCLA’s Anderson School of Management. Ajoy Reddi has 16 years of investment experience and was most recently International Analyst at Allianz

Global Investors where he focused on European equities. Prior to Allianz, Ajoy was an international research analyst at William Blair & Company. His previous experience also includes an analyst role at Franklin Templeton Investments. Ajoy earned his B.A. from Johns Hopkins University and his M.B.A. from University of Chicago Graduate School of Business.

headed by Deborah A. Vélez Medenica, CFA. Adding Pedro and his team enhances our international capabilities and deepens our commitment to these important markets. We believe the opportunities for investing globally are significant and are of particular interest to us as pioneers of growth investing,” added Dan.

Warren Zhang, CFA has 17 years of investment experience and was most recently Vice President, Analyst at Allianz Global Investors where he focused on Asian equities. Prior to Allianz, he was an emerging markets equities analyst at Morgan Stanley Investment Management. Warren was also an ‘analyst at Fiduciary Trust International. Warren earned his B.S. in Civil Engineering from Tongji University in Shanghai, China. He earned his M.A. in Economics from the University of California at Riverside and his M.A. in Finance from Yale University School of Management. In addition, Warren is a CFA charter holder.

Alger’s seven international professionals have, collectively, more than 100 years of international investing experience.

“Pedro, Ajoy, and Warren bring significant experience in international equity markets to Alger,” said Dan Chung, CEO and Chief Investment Officer. “We expanded our international capabilities in 2010 with the hiring of our emerging markets team

“We believe our international team, in combination with our nearly 30 person U.S. investment team, will give Alger unique insights into investment opportunities in the U.S. and abroad, which will benefit our clients and shareholders,” said Dan. “I am truly excited to join a firm that is a pioneer of growth style investing,” said Pedro Marcal. “My team and I were looking for an organization with a similar style and philosophy of growth investing, which we found at Alger. We look forward to expanding Alger’s investments in international markets as we seek to earn superior returns for clients,” added Pedro.

Colin Jelley appointed Head of Wealth Planning at Skandia Skandia has appointed of Colin Jelley as Head of Wealth Planning. Skandia firmly believes wealth planning expertise is a real differentiator in today’s market, and attracting key industry experts can add real value to financial advisers and their clients. Colin will report into Steve Powell, UK sales director for Skandia, and will be responsible for leading the wealth planning specialism Skandia is renowned for in the adviser community. Colin will be working in partnership with advisers, helping them meet their clients’ financial planning needs, which are at the heart of their business. Colin’s expertise and that of his 10 strong team will help deliver a range of financial planning solutions, both onshore and

offshore, that are of real benefit to advisers and their clients. Colin is well respected within the industry and is a member of the UK technical committee of the Society of Trust and Estate Practitioners. His passion and excellence will help lead the team and contribute to the wider business strategy. Steve Powell, UK sales director at Skandia, comments: “Colin has added tremendous value to our business over the years, and we are delighted to have him with us again in this new role. His vast wealth of knowledge and expertise is second to none and his in depth knowledge of Skandia and our products

and services will help him hit the ground running. Skandia has always been a market leader in the wealth planning support it provides to advisers, and Colin joining will enhance that reputation and add real value to the team.” Colin Jelley comments: “Working closely with advisers and leading a strong team of talented and dedicated experts, means we have a real opportunity to raise the bar on the wealth planning expertise we can share with advisers. Skandia is an ambitious company with a great culture and I’m excited about being part of its future as a wealth solutions business.”

James Cameron joins Infrastructure UK Advisory Council James Cameron, the chairman of Climate Change Capital, the environmental investment manager and advisory group, has been appointed to the Infrastructure UK advisory council, a unit within the Treasury aimed at prioritising and improving the delivery of UK infrastructure investments. The council, which meets every quarter, is chaired by Paul Skinner and includes Permanent Secretaries

ACQUISITION INTERNATIONAL

from key government departments as well as other senior representatives from the private sector including, Steve Holliday, CEO of the National Grid, Cressida Hogg, managing partner infrastructure of 3i and Ian Tyler CEO of Balfour Beatty Plc. According to HM Treasury, £200 billion of investment is planned over the next five years in energy, transport, waste, flood, science, water and

telecoms infrastructure, with the majority coming from the private sector. Mr Cameron said: “I am delighted to be joining such a prestigious group of experts in helping to map out the UK’s infrastructure requirements. The UK has a tremendous opportunity to develop resilient infrastructure essential for our present needs and fit for the future”.

March 2013 /

DEAL GURU:

Ernst & Young’s Global Corporate Divestment Study reveals five leading practices to maximise divestment success

ERNST & YOUNG’S GLOBAL CORPORATE DIVESTMENT STUDY REVEALS FIVE LEADING PRACTICES TO MAXIMISE DIVESTMENT SUCCESS

-----------------------------------------------------------------------The 2012 Global Corporate Divestment Survey by Ernst & Young reveals that 73% of companies that divest feel that they have left money on the table. ------------------------------------------------------------------------

Such a high percentage of corporates leaving value on the table will increasingly spotlight the benefits of a more strategic approach to divesting with potential sellers looking for ways to maximise value and make their asset as attractive as possible to a broad range of buyers. Ernst & Young highlights five leading practices that sellers should focus on to maximise divestment success: 1. Conduct structured and regular portfolio management: By regularly reviewing their portfolio, companies can use divestments as a strategic tool to build value rather than divesting as a reactive move to free up cash or pay down debt.

extract value from sale increases. Additionally making management available to provide information and instill confidence that they are committed throughout the transition and beyond is proven to increase sale value. 4. Prepare rigorously for the divestment process: By preparing effectively, companies can instill greater buyer confidence, gain control over the process and realise greater speed in completion and value in price. Tailoring information for buyers like standalone cost of the carved out entity, synergy opportunities and cost improvement opportunities is critical in getting the deal over the line.

2. Consider the full range of potential buyers: Appealing to a full range of buyers, including strategic and financial, domestic and overseas, can create strong interest for an asset and realise a price that exceeds expectations.

5. Understand the importance of separation planning: A clear separation roadmap is identified by more than half of respondents as the most increasingly complex aspect of divestment. Other challenging areas include negotiating transition services agreements (TSAs), estimating standalone costs, tax planning and decisions regarding the completion mechanism. Buyers that do not fully understand these factors perceive greater risk, which is often reflected in their offering price.

3. Articulate a compelling value and growth story for each buyer: When sellers are able to provide more clarity on the value and growth story for individual buyers, the likelihood that they will

Michel Driessen, Operational Transactions Services Leader at Ernst & Young, who lead the global research, comments: “In this prolonged period of low growth, the conditions for completing

ACQUISITION INTERNATIONAL

transactions remain challenging with boards, regulators and shareholder demanding greater assurances, and buyers scrutinising potential deals more carefully than ever.” “With these challenging conditions, sellers need to present their case in the most appealing way possible. More thorough preparation is vital and sellers should improve how they market their assets to a wider range of suitors. “Our study provides empirical evidence showing that those who take strategic steps are achieving greater value and speed and exceeding expectations. They widened the net, stood in the buyers shoes and had robust processes in place. Following these practices will help ensure a successful divestment that is fully aligned to the strategic priorities of the business.”

Company: Ernst & Young Web: www.ey.com

March 2013 /

ON THE COVER:

Burgan Bank 2012 Performance - Defeating all odds

BURGAN BANK 2012 PERFORMANCE Defeating all odds -----------------------------------------------------------------------Burgan Bank’s solid performance has helped position it as one of the most diversified financial group’s across the Middle East & North African region ------------------------------------------------------------------------

2012 was an eventful year for Burgan Bank Group. It marked a new chapter of solid growth and performance, in which the group was successfully able to improve its profitability levels, overall asset quality, capitalization, liquidity and market positioning. The group demonstrated prudency in delivering sound results across its business and financial metrics. Burgan Bank Group’s exceptional performance was carefully guided by the excellent execution

/ March 2013

of the corporate strategy and the objectives achieved through delivering tangible results and creating a niche for its operations amongst existing competition. Leading indicators for the group are pointing to the right direction; Burgan Bank group is well positioned to continue building on its strategic initiatives to achieve new heights of its organic and inorganic growth plans aiming at maximizing returns to shareholders, customers and staff.

same period of 2011 which was reported at KD 50.6 million. Earnings per share (EPS) grew 12% to reach 37.8 fils in comparison with 33.7 fils in 2011. The group’s operating income surged by 16% to reach KD 190 million, while operating profit before provisions soared by 17% to ultimately reach KD 119 million. Returns of Equity reported at 12.4% while Return on tangible equity reported at 20.2% - the highest among domestic peers.

2012 Solid Growth & Performance Burgan Bank Group reported a consolidated net profit of KD 55.6 million for the year ending 31st December, 2012, reflecting a 10% increase from the

Revenue composition in 2012 has been stable, and core earnings continue to grow stronger. The group is continuously increasing its market share with profitability. The group’s loans and advances grew by 50% to reach KD 3.4 billion, whereas customers’

ACQUISITION INTERNATIONAL

ON THE COVER:

Burgan Bank 2012 Performance - Defeating all odds

deposits totaled to KD 3.9 billion reflecting an increase of 39%. The group’s operating profit margins stood at 62.6%. The group’s loans to deposit ratio currently stands at 86%. During 2012, Asset quality improved as NonPerforming Loans (NPLs) continued their downward trend. The NPL ratio (net of collateral) to gross loans stood at 1.9% while loan loss coverage ratio improved to 46%. The balance sheet remains healthy with optimal capitalization levels and liquidity; and the capital adequacy ratio stands at 18.5%. In 2012, Burgan Bank Group successfully completed an issuance of KD 100 million Lower Tier II Subordinated debt, the first bond issuance of its kind in Kuwait in terms of currency, tenor and size. The initiative was in line with our strategy of raising funds from debt capital markets to strengthen our capital base post acquisition, diversify its investor base and to help in the creation of a yield curve in Kuwait. Burgan Bank Group maintained a robust Liquidity level that is higher than all domestic peers with a liquidity ratio of 23.4%. Regional Operations Burgan Bank Group’s regional expansion approach is aimed at building and acquiring scale, capabilities and footprint. Diversifying revenues streams has positioned Burgan bank as the most diversified bank in Kuwait.

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The group’s subsidiaries are all profitable and growing despite being in what has been seen as risky environments due to the Arab Spring. As part of the regionalization strategy and to complement the consistent growth plans, Burgan Bank completed its acquisition process in Turkey to acquire a 99.26% stake of Eurobank Tekfen. Eurobank Tekfen and its subsidiaries (EFG Istanbul Equities & EFG Leasing) became majority owned subsidiaries of Burgan Bank group as of December 21, 2012. Following the acquisition, Eurobank Tekfen, as of January 2013, is operating under the name of Burgan Bank – Turkey, where its subsidiaries EFG Istanbul Equities and EFG Leasing will be branded as Burgan Securities and Burgan Leasing respectively. Expanding the group’s brand into Turkey marks a key milestone in its continued efforts to building a strong regional banking franchise and, to ultimately be able to provide customers with sound financial solutions across its network of subsidiaries in the Middle East, North Africa, and now, Turkey. Burgan Bank-Turkey is backed by a clear cut strategy that focuses on the upside geo-economic growth potential Turkey provides, along with the benefits of the bank’s wider group synergies across Jordan, Iraq, Tunisia, Algeria and Lebanon. Acquiring Eurobank Tekfen marked a unique opportunity to enter a key market with a fully

operational and diversified banking platform at an attractive pricing level. It further represents a strategic fit with Burgan Bank Group’s overall expansion approach. The deal was presented at an attractive price; below book values, and accordingly there was no creation of goodwill. The bank also has been benefiting from Turkey’s ever increasing growth potential. Generally, the Turkish economy and banking sector have continued to demonstrate solid performance and offer opportunities for continued long term expansion. Burgan Bank will benefit from the attractive Turkish banking market through an established franchise led by seasoned management team and offering broad banking services to Corporate, SME, private and Retail clients.

Company: Burgan Bank Name: Fahad Al Reshaid Email: froshid@burgan.com Web: www.burgan.com Address: 11th floor, Burgan TowerSharq- Kuwait, Abdulla AL Ahmed St. Telephone: +965 22988383

March 2013 /

2012 LEGAL AWARDS:

New York Trademark Law Firm of the Year

2012 LEGAL AWARDS New York Trademark Law Firm of the Year

-----------------------------------------------------------------------Dennis S. Prahl is a partner in the Trademark Group of Ladas & Parry LLP, based in New York. He speaks to Acquisition International about how it feels to be awarded New York Trademark Law Firm of the Year. ------------------------------------------------------------------------

Ladas & Parry LLP specialises in all areas of intellectual property law, with the Trademark Group focussing in all areas of intellectual property, other than patent work, ranging from counselling clients on international trademark clearance, adoption, registration and enforcement to licensing, acquisitions and litigation. The firm has 100 years of experience protecting its clients’ intellectual property in the United States and abroad. Over the last 100 years, while other firms have come and gone, Ladas & Parry has continued to serve its clients passionately and effectively. Its focus this year and every year is very much on the future. Ladas & Parry LLP has a team of highly skilled US attorneys, foreign attorneys, patent agents, and professional representatives in its offices. Prahl describes how it felt when the firm was awarded the prestigious title of New York Trademark Law Firm of the Year, as voted by Acquisition International magazine readers. “We were very honoured and excited to win this award,” he enthuses. “It has reinforced our position among intellectual property boutique firms and has been an added bonus as we have celebrated our centennial year.” The award is recognition of Ladas & Parry’s hard work and successes in the transactional market in what have been very difficult economic conditions. “We are very adaptable to client demands and requirements and have continued to focus on giving our clients solid business and commercial-oriented

/ March 2013

advice in connection with their IP transactions,” explains Prahl. “We are a very collegial and collaborative, teamoriented group and work extremely well together. Although we put in long hours our team really enjoys working together to give our clients the best, most cost-effective, level of service. “Although we have a lot of work from long-standing and reliable clients, much of our new work comes from referrals from our existing clients who are happy to share their experience with others. The motto “good work is rewarded with more work” drives our philosophy. We are also actively and extensively involved in IP associations around the world and actively staying in touch with our clients to understand their businesses, plans and future strategies.” The firm differentiates itself from the competition by being dedicated to providing the best full-service IP legal advice to clients in the most commercially relevant context and cost-effective manner. “We have extensive experience in global IP matters that is unparalleled,” Prahl adds. “I think what really makes us the leader of the pack however is our dedication to clients, their needs and their concerns, which need to be foremost.” Despite the firm’s success there are still a range of issues which face the industry and must be combated, as Prahl continues: “The biggest issue facing the trademark industry is the continuing evolution of what constitutes a trademark and how trademarks are used, whether on products, in promotions, as domain names, in apps, as social media names. We pride ourselves on being at the forefront of these trends so we can keep our clients on top of these issues before most people even recognise them as issues.”

The legal market is ever-changing and Prahl has noticed that clients continue to be concerned with costs, which presents an obvious challenge to the firm. “Our challenge is to continue our drive to be the most cost-efficient and valuable IP law firm available,” he says. However with the global market being in such a precarious position of late it is important for Ladas & Parry to place their services within the market effectively, as Prahl states: “As a firm that has seen a century of service and much global turmoil throughout that time, we are very experienced at navigating the ebbs and flows of the global market.” There are exciting things on the agenda for Ladas & Parry as the company is set to evolve and change shape with the addition of a new office which has just opened in the Washington DC area, and Prahl noted that the company has a successful growth strategy and is always looking out for new growth opportunities. Prahl concludes by stating what made the firm stand out from the pack: “Our dedication to clients, their needs and their concerns needs to be foremost.”

Company: Ladas & Parry LLP Name: Dennis S. Prahl Email: dprahl@ladas.com Web: www.ladas.com Address: 1040 Avenue of the Americas, New York, NY 10018 Telephone: +1 212 708 1800

ACQUISITION INTERNATIONAL

2012 LEGAL AWARDS:

Indonesian Corporate Law Firm of the Year

2012 LEGAL AWARDS Indonesian Corporate Law Firm of the Year

-----------------------------------------------------------------------Winita E. Kusnandar is the Managing Partner of Kusnandar & Co. Here she discusses the firm, its reaction to winning the award, and the legal environment within Indonesia. -----------------------------------------------------------------------Kusnandar & Co. is a full service law firm with legal expertise encompassing everything from Corporate, Investment and Intellectual Property as well as Litigation and Arbitration (domestic and overseas) matters. Commenting on the firm’s reaction to winning Indonesian Corporate Law Firm of the Year, Ms Kusnandar stated that the firm was “humbly honoured and at the same time proud that our endeavours to offer the best possible services to our clients and the legal/investment community of Indonesia is recognised”. She continued: “Achievement recognitions such as this would undoubtedly only motivate and challenge us into striving to becoming an even more successful goodwill ambassador of Indonesia in protecting our clients’ interests while promoting its investment opportunities, championing its causes while continuing to strive for a sustainable investment climate in Indonesia.” Ms Kusnandar believes that Indonesia, with its population of 240 million, has now attained a “darling investment status as a very enticing emerging market”, not only within the ASEAN region, but also Asia and as a world economic player. She stated that it is certainly becoming more competitive in all areas including within the service industry. “Gone are the days when investors simply call in to the top tiered firms seeking legal counsel,” she observed. “Along with the Indonesian economic boom, new firms and consulting firms become more rampantly prominent competing head to head against their more seasoned and mature counterparts providing a healthy competition. Nevertheless, as evident on the playing field, it seems that wherever we turn to, K&C continues to strive for and enjoy trust from our clients, for which we are extremely thankful. “Given our minimal direct marketing campaigns and save for contributing to talks and seminars, attending conferences, and networking events, K&C seems to have been very adaptable.”

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Ever since its establishment in 1980, K&C has “maintained our team as our own family”, enthused Ms Kusnandar. The firm maintains camaraderie, respect and professionalism in its operations, from the top level partners all the way to supporting staff, for which the firm has often been applauded by its clients. “Guided by our corporate doctrine of all for one and one for all, our team culture of growing together and mutually advancing plays a key role in helping us achieve the award. Thus whatever recognitions we obtain, it shall perpetually be shared by our concerted endeavours. “As important and gratifying as awards can be, K&C maintains its first and foremost duties to its clients and team. Thus, we truly believe that as long as we have rightfully protected our clients’ interests and recognising our team’s efforts and dedications, we believe that the ultimate award continues to be in the form of contented clients and a happy and healthy team, and any external recognition is extra icing on our cake.” Ms Kusnandar noted that Indonesia along with the rest of the world is rapidly changing, as is the legal market. With many new local partnerships flourishing while as many of the veterans are collapsing, she believes that the legal market is becoming more challenging. She highlighted the price war competitions between firms, clientele and personnel poaching, outside counsel consolidations, as well as the influx of foreign firms into Indonesia, describing the atmosphere as “typical of a country in an era of globalisation.” “At K&C, we have been acutely aware of the inevitable change and we are welcoming it with open arms as it will only solidify our game within the legal market which will provide for a healthy market competition while providing us with bigger and better challenges,” she commented. There are several issues currently affecting legal services in Indonesia. Ms Kusnander noted that there are issues at the governmental level in providing for a clean-cut legal infrastructure and certainty, challenges in creating public awareness of acknowledging and executing a court judgement, and reformation of providing a safe and certain legal remedy for clients.

“There are many opportunities here for us as a goodwill ambassador to Indonesia to ameliorate and as such, hopefully with time, we shall be able to overcome these issues in favour for good legal governance.” Looking three years ahead, Ms Kusnandar believes that the legal market will certainly have changed. “With the implementation of the ASEAN Economic Community in 2015 opening up the country while eliminating many restrictions including foreign professionals, Indonesia will definitely see more foreign lawyers and legal consultants thus making the legal market even more competitive. At K&C, we continue to educate the country’s future generations and we do this best by recruiting new talents.” She concluded by highlighting the main factor that distinguishes the firm – “quality of work and services”. “Aside from a firm’s brand name, stellar team, public and private connections and links to various facilities whatever it may be, K&C is a staunch advocate of the quality of work and services of a law firm for which it has strived time and again even 33 years after its establishment in 1980.”

KUSNANDAR & CO.

K&C

ADVOCATES & SOLICITORS IPR ATTORNEYS

Company: KUSNANDAR & CO. Name: Winita E. Kusnandar Email: kusnalaw@kusnandar.com Web: www.kusnandar.com Address: Equity Tower, 25th Floor, Sudirman Central Business District (SCBD) Lot 9 Jl. Jend. Sudirman Kav. 52-53 Jakarta 12190, Indonesia Telephone: +62 21 5140 2020, 2903 5858 (Hunting)

March 2013 /

2012 HEDGE FUND AWARDS:

UK Managed Accounts Platform of the Year

2013 INTERNATIONAL HEDGE FUND AWARDS

UK Managed Accounts Platform of the Year

-----------------------------------------------------------------------Andrew J Grant is European Head of dbSelect Trading, part of the Deutsche Asset & Wealth Management division of Deutsche Bank AG based in the London office. He speaks to AI magazine about an incredible 12 months, and about winning the prestigious Hedge Fund Award. -----------------------------------------------------------------------Founded in 1870, Deutsche Bank AG is a Germany-based global investment bank. The Company diversifies its activities into three group divisions: Corporate & Investment Bank (CIB); Private Clients and Asset Management (PCAM), and Corporate Investments (CI). The Corporate & Investment Bank group division comprises corporate banking and securities activities and is divided into Corporate Banking & Securities (CB&S), comprising Markets and Corporate Finance businesses, and Global Transaction Banking (GTB) corporate divisions. The Private Clients and Asset Management group division comprises asset management, private wealth management and private and business client activities. PCAM is divided into Asset and Wealth Management (AWM), focusing on managing assets on behalf of institutional clients, among others, and Private & Business Clients (PBC) corporate divisions. The Corporate Investments group division manages alternative assets and other debt and equity positions. Today Deutsche Bank employs over 100,000 people in more than 70 countries. Andrew explains more about the company’s advantage when it comes to the competition. “Our mission statement is ‘We compete to be the leading global provider of financial solutions, creating lasting value for our clients, our shareholders, our people and the communities in which we operate’. “dbalternatives and dbSelect are the award winning hedge fund platforms of Deutsche Bank. They provide the best of both worlds: an open architecture platform with full oversight by DB. The platforms provide the features and benefits of managed accounts without the logistical challenges and with minimised risks (e.g. mitigated fraud, monthly to daily liquidity dependening on underlying strategy, enhanced transparency and security as well as active risk management). With a combined operating history of over 10 years, the platform is the largest in the

/ March 2013

industry with assets of $11bn and offers the most extensive access to trading strategies, with over 250+ available.” During the last quarter of 2012, total hedge fund assets under management reached an all time high of $2.3trillion, Andrew states describing the industry last year. “Relative value strategies, primarily driven by multi-strategy, continued to raise the majority of new capital allocations – a total of $6.5bn for Q4 and $41.1bn for 2012. Industry consolidation remained on course as the largest managers (>$5bn AuM) brought in $12.5bn of new capital in Q4 and $55.7bn in 2012. However, smaller managers (<$500m AuM) also raised assets this year, bringing in a net of $2.2bn in 2012. The midsized managers ($500m to $5bn AuM) however experienced net outflows of $23.5bn for the year.” “According to industry indicators, hedge fund redemptions increased in the last quarter of 2012 especially for systematic and volatility strategies,” he continues. “Credit and distressed managers remained as the top performing strategies in the course of 2012. At Deutsche Bank, gross and net exposure of our hedge fund clients increased by 9.6% and 7.2% respectively in 2012. New start-ups remained at all-time lows, yet the size and quality of new launches was impressive.”

to managers, leverage, gap risk protection, structured products, up to daily liquidity, flexibility, efficiency and transparency.” Recently, Deutsche Bank’s dbSelect platform was voted UK Managed Accounts Platform of the Year in Acquisition International’s Hedge Funds Awards, as voted by the magazine’s readers. “I was very happy when I heard that we won this award,” enthuses Andrew. “It is great that we have been recognized for our many years of hard work in the hedge funds space.” With regards to the future, Andrew believes Deutsche Bank will see more of the same and predicts regulatory changes will continue to be another key consideration for hedge funds over the coming year. “Institutional investors face their own regulatory requirements, such as Solvency II, AIFMD, Dodd+Frank, and other rules,” he says. “While this presents challenges for the hedge fund industry, we believe the changing regulatory environment will present opportunities, as well as challenges, for Deutsche’s platforms. “We have continued to grow, adding managers and gaining the confidence of investors worldwide, in spite of the difficult economic and regulatory climate.”

Deutsche Bank had a successful year last year, Andrew provides further comments: “Over the course of 2012, we added many new manager strategies to dbSelect, now offering 175+ in highly liquid alternative programs – mainly CTA, FX, Commodity, and Global Macro. We have also managed to adapt to changes in response to investor demands, for example, introducing accessibility for US 40Act funds.” He tells how Deutsche has been rebuilding its reporting systems in response to client demand. The new system, which went live in October, is now able to handle more sophisticated instruments and enhances the platform’s risk management, regulatory monitoring and client reporting. “We aim to be the industry leading fund derivatives platform with the ability to offer funded and unfunded access

Company: Deutsche Bank AG Name: Andrew J. Grant Email: andrew-j.grant@db.com Web: www.db.com Address: Winchester House, 1 Great Winchester Street, EC2N 2DB Telephone: +44 207 545 9328

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving M&A Disputes in Arbitration

RESOLVING M&A DISPUTES IN ARBITRATION 3. Selection of arbitration forum

The law of seat of arbitration plays an important role in the arbitration process. Proper selection of arbitration forum has impact on effectiveness of injunctions, fairness of arbitration, and enforceability of arbitral awards. The London Court of International Arbitration is very popular for resolving M&A disputes involving Ukrainian parties, since such M&A transactions are governed by English law. The ICC International Court of Arbitration is also famous for its expertise in resolving complex M&A disputes. 4. Consolidation of arbitral proceedings When ultimate beneficiary guarantees proper fulfillment of sellers’ obligations through indemnity agreement distinct from the underlying agreement (the Share Purchase Agreement or Shareholders Agreement), it makes sense to include into the arbitration agreement or arbitration clause a provision permitting consolidation of the arbitral proceedings. 5. Piercing corporate veil (alter ego) concept vs. distinct personality concept Ukrainian law does not recognize the doctrine of piercing corporate veil (alter ego). Under Ukrainian law a business entity is distinct from its shareholders. The shareholders are not bound by any instrument signed by such business entity. Therefore, if the arbitral tribunal applies the doctrine of piercing corporate veil and finds that arbitration agreement or arbitration clause is binding upon the shareholders of a business entity, the award rendered by the tribunal on the basis of such arbitration agreement or clause may not be enforceable in Ukraine. -----------------------------------------------------------------------Kostiantyn Likarchuk is a Partner at Avellum Partners, and Mykyta Nota is an Associate at the firm. -----------------------------------------------------------------------Traditionally M&A transactions involving Ukrainian targets are structured in a specific way in order to reflect peculiarities of the Ukrainian business environment. As a rule, sellers of the Ukrainian target are “shelf companies”. Ultimate beneficiary of the Ukrainian target controls and directs the sellers. The ultimate beneficiary usually guarantees proper fulfillment of the sellers’ obligations either (i) directly under the Sale and Purchase Agreement or Shareholders Agreement or (ii) indirectly under a separate instrument (the Deed of Indemnity, Deed of Guarantee, etc).

for jurisdiction agreements between the parties from CIS countries, which are enforceable under the Convention on legal assistance and legal relations in civil, family and criminal matters adopted in Minsk on 22 January 1993).

Enforcement of such structures requires deep knowledge and outstanding expertise in arbitration involving Ukrainian parties. Before drafting any dispute resolution clause the following issues are of high importance.

When considering arbitration, there is a choice between an ad hoc tribunal, which may be created for resolution of a particular dispute, and an arbitration institution, which is set up and operates under the auspices and within the framework of specialized organizations (for instance, the London Court of International Arbitration, the Arbitration Institute of the Stockholm Chamber of Commerce). Institutional and ad hoc arbitration have advantages and disadvantages, which must be taken into account while drafting arbitration agreements or clauses.

1. Enforceability of jurisdiction agreements enforceability of arbitration agreements

vs.

Ukrainian courts do not recognize jurisdiction agreements of the parties to resolve their disputes in foreign courts (except

ACQUISITION INTERNATIONAL

In contrast, Ukrainian courts recognize and enforce arbitration agreements in accordance with the New York Convention on the Recognition and Enforcement of Foreign Arbitral of 1958 and the Law of Ukraine “On International Commercial Arbitration” (which is based on UNCITRAL Model Law “On International Commercial Arbitration” of 1985). 2. Institutional vs. Ad hoc arbitration

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

March 2013 /

SECTOR SPOTLIGHT:

Long-term UCITS net sales surge to EUR 53 billion in January 2013

LONG-TERM UCITS NET SALES SURGE TO EUR 53 BILLION IN JANUARY 2013 -----------------------------------------------------------------------The European Fund and Asset Management Association (EFAMA) has published its latest Investment Fund Industry Fact Sheet, which provides investment sales and asset data for January 2013. -----------------------------------------------------------------------26 associations representing more than 99.6 percent of total UCITS and non-UCITS assets at end January 2013 provided us with net sales and/or net assets data. The main developments in January 2013 in the reporting countries can be summarised as follows: • UCITS experienced a jump in net inflows in January to EUR 49 billion, up from EUR 1 billion recorded in December, reflecting a surge in net sales of long-term UCITS and a reduction in net outflows from money market funds. •

Net sales of long-term UCITS (UCITS excluding money market funds) increased substantially to record net inflows of EUR 53 billion, up from EUR 35 billion in December.

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Balanced funds also saw greater inflows of EUR 11 billion from EUR 7 billion in December.

About the European Fund and Asset Management Association (EFAMA)

•

Net outflows from money Market funds fell to EUR 5 billion compared to EUR 33 billion in December.

•

Total non-UCITS recorded net sales of EUR 17 billion, down from EUR 30 billion of net inflows witnessed in December. Special funds (funds reserved to institutional investors) recorded reduced net inflows amounting to EUR 15 billion, compared to EUR 27 billion in December.

EFAMA is the representative association for the European investment management industry. EFAMA represents through its 26 member associations and 59 corporate members approximately EUR 14 trillion in assets under management of which EUR 8.7 trillion was managed by approximately 54,000 funds at end September 2012. 35,600 of these funds were UCITS (Undertakings for Collective Investments in Transferable Securities) funds. For more information about EFAMA, please visit www.efama.org.

•

Total assets of UCITS stood at EUR 6,395 billion at end January 2013, representing a 0.7 percent increase since end December 2012. Total assets of non-UCITS enjoyed an increase of 0.3 percent in January to stand at EUR 2,557 billion at month end.

Bernard Delbecque, Director of Economics and Research at EFAMA, commented: “A perceived reduction in global stock market uncertainty supported by stronger financial market confidence strengthened investor sentiment in January, leading to the best month for net sales of long-term UCITS since EFAMA began collecting monthly data in October 2008.”

Net sales of equity funds continued to rise to reach EUR 21 billion, compared EUR 14 billion in December. Bond funds also recorded higher net inflows of EUR 19 billion, rising from from EUR 14 billion in December

About the January Monthly EFAMA Investment Fund Industry Fact Sheet The fact sheet is published by EFAMA on a monthly basis and represents net fund product sales data and/or net assets data for UCITS and non-UCITS assets provided by 26 national associations. The contributing national associations are: Austria, Belgium (net assets data only), Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and the United Kingdom.

EFAMA INVESTMENT FUND INDUSTRY FACT SHEET (1) Net Sales (EUR bn) (2) UCITS Equity Bond Balanced Other UCITS Sub Total Long Term Money Market Total UCITS Non-UCITS Special Real Estate Other Non-UCITS Total Non-UCITS Grand TOTAL

January 21.5 19.4 11.3 1.3 53.4 -4.7 48.7 January 15.2 0.7 0.5 16.7 65.4

JANUARY 2013 DATA Net Assets (EUR bn) (3)

UCITS Net Sales (EUR bn) December 13.5 14.1 7.3 -0.3 34.6 -33.3 1.3 December 26.9 0.1 3.1 30.2 31.5

47 25

Category UCITS Non-UCITS Total

January 6,395 2,557 8,952

Net Assets by UCITS Type Money Market funds 16%

-10

-33

Balanced funds 16%

19 18

25 13 34 38 35 13

8 8

Equity Fund Net Sales (EUR bn)

4 5 1

Bond Fund Net Sales (EUR bn) 26

16 20

13 14 21

24 18

25 21 19 14

11 3 6 2 5 3 7

2 1 4

Bond funds 29%

NonUCITS 29%

10 13

-23

-33

-5

16 10 5

5 10 9 4 3 10 3

-3 -1 -3

UCITS 71%

Worldwide Assets (EUR bn)

Special Fund Net Sales (EUR bn) 6

Equity funds 34%

UCITS/Non-UCITS Net Assets

-24 -18

Balanced Fund Net Sales (EUR bn)

Other UCITS 5%

MM Fund Net Sales (EUR bn)

-7 -12 -9 -3 -10

-9

14 9

3 3

end 2012 6,351 2,551 8,901

Net Sales of Long-Term UCITS (UCITS excluding Money Market Funds) Long-term Fund Net Sales (EUR bn)

% change (4) 0.7% 0.3% 0.6%

Regions

Sept 12

USA (5)

10,818

Europe (6) Asia and Pacific

8,741

America excl. USA World

2,144 24,515

2,690

(1) Excluding Liechtenstein; (2) UCITS in the sense of publicly offered open-ended funds; non-UCITS include other nationally regulated funds; excluding Belgium; (3) for countries reporting assets on a monthly basis (more than 99.6% of European investment fund assets); (4) change on previous month; (5) mutual funds; (6) for countries reporting assets each quarter, including non-UCITS.

ACQUISITION INTERNATIONAL

WWW.EFAMA.ORG

March 2013 /

SECTOR SPOTLIGHT:

Managing High-Risk Litigation

MANAGING HIGHRISK LITIGATION l The increasing popularity of various alternative dispute resolution techniques has certainly affected the type of dispute that gets resolved in court, however the overall volume of litigation work remains strong thanks to a dramatic increase in the number of highrisk litigation cases. High-risk litigation generally includes cases where large amounts of money are at stake; however there are other identifying factors as to why a case might be defined as high-risk, such as multi issue, party and jurisdictional suits, a real probability of failure and a result that could affect the client’s ability to conduct business moving forward. Acquisition International discusses the key issues with Wishart, Norris, Henninger & Pittman, P.A.

-----------------------------------------------------------------------Megan Sadler works for Wishart, Norris, Henninger & Pittman. Here, she speaks to Acquisition International magazine regarding the management of high risk litigation in the USA. -----------------------------------------------------------------------Wishart Norris is a turn-key law firm that focuses on the needs of business owners and their families. Megan explains: “While this includes both commercial litigation and mergers and acquisitions, we also provide a broader set of services, including, commercial real estate, family law, tax and estate planning, tax controversy and succession planning.” When asked what makes the firm stand out from the competition, Megan explains that it focuses on forging longterm relationships with its clients, and has the expertise to provide business owners with valuable planning and advice at every stage of the business and the business owner’s life. “In the area of business litigation, we commonly litigate issues such as breach of contract, business torts, employment disputes, shareholder disputes and complex torts,” she adds. “The common thread of focus throughout Wishart Norris is on the needs of the business owner. This common thread allows our litigators to collaborate with attorneys in other practice areas to gain a deeper understanding of the issues. Our holistic approach to litigation focuses not just on the litigation at hand, but also on the resolution of any larger systemic issues facing the business and business owner.” In recent years there has been a dramatic increase in the number of high-risk litigation cases, which Megan attributes to clients expanding their regional or statewide operations to a national, or even a global, level. “These businesses are

20 / March 2013

now exposed to a patchwork of local, state, federal and foreign laws and regulations. Manufacturing and shipping capacities have dramatically increased, and great advances have been made in industry and technology. Simultaneously there has been an increase in environmental risks and the possibility of experiencing catastrophic events (including those brought about by terrorism). “As our economy becomes increasingly global, planning for and managing high-risk litigation has become all the more important. This type of litigation risk must now be considered when structuring business deals, managing assets and resolving disputes, as such cases have the capacity to severely cripple or even destroy a business.” Every case for Wishart Norris is unique, states Megan, however there are three factors which she believes yield success, regardless of the facts of the case. “First and foremost is communication. Wishart Norris strives to communicate clearly and effectively with our clients and with opposing counsel. Next, we focus on a solution that makes sense for our client under the circumstances and in light of the client’s business and litigation objectives. “Finally,” she adds, “we have found that the key to success in high-risk cases has been our firm’s agility in relevant core competencies as well as its organizational skills and resources. As a mid-size firm with a broad range of skill sets, Wishart Norris is able to analyze and address complex issues quickly and cost effectively.”

Company: Wishart, Norris, Henninger & Pittman, PA Web: www.wnhplaw.com Address: Charlotte: 6832 Morrison Blvd. Burlington: 3120 S. Church St. Telephone: Charlotte: +1 (704) 364-0010 Burlington: +1 (336) 584-3388 Name: Megan Sadler Email: Megan.Sadler@wnhplaw.com Name: Molly A. Whitlatch Email: Molly.Whitlatch@wnhplaw.com Name: Pamela Duffy Email: Pamela.Duffy@wnhplaw.com

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SECTOR SPOTLIGHT:

ANTITRUST LITIGATION

Antitrust Litigation – Resolving Competition Disputes

Resolving Competition Disputes

l Litigation involving competition law issues has over recent years become more and more international. More decisions by competition and other economic regulatory bodies are being challenged in the courts because the stakes are so high. Actions against anti-competitive practices, whether public or private, often involve companies located in different countries, making this area of expertise all the more complex. An increasingly globalised economy, the volume of world trade and the operations of multinational companies are only some of the aspects hinting at the transnational dimension of modern business transactions. Along with the internationalisation of commerce, anti-competitive business practices increasingly tend to produce cross-border effects. Recent legislative and judicial developments have led to an increased focus on competition litigation across many regions throughout the globe, as a result, expert, commercial competition litigation advice is increasingly important for companies, not only as defendants but also using private litigation as a means of redress. Because the risks of engaging in competition litigation can be high, companies should ensure that assessing those risks is a key part of any corporate risk management strategy. When competition issues end up in court, it is therefore essential that those involved ensure that they seek the best advice from experts within the field who are able to advise them on an international level. Acquisition International spoke to leading experts in the field to get their opinion of the key current issues. Achieving commercial outcomes is always the main goal at Hausfeld, and Maton explains what he believes are the key skills needed for professionals dealing with antitrust litigation. “A successful antitrust litigator combines legal knowledge, intellectual ability, business knowledge, understanding of the industry and cultural consciousness in order to be able to provide sophisticated legal advice to a wide range of business sectors in a complex global economy. A combination of creativity and analytical precision is significantly important as well.” He adds that familiarity with regulations across multiple regions is also of huge importance for a successful antitrust litigator. “The increasingly globalised nature of anticompetitive practices has been accompanied by an increase in competition laws enacted by countries around the world. As the number of competition laws enacted worldwide has increased, so it has the divergence in their application and enforcement. Competition authorities worldwide have started to coordinate their efforts in investigations but there are still inconsistencies in detection and regulation of anticompetitive practices.”

-----------------------------------------------------------------------Anthony Maton is a Partner specialising in competition and financial services litigation in the European Office of Hausfeld & Co LLP in London. -----------------------------------------------------------------------“Hausfeld & Co LLP is a specialist firm focused on claimant litigation, particularly in the competition & financial services fields; we are leaders in the work we undertake,” begins Maton, explaining what it is that sets Hausfeld apart from the competition.

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Maton has witnessed an increased focus on private actions for competition law infringements recently. “The increase can be attributed in part to the Enterprise Act 2002, which introduced the specialist Competition Appeal Tribunal (“the CAT”) to hear claims for damages on a follow-on basis after a finding of infringement by either the UK or the EU competition authorities,” he states. “With the introduction of the CAT came several advantages over the High Court; the main one being the more generous limitation period – especially since the Deutsche Bahn judgment last summer – which may have had the effect of allowing previously time barred actions. Last

year also saw the first successful follow-on damages award from the CAT in the Cardiff Bus case, awarding not only compensatory damages, but also exemplary damages, which likely incentivised potential claimants.” With regards to the forthcoming 12 months, Maton expects to see reformed private actions in competition law, with the introduction of opt-out collective actions in the UK. “We would like to see the increased involvement of claimants in Competition Authority investigations, which can assist Authorities in gaining insight into specific technical aspects of different markets. In addition, involvement in the investigations would close the informational disparity between claimants and defendants as Authorities such as the Office of Fair Trading become party to a great deal of information and representations that is not normally available to follow-on damages claimants post OFT investigation.”

Company: Hausfeld & Co LLP Name: Anthony Maton Email: amaton@hausfeldllp.com Web: www.hausfeldllp.co.uk Address: 12 Gough Square, London EC4A 3DW, United Kingdom Telephone: (0044) 20 7665 5000

March 2013 /

BATINI TRAVERSO & ASSOCIATI The Firm Batini Traverso & Associati was established in 1960. The main specializations are insurance law and banking law. In insurance we handle extensively GL work (Medmal, D&O, Professional, Product) and Marine & Aviation (Shipping, Logistic, Off Shore and Project Cargo, Transport, Yachting). The Firm is also widely known for its Yachting and Super Yachts accounts (yacht building, yacht sale and purchase). In banking law we assist major Italian and International banks in shipping finance, yacht finance, real estate and credit enforcement matters all over Italy. Our clientele is predominantly foreign both for our insurance department and our banking department. Our firm has 18 lawyers spread over 4 offices. Take a moment to visit our web site.

MILANO | GENOVA | LIVORNO | RAVENNA

www.bbpartners.it

SECTOR SPOTLIGHT:

Healthcare Technology

HEALTHCARE TECHNOLOGY

l The healthcare industry is being transformed quicker than ever by advances in technology. Healthcare is very data dependant and relies on information such as patient history, medical records, scanning and testing data. Technology is having a big impact on the way data is stored and accessed and at the heart of this change is cloud technology, which is being implemented by the healthcare industry to great effect. The ability to share information among others in similar fields in different locations is hugely beneficial. The increased access and availability of data is a substantial development in effective diagnosis and treatment. Mobile Health will become one of the biggest areas for development this year, creating access to healthcare on a mass basis. The market for healthcare mobile data, voice and services was estimated at $8 billion USD in 2012 for the Asia-Pacific region alone. Mobile devices can greatly extend the reach of healthcare platforms, and the potential for further development is huge. The widespread use of handheld devices has encouraged many vendors to focus on the development of mobile apps. Medical and healthcare apps are the third fastest growing category for iPhone and Android. Acquisition International speaks to David L. Levy MD the leader of Health Industries at PwC to examine the changes to the healthcare industry over the past year and discussing the outlook for 2013. will take more time. “Enterprise-wide IT systems that address both enterprise and clinical processes (e.g. electronic medical records) are becoming a basic necessity in leading delivery systems,” continued Dr. Levy. “Digitisation empowers both healthcare systems and patients by making available new information on patient preferences, service delivery and clinical outcomes.” The potential of Big Data to facilitate this move towards developing more personalised, effective medicines is also on the rise. However, according to Dr. Levy, this is an area that is still largely untapped. “The potential commercial value of mining, analysing, and monetising big data sets is tremendous. Big pharmaceutical companies are experimenting with innovative R&D and operating models, and improving ways of collecting biological data. While we’re starting to see some signs of progress, we’re still in the early stages of using this information to our advantage,” said Dr. Levy.

“I’m optimistic though that as the sector gets better at processing the information, we will be able to develop treatment regimens that target diseases at the molecular level thus remedying the disease more effectively,” he concluded. Discussing the healthcare industry in 2012, Dr. Levy noted that with precision-based medicine and the rise of technological advances, such as mHealth, PwC is seeing more consumer-centric business models emerge where patients are at the centre of care. “Again, we’re following a similar trajectory of evolution as other industries, including banking, travel, retail etc., where they were forced to change in order to adapt to the new paradigm,” explained Dr. Levy. “Consumers are also demanding a greater say in how their dollars are spent and are becoming more empowered in taking greater control of their health.” He believes that the intersection of mobile technology and healthcare – or mHealth – can revolutionise healthcare by

ACQUISITION INTERNATIONAL

transforming and strengthening the relationship patients have with their doctors and how they manage their own health. “By empowering consumers with tools, information, choice and control, mobile health is making healthcare better, faster, more convenient and less expensive, and the research shows that consumers agree,” he stated. According to Emerging mHealth: Paths for growth, a global report commissioned by PwC and conducted by the Economist Intelligence Unit, roughly one-half of patients surveyed for the report expect mHealth will improve the convenience, cost and quality of their healthcare in the next three years. Six in ten doctors and payers believe that its widespread adoption is inevitable, but widespread adoption

Company: PwC Name: Dr David L. Levy Email: david.l.levy@us.pwc.com Web: www.pwc.com Address: 300 Madison Avenue, New York, NY 10017 Telephone: + 1 646 471 1070

March 2013 /

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

contact@cabinetsefrioui.com

+33 1 47 66 11 00

‘‘

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

SECTOR SPOTLIGHT:

Global Real Estate Indicators

GLOBAL REAL ESTATE INDICATORS

l After an extremely turbulent few years the global real estate sector finished 2012 on a carefully positive note. Despite recent poor performance and regulatory changes, the private equity real estate market seems to be finding a bit of equilibrium; capital real estate values have stabilised, REITs are back on track in terms of leasing activity and most rated developers are seeing improved profitability. Real estate funds are still a long way from the 2008 high of $139.9 billion, however many firms are positioning themselves in order to profit from this emerging, potential recovery. Acquisition International speaks with BrookStreet des Roches LLP to get the firm’s take on the global real estate sector.

-----------------------------------------------------------------------Hugh Blaza is Managing Partner at BrookStreet des Roches LLP, a law firm based in Oxford. ------------------------------------------------------------------------

BrookStreet des Roches was founded in 1994 with the specific intent of providing an excellent service to the commercial real estate sector. Blaza continues: “It has grown its headcount from 12 to 80 in its lifetime and now contends for significant real estate work with firms of much greater size and longerestablished reputations. “The firm has a particular reputation in the retail sector but is also active in the utilities, property management/investment, leisure and construction sectors.” Blaza describes how 2012 was a mixed year for the real estate industry in his particular jurisdiction: “Activity appears to be on the increase, although some of it is distressed following the failure of a number of household name retailers.”

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Whilst he has not noticed any emerging trends of late in this jurisdiction he lets slip that ‘word on the street’ is that Private Equity activity is about to increase. “Firm’s are positioning themselves globally or by specialising and becoming more niche in order to thrive in the current economic conditions,” explains Blaza. “However, the ‘squeezed middle’ appears unsure where to go or what to target.” It seems the core affects of the financial crisis of the last few years have been the reduction in M&A activity due to the lack of support from the banks. “Companies have cash, but are waiting for sustained stability,” Blaza adds. Despite the sour climate the firm has seen successes in 2012, not least new client wins and the increase in new instructions from existing clients who now prefer the firm to their previous advisors. Blaza states

that he predicts this activity to continue over the next 12 months. “We can expect gradual improvement, although there will be some jitters on the high street I believe.”

Company: BrookStreet des Roches LLP Name: Hugh Blaza Email: hugh.blaza@bsdr.com Web: www.bsdr.com Address: 25A Western Avenue, Milton Park, Abingdon, Oxford, OX14 4SH Telephone: +44 (0) 1235 836600

March 2013 /

SECTOR SPOTLIGHT:

Logistics and Transportation

LOGISTICS AND TRANSPORTATION

l Global uncertainty has produced several trends that have affected logistics and transportation providers however confidence should be restored by improved economic conditions in 2013. Demand for air transport from travellers and cargo shippers lifted both passenger traffic and cargo volumes last year, prompting the global association of airlines to forecast a return to growth this year. Asia-Pacific carriers posted the strongest growth among the major regions, with demand up 6.2% year on year, on a capacity increase of 2.5%. Demand in emerging markets combined with the increased scale and concentration of shipping activity, means that ports across the world face new pressures to improve operating efficiencies, increase service reliability and avoid costly congestion that can seriously disrupt international container supply chains. Online retail has been responsible for a high logistics take-up over the past two years. In The Netherlands it was responsible for 60% of demand since 2010, and in Germany, Spain, Russia and the UK for 40%. According to Forrester Research, annual U.S. e-commerce sales are well over the $200 billion and are expected to increase another 45% (to almost $327 billion) by 2016. The rising frequency of online and mobile shopping has seen the demand for last-mile deliveries increase rapidly. Acquisition International speaks to ThomannFischer for the firm’s take on the changes to the logistics and transportation industry over the past year and the outlook for 2013.

-----------------------------------------------------------------------Stephan Erbe is a partner at the law firm of ThomannFischer in Basel, Switzerland. -----------------------------------------------------------------------Mr Erbe practices as counsel and attorney in courts and arbitration courts with particular emphasis on contract law, corporate law, labour law and commercial law. He has special know-how in the field of transport, logistics and aviation law and extensive experience in ship and aircraft financing. His professional experience includes: Attorney-at-law with KPMG Legal Basel (2000-2002); Attorney-at-law with McGrigors, London (2002-2003); Head of KPMG Legal Basel (2003-2004); since 2004 independent attorney-at-law in Basel. “My experience in the transport and logistics sector goes back more than 10 years,” said Mr Erbe. “As a member of the Transport Commission of the Basel Chamber of Commerce, of the legal commission of the two main European associations for Inland Navigation (VBW and IVR) and of the German Association of Transport Law (DGT) I have a vast network, both nationally and internationally. “Regarding Inland Navigation I am one of very few lawyers in Switzerland with particular know how in that field.”

26 / March 2013

Although the Swiss economy has proven stronger than many of its neighbouring countries, Mr Erbe stated that the very important export sector in particular is under some pressure due to the strong Swiss currency.

Looking ahead, Mr Erbe stated that for the logistic and transport sector it will be decisive whether the Swiss economy will keep up its good performance, as it reacts quite directly to any changes in the economy.

“These problems have a direct impact on the Swiss logistics sector, which has seen a lower growth than in previous years,” he commented. “However, the logistics industry is still a growing industry and, with over 170,000 employees, plays a vital role in the Swiss economy.

“As an exporting country, the strong currency remains one of the major issues. Should the export industry be affected further by the strong currency, then the logistic sector will follow short by,” he concluded.

“Even though there is a political pressure to move more goods by train instead of by truck, it is still the road transport, and on a lower level the Rhine transport, which have the highest growth rates,” he added. Due to the good performance of the Swiss economy in general, Mr Erbe noted that the domestic demand has remained on a high level, giving strong support to the retail economy. “As one of the main drivers of domestic transports, the retail industry will have a significant impact on the national logistic sector,” he continued. “Very recently more and more Swiss consumers react to the strong Swiss currency and increase their spending abroad. The future will have to show whether this will also impact the transport sector.”

Company: Thomann Fischer, Attorneys Name: Stephan Erbe Email: erbe@thomannfischer.ch Web: www.thomannfischer.ch Address: Elisabethenstrasse 30, 4010 Basel, Switzerland Telephone: +41 61 226 24 24

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

2013 Shipping & Maritime Predictions

2013 SHIPPING & MARITIME PREDICTIONS

l The world’s oceans are the backbone to global trade, but suffering from high oil prices and over capacity, many operating in the industry have to enter 2013 with a fresh approach in order to stay afloat. Tough times have encouraged radical thinking and the world’s sharpest shipping minds are now focussing and advising on how to cut costs and lessen the negative environmental impact of shipping. Acquisition International speaks to Wang Jing & Co. to discuss environmental regulation and change in the industry. grounded or abandoned vessel are not subject to limitation (emphasis added). In The ZEUS, the Supreme Court was of the opinion that for the purposes of the relevant provisions under the PRC Maritime Code, a “vessel” should be interpreted to refer to “not only the hull, but also the articles onboard the vessel, including the accessories and bunkers, whether they depart from the vessel due to the accident or not”. Consequently, it was held that the local MSA’s claim for removing or cleaning the bunkers from the vessel should not be subject to limitation. The Supreme Court’s ruling reveals that for the claims that are not covered by the CLC Convention (which sets up a separate limitation for the claims falling into her ambit), the cleanup costs of a sunken, distressed, grounded or abandoned vessel should not be subject to limitation under Chinese law. -----------------------------------------------------------------------Mr. Wang Jing is the founder and Managing Partner of Wang Jing & Co. ------------------------------------------------------------------------

Wang Jing & Co. is an award-winning full service law firm founded in Guangzhou, China in the early 1980’s. The firm has since grown to include 8 additional offices in Shanghai, Beijing, Shenzhen, Tianjin, Qingdao, Xiamen, Haikou and Fuzhou. With 20 partners and more than 250 professional and supportive staff, Wang Jing & Co. continues to dominate the Shipping & Insurance market in China. Our specialist lawyers are dedicated to keeping our clients abreast of the latest industry developments and are committed to providing the highest quality legal advice. Bunker Pollution and the Limitation of Cleanup Costs In recent years, China has become a signatory to various international conventions and regulations in relation to oil pollution control and prevention. China has ratified the International Convention on

ACQUISITION INTERNATIONAL

Civil Liability for Oil Pollution Damage (the “CLC Convention”) and the subsequent International Convention on Civil Liability for Bunker Oil Pollution (the “Bunker Convention”). In addition, while China is not a signatory to the Convention on Limitation of Liability for Maritime Claims, the convention prompted legislators to update and improve China’s own pollution regime. While great improvements have been made, there still remain some areas of uncertainty, leading to the September 2012 Supreme Court judgment regarding The ZEUS. The case involved a claim for the cleanup costs associated with non-tanker bunker pollution incurred in respect of the grounding of The ZEUS due to the impact of a typhoon. The case applied the Bunker Convention, under which the ship owner is able to invoke the limitation of liability as provided for under national law. Under Chinese law, the PRC Maritime Code provides that claims for refloating, removing, dismantling or eliminating the harm of a sunken, distressed,

Undoubtedly, this ruling is the most influential and controversial with regard to oil pollution claims in China in recent years. Accordingly, in view of China’s important role in the shipping market, we advise ship owners, hull underwriters and P&I clubs to reassess their coverage of oil pollution risks and readjust their strategies accordingly.

Company: Wang Jing & Co. Name: Wang Jing Email: info@wjnco.com Web: www.wjnco.com Address: 11/F., Block D, GT Land Plaza, 8 Zhu Jiang West Road, Zhu Jiang New Town, Guangzhou, 510623, P.R. China Telephone: +86 20 8393 0333

March 2013 /

SECTOR SPOTLIGHT:

ARGENTINA Argentina: The Recovery of the Oil & Gas Industry

The Recovery of the Oil & Gas Industry excess of current levels of production (as adjusted) shall be allowed to collect a price that will be grossed-up with a State subsidy, thus resulting for the producer in an aggregate revenue of US$7.50 per MM/BTU (which is almost triple than prior prices for domestic producers),” added Mr Alfaro. He explained that YPF’s new investment plan comprises US$7,000 million in capital expenditure each year from 2013 to 2017, focusing on the unconventional reserves at Vaca Muerta and marginal fields. He stated that, given the huge amount of foreign capital that is needed to develop these shale reserves, more changes are expected in the regulatory framework and in the Argentine oil & gas business environment, prompting major international companies to again commit substantial capital. “An audit carried out by US consultant Ryder Scott to assess the potential of the Vaca Muerta formation in Argentina’s Neuquén Province estimated prospective resources significantly in excess of those estimated in the past by both the US Energy Information Administration and Repsol,” he commented. “The newest estimations consider that Argentina has the potential to replicate the shale revolution that recently took place in the US.”

-----------------------------------------------------------------------Carlos E. Alfaro is the Managing Partner of ALFAROABOGADOS, an international corporate law firm from Argentina with correspondent offices in New York, Madrid and London. -----------------------------------------------------------------------Mr Alfaro stated that 2012 was a turning point for the Argentine oil & gas industry. He noted that the State expropriation (renationalisation) of Repsol’s 51% ownership in YPF brought the Argentine oil & gas industry back to life. YPF is Argentina’s largest crude oil producer and one of the largest natural gas producers in the country. YPF had virtually stopped investments in developing new exploration sites and in recovery of secondary wells during the last years of Repsol’s control, which heavily contributed to a production decline at a national level. “The renationalisation of YPF and subsequent aggressive but realistic strategic investment plan set out by the company became the new driving force behind Argentina’s energy sector, and it did not drive major foreign companies away,” observed Mr Alfaro. “Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp. and Total S.A. are continuing to drill in their existing concessions, and they keep on negotiating business alternatives with both YPF and the Argentine government.” At the beginning of 2013, the Argentine government also implemented new measures aimed at encouraging production. It modified the thresholds applicable to export duties in terms such that when the WTI international price exceeds a reference price fixed at US$80 per barrel, the producer is allowed to collect US$70 per barrel. “Later, in February 2013, the Commission in charge of the Oil & Gas National Investment Plan has resolved that all domestic producers injecting natural gas to the system in

28 / March 2013

Mr Alfaro noted that the trend of importing more and more refined fuels and gas while exporting less and less crude oil is expected to continue, pushing the cost of imports higher. Indeed, gas imports cost US$4,700 million in 2012, with a heavy impact on the country’s trade balance. “YPF says it has secured all the required shipments for 2013,” he continued. “YPF also reported it will continue negotiating with a list of 30 international LNG importers in hopes of securing further shipments. “At the same time, domestic output is limited by refining capacity. Coupled with the expected development of unconventional resources in the upstream sector, the downstream industry shall have to invest heavily in refining capacity. “Most of the new business opportunities shall require coinvesting with YPF or a close relationship with government.” Chevron and Pan American Energy (Bridas-CNOOC) signed agreements with YPF to such effect. Discussing the key factors currently affecting the oil & gas industry, Mt Alfaro stated that the fiscal situation needs to be tidied-up if Argentina wishes to secure substantial long-term investment and boost the country’s shale potential.

production since its nationalisation. Mr Alfaro believes that the level of success of the implementation of YPF’s five-year plan shall be crucial to the Argentine oil & gas industry. “Production of natural gas is also expected to increase given to the government’s recent decision of allowing producers to collect US$7.50 per MM/BTU of new gas injected into the system. “It is widely expected that after the 2013 mid-term national elections to be held in October, and as soon as the government announces new measures encouraging the market to invest, Vaca Muerta shall receive huge investments, both for exploration and infrastructure.” Prices of fuel sales in the local market in Argentina are mandatorily fixed by the government. Mr Alfaro explained that there is a formula for pricing oil for exports, determining that when the WTI international price exceeds a reference price fixed at US$80 per barrel, the producer is allowed to collect US$70 per barrel, and the remainder is withheld by the Argentine State as an export duty (such an export duty works as an indirect cap for domestic prices of crude oil). When it comes to gas, where exports have been shut off, the mandatorily fixed-price of domestic output ranges from US$ 2,50 per MM/BTU to US$ 7,50 per MM/BTU (in this latter case for gas injected to the system in excess of certain reference threshold of output). “Even though the above mentioned prices are substantially higher than those applicable in 2012, they are still very low when compared to those of oil, gas and refined fuels in foreign countries,” observed Mr Alfaro. “In fact, when considering Argentina’s huge annual bill for imports of gas and refined fuels, it is evident that the fixed price of refined fuels, natural gas and crude still needs to be increased substantially to encourage production and balance the trade account. Since 2013 is an elections year, whether those price increases shall take place during this year or not is a matter with strong political implications that may not be foreseen in anticipation. However, sooner or later those price increases shall have to be applied. “It is always difficult to make predictions in a country like Argentina because of its political imbalances but the year 2013 should bring new alliances and investments in the oil and gas sector particularly more partnerships between YPF and local and foreign owned oil companies to co-invest in developing its shale reserves” he concluded.

“Midterm elections in October also create expectations of policy changes,” he added. “Pressure from the agricultural exporters to increase the pace of devaluation is mounting. Foreign exchange restrictions have been resisted by the business community. “But although the industry complains about export duties, import restrictions, fixed prices, restrictions to the repatriation of dividends, and labour union conflicts, the balance sheets of most players show that they conduct business at a reasonable profit.” Production at existing oil fields is expected to remain high in 2013, primarily due to continued pressure on YPF to increase

Company: ALFARO-ABOGADOS Name: Carlos E. Alfaro Email: cealfaro@alfarolaw.com Web: www.alfarolaw.com Address: Avenida Libertador 498 – Buenos Aires - Argentina Telephone: 54-11-4393-3003

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:

Doing Business in Slovakia: An Ideal Investment Destination

DOING BUSINESS IN SLOVAKIA

An Ideal Investment Destination l Slovakia, the country in the heart of Europe, offers great advantages to foreign investors: strategic location between East and West with great export potential, the common European currency the Euro, flat tax rate and flexible labour code. Today, Slovakia is widely seen as a success model for other EU countries for creating an investment and business-friendly environment. The country enjoys positive ratings from international rating companies and gained the best position among the CEE countries in the World Bank’s Doing Business Report 2008 - 2013. Slovakia is currently ranked the 35th most attractive country for M&A, ahead of many of its nearby countries. Until the global economic crisis, Slovakia was enjoying sustained high economic growth, however like so many other countries, the Eurozone crisis has affected the region of late. The outlook for CEE for 2013 continues to be dominated by the uncertain evolution of the debt crisis in Europe but a number of emerging European countries in certain sectors are expected to slowly pick up in 2013. Indeed, the CEE region remains attractive to investors. Acquisition International speaks to some of Slovakia’s leading experts to discuss the country’s business environment and the opportunities it provides. Mr Války believes that Slovakia is one of the best-placed Eurozone economies, and he expects that there will be little change in 2013 compared to 2012. “I assume the wary tendencies in the investment activities of the firms will be seen taking into account the uncertainty in Europe and in particular in the Eurozone,” he explained. “Some M&A activity may be expected from private equity players. Thus, the M&A and investment activity in Slovakia will depend on the evolution of the Eurozone debt crisis and its solutions; the availability of the financing to the investors. “The already introduced austerity measures (such as the increase of the corporate income tax) may also affect the M&A and investment activity in the country and the implementation of the austerity measures planned in the second half of 2013 may impact the same in a negative way.” “The investment activity may be negatively affected by the higher corporate income tax introduction since 1st January 2013 which increased from 19% to 23%. Other not positive impacts may be connected with the recent amendments to the Slovak Labour Code which makes it a bit less flexible as well as changes to social and health insurance payments introduced since 1st January 2013,” concluded Mr Války.

Bratislava castle and novy bridge -----------------------------------------------------------------------Ladislav Války is the Managing Partner at VÁLKY PARTNERS s.r.o. -----------------------------------------------------------------------Mr Války describes Slovakia as an export oriented economy, noting that the dominant industry areas are automotive and related industries such as machinery or textiles. Slovakia’s main export partners include Germany, France, and its direct neighbours such as Czech Republic, Austria or Poland. “As part of the Eurozone, Slovakia feels the Eurozone problems such as the debt crises and overall Eurozone stagnation combined with a weak domestic consumption,” he added. Despite the current economic situation in Europe, including

30 / March 2013

Slovakia, Mr Války stated that the country still remains attractive to investors. “Its main strategic advantage is its location in Central Europe, so some strong players have established their logistic or customer support centres in Slovakia,” observed Mr Války. “Furthermore, Slovakia is part of the Eurozone so the foreign exchange issues are removed from the business transactions with the entrepreneurs from the Eurozone member states. “Another factor is, still an attractive, despite some recent changes, tax regime combined with the well-educated and experienced work force but still for the competitive salaries. “It is also worth mentioning an investment aid to encourage investments for the development of the country’s regions by way of supporting the initial investments or creating new jobs.”

Company: VÁLKY PARTNERS s.r.o. Name: Ladislav Války Email: ladislav.valky@valkypartners.sk Web: www.valkypartners.sk Address: Muškátová 36, 821 01 Bratislava, Slovakia Telephone: +421-905-941 274

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing Business in Slovakia: An Ideal Investment Destination -----------------------------------------------------------------------František Sedlačko is senior partner and the founder of SEDLAČKO & PARTNERS, s.r.o. law firm, which ranks among the most dynamic and leading medium law firms in Slovakia. ------------------------------------------------------------------------

František Sedlačko graduated from the Faculty of Law in Košice, SK, in 2002. He is now an attorney at law, a member of the Slovak Bar Association and also a member of the Editorial council of Bulletin of Slovak Advocacy. “Our people make the difference in our firm,” states Sedlačko, explain what sets the company apart from others. “The working style in SEDLAČKO & PARTNERS encourages creative and lateral thinking to achieve the suitable legal solution for every client. We believe that the legal advice should be as pragmatic and solution-oriented as it is technically excellent. As an independent law firm, we can react flexibly to clients´ needs and requests. Relying on precise knowledge of the Slovak law and legal system, we do not underestimate the importance of local conditions and specifics. SEDLAČKO & PARTNERS is able to support clients with wide range of issues of their business from establishment, through managing to the operating.” -----------------------------------------------------------------------JUDr. Ivan Ikrenyi, PhD is partner at IKRENYI & REHAK, s.r.o., a Slovak law firm and of I & R KONKURZY A RESTRUKTURALIZACIE, k.s. , a company acting as a bankruptcy trustee. -----------------------------------------------------------------------Ivan Ikrenyi studied law both in Bratislava, Slovak republic and Rotterdam, Netherlands. The activities of IKRENYI & REHAK, s.r.o. cover legal consultancy mainly in the field of civil, commercial and employment law, real estate, corporate agenda, M&A and energy law. A significant place in the portfolio belongs to an insolvency agenda provided by daughter company, I & R KONKURZY A RESTRUKTURALIZACIE, k.s., a registered bankruptcy trustee. Ivan explains what he feels gives his firm the edge over the competition: “A solid background, a team of legal professionals, knowledge of the specifics of Slovak environment, and offices in almost every major city in Slovakia.” Slovakia is an ideal investment destination mainly because of its political and economic stability strengthened by the common European currency. “The labour costs are favourable,” continues Ivan. “Although productivity rates are similar, labour in Slovakia is still significantly cheaper than in the Czech Republic, Hungary and Poland (its -----------------------------------------------------------------------Jozef Mathia is Leading Transaction Partner at Ernst & Young in the Slovak Republic. ------------------------------------------------------------------------

Ernst & Young‘s Transaction Advisory Services team in Slovakia works with some of the world’s largest organizations, fastest growing companies and private equity firms on some of the largest and most complex cross-border deals in the global market. Based on Ernst & Young’s latest M&A Barometer, the total value of deals closed in 2012 in Slovakia was higher than in 2011, thanks to the biggest transaction, the acquisition of a minority stake in SPP by EPH. Top transactions closed in 2012 included the acquisition of the Aupark Tower by the American Heitman European Property Partners IV, American Washington Penn Plastic’s Co. acquisition of 100% shares in TK Logistics and Asseco Poland’s acquisition of over 50% of shares in Asseco Central Europe. Also worthy of mention is the acquisition of Austrian Volksbank International AG (VBI) in nine CEE countries including Slovakia, by Russian financial institution Sberbank. The majority of deals were closed in the Manufacturing, Telecoms and IT industries.

ACQUISITION INTERNATIONAL

Slovakia is an ideal investment destination mainly due to its political and economic stability which is strengthened by the Euro. Also, its competitive taxation system and the availability of a highly-skilled and educated workforce, with favourable labour costs, add to the mix. “The country offers great advantages to foreign investors and strategic location between East and West Europe with great export potential,” says Sedlačko. “In order to promote further economic expansion and attract foreign investments, the Slovak government is following up on the priority of connecting the western and eastern part. The business environment is also improved by new taxation legislation and introduction of e-Government. Decisive is also the proximity to eastern trades.” Sedlačko has predictions for the following 12 months regarding the Slovak M&A market, which was severely affected by the EuroZone crisis. “Slovakia is a very good market for M&A nowadays but most activity in the last few years has been budget driven and focused on distressed assets. We do not expect changes in those trends. But we should emphasise that the economic conditions for M&A do not differ from other Western-Europe countries. immediate neighbours) and approx. six times lower than much of Western Europe.” “The highly prospective opportunities for doing business in Slovakia (mostly R&D) are by my opinion the fields of automotive industry and its supplier sector, a part of chemical industry (tyres and plastic parts used for cars) electronics, energetics and renewable energy sources, biotechnology and ICT and software development,” states Ivan.

“Slovakia’s economy has been growing and this trend is reflected in daily life,” he adds. “It is expected that the export-oriented economy in 2013 will not avoid a slowdown of growth, as the sovereign debt crisis in the Eurozone, but the positive report is that it will definitely not stop growing. Also major improvement in public finances was accepted, which could influence the prospective investors. This proves that the investment in Slovakia can be profitable in next few years indeed.”

Company: SEDLAČKO & PARTNERS Name: JUDr. František Sedlačko, PhD., LL.M. Email: sedlacko@sedlacko.sk Address: Štefánikova 8, 811 05 Bratislava 1, Slovak Republic Telephone: +421 2 546 30 226

affected by the crisis in Europe. These companies went into bankruptcies mainly after mismanaged restructuring efforts what means that these companies usually still run a concern with important assets. For that reason, in last approx. six months we observe a number of mainly Slovak investors that focus in acquisitions of bankrupt but still operating companies or takeovers of concerns in restructurings or simple asset sales, as these sales are generally free and clear of liens and claims and presently the only way to carry out a M&A transaction for challenging prices.”

“An above-standard gross profit margin is also characteristic for paper and pulp industry. Forecast for its development origins in the surplus of wood pulp and the need for modernisation and higher finalisation of paper production.” Speaking of forthcoming trends in the country, he adds: “We expect an increase in M&A and in foreign investments this year in comparison to the overfall in last two - three years caused by the world economy situation. The most of investors we expect to originate from German, Austrian, US and Canadian enterprises that will set up their branches in Slovakia for production, admin. or technology centres. “This year we expect a number of significant Slovak companies go bankrupt, companies that tended to be strong and not

Despite low transaction activity, Slovakia remains fundamentally one of the best-placed Eurozone economies over the medium term. Taking into account the rather pessimistic Eurozone forecast, many analysts expect the M&A market will remain flat or decline somewhat. More than ever, the market is dominated by buyers, rather than sellers, dictating that business owners must be ready for a potential exit in good time. The trend of permanent readiness for deal making is highly demanding in terms of corporate management. Whereas before the crisis, investors would be “mining” information from the target often for over half a year, and were fully prepared to invest time and money, nowadays, they expect comprehensive service, comfort and quality on the part of the sellers and their advisors. For 2013, focused, strategic deals will continue to be in vogue. New buyers are entering the arena, but the completion of transactions will continue to be problematic. Asia is on the rise and will continue to remain buoyant, gaining market share from Europe. Fairly positive market sentiment and an economic

Company: IKRENYI & REHAK, s.r.o. Name: JUDr. Ivan Ikrenyi, PhD. Email: ikrenyi@ikrenyirehak.sk Web: www.ikrenyirehak.sk Address: Soltesovej 2, 811 08 Bratislava, Slovakia Telephone: +421 2 50 10 21 11

recovery in the US should ensure that North America continues to be the leading M&A region in 2013. In Slovakia deals closed in the sectors of Telco, Power and Utilities, Retail and Consumer products are expected to be on the up as well as unique, nonrecurring deals in financial services.

Company: Ernst & Young Name: Jozef Mathia Email: jozef.mathia@sk.ey.com Web: www.ey.com/sk Address: Hodžovo námestie 1A, 811 06 Bratislava, Slovakia Telephone: + 421 2 3333 9544

March 2013 /

SECTOR SPOTLIGHT:

Magister Advisors: Post-Barcelona Analysis – “The Mobile Industry Desperately Needs a General Motors”

MAGISTER ADVISORS Post-Barcelona Analysis – “The Mobile Industry Desperately Needs a General Motors”

-----------------------------------------------------------------------Mobile data ‘value add service’ companies, including apps advertising and content providers, which were so prevalent at Mobile World Congress (MWC), are under intense price pressure and must consolidate to build scale according to Magister Advisors, M&A advisors to the technology industry. -----------------------------------------------------------------------The App World section of the exhibition at MWC had 250 exhibitors alone this year, up more than 25% on last year, reflecting the enormous growth in small companies straining to find a profitable niche. Dozens of these companies have App as part of their name, reflecting the urgent clamour to achieve relevance and prominence. There is an opportunity for one ‘General Motors’ to consolidate the industry and finally deliver real profits the way GM did in the 1930’s car industry, Magister Advisors contends. Victor Basta, managing director of Magister Advisors, said: “In the 1930s, General Motors became the market leader not because it was the best company but because it went on an acquisition streak and hoovered up a lot of small businesses to achieve scale. These acquisitions built a business that led global sales in its market for 77 consecutive years from 1931. One or two network operators have that opportunity today and we expect to see one step out in front and acquire

32 / March 2013

multiple unprofitable businesses that play an important role in the mobile ecosystem but make no money.” “Mobile app and value add service companies, from operator divisions such as Telefonica Digital to independents such as Millenial Media, are simply not yet able to generate significant profits, despite very rapid growth. While online giants like Skype, Twitter, Facebook and others are grabbing most of consumers’ mobile time, ‘native’ mobile players are finding profits hard to achieve because the market is so fragmented. Even operators such as Telefonica, Vodafone and NTT who face a ‘must win’ game in mobile data services, cannot grow enough data service revenue to compensate for declining call and SMS revenue.’ “The 2013 mobile industry looks very similar to the US car industry in the 1930s. Many app and service vendors are struggling to attract the attention of consumers and the $64 billion question is “how do we make money?” The answer, in our view, is scale. Many of these smaller businesses are logical acquisition targets for a General Motors-style consolidator with global ambitions. The network operators are the best placed to be General Motors in this scenario, but so far they are doing very little despite the wider threats that the changing dynamics of the industry present.”

About Magister Advisors Magister Advisors is a leading M&A advisory firm to the technology industry. With offices in London and Silicon Valley, Magister advises companies seeking to achieve an optimum exit. Last year Magister advised on 15% of all European technology exits valued above $50m. Recent Magister deals include the sale of C3 Technologies for $250m (40x revenue), LoveFILM’s $320m exit to Amazon, Mobile Interactive Group’s $59m exit to Velti and Clearswift’s sale to Lyceum Capital.

Company: Magister Advisors Web: www.magisteradvisors.com

ACQUISITION INTERNATIONAL

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

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

www.legumamicuss.com Karteekka@legumamicuss.com

SECTOR SPOTLIGHT: Doing Business...

DOING BUSINESS IN...

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

...Cameroon

-----------------------------------------------------------------------Elvise Chenwi is Managing Partner of Chenwi Chartered Accountants (CCA), an authorised accounting practice in Cameroon and the CEMAC region. -----------------------------------------------------------------------Mr Chenwi is a fellow of the Association of Chartered Certified Accountants. He holds an MBA from the GSB, UCT South Africa and a Master in Applied taxation from the University of Douala, Cameroon. He is licensed to practice Accounting in the CEMAC region and is a member of the Institute of Chartered Accountants in Cameroon (ONECCA) He has 13 years of senior management and consulting experience in Cameroon and the CEMAC countries. “The current business environment in Cameroon can be described as pregnant with opportunities,” states Mr Chenwi, “Yet hindered by economic policies which keep the risk adverse investor at bay. “The country sports an abundance of natural resources, a culturally diverse people and a gateway into the six countries of the CEMAC region. A politically uncertain future does not bode well for country risk. “Opportunities abound in the extractive industries-oil and gas, mining, agriculture and infrastructure development,”

34 / March 2013

he continues. “These constitute the strongest pull factors and are expected to continue in the foreseeable future. Investment incentives are available in the form of tax and customs concessions for strategic sectors and for economic impact projects.” With the region being an attractive opportunity for investors Chenwi Chartered Accountants must ensure it stays ahead of the game at all times. “The firm’s strong professional and academic credentials, as well as an intimate knowledge of the market, blend nicely with its one size does not fit all philosophy to deliver world class service with an individual touch. A full range of accounting, audit, payroll, tax, investment and other advisory services, delivered in English, provides a one stop shop for new and existing investors in a predominantly French speaking market,” Elvise explains regarding how the firm differs from the competition. Regarding future prospects, Mr Chenwi assures us we can look forward to seeing increased CAPEX on infrastructure projects and increasing development in mining and oil & gas activities as identified in the growth and employment strategy paper. “Household incomes are on the low and infrastructure in a sore state,” he explains. “FDI will improve tax revenues and spending capacity of government, reduce unemployment and improve household disposable incomes. The resulting consumer confidence is sure to spur consumer spending

which will in turn spur production and create opportunities in other sectors. However, continued use of CAPEX to fund non-manufacturing equipment imports waters down the potential benefits to the local economy. “Political stability enjoyed to date maybe compromised as the country approaches a period of uncertain political transition. “Real GDP is expected to grow 4.6% up from 4.4% in 2012,” Mr Chenwi says. “In the event of sustained slowdown in the Eurozone, Cameroon’s main trading partner, we can expect some adverse consequences on the local economy.”

Company: Chenwi Chartered Accountants Name: Elvise Chenwi Email: echenwi@chenwicharteredaccountants.com Web: www.chenwicharteredaccountants.com Address: 304, BICEC Building, feux rouges Bessengue, Douala, Cameroon Telephone: +23774064816 or +23733414530

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Doing Business...

-----------------------------------------------------------------------Nico Halle, an International Legal Consultant, Barrister and Solicitor of the Supreme Court of Cameroon, is the Senior Managing Partner of the Nico Halle & Co. Law Firm in Cameroon. ------------------------------------------------------------------------

The Nico Halle & Co. Law Firm’s areas of expertise include, but are not limited to: Corporate Law; Immigration Law; Labour Law; Intellectual Property Law; Mining Law; Forestry Law; and Maritime Law. The firm was founded by Mr Halle in 1986. Throughout the years, the firm has cemented and established itself as one of the leading law firms in its areas of expertise. “With regard to local and global competition, we have the advantage of experience on our side,” commented Mr Halle. “Due to our long-standing presence in our areas of practice, we have been able to hone and develop skills and savoir-faire necessary when dealing with situations that arise in execution of assignments.” Mr Halle stated that the Cameroonian business environment is improving, noting that there has been a tremendous increase in economic activities with new companies being established in most parts of the national territory. According to the Presidency of the

...Germany -----------------------------------------------------------------------Michael Wiehl is Partner, and Head of M&A-practice group of Rödl & Partner, based in Nuremberg, Germany. -----------------------------------------------------------------------Wiehl begins by stating that the German economy coped well with the financial crisis, however he noted: “a slight decline in the last months”. “The strength of the German Mittelstand, mostly familyowned businesses from 10 to 100,000 employees, has helped to maintain steady economic growth,” he continued. “A major secret of these firms is their international presence. And as we have seen they have used the last years to expand, to acquire new companies and gain know-how to strengthen their international competitiveness even further.”

Republic, there is an expected growth rate of 6.7% in 2013.

opportunities, and development, etc.

Discussing the benefits of doing business in Cameroon, Mr Halle noted that corporate income tax is placed at 35%, according to the Cameroon Tax Code. He added that newly set up companies benefit from a two year tax holiday.

“With regard to the barriers that exist for those looking to invest in Cameroon, there is little or none. Some of them include time constraints and administrative bottlenecks. Despite this, there exists a chunk of investment incentives, some of which are mentioned above,” he concluded.

“The Industrial Free Zone (IFZ) grants a 10 year holiday subject to a flat tax of 15% on corporate profits from the 11th year,” he continued. “Businesses subject to the IFZ are also exempt from existing and future custom duties and taxes, including those on locally purchased production inputs. “Both the Investment Charter and the IFZ allow foreign investors to repatriate their profits. “Cameroon has enjoyed ceaseless peace since independence. This does not only provide security to the investors but their various investments.” Looking ahead, Mr Halle stated that the region will benefit from increased economic activities. He anticipates increased cash flow, increased employment excellent Know-how in most of the important industries and a fantastic infrastructure. Private Equity firms and corporations from abroad have been attracted to buy Mittelstand companies or shares of firms to get an easy access to Germany. We have advised on many of these transactions that have all been very successful both for the buyer- and the seller-side.” Despite a relatively successful 2012, Wiehl is not too optimistic about a pick-up in global demand over the next 12 months. “Some of the boosting economies like Brazil are currently facing difficult times, and growth rates in China have declined as well,” he explains. “Even the German economy has seen a decline in export rates. But the degree of the international presence of German firms is still growing.”

Investors are attracted to Germany as they find an especially positive business atmosphere, explains Wiehl.

Rödl & Partner is a multi-disciplinary professional service firm providing legal advisory services as well as audit, management, tax consulting and financial services for international business organisations. Founded in 1977 in Germany, Rödl & Partner is active at 89 wholly-owned locations in 39 countries. The integrated firm owes its dynamic success to over three thousand entrepreneurialthinking colleagues.

“Some key indicators include a motivated and highly educated work-force, great research and development,

“Rödl & Partner is not merely a collection of accountants, auditors, lawyers, management and tax consultants

ACQUISITION INTERNATIONAL

increased

infrastructural

Company: Nico Halle & Co. Law Firm Name: Nico Halle Email: hallelaw@hallelaw.com Web: www.hallelaw.com Address: B.P.: 4876 Douala, ImmeublePharmacie Bell, Face SGBC Bali, Douala - Cameroon Telephone: +237 33 42 64 79 working in parallel,” states Wiehl, commenting on what he believes provides the company with its competitive edge. “The firm’s professionals work together, closely interlinked across all service lines. Our strategic advantage is the combination of our multidisciplinary approach, our global reach and our traditionally strong presence among family businesses. This combination cannot be found anywhere else – a firm that is devoted to comprehensively supporting foreign direct investment anywhere in the world.”

Company: Rödl & Partner Name: Michael Wiehl Email: michael.wiehl@roedl.de Web: www.roedl.de Address: Aeussere Sulzbacher Strasse 100, 90491 Nuremberg, Germany Telephone: +49 (9 11) 91 93-1300

March 2013 /

CAMEIRA LEGAL

A NUTSHELL... CAMEIRA LAW is a leading Portuguese and Brazilian law firm driven by a successful international expansion with commitment to excellence. The firm provides effective ways of meeting clientsâ&#x20AC;&#x2122; needs. Heirs to an important and prestigious tradition of law practice in Lisbon, the firm offers a comprehensive range of legal services with a unique depth on every facet of business law. Our partner led friendly teams are top-tier providers of legal advice to multinational companies of all sizes across all investment sectors. Pre-eminent teams of legal advisers combine highly skilled professional experience with the ability to understand the dynamics and key requirements of the international and domestic business environment. Highly motivated lawyers share the same understanding as our clients of the need to build creative and sound commercial relations, while employing world-class cutting-edge financial and corporate capabilities. Our M&A, Corporate Finance, Tax and Dispute Resolution specialists bring together an unrivalled experience in cross-border transactions that drive the Portuguese and international economies. Located in the heart of Lisbon at Chiado, CAMEIRA LAW is equipped with state-of-the-art information technology and maintains easy and secure communications with its Clients wherever they are.

www.cameiralaw.com LONDON london@cameiralaw.com 13-15 Craven Street, London WC2N 5AD Telephone: +44 (0)20 7930 1900 LISBON lisbon@cameiralaw.com Rua Tierno Galvan, Torre 3, 17Âş Piso 1070-274 Lisboa Telephone: +351 21 382 2500

SECTOR SPOTLIGHT:

Cross Border M&A in Southeast Asia

CROSS BORDER M&A IN SOUTHEAST ASIA Greenfield FDI to Green Light Cross-Border M&As in Vietnam •

Ho Chi Minh City / Vietnam

Hong Kong’s Kerry Logistics, securing a majority stake in Tin Thanh Express.

In the future, cross-border M&As will continue to increase as many state-owned enterprises are restructuring to divest from their non-core businesses. In addition, other growth sectors include property, banking, finance, infrastructure, telecommunications, consumer goods and manufacturing.

-----------------------------------------------------------------------Kent Wong is a Partner and Head of Banking & Finance, Capital Markets at VCI Legal. -----------------------------------------------------------------------During the past few years, M&A activities in Vietnam have been growing rapidly, as a result of Vietnam being perceived as being a promising growth market, with an abundance of inexpensive assets, and the Government’s determination to strengthen the banking and financial sectors. Despite there being no official data regarding inward flows of FDI entering Vietnam through cross-border M&As, recent transactions highlight an upward trend. In the past, Vietnam received FDI mainly through greenfield investments, but there has been an uptick in foreign companies investing in Vietnam by acquiring a stake in existing companies. For example, in October 2012, Suntory Holdings, a Japanese global beverage company, acquired a 51 percent stake in PepsiCo Vietnam’s beverage business. Suntory now controls -----------------------------------------------------------------------Syed Naqiz Shahabuddin is the Managing Partner of Naqiz & Partners. ------------------------------------------------------------------------

Naqiz & Partners was established in January 2005 and has grown exponentially and is now recognised by both clients and peers as a leading full-fledged corporate law firm with an associate office in Jakarta, Indonesia. The Firm has also garnered accolades from clients and has been consistently ranked as a “recommended law firm in Malaysia” by international publications based on its successes in representing both local and foreign clients in notable and crossborder transactions. The Firm has an extensive experience in a broad range of transactions, including corporate/ commercial law, banking & finance, mergers & acquisitions, capital markets, property & real estate, IT & telecommunication, intellectual property as well as in infrastructure projects.

ACQUISITION INTERNATIONAL

Until now, Vietnam has no single, comprehensive M&A law. M&A rules are found in various pieces of legislation, including the Law on Enterprises, Law on Investment, Law on Securities, Law on Competition, laws regulating specialized business sectors and certain commitments made in international treaties. However, there are a number of legal issues which an investor, especially a foreign acquirer, should be aware of. Although some difficulties, restrictions and obstacles still remain, M&A in Vietnam is expected to be one of the key, effective channels for market entry. As the Vietnamese legal environment is developing continuously, this leaves room for lawyers’ creativity in getting the deal through. Looking forward, it is anticipated that M&A activities will continue to surge as foreign investors continue to view Vietnam as a promising market. one of the biggest players in Vietnam’s growing beverage market. Last year also saw Taiwanese food processor UniPresident acquiring a 44 percent stake in Vietnam’s troubled Tribeco, to become the controlling shareholder. Other notable M&A cases include: • Thailand’s SCG purchasing a 20% stake in Binh Minh Plastic JSC and a 23% stake in Tien Phong Plastic JSC; then, in December, SCG acquiring 85% of Prime Group; • Singapore’s Platinum Victory purchasing an 11% stake in Refrigeration Electrical Engineering Corporation; • Singapore’s Orchid Fund acquiring 10.65% of FPT; • The Philippines’ Ayala Corporation purchasing a 10% stake in HCMC Infrastructure Investment JSC and 47% of Kenh Dong Water Supply JSC; • The Philippines’ Manila Water Company acquiring a 49% stake in Thu Duc Water Company; • Indonesia’s Semen Gresik acquiring a 70% stake in Thang Long Cement JSC; and

Company: VCI Legal Name: Kent Wong Email: kentwong@vci-legal.com Web: www.vci-legal.com Address: Suite 501, 5th floor, Sailing Tower, 111A Pasteur Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam Telephone: +84 8 827 2029

Beyond our associate offices, we collaborate closely with handpicked selection of prominent law firms across the region. Lawyers in each office draw upon a wealth of experience in their local markets and call upon our expertise as needed to serve our clients best. Areas of practice: Corporate & Commercial, Banking & Finance, Islamic Banking & Finance, Infrastructure & Projects, Capital Markets, Technology, Media & Telecommunications, Intellectual Property, Real Estate & Property, Languages: English, Bahasa Malaysia, Mandarin and Cantonese Number of Partners: 8 Number of Fee Earners: 24

Company: NAQIZ & PARTNERS Name: Syed Naqiz Shahabuddin Email: naqiz@naqiz.com Web: www.naqiz.com Address: (Main Office) No.42A, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur Telephone: +(603) 2081 7888 Fax: +(603) 2081 7886 Address: (Branch Office) Suite 9B.02, Level 9B, Wisma E&C, Lorong Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur Telephone: +(603) 2095 1188 Fax: +(603) 2095 1186

March 2013 /

SECTOR SPOTLIGHT:

Bangladesh: The Next Hotspot for Investment

BANGLADESH

The Next Hotspot for Investment

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

-----------------------------------------------------------------------Raihan Shamsi is the CEO of GrameenPhone IT ltd. -----------------------------------------------------------------------GPIT is one of the largest IT services companies in Bangladesh with a 400 strong certified and competent workforce. We are an end to end IT System Integrator (SI) providing implementation and post-sales support and maintenance services. GPIT was established in 2010 as a 100% subsidiary of Grameenphone, the largest Telecom company in Bangladesh with more than 40 Million subscribers. Our mission is to “Help transform businesses through best IT solutions to reach new peaks in productivity and efficiency” We currently manage: • The largest Data Center in Bangladesh • One of the largest ERPs in Bangladesh with around 5000 users • The 3rd largest Business Intelligence (BI) implementation in Asia • One of the largest Call Centers in Bangladesh Expertise: We manage the end to end IT operation and service (AD, AM, IM) of the largest Telecom operator (GP) of Bangladesh. We have a strong delivery team with an average experience of five years. Our diversified technical expertise includes ERP, Business Intelligence, Contact Center, CRM, Middleware and Data Center. We have a proven record in on time delivery of complex IT projects and our operational performance is comparable to global companies .1

ACQUISITION INTERNATIONAL

Partners: We have premier partnerships with the largest and best OEM vendors of the world including Oracle, Cisco, HP, Dell, IBM, Huawei, Avaya and Temenos. Clients: We operate in the Banking and Financial Services, Government, Telecom and the Enterprise verticals. Our top clients include multinational banks, large enterprises, internet service providers and large telecom companies. We have proven footprints in Europe and Asia.

BPO operation in Bangladesh when implemented. GPIT strongly believes that the BPO industry in Bangladesh has immense potential and is confident that with the support of the Bangladesh Government, GPIT will establish itself as the trend setter and open the door for the employment of thousands of competent Bangladeshi resources in this sector. 1. AT Kearny Global Cost Benchmarking 2. Expert Analysis 3. EEI Survey conducted by Kenexa, USA

Certifications: GPIT is the only company in Bangladesh who is both ISO 27001 and ISO 20000 certified, and is CMMI Level 3 appraised with a certified Project Management team. We operate according to ITIL best practices. We have adopted an organization wide “customer first” attitude and customer centricity is in our core. Our CSI in 2012 was 85%. In addition to a high quality service, we provide our customers a 15-20% cost advantage compared to what the other South Asian competitors (India, Vietnam, Philippines) can offer .2 We highly value employee engagement and our Employee Engagement (EEI) score in 2012 was 77%.3 In 2013, GPIT will venture into the BPO business with the implementation of an ERP Finance & Accounting operations centre in Bangladesh for Telenor. This will be the largest

Company: GPIT Name: Raihan Shamsi Email: araihan@gpit.com Web: www.gpit.com Address: GP House, Level #4, Bashundhara, Baridhara, Dhaka-1229, Bangladesh Telephone: +880 1711083161

March 2013 /

SECTOR SPOTLIGHT:

Bangladesh: The Next Hotspot for Investment

-----------------------------------------------------------------------Al Amin Rahman is a partner at Fox Mandal Associates based in Bangladesh and responsible for Bangladesh operations. -----------------------------------------------------------------------Mr Rahman was admitted in the English Bar in the Hon’ble Society of Lincoln’s Inn, UK and also an advocate of the Supreme Court of Bangladesh. The firm was founded in India in 1892 and is now one of the biggest in Bangladesh. “My major areas are foreign investments, project finance, infrastructure, power sector, company law and M&A” he explains and continues to describe how the firm fares against its competition. “Fox Mandal is one of oldest and largest full service law firms in South Asia catering for a wide range of domestic and international clients. Further, our lawyers regularly attend seminars, workshops, and working with international clients gives us the advantage over other competitors.” Bangladesh is now being considered as one of the most preferred destinations for Foreign Direct Investment (FDI) following creation of an ideal investment climate in the country by the Government. “Bangladesh is pursuing an open, non-discriminatory industrial and investment policy” states Mr Rahman. “The -----------------------------------------------------------------------ABM Nasirud Doulah is a Partner at Doulah & Doulah. -----------------------------------------------------------------------Bangladesh is situated at the strategic entrance of the Ganges delta of Indian Sea connecting South Asia with ASEAN countries. Major competitive advantages of doing business in Bangladesh lies on the abundance of low cost skilled and semi-skilled workforce and adequate infrastructure with easy access to its sea ports. Its current business environment can be termed as one of the finest compared to other developing countries due to its investment friendly regulations. There are no restrictions over shareholding structure, management structure, or repatriation of profits. The level of taxes imposed is of moderate level with various exemptions and incentives available for certain sectors. These led the Singaporean ministers recently referring to Bangladesh as a preferred destination for Southeast Asian investors. Bangladesh has been able to maintain a healthy GDP growth rate of 6% amid global recession. It received US$699.89m as FDI in Jul-Dec’12 period with a 33.33% increase from JulDec’11. Various infrastructure projects are at the horizon with some longest bridges, deep sea ports, express highways,

40 / March 2013

World Bank in its latest FDI-friendly index report has ranked Bangladesh as one of the most convenient and profitable destinations among 87 countries. Goldman Sachs identified Bangladesh as Next 11 country which includes Turkey, Vietnam, South Korea, Mexico and Nigeria. “Bangladesh offers one of the most liberal investment climates in South Asia such as 100% FDI, equal treatment for local and foreign investors and 100% profit repatriation. Bangladesh offers a competitive location for doing business with 170 million domestic market plus big markets such as India, Myanmar, China, Nepal, beside. Skilled and unskilled labour and land is also one of the cheapest in the world.” There are several sectors which Mr Rahman has noticed emerging as particularly attractive sectors, including Power & Energy, “infrastructure, chemical, garments, hotels, engineering,” Telecommunication and Agriculture, to name but a few. However, despite the opportunities these sectors present, there are still issues facing investors. “There is red tape which is considered to be the barrier of the economy, although the Government is handling these issues with priority.

economic zones etc. in the build. Several thousands of MWs are projected to be shortly added to the grid and investment in power sector has been particularly lucrative due to the incentives offered in the sector. Following the sea boundary dispute resolution some thousands of acres have been open for exploration. Other sectors which are at boom include ready-made garments, knitting, pharmaceuticals, firming & agriculture, agrochemical etc.

“Regarding the future of investment in Bangladesh,” he continues “I believe foreign investors will increase their investment to Bangladesh considering it as an alternative destination for investment next to China and India. “Bangladesh shall definitely have preferences because of its 170 million plus local market, cost competitiveness, growing middle class and other facilities.”

Company: FM Associates Name: Al Amin Rahman Email: dhaka@fma.com.bd alamin.rahman@fma.com.bd Web: www.foxmandal.com Address: 87 New Eskaton, 16th Floor, Hometown Commercial Complex, Ramna, Dhaka, 1000, Bangladesh Telephone: +8802 8313311, 8317797

Corporate & M&A Partner Mr Doulah is considered as a leading Finance & FDI expert. His publications include Legal Aspects of Doing Business, Project Finance, Corporate Governance, Foreign Tax & Trade Briefs, Money Laundering, Asset Forfeiture & Compliance etc. He is also a member of Thomas Jefferson School of Law Tax, and AML research teams.

Doing business in Bangladesh is easy but yet it is important to have experts structuring businesses efficiently to ensure compliance to local rules and regulations and exploit all of the incentives available. In case of joint venture projects, finalizing a pre- investment shareholders’ agreement is of paramount importance to avoid any loss or conflict at later stage and build the essential trust.

D&D is a leading law firm from with top-ranked transactional capabilities with strong litigation practice representing world’s largest businesses like GE, AIG, Nokia, ABB, AES, ElPaso, JPMorgan, Morgan Stanley, Citigroup. Merrill-Lynch, GAP, IDB, Pepsi, Sony etc. Multidimensional expertise enables the firm to provide most durable and future proof solutions.

Company: Doulah & Doulah Name: ABM Nasirud Doulah Email: ndoulah@doulah.com Web: www.doulah.net Address: Plot -153, Road-2/2, Mirpur-12A, Dhaka -1221 Telephone: +8801711506015

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Driving Investment in Ghana

DRIVING INVESTMENT IN GHANA

l Following 25 years of sound management Ghana’s economy has improved dramatically; well-endowed with natural resources, a competitive business environment and sustained reductions in poverty levels, it is now recognised as the world’s 16th fastest growing economy on the IMF’s World Economic Outlook. Some are even going as far as to describe Ghana as the ‘Switzerland of Africa’. The recent election has highlighted the country’s potential and prompted economic growth. Rand Merchant Bank has predicted growth to remain above 7% in 2013, though this is far from the double digit figure of almost 15% achieved in 2010, it is well above the predicted growth rates of most advanced economies. So much so in fact, that many advanced-nation businesses are currently looking to Ghana for investment opportunities, the Canadian Business Delegation being the most recent. In conjunction with some of Ghana’s leading professionals, Acquisition International examines the current investment opportunities and pull factors which are bringing foreign direct investment into the region. stringent effort and will to reverse the current trends in the stability of the currency and associated issues”. He stated that it is difficult to predict how successful the government will be in dealing with these issues in 2013. “We need to put people with the right qualifications and experience in the vital areas of national strategy planning and implementation,” he observed. “A regime that closely monitors and evaluates the progress of national programs is needed. The potential to turn our fortunes around is enormous. If we take the necessary steps, we will make progress.

-----------------------------------------------------------------------Greg Parbey is the Managing Director of QUALMS Consult Limited. -----------------------------------------------------------------------QUALMS Consult was set up six years ago to provide project technical staffing, plant shutdown maintenance, site construction and HSEQ training and advisory services to enhance work practices and business results for clients in Africa. “For the past six years our competent technical experts have provided onsite technical services, specialist training, advisory and implementation services for clients in the mining, construction, oil and gas, food processing, food retail, commodity export and hospitality industries in Ghana, Nigeria, Ivory Coast, Sierra Leone, Liberia, DR Congo and Egypt,” commented Mr Parbey. “Through our services, our clients have improved on their business profits, employee satisfaction, expert competitiveness and over business results.” Discussing the current business environment in Ghana, Mr Parbey stated that several gaps exist in industrial safety and health systems and projects personnel management.

42 / March 2013

“I foresee ordinary citizens, civil society and pressure groups taking more interest in how the country is run. If this happens, government will be forced to stay on its toes and implement the necessary measures to bring the positive change we have dreamt of for so long. “The major challenges include the absence of national policy and legislations that regulate safety and health,” he noted. “That notwithstanding, players in the industry understand the role that health & safety play in ensuring productivity and are therefore willing to put some systems in place in this regard.”

“We have all the natural, intellectual, human resources to turn the fortunes of our country around in the business and corporate sector. Whether or not we are able to achieve this depends on what plans and strategies we advance,” he concluded.

He believes that the main factors that attract foreign investors to Ghana include the country’s peaceful political environment; the numerous untapped business opportunities; and, to some extent, the presence of legislation that protects them and their investments. “Admitting that gaps currently exist in infrastructure, Ghana however continues to grow in infrastructural development,” he continued. “Extension of road and air transport within the country, comparatively better power supply within the sub region, expansion of telecommunications facilities are some systems that support investments.” Mr Parbey thinks that the political will and technical expertise of government to make significant institutional reforms is deficient, adding that it “certainly takes more

Company: QUALMS Consult Limited Name: Gregory Alvin Parbey Email: gaparbey@qualmsconsult.com Web: www.qualmsconsult.com Address: 1st Floor Block 2, Abwest Business Centre, Opp Texpo Batsonaa Martek Spintex Road Accra Ghana Telephone: +233 302 816242

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Driving Investment in Ghana -----------------------------------------------------------------------Andrew Opuni-Ampong is Managing Partner at Deloitte & Touche, based in Ghana. -----------------------------------------------------------------------The Ghanaian firm of Deloitte has a long history in the country, dating back to when it was originally formed by Mr James Donald Barnes CA Scotland on 1st January 1947. Through more than 65 years of history, Deloitte’s practice in Ghana has set the bar for professional services in the marketplace whether it is audit, tax, consulting or financial advisory. Today, the Ghanaian firm is still setting the Standard of Excellence in the industry under the leadership of the Country Managing Partner Andrew Opuni-Ampong, who is supported by capable partners and over 100 staff. “Our reputation is one of our vital assets that gives us an advantage over our local and global competitors in our area of expertise,” Mr Opuni-Ampong explains. “Deloitte sustains a culture of integrity, in which its people strive to do not only what is legal, but what is right.” The economy in Ghana is still at its emerging stage thus making way for businesses to grow and expand. “While many Ghanaians are entering the consultancy field, it would seem to many practitioners that the very challenging assignments are invariably won or assigned to global entities and their local offices. This therefore drives the demand for our -----------------------------------------------------------------------Patricia Safo is CEO of JCS Investments Ltd. Here Patricia talks to Acquisition International magazine and explains its unique way of doing business. -----------------------------------------------------------------------JCS Investments is a lean and flexible organisation, and Patricia makes the point that “the company seeks to optimize efficiencies in its dealings with its target group, without sacrificing quality.” She emphasizes the role of senior staff in helping to motivate other team members. “This enables us to strengthen our unique style of executing deals and change initiatives - improving alignment of business activities with our core values.” This focus on a sense of shared purpose certainly helps explain how JCS differentiates itself from its competitors, and Patricia goes on to observe that as technologies shift and advance, JCS Investments continually evaluates its values and approach. “Our primary focus is on targeting market segments that add impact to society, but we are mindful that we must periodically question our own assumptions.” As part of its core mission, JCS has the objective of creating an ‘enabling environment’ that can assist those who wish to move up the social ladder, but the company is also realistic about potential problems. Patricia emphasizes, “I take the view that a number of the local SME businesses have some -----------------------------------------------------------------------Gifty Haizel is a Director at SigmaStrat, based in Ghana, and is responsible for HR & Administration. ------------------------------------------------------------------------

Sigma Strategic Business Consult Limited (Sigmastrat) is a business strategy, project management and performance Improvement consulting firm that serves as a key advisor to leading companies in Ghana and the West African subregion. “We provide our clients with unique insight to drive critical decision making and solve their most pressing problems,” explains Gifty Haizel, a Director at the firm. “Sigmastrat also provides LEAN Kaizen and Six Sigma solutions. We are dedicated to helping companies and organizations improve their performance and achieve sustained profitable growth.” Gifty believes that when it comes to its competitors, Sigmastrat has the edge. “Our unique selling point is the fact that we take each client not just as a number but as a partner and help them not just through advisory but run them through our Continuous Improvement Journey ensuring they are satisfied with the level of improvement they can physically observe over the duration. This applies both to our Team development (Management

ACQUISITION INTERNATIONAL

services. The current business environment in our sector appears to be at its take-off stage in the country.” The current infrastructure in the Country is appreciably good but needs improvement to sustain the growth of the economy in the longer term. “Ghana’s current infrastructure spending is said to be inadequate to meet the demands of a middle-income economy, and the World Bank has said additional spending of US$1.1billion is required each year.

“The Economic Intelligence Unit (EIU) has predicted the economy to grow by 7.6% in 2013 and I believe this will be mainly driven by the services sector. Furthermore, we expect business activities in the services industry to expand and outpace the performance in 2012. “I will encourage foreign investors to be part of this emerging market which is about to take-off as it can only get better.”

“While new roads, bridges, rail-lines and ports have to be constructed, existing infrastructure needs to be upgraded to make economic activities more efficient. “There is an urgent need to overhaul the entire rail network to facilitate the transportation of goods and people, ease the pressure on the country’s road network, and offer a cheaper means of transportation.” The 2012 budget projected an overall cash budget deficit of GH¢3,368.8 million, equivalent to 4.8% of GDP. Despite this deficit, Mr Opuni-Ampong believes that the government is committed to institutional reform, including resolving the fiscal deficit, stabilising currency and rebuilding foreign exchange reserves. sort of problem, which they need to address to increase their efficiency. Understanding the nature of these challenges is an important aspect of our work.” With regards to the environment in Africa, Patricia feels it is very important to note that business in the country is changing. “There is now more emphasis on negotiation to reach agreements,” she says. “Promoters are reluctant to accept any offer that falls below their expectations and local promoters understand the value of their organization and want to be treated with respect. This is an important issue and requires awareness of the cultural aspects of the business process, particularly in the context of investment and joint-ventures.” This is where JCS comes into its own as the firm’s expertise is anchored in sound business experience. “Our background brings a lot of comfort to local business promoters as we understand the challenges of doing business in Ghana. Our unique style of executing deals and change initiatives is designed to build Trust with partners, as we listen to people’s concerns and work hard to surface underlying problems in a way that leads to an amicable, but financially robust agreement, which is acceptable to all parties. Patricia has some predictions for the coming year and how business will fare in the country. “2013 is going to be a tough

Training) service and Corporate Continuous Performance Improvement (Process Improvement Consulting) Service. Our Annual SigmaStrat Corporate Performance Improvement Summit which we hold each September is one of the ways we seek to consolidate Continuous Improvement in the business community”

Company: Deloitte & Touche, Ghana Name: Andrew Opuni-Ampong Email: administrator@deloitte-gh.com Web: www.deloitte.com/gh Address: Ibex Court, 4 Liberation Road, Ako Adjei Interchange, P. O. Box GP 453, Accra, Ghana Telephone: 00 233 (0) 302 775 355 | (0) 302 770 559 Fax: 00 233 (0) 302 775 480 year. Clearly more investment required in the energy sector. Current limitations in energy generation will inevitably have an adverse effect on the economy, not least in rural areas that need additional processing and ‘value add’ operations”. However, despite the difficulties, Patricia concludes on an optimistic note. “Business opportunities will continue to exist throughout all sectors of the Ghanaian economy. The challenge for business entrepreneurs and investors is to spot the opportunities and then connect with the individuals and companies that are managing to navigate the numerous obstacles.”

Company: JCS Investments Limited Name: Patricia Safo Email: patricia@jcs.com.gh Web: www.jcs.com.gh Address: P.O. Box 30710, KIA Accra, Ghana Telephone: +233 302 817 641

“The government has invested into youth in entrepreneurship aiming at reducing unemployment and boosting economic activity in the country. Fiscal and structural interventions seem to be enjoying some focus and I believe that 2013 will be a good springboard for greater investment going forward.”

Gifty continues to describe what she feels are the main factors that attract foreign investors to Ghana. “Foreign investors the world over want a stable economy, stable political climate, and ready market for their products and service together with investor friendly government policies and ease of doing business,” she begins. “I believe these are mostly positive in Ghana and are the main factors that attract investors in Ghana. “Unemployment is not on the low side currently,” she says of the country’s infrastructure. “Even though there have been massive foreign investments in the past, I believe there is always room for improvement. The government has already made quite a substantial investment into Public Sector reforms to remove inefficiencies and improve productivity in Ghana, and Gifty states that the future for the country is looking good.

Company: Sigma Strategic Business Consult Ltd. (SigmaStrat) Name: Gifty Haizel Email: ghaizel@sigmastrat.com Web: www.sigmastrat.com Address: PMB 163, Community 1, Tema, Ghana Telephone: +233269628023 (Ghana Office) +254732050957 (Nairobi Office)

March 2013 /

SECTOR SPOTLIGHT:

Driving Investment in Ghana

MONFANT BANKS is a management consulting firm. We are the trusted advisor to African leading businesses, government and institutions. We provide the following services to our cherished clients l Business Valuation and Forensic services l Accounting and Internal audit outsource services l Strategy and restructuring, Debt management and Accounting services l Business process and Re-engineering l Training and Capacity building services Trainer in consulting practice MBIC GOUP is a proud representative of Chartered Institute of Management Consultants in Ghana.

Website: www.mbicgroup.com Email: mbicgroup1@gmail.com Mailing Address: P.O.Box DC 1164, Accra-Ghana Physical Address: Osei Tutu BLVD, 2nd Floor, SSNIT House, Asafo Kumasi, Ghana

Crossbridge Consult is a team of organizational psychologists and management experts specialised in affecting thinking, changing mindsets and work behaviour for increased performance at the individual, team and organisational level. Our primary goal therefore is to improve performance by applying process consultation and behaviour transformation processes that impact thinking and workplace behaviour in a measurable way. Crossbridge Consult Limited, 21 Nii Sai Street, East Legon, Accra, P.O. Box Kia 9216, Airport, Accra, Ghana Tel: 233 302543023 Mobile: 233 024 4219716

Email: info@crossbridgeconsult.com Web: http://crossbridgeconsult.com

44 / March 2013

ACQUISITION INTERNATIONAL

MALTA

SECTOR SPOTLIGHT:

Malta: Attracting Foreign Trade & Maintaining a Competitive Environment

Attracting Foreign Trade & Maintaining a Competitive Environment l The Maltese general election took place this month, and political propaganda has been rife in the Maltese media. Angela Merkel recently praised Malta for its “excellent” economic performance; saying how it had proven that positive results can still be achieved in a difficult environment. Positive results have certainly been proven; according to statistics issued by Eurostat and the National Statistics Office, in 2012 Malta had the second best performing economy out of the 17 Eurozone member states (surpassed only by Estonia). All of the country’s major economic sectors registered growth, including retail and wholesale, financial services, manufacturing, tourism and real estate; Finance Minister Tony Fenech said this performance proved that the country was on the right track and praised the nation for its ability to “sail through the rough international economic climate relatively well”. However, at a time of such transition, particularly when the rest of Europe is still struggling, it’s important to focus on what allows Malta’s economy to survive. Malta’s liberal economy remains extremely dependent on foreign trade, industrial supplies are reliant on imports and income is dependent on consumer goods and the exportation of goods and services. So, how can the country continue to attract foreign investment whilst keeping goods and services competitive? Acquisition International spoke to Malta’s leading legal and financial experts to discuss these issues.

OTHER EXPERTS IN THIS AREA

Company: Avanzia Taxand Name: Walter Cutajar Email: walter.cutajar@avanzia.com.mt info@avanzia.com.mt Web: www.avanzia.com.mt Address: Regional Building Level 4, Mikiel Anton Vassalli Street, Msida MSD 9010, Malta Telephone: +356 2730 0045 Fax: +356 2730 0049

ACQUISITION INTERNATIONAL

March 2013 /

SECTOR SPOTLIGHT:

Malta: Attracting Foreign Trade & Maintaining a Competitive Environment

-----------------------------------------------------------------------Le Méridien St Julians Hotel & Spa in Malta is part of the Starwood Hotels & Resorts Worldwide Group. Franco Vella, General Manager, talks about the hotel’s positioning on the travel market. -----------------------------------------------------------------------Le Méridien St Julians Hotel & Spa in Malta, part of Starwood Hotels & Resorts Worldwide, opened its doors back in 2005. It has since welcomed many celebrities and professional sports teams. Our targeted customer is the creative guest and we are strengthening our positioning year after year with plenty of cultural initiatives involving the local artistic community. Our hotel also strives to continuously improve its sustainability with environment-friendly practices. It is regularly awarded for the efforts that our team puts together to make business the green way. -----------------------------------------------------------------------Geraldine Noel is Managing Partner of Acumum Legal Group, based in Malta. ------------------------------------------------------------------------

Acumum Legal Group is a recent entrant to the Malta legal scene, only being incepted by Geraldine Noel, a UK barrister, registered in Malta, in 2012. She explains more about the firm: “Utilising a multi-disciplinary & multi-jurisdictional approach, we are engaged by both private individuals and corporations in the areas of Tax, Corporate Formation & Services, Aviation, Intellectual Property - IP Holding Companies & Royalty Routing, Gaming - Malta, UK, Alderney, Caribbean, USA, Private Client, Trusts & Estate Planning, Maritime, Financial Services, Public & Private Law. Through our associated Barristers Chambers, we are able to provide advocacy services in Malta, UK, at EU level and most Commonwealth countries.” Despite its new status, Geraldine believes Acumum has the edge over its competitors due to it being a boutique legal and advisory firm, specialising in international law, with Maltese and UK lawyers and accountants having extensive international experience.

Le Méridien St Julians has the cultural charm of a distinguished boutique hotel and yet the authentic relaxing feel of a Spa resort. The property boasts the leading Spa facilities on the island, which certainly is a great asset on a very competitive market. The hotel is also a hidden gem of contemporary design subtly integrated in the unique architecture of pretty Balluta Bay. This different perspective on our rich local culture is much appreciated by the curious traveller. With a perfect central location easily accessible with public transport and a few minutes away from the island’s main attraction, the hotel is perfect both for the leisure and the corporate traveller. Our premises also present an entire floor dedicated to meetings and conferences. But most of all, what continuously distinguish us from competition is the level of service that we strive to achieve. From welcoming its guests to bidding them farewell, Le Méridien provides a personalised attention and an interesting contemporary view on the vibrant heritage of the Maltese islands. On the leisure side, tourists abundantly visit the islands during the summer months and for obvious reasons. Sunny weather, blue lagoons, vertiginous cliffs and wild landscapes supplemented by a Mediterranean breeze and the legendary hospitality of the Maltese people never fail to highlight Malta as a perfect holiday destination. Its cultural heritage also attracts history lovers and one can endlessly stroll through

firm operating in Malta, but without any of the law firm trappings – the fancy offices, unnecessary support staff – enabling us to be able to pass on considerable cost savings to our clients.” Geraldine describes the current business environment in Malta as bright, with lots of enquiries from corporates and individuals wanting to start a business in Malta or to relocate current operating businesses to Malta.

Malta was the second best-performing economy out of the Eurozone member states in 2012, and Geraldine believes that this was down to the hard work ethic of those operating in Malta, as well as competitive laws and taxation principles, and cautious internal spending.

“Our business model is to stay small, specialised and lean,” she explains. “To be the best international law -----------------------------------------------------------------------Marilyn Mifsud LL.D is Legal Banking and Securities Associate at PKF Malta. -----------------------------------------------------------------------PKF Malta is a fast growing, progressive firm and a member of the PKF International. Marilyn explains further: “We offer a vast array of services including but not limited to Company Formation, Tax Consultancy, Accountancy and Audit services with a specialisation that seeks to accommodate foreign traders in the sectors of Captive Insurance, Hedge Funds, Gaming, Aviation and Shipping.

borders. This means that local banks did not take deposits significantly overseas, since had it done so, local banks would have had to repay those depositors post crisis from local funds, which would in turn have resulted in far greater economical plight. Malta also implemented but was not in dire need of the higher standards for the depositor compensation scheme that was put into place in European member states. This shows our well-capitalised banks to be another chief contributor to Malta’s positive economic performance.”

“Overall we are a small firm which makes it possible to forge a close relationship with all of our clients, a priceless stance in an industry that is increasingly reliant on the esteem in which a firm’s reputation is held.”

Recently, Finance Minister Tony Fenech commented that Malta’s performance proves that the country is “on the right track”, and Marilyn agrees wholeheartedly with this statement.

Marilyn continues to describe what factors have contributed to Malta being the second best performing economy out of the Eurozone member states in 2012.

“It has been said that Malta’s good economic performance in 2012 owed a lot to our debt allocation. While having locally contained debt as a country was a vital fact that saved our economy while others were distraught, it is not alone sufficient to determine a country’s economic direction futuristically. With an election looming over and the political demographic being what it is (a fiftyfifty rift plus slight spill-over that always determines the victor), an economic growth debate will always vary context-depending. If the EU Commission’s statistics read

46 / March 2013

Company: Le Méridien St Julians Hotel & Spa Email: infolmsj@lemeridien.com Web: www.lemeridienmalta.com Address: 39 Main Street, Balluta Bay, STJ1017 ST Julians, Malta Telephone: +356 2311 0000

BBB+ - stable, which is quite amazing considering the economic turmoil that other EU countries are facing.” The future looks even brighter for Malta with regards to foreign trade and the business environment, as Geraldine states: “In 2013, we will see an increase in companies relocating to Malta; due to the tax and fiscal benefits for companies and highly skilled professionals, the multilingual workforce, as well as for quality of life reasons.”

“We are finding that there is a lot of interest from companies and financial service providers who are looking to move away from traditional tax havens to legitimate, low tax regimes like Malta,” she adds.

“Malta is positioning itself as a premier business centre,” she continues. “A legitimate low tax EU jurisdiction, without the reputational risk that tax havens attract. This is reflected in Malta’s credit rating: Fitch A+, Moody’s

“Most of the country’s debt is self-contained and the importance of this in relation to Malta’s recent economic performance cannot be stressed enough,” she begins. “This minimised the shocks needing to be absorbed in the aftermath of the crisis when compared to other countries whose financial institutions owed significant debt across

temple sites (unique in the world), beautiful cathedrals, countless museums and quaint villages that all still show vivid signs of ancestral traditions. The island is also well equipped to welcome incentive groups and conferences. With short distances between all points of interest as well as fully equipped conference centres, group organisers can easily find the right angle for their event. The multiplicity of spoken languages is also a plus for any type of traveller. Indeed, most Maltese people speak Maltese, English and Italian.

Company: Acumum Legal Group Name: Geraldine Noel Email: gnoel@acumum.com Web: www.acumum.com Address: 26 Efesu Street, St Paul’s Bay, Malta, SPB 2700 Telephone: Malta Office: +356 2778 1700 Local rate: +44 (0)203 514 5611

economic growth for Malta and half the population deem this unfelt, neither is above reproach. When performance is analysed in its interplay within the various systems it partakes in, objective growth can better be deduced from the precipitates, for instance Malta’s reduced eligibility to EU-cohesion policy funding, resultant from economic growth is at large an undisputed indicator that Malta is on the right track economically.”

Company: PKF Malta Name: Marilyn Mifsud LL.D Email: mmifsud@pkfmalta.com info@pkfmalta.com Address: 35, Mannarino Road, Birkirkara, BKR 9080, Malta Telephone: +36 21 484 373

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Malta: Attracting Foreign Trade & Maintaining a Competitive Environment

ACQUISITION INTERNATIONAL

March 2013 /

SECTOR SPOTLIGHT:

Middle Market M&A: The Drive for US M&A in 2013

MIDDLE MARKET M&A The Drive for US M&A in 2013

l The US M&A market saw its best performing year in 2012 by deal value since 2007, according to Mergermarket’s year-end League Tables. The US M&A market rebounded from the first three quarters of 2012, which resulted in an 18.6% drop compared with the same period of the previous year, however in Q4 2012, M&A rose 45.6% from the third quarter in terms of deal value. The fundamentals for sustained M&A activity in 2013 are solid, with improving corporate confidence, increasing private equity activity from both a buy and sell side perspective, and relatively healthy debt markets. There remains strong competition for quality assets as both corporates and private equity continue to seek out deals to fuel their growth and deploy capital. In terms of deal size and with the absence of transformative mega deals, middle market deals have been the “silver lining” for deal activity, accounting for 98% through November 2012 alone. This trend in middle market deals is predicted to continue in 2013. Acquisition International discusses US M&A with leading players in the middle-market. -----------------------------------------------------------------------Peter S. Baty is leader of Sanborn, Head & Associates’ Acquisition & Divestitures practice, which focuses on servicing lower to middle-market private equity clients. ------------------------------------------------------------------------

“For 20 years, Sanborn, Head & Associates has been providing strategic environmental advisory and engineering services, with deep expertise in assisting our clients make informed transactional decisions throughout the deal cycle through the identification, quantification, and management of environmental risks and opportunities,” Baty says of the firm. “I think our clients appreciate our ability to add value,” he continues, going on to explain how the firm differs from the competition. “Although we are the environmental guys, we are business focused first. With any transaction, our primary objective is to help our clients close successful deals, not to simply identify deal killers. Our team is comprised of seasoned professionals that understand the language of business and environmental risk, allowing for a seamless marriage of these often disparate subject matters.”

Baty reports that the pace of middle market transactions in the second half of 2012 was brisk, with acquisitions of small to medium-sized familyowned businesses in abundance. “This was in part due to the pending year-end tax changes,” he explains. “We had been approaching 2013 with cautious optimism given the relative uncertainty about the economy, but based on what we’re seeing and hearing from our clients, we now expect that M&A activity in 2013 will continue to be strong. Factors contributing to this include an overall improving economy, increased political certainty, and an abundance of private equity funds that need to be invested.” In regards to the future, Baty also has some predictions, such as the strongest sectors in the northeast USA being private equity in healthcare, lifesciences and technology. “The energy and manufacturing sectors have also been picking up the pace more recently and I predict that these will continue to be areas of then an operating company CFO and, for the past ten plus years, have been the founder and CEO of SJP,” he enthuses. “I love the confluence of making investment decisions and having some influence over them at the same time. I can’t imagine myself doing anything else. Although when not doing it, I enjoy running, dog sledding racing, and being a pilot.”

-----------------------------------------------------------------------Scott S. Johnson is CEO of at SJ Partners LLC based in New York. ------------------------------------------------------------------------

Johnson sees the outlook for M&A activity as competitive but attractive with ample credit still available. “We saw a very active U.S. M&A market in late 2012 as sellers rushed to execute transactions before capital gains taxes increased,” he explains. “For a successful portfolio company that has grown over tenfold during our ownership we in fact closed our 13th and 14th add-on acquistions in December.

strength through 2013,” he adds. “As the middle market private equity firms and strategics continue to compete aggressively for deals, I anticipate that more businesses with “warts” (like historical environmental issues) will get shaken loose - which, will provide both a need and an opportunity to strategically manage those liabilities to realise maximum asset value.”

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

“As for ours, we like to think that our operating expertise is a competitive advantage. We partner with outstanding, equity oriented executives to acquire and grow companies. These operators have generally run independent companies or Fortune 500 divisions and are excited to run or be active board members of middle market companies with us. We particularly like solid operations with under-marketed and under-distributed products where our operating perspective can uniquely help such companies reach their potential.”

SJ PARTNERS LLC

“Established over ten years ago, SJ Partners (SJP) acquires middle market services and consumer companies,” explains Johnson. “We target companies with $2-10 million in EBITDA and are distinguished by our operating orientation and ability to execute a growth by acquisition strategy when that makes sense.” Johnson himself started as an equity research analyst at Salomon Smith Barney and then Merrill Lynch. “I was

48 / March 2013

“Now there is not nearly that level of activity and buyers need to stand out. I have taught a private equity class at my alma mater, Columbia Business School in New York. In the first class, I have a slide of the cover of Michael Porter’s seminal book “Competitive Advantage” and I title it “We Are not Immune From This.” What I mean is that private equity buyers need competitive advantages and I honestly think too many PE shops don’t really have sustainable competitive advantages,” added Johnson.

Company: SJ Partners LLC Name: Scott S. Johnson Email: scott@sjpartners.com Web: www.sjpartners.com Address: 250 Park Avenue South, 7th Floor, New York, NY 10011 Telephone: (212) 362-1530

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Bringing Foreign Direct Investment

BRINGING FOREIGN DIRECT INVESTMENT

l In 2007 cross-border investment flows reached an unparalleled high of $2 trillion as global corporations made the most of strongly performing international markets. In the 5 years to follow the housing market collapsed, we’ve had an international banking crisis and we have experienced record levels of unemployment. This combination created severe economic contraction affecting all corners of the globe and had a massive impact on the global flow of Foreign Direct Investment. In the years since, patterns of FDI have been patchy to say the least and unsurprisingly investors remain wary, however according to both the 2012 A.T. Kearney FDI Confidence Index and the World Investment Report 2012 by the United Nations Conference on Trade and Development, flows of investment have shown signs of recovery. Government leaders across the board are keen to attract FDI, it can help to reign in fiscal deficit, provide employment and support economic growth. A.I. speaks to experts from around the world to discuss current levels of FDI and the opportunities within their jurisdictions. -----------------------------------------------------------------------Aarón Levet V. is a Partner at Santamarina y Steta, S.C. -----------------------------------------------------------------------Discussing Mexico’s approach to foreign direct investment, Mr Levet stated that, in general terms, Mexico has a very open policy and legislation as regards foreign investment. There are, however, certain specific activities which are reserved exclusively to either the Mexican State (e.g. basic petrochemicals, electricity, public mail and others) or to Mexican individuals or corporations with no foreign investment (e.g. sale and distribution of oil and gas, public broadcasting services in radio and television and others) and other activities in which foreign investment is restricted to specific percentages (such as commercial fishing, insurance and bonding institutions and others). “Except as mentioned above, foreign investors may participate in any proportion in the capital stock of Mexican companies, acquire fixed assets, participate in new economic activities or in the manufacture of new product lines, open and operate facilities, and expand or relocate those already existing,” he explained. “On transactions that exceed 2.68 billion Mexican pesos, irrespective of the economic activity, the prior authorisation of the National Commission of Foreign Investments is required if the foreign investor plans to -----------------------------------------------------------------------Jose Anibal Olivas Cajina is a tax adviser and lawyer at Alvarado y Asociados, a law firm based in Nicaragua. -----------------------------------------------------------------------Alvarado y Asociados, founded in 1990, is one of the oldest and largest law firms in Nicaragua with three partners and seven qualified associates as well as several Para-legal and legal clerical staff. Lawyer Jose Anibal Olivas Cajina believes this, in part, is why the company is so successful. “Through our professional experience, we have learned to understand how our clients do business and the nature of their business, taking into consideration the different cultures, as well as our client’s business needs and expectations,” he explains. The 2013 Doing Business Report, recently published by the World Bank, revealed that Nicaragua improved the position in its overall ranking with positive developments in the Trading Across Borders, and Resolving Insolvency categories. “This is the third consecutive year the country has improved its position within the report, which demonstrates a positive impact of the various efforts carried out to improve the country’s investment climate,” explains Jose, regarding the country’s position in the industry. “Nicaragua has various incentive laws for priority sectors, such as the Tourism Incentive Law, the Renewable Energy Incentive Law and the Free Trade Zones Law (for export-oriented industries, including light manufacturing, agribusiness and contact centres). According to international agreements with WTO members (Doha Article VII), Nicaragua will be one of the few countries in the region able to provide free zone and other tax incentives to exporters after 2008,” he adds.

ACQUISITION INTERNATIONAL

participate, directly or indirectly, in more than 49% of the Mexican company.”

Mr Levet anticipates that FDI in Mexico in 2013 will again reach the 2011 level of US$20 billion.

Preliminary reports reflect that FDI into Mexico during 2012 amounted to nearly US$13 billion, which compared to the US$20 billion achieved during 2011 shows a significant reduction.

“There has been a significant increase in M&A transactions during the first months of 2013. The new administration will be submitting to the Congress new proposed legislation on telecommunications and energy and an integral tax reform which, if approved, will encourage FDI,” he concluded.

“The most relevant reasons for this substantial decline may be attributed to the financial crisis that the United States is facing and the fact that 2012 was a presidential election year,” observed Mr Levet. Mexico offers a variety of attractive features for those seeking to invest in the country, including: tax incentives in practically every State; its large size with a population of 110 million; financial stability; free trade agreements with more than 44 countries; a stable democracy; and its location. In order to attract greater levels of investment, Mr. Levet believes that it is necessary for the Mexican government to combat corruption and provide safety to the population, and to promote competition to reduce the negative effects of the existing monopolies (energy, communications, cement, sugar, etc.). He also stated that it is important to invest in infrastructure (directly or through PPA’s) and to improve education to develop a trained and more specialised work force.

On October 2012, PRONicaragua, the official investment promotion agency of Nicaragua, stated that foreign direct investment (FDI) reached US$289 million during the first quarter of 2012, representing a 76% increase when compared to the same period of 2011. Although these data do not fully coincide with the statistical data collected by the Central Bank of Nicaragua, the fact is that the increased levels of FDI in 2011 will still favourable in 2012, principally by the FDI over the energy matrix. Preliminary projections had indicated that the country, could close 2012 with approximately US$1,000 million in terms of FDI. If the projections do not reach the expected levels projections continue to be favourable in 2013 due to issues such as safety, improve conditions and protection of investments. In 2011, Nicaragua had a record performance attracting a total of US$968 million in FDI, increasing by 90.5% when compared to the US$508 million reached in 2010. The FDI attracted in 2011 was led mainly by the energy, telecommunications and free zones sectors, which together accounted for 52% of total FDI. “The main countries that invested in Nicaragua include the United States of America, Spain, Mexico, Panama Guatemala and Canada, which in turn accounted for 84% of total FDI,” Jose further explains. With regards to FDI in Nicaragua in 2013, Jose expects to see an increase by approximately 4% especially if investments in infrastructure projects that have already been approved by the government start on this 2013.

Company: Santamarina y Steta Name: Aarón Levet V Email: alevet@s-s.mx Web: www.s-s.mx Address: Corporativo Paseo 10289, Av. Paseo de los Héroes 10289, Piso 3, Despacho 303, Col. Zona del Río, 22320 Tijuana, Baja California Telephone: +52 664 633 7071

“According to a report released by the United Nations Economic Commission for Latin America and the Caribbean and the International Monetary Fund, Nicaragua is now the #1 Latin American country with the highest ratio of foreign direct investment as a percent of GDP. A publication by the Latin Business Chronicle stated that Nicaragua was the country with the highest index of FDI as percentage of its GDP in Latin America in 2011, with a total of 13.3%, followed distantly by Panama with 9.1% and Chile with 7.0%.”

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

March 2013 /

SECTOR SPOTLIGHT:

Bringing Foreign Direct Investment particular in areas of science, technology, research academia, commerce and trade. “It is anticipated that the establishment of the first SEZ will offer the Islands an opportunity to develop a knowledge-based industry and increase job creation in the local economy.” The Cayman Islands is now targeting sectors that fit in the SEZ model, knowledge-based industries, specifically companies in areas of biotech research, global commodities trading, technology, media and academia. It is also targeting research and development facilities, and is open to having discussions and receiving proposals for renewable energy which is an evolving sector in the Cayman Islands. Due to the Islands’ limited land availability, it is interested in solar and wind technology, though other proven technologies are also possible targets.

-----------------------------------------------------------------------Jonathan Piercy is Director of the Cayman Islands Department of Commerce and Investment which is responsible for stimulating business activity and attracting inward investments that fuel growth and development in the Cayman Islands economy. ------------------------------------------------------------------------

The Cayman Islands Department of Commerce and Investment’s (DCI) main areas of focus include foreign direct investment (FDI), small business development and, trade and business licensing. “DCI’s small business development programme provides one-to one, private and confidential counselling sessions and regular training workshops that cover a variety of technical areas critical to local entrepreneurs and start-ups,” explains Piercy. “By working closely with a DCI Business Development Advisor, clients are better equipped to write their own business plans and make more informed decisions.” The department also has oversight of some aspects of the business licensing process. For example, companies not governed by the Cayman Islands Monetary Authority or the Hotel Licensing Board must apply to the Trade & Business Licensing Unit within DCI for the requisite licences required to conduct business in Cayman. Piercy emphasises The Cayman Islands’ competitive strength in global financial services, which he believes lies in its ability to provide an effective and costefficient tax neutral platform for international capital flows. “Cayman offers a vast range of services for clients, and our products are supported by an excellent professional infrastructure in an environment of economic, social and political stability.” Piercy continues: “One of the key advantages of doing business in Cayman is the depth of local expertise available in all disciplines relating to global finance. These services are delivered by top legal, accounting/audit, and fund administration firms. Their aim is to ensure that the expectations of clients are met and ultimately result in creating solid returns for investors. “Another advantage over global competitors is our established regulatory and legal framework. In addition, the Cayman Islands government

50 / March 2013

maintains a partnership philosophy with the private sector to help ensure Cayman’s business environment remains favourable.” The Cayman Islands Government takes a serious approach to foreign direct investment as it believes investment projects are critical to maintaining buoyancy and diversity in Cayman’s economy. The country is keen to identify, attract, and retain FDI in sectors and business activities that add high economic value. Projects which provide local jobs, cause minimal impact on the natural environment, and increase spending in the local economy are the most appropriate. “Targeted growth sectors include our economic pillars of tourism and financial services, but other FDI that fits the above mentioned criteria will be welcomed by the jurisdiction. Incentives are offered to key projects and are negotiated on a case-by-case basis. “The country’s strategy is to partner with the local private sector and build adequate synergies for efficient facilitation and retention of FDI projects. Local policies are reviewed on a regular basis with a view to making the Islands more business friendly.” In terms of geographic proximity, the Cayman Islands is located in the northwestern region of the Caribbean Sea. “We are but an hour’s flight from the United States and our airport handles close to 1,000,000 international and domestic passengers each year from the U.S., Canada, Central America, and the United Kingdom,” Piercy states. “We also provide an alternative time-zone for European and Asian investors to help them extend their global access to capital markets. The country has a strong probusiness model that supports commercial activity such as an absence business taxes – no income, capital gains, corporation, or property taxes.” To encourage the growth of existing sectors and attract new business segments, the Cayman Islands Government approved legislation in late 2011 to facilitate the development of special economic zones (SEZs) in the jurisdiction. Government is of the view that SEZs will improve the conditions for private sector investments within the Cayman Islands, in

“We are focusing energy and resources on ways to stimulate growth in our economy through measures that benefit market participants and the country as a whole. For existing businesses, we are enhancing our policies in areas such as immigration to make our regulations more flexible and pro-business so that firms can find and retain top talent. “For new business, we are keen to create the most attractive environment possible to attract even more FDI. We are working on raising our country’s profile and highlighting the advantages to doing business in the Cayman Islands through various mediums. We have formed strategic partnerships with CAIPA and WAIPA, and have developed strategies to enter new markets such as Asia and Latin America.” Great investment opportunities exist in various sectors and there are several capital works projects currently being considered, explains Piercy. These include the airport expansion project, the wastewater treatment plant project, and the cruise port birthing facility. Government is also keen on waste-to-energy technologies that could be used in processing solid waste. These projects have gained interest from countries out of Europe, Asia, and the Americas. Multinational corporations see the benefits of participating in these as they have a substantial cost benefit for them. The Cayman Government is optimistic about Cayman’s FDI outlook. “Our focus for the remainder of this year and into next year is to move forward,” states Piercy. “We wish to take the Cayman Islands to another level of growth and prosperity that sees us asserting our hard-earned place as a model of economic and social stability and strength for other small countries to follow.”

Company: Department of Commerce and Investment Name: Jonathan Piercy, BS.c, TEP Email: jpiercy@dci.gov.ky Web: www.dci.gov.ky Address: Suite 126, Government Administration Building, Grand Cayman, KY1-9000, Cayman Islands Telephone: (345) 945.0943

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Doing Business in 2013

DOING BUSINESS IN 2013 — Forming Companies in...

“The DRC’s investment climate remains highly challenging. Conduct due diligence on potential business partners, including: obtaining copies of registration papers; verifying a physical location; confirming with the Congolese Chamber of Commerce (FEC); and confirming banking information. “The DRC has a very low level of financial intermediation given its size and population, but there has been an influx of new banks and other financial institutions over the past four years. But access to banking and credit facilities is still difficult.”

DRC

-----------------------------------------------------------------------Freddy Mulamba Senene is Senior Partner at MULAMBA and ASSOCIATES Law Firm, based in the Democratic Republic of the Congo. -----------------------------------------------------------------------MULAMBA and ASSOCIATES Law Firm was found recently in 2012, focused for the moment on legal representation and providing consultancy for cases in the following area of expertise: civil law, telecommunication law, commercial law, labour law, banking law, intellectual property law, arbitration and legal mediation, taxes, etc., by collaborating with well-known lawyers and law firms, in Democratic Republic of Congo. Freddy explains how the company differentiates itself from its competition: “The Firm is a dynamic law firm, engaged in big commitments and with high managerial capacities of these commitments,” he states. “Our objective is to become a point of reference for clients, who require at any time professional

Macedonia

-----------------------------------------------------------------------Zika Stojanovski is the Mayor of the Municipality of Ilinden. He speaks to Acquisition International about the business climate in the Republic of Macedonia. -----------------------------------------------------------------------“The Municipality of Ilinden is a local self-government unit which was established in 1996 which includes 12 populated areas across a total areas of 98,7 km2,” explains the Mayor of the Municipality, Zika Stojanovski. “The Municipality is located in the immediate vicinity of the city of Skopje precisely 10km from the city centre. According to the law for local self-government unit Municipality of Ilinden have competence for urbanistic planning, local economic development, environment protection, education, social protection and protection for children, culture, sport, fire protection and managing with urbanistic ground which is in property of Republic of Macedonia. “The Municipality of Ilinden is different from the other municipalities,” he continues. “It has a good geostrategic position, great road infrastructure, railway infrastructure and airports. Also we have qualified and efficiency administration which continuously follow the new modification in the law and all that with one mark, to give on the investors quality and in time services when they want to start new business. The participation of the citizens is one of the key criteria and mechanisms in the functioning of the local government.”

52 / March 2013

legal assistance, solution for complex conflicts within a short period of time and prevent them whenever possible.” The country can offer certain benefits to prospective companies, as Freddy continues: “Many stimulus programs and new regulations make it easier for businesses to grow and propel economic recovery. And recently, the DRC has finalised its accession process to OHADA which had begun in February 2004 and was authorised by law on 11 February 2010.” The DRC is now the 17th African State in which OHADA law will be applicable. From 12 September 2012, OHADA law is directly applicable in the DRC, except for specific transitional periods provided under certain Uniform Acts, in particular for prospective and existing companies. “The effective application of OHADA law in the DRC will bring significant immediate improvements to a number of fields of DRC business law which were often outdated such as for instance corporate law, security interests, recognition and enforcement of foreign arbitral awards,” Freddy adds.

Stojanovski explains that the foundation of a company in the Municipality is a fast and easy procedure, with three public enterprises Public communal enterprise managing with waste, public enterprise for managing with the waterworks and public enterprise for managing with the sports objects. “Our municipality secures the investors’ continuous support,” he states. “The foundation of a business is simple and easy, and in the course of operation is not exposed to additional local taxes, with the exception of property taxes that the investor pays per year at the lowest item in the Republic of Macedonia 0.1% and utility fee for companies in the amount of 100 €/ year.” Stojanovski has seen the most growth recently in the manufacturing and reconstruction sectors, and formations are still being made regularly. “In the past four years we formed nine local economic zones where to be set 110 cornerstones of new commercial buildings which will create around 1,500 jobs. The unemployment rate decreased from 32% to 21% within the past two years. “This development is due to the geostrategic position of the Municipality of Ilinden (in the near of the capitol, excellent road infrastructure, etc), as well as participatory and qualitative spatial planning and Bidding attractive locations for new investment, and low costs for the construction and utilities.”

The incorporation process differs when dealing with different sized companies and different company structures. “Before the RDC access to OHADA, the main company structure was the SPRL (société privée à responsabilité limitée),” states Freddy. “As the DRC entered in the OHADA treaty, the Uniform Act relating to Commercial Companies and Economic Interest Group established by the OHADA become applicable in DRC. The main company structures are now the two types of limited liability companies (société à responsabilité limitée and société anonyme).”

Company: MULAMBA and ASSOCIATES Name: Freddy MULAMBA SENENE Email: freddymulsen@yahoo.fr Web: www.cac-rdc.org Address: 49 avenue des Marais, Kinshasa/Gombe (DRC) Telephone: +243 89 812 60 00/ +243 99 812 60 91

Improving the business climate in the municipality can be done through the establishment of electronic issuance of building permits, shortening procedures for the adoption of new urban plans, the establishment of a geographic information system and integrated data management, believes Stojanovski. He also has some predictions for the future of formations in the jurisdiction. “In the next period we are expecting a growing number of companies to launch their businesses in the Municipality of Ilinden. We will continue to provide conditions to support existing businesses and improving conditions for new investments, through extensive investments in road, utility, energy and gas infrastructure, development of new economic zones.”

Company: Opstina Ilinden Name: Zika Stojanovski Email: gradonacalnik@ilinden.gov.mk Web: www.ilinden.gov.mk Address: 9 b.b setelment Ilinden 1041 Telephone: +389 2 2571-703

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Doing Business in 2013

Sunset over the Yemeni capital Sanaa

“We were honest and open in giving advice to our clients from the beginning regarding to their position in the cases and the firmness extent of their legal position and the chances of success and failure before engagement in any cases,” explained Mr Al-Buraihi. “That matter had a great effect on our clients, because the credibility should start from the starting point of dealing between the attorney at law and his client and that constitute the first and the cornerstone of making any law business work and succeed. We always believed in that principle and we use that in our way of dealing with our clients.” The firm’s methods have increasingly widened its base of clients and the diversity of specialties. Ultimately that contributed to the diversification of cases that are referred to the firm.

Yemen

-----------------------------------------------------------------------Khaled Al Buraihi Advocacy & Legal Services (KAB) is a sole proprietor legal institution belonging to Mr Kaled Ahmed Ali Saeed Al-Buraihi. ------------------------------------------------------------------------

The firm works under the prevailing laws in Yemen, aiming to render the required services necessary for commercial authorities, corporations and banks, local and international companies working in Yemen. The firm’s team of lawyers are experienced and efficient in all Yemeni and international laws. Initially, KAB’s work addressed insurance, taxation and commercial issues. At the time, the firm had formed a broad base of clients impressed by its level of professionalism and performance in all its referred cases.

“Furthermore, the legal studies part has deeply affected in developing our business at our office for the need to dig in specific cases and here we can refer to the legal development in Yemen,” continued Mr Al-Buraihi. “Still we were not satisfied, therefore we updated all our studies annually to be in line with latest updating in judiciary profession and law to serve international firms, for example the partnership between our office and the Washington International Bank in doing numerous studies that has great influence in changing and developing the Yemeni legislations to facilitate the business atmosphere in our country Yemen, and we are really proud of what we have achieved of development.” He added that Yemen was at the top of 50 centres at the world level in enhancing the working environment and the ease of investment projects. KAB worked as bank attorneys, then become attorneys working in favour of the most considerable international financial institutions. The firm acquired the confidence

of the green bank (Credit Agricole Corporate and Investment Bank “International French Bank”) in Yemen, and of all its branches for more than 10 years. “We succeeded within our work with it in promoting and developing the legal environment of all agreements related to the bank, starting by opening accounts and ending in rendering facilities and documented credits, that considerably minimised the cases of the bank before the courts and avoided many legal problems, and we are very happy of our clients’ satisfaction of what we have achieved regarding to that,” commented Mr Al-Buraihi. “Our office paid attention to cases relevant to human rights and particularly women, child and refugees’ rights. Furthermore, we do not receive any international support in return for our services of that type, because according to our certainty and belief in rights, justice and equality of all human races, that what all religions called for,” he concluded.

Company: Khaled Al Buraihi Advocacy & Legal Services Name: Kaled Ahmed Ali Saeed Al-Buraihi Email: info@kab-bizconsultyemen.com Web: www.kab-bizconsultyemen.com Address: Sana’a Al-Saeed Trading Center, Floor No. 8, PO Box: 884, Yemen Telephone: +967-1-202854 / 202918

Hong Kong — When is a Conduit a ‘Conduit’? The question the subject of this Article arises when the examining body (the court) is required to determine the beneficial ownership of revenues – such as dividends, royalties and interest. The argument for the beneficial owner of the revenues being the conduit company is that the company is independent of its alleged principal (the ultimate recipient of the revenues). The argument against the beneficial owner of the revenues being the conduit company is that the company is no more than the mere agent of the principal (the ultimate recipient of the revenues).

-----------------------------------------------------------------------Jonathan Shaw is a Barrister-at-Law at Chancery Partners Limited. ------------------------------------------------------------------------

To complete the question asked in the title to this Article, we say: When is a conduit company a “conduit”? (that is to say, when is it simply an agent of a principal, and when is it not?). The short answer, very largely speaking (but caution here: there still remain internal jurisdictional conflicts), is: it depends upon the legal code of the examining body (in the end, a court). If the legal code in question is that of a common law jurisdiction, the company is more likely than not to be considered not to be a conduit company. If, on the other hand, the legal code in question is a civil law jurisdiction, the company is more likely than not to be considered a conduit company.

ACQUISITION INTERNATIONAL

The decisions of common law jurisdiction courts tend to give the benefit of the doubt to the conduit company not being a mere agent; min other words, that: (a) it is independent of its alleged principal; and (b) there is an absence of any double taxation agreement provision which outlaws “treaty shopping”, for example: Indofood InternationalLimited v. JP Morgan Chase bank NA [2006] 8 ITLR 653; PrevostCar, Inc. v. The Queen (2008) TCC 231 [Affirmed (2009) FCA57]; and Union of India and Another v. Azadi Bachao Andolan and Another [2004] 6 ITLR 233. On the other hand, the decisions of civil law jurisdiction courts tend to invoke the civil law concept of abus de droit (substance overform) to overcome the absence of an explicit anti-abuse provision in double taxation agreements, for example: Bank of Scotland v.Ministre de l’Economie, des Finances et de L’Industrie [2007] 9 ITLR683; Swiss X Aps. [2006] 8 ITLR 537; and YankoWeiss Holdings (1996) Ltd. V. Assessing Officer of Holon [2007] 10 ITLR 524. Other examples can be found in N AG v Regional

Tax Office forUpper Austria [2000] 2 ITLR 885; Re: a Corporation IR 38/00 [2003] 5 ITLR 589 (a decision of the German Bundesfinanzhof) In the event, the jurisdictional conflict will be resolved (as it is incrementally being done to date) by double taxation agreement States agreeing to the include in their double taxation agreements a “Limitation of Benefits” clause/provision, see, for example the double taxation agreement between India and Singapore. This means that it is crucial when using a ‘tax treaty’ company in the structuring of a cross-border acquisition, that it is correctly planned, and its ultimate ownership, or holding company, must be judiciously considered.

Company: Chancery Partners Limited Name: Jonathan Shaw Email: jlshaw@attglobal.net Web: www.chancery-partners.com Address: 12F Diamond Exchange Building, 10 Duddell Street, Central, Hong Kong Telephone: +852 2530 1776 +852 91012 438 (Mobile)

March 2013 /

SECTOR SPOTLIGHT: Doing Business in 2013

OTHER EXPERTS IN THIS AREA

Hazboun & Co. Company: FBL Advogados Name: Berta Grilo Email: berta.grilo@fbladvogados.com Web: www.fbladvogados.com Address: Rua dos Enganos, nº 1, 7º Luanda Angola Telephone: + 244 222 397 073

Company: Hazboun & Co. Name: George Hazboun Email: ghazbon@yahoo.com

Company: Jackson, Etti & Edu Name: Afolasade Olowe Email: afolasadeolowe@jacksonettiandedu.com Web: www.jacksonettiandedu.com Address: 3-5 Sinari Daranijo Street, Off Ajose Adeogun, Victoria Island, Lagos, Nigeria Telephone: +234 1 773 6361

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

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

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

• •

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

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

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

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

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

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Insolvency: Don’t Just Wait for Recovery

INSOLVENCY Don’t Just Wait for Recovery l Over the course of 2012 and even in these early days of 2013, the number of big-name brands that are forced into bankruptcy continues to shock us. Many in the international business community have been ‘hanging on’ to survive but it is becoming clearer, year on year, that in this environment the ‘hold tight and wait for recovery’ approach simply isn’t working. Many insolvency specialists predict that the only companies who will thrive this year will be those who create a firm business plan based on succeeding in current market conditions and not those who sit tight, waiting for the return of cheap credit. Acquisition International speaks to leading insolvency specialists from the international advisory community to get their opinion on how to thrive in the current environment. -----------------------------------------------------------------------Ottmar Hermann is the founder and Senior Partner of HERMANN RWS. ------------------------------------------------------------------------

As a lawyer, certified auditor and tax counselor I closely deal with refinancing, restructuring and liquidation of companies and corporate groups. As early as 1986 I was appointed as an insolvency administrator. HERMANN RWS is one of the leading German law firms for insolvency administration, insolvency law and restructuring. The firm advices business people as well as businesses and financial institutions in all aspects of insolvency, business (including corporate, commercial law, competition and civil law), tax, labour law, real estate and construction law. HERMANN RWS offers a competent and multidisciplinary support to all parties involved in the insolvency proceedings including investors as well as other clients affected by business crisis. Especially the administration of insolvency presuppose an entrepreneur and profound understanding as well as the capability of finding a solution for all subjects on the basis of legal and practical knowledge, which -----------------------------------------------------------------------Alan Tilley is the Principal at Bryan Mansell & Tilley LLP. ------------------------------------------------------------------------

BM&T is a turnaround and restructuring boutique specialising in UK and pan European operational and consensual financial restructuring. BM&T has completed over 50 assignments of businesses ranging from £10 million to £1 billion in turnover. Managing Principals Alan Tilley and David Bryan have a combined 30 year experience in turnaround having established the European division of US industry pioneer Glass & Associates in 1997. Chartered accountants, they have previously worked in USA, Germany and France in major manufacturing companies. BM&T’s professional capability has been recognised by industry peers; Alan Tilley was Insolvency & Rescue UK Turnaround Manager of the year 2010. BM&T was awarded TMA Global International Turnaround of the Year 2011. BM&T authored the Guide to Turnaround, a comprehensive publication on best practice in turnaround, for ICAEW in 2011.

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might come out when national and international concern is acquired, operated or sold. The special focus of HERMANN RWS is on well-targeted services and diligent consultancy in all areas of business life and in connection with corporate crises and insolvencies, also across borders. For many years, numerous professionals within the law firm have been closely involved as insolvency administrators with the handling of insolvency proceedings and are thus familiar with all the matters accompanying insolvency. We are, therefore also able to offer competent assistance to our clients involved in, or concerned with, insolvency. Our law firm’s outstanding expertise is based on thousands of successful proceedings. In 2012 we were able to maintain our position as one of the leading insolvency practices in Germany. With the new German insolvency law debtor-inpossession proceedings became more favorable and a debt equity swap has newly introduced in German insolvency law as well. Here I was appointed as custodian in the case of Dura group, one of the first proceedings Restructuring professionals have been asking whether the era of “extend and pretend” and “zombies” is the new normal. This would be defying economic logic. Competitive pressures affecting “zombies’” ability to survive, improving bank balance sheets, and rising interest rates will change. The issue is when and what recovery processes will emerge. Whereas the default position has been balance sheet restructuring without addressing underlying business issues this could change. Creditors accepting a haircut should want to see operational change as this increases enterprise value and moves the value break in their favour. BM&T is not an insolvency practice. It seeks to preserve value where a viable business exists. The plan identifies the level of balance sheet funding that can be supported by future cash flows. This necessitates engagement with creditors to renegotiate the terms of debt. BM&T negotiates solutions outside of formal process leveraging concessions against the threat of insolvency where the recovery to the creditor can be demonstrated as better in a consensual settlement than in a formal process.

under the new legislation. My Partner Rainer M. Bähr was acting as custodian of Solarwatt AG, which included the first successful debt-equity swap under the new law. With offices located in the most important German business and financial centers and cooperation partners worldwide, HERMANN RWS offers its clients suitable and appropriate solutions even in the most complex cases.

Company: HERMANN RWS Name: Ottmar Hermann Email: frankfurt@hermann-law.com Web: www.hermann-law.com Address: Bleichstrasse 2-4, 60313 Frankfurt am Main Telephone: + 49 (0) 69 91 30 92 0

Most distressed companies can be saved by early action. Whereas management will seek professional advice on tax, IT and legal matters they are loathe to seek assistance in business turnaround. It is a skill set like any other profession. Managements know their company’s products and customers. They are not hired for their crisis management skills so should not feel diminished by seeking advice. There are as many solutions as situations. A crisis can hit any business and a crisis is no place for on the job training.

Company: Bryan Mansell & Tilley LLP Name: Alan Tilley Email: atilley@bmandt.eu Web: www.bmandt.eu Address: 23 Austin Friars, London, EC2N 2QP Telephone: +44 (0) 7950 808777

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Corporate Fraud & the Forensic Accountant

CORPORATE FRAUD & THE FORENSIC ACCOUNTANT l According to the 2012 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners (ACFE), it is estimated that organisations lose 5% of their total revenue to fraud; this translates into a staggering global annual loss of $3.5 trillion. Corporations exist in a world where cases of fraud are piling up and businesses are becoming more vigilant, as a result Forensic Accountants and Fraud Examiners have never been in such demand. Largely down to rapid recent advances in technology, corporate fraud and the art of preventing it are evolving. Technology has in one respect it has made it quicker and easier to find and analyse data i.e. speeding up the process of criminal investigation, however it has also made the world a much smaller place, which in many cases gives an advantage to the fraudster. When called upon, a forensic accountant can help to uncover acts of dishonesty and calculate the exact value of the consequences to the board and investors. In a separate ACFE report, findings suggest that it takes an average of 18 months before a fraud is detected, 72% of cases are uncovered by whistle-blowers, management reviews and internal audits, therefore internal vigilance is absolutely essential in the fight against fraud. Prevention and deterrence is the best way to combat the natural tendencies of people facing financial pressures, however after the event, the right forensic accountant can help a company identify who is involved, how and why it happened and will work with you to ensure every possible system is in place to prevent it from happening again. Acquisition International speaks to experts in the field for their opinion on corporate fraud and the role of the forensic accountant.

According to Bee, a forensic accountant must have “an inquisitive spirit and the focus of a Rottweiler, backed up by strong numerical and communicative skills, both written and verbal”. Crucially, she adds that a forensic accountant must also be able to maintain objectivity in the face of external pressures when undertaking investigative work. “This holds true for cases of corporate fraud where, in many instances, there is collusion amongst members of staff and interviews may result in deliberate attempts by multiple interviewees to obfuscate the facts,” Bee explains. “It is also useful if the forensic accountant is empathetic rather than confrontational in their investigative approach, while maintaining their professional scepticism at all times.” Bee continues by noting that a forensic accountant should be competent in accountancy matters and be compliant with their local professional body’s professional and ethical guidelines. They should be comfortable around accounting and internal control systems, and be able to quickly map out the peculiarities of the specific system they are investigating. “A forensic accountant should be able to deal with a large amount of documentary evidence, understand and be -----------------------------------------------------------------------S. Todd Burchett is a Partner in BKD’s Forensics & Valuation Services division. He heads up the firm’s Forensics & Valuation Services practice in Texas. -----------------------------------------------------------------------Mr Burchett has 25 years of experience in accounting, the last 15 of which he has provided forensic accounting, valuation, investigation and litigation support services. “We believe our sophisticated data mining services combined with our computer forensics capabilities give us an edge when performing a forensic accounting or fraud investigations,” he said, commenting on how BKD distinguishes itself. Mr Burchett stated that the key abilities required of forensic accountants are good analytical skills, experience in managing an investigation and the various paths they may take, and a good reputation for being willing to tell it like it is.

able to work to tight deadlines, and have a knowledge of relevant law and court procedures,” Bee adds. “To some extent, a forensic accountant needs to have a good imagination that will enable them to be flexible enough to recognise the different possible interpretations applicable to the evidence in front of them. Inflexibility could potentially lead to bias in the investigation.” Discussing the main challenges faced in cases of corporate fraud, Bee states that traditional forensic accounting involves following a paper trail through to its logical conclusion. “Increasingly, as technology advances, the use of paper as a standard communication medium is vanishing which, in turn, affects your old-fashioned forensic accountant’s ability to review piles of receipts, invoices, bank statements, ledgers and tax documents to trace missing assets or establish how a fraud was perpetrated,” she observes. “However, forensic techniques are keeping pace with these changes – now, rather than just focusing on confiscation of physical books and records, investigators will confiscate computers and data storage devices, and obtain details of cloud-based accounts. Forensic accountants increasingly need to be IT-savvy and keep up-to-date with developments in the computing arena.”

BKD has observed a considerable uptick in corporate crime, specifically fraud, in the last four years. “Corporate fraud seems to be rampant in every neck of the woods,” continued Mr Burchett. “We have not found any one industry or geographic location that is immune.” Discussing the impact of technologic developments, he believes that...

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-----------------------------------------------------------------------Bee Lean Chew is a Chartered Accountant and Partner at Wilder Coe LLP. ------------------------------------------------------------------------

“The understanding and implementation of controls to prevent unauthorised transactions needs to be embedded in the organisational culture, from supervisory functions through to those staff members who carry out the controls,” she concludes.

Company: Wilder Coe LLP Name: Bee Lean Chew Email: bee.chew@wildercoe.co.uk Web: www.wildercoe.co.uk Address: 233-237 Old Marylebone Road, London, NW1 5QT Telephone: 020 7724 6060

In 2013, BKD continues to see a lot of activity in corporate credit card & business reimbursement fraud and vendorrelated fraud. “Businesses have not yet gotten their arms around the preventative side to fraud. It takes the right culture and willingness to stay on top of things to deter fraud,” concluded Mr Burchett.

until businesses catch up with implementing and auditing the controls surrounding the technology that they have implemented, there will be a problem with fraud in these areas.

He noted that the main challenges in cases of corporate fraud are determining what analysis to perform, given the current evidence.

BKD employs some preventative services. In particular, the firm assists clients with fraud risk assessments, internal control reviews, corporate credit card reviews, and implementation of fraud hotlines. It also performs data mining services and works with internal auditors to implement continuous auditing & analytics.

“This can be overcome by good communication on the front end and a willingness to change directions as the evidence directs you,” he explained.

Mr Burchett stated that the most popular or successful method to deter corporate fraud is proactive monitoring which is evolving into continuous auditing & analytics.

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In order to deter corporate fraud, Bee believes that the first step is to establish a strong culture of good corporate governance. This, she states, has to be driven by a top-down approach by management through to the most junior employees.

Company: BKD, LLP Name: S. Todd Burchett, CPA, ABV, ASA, CFF Email: tburchett@bkd.com Web: www.bkd.com/services/forensicsvaluation-services Address: 10001 Reunion Place, Suite 400, San Antonio, Texas 78216 Telephone: +1 210 268 1932

March 2013 /

SECTOR SPOTLIGHT:

Intellectual Property: the Importance of Protecting Intangible Assets

INTELLECTUAL PROPERTY

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

As the founder and CEO of Intellect Worldwide, Solomon Lee has more than 20 years experience in the intellectual property industry. Here, he provides an overview of what differentiates the firm from its competition. “We have a proven track record of obtaining trust from our clients in handling their IP portfolio,” he begins. “Not only do we provide IP registration services, we provide IP expansion, commercialisation, management and training as well. We are essentially a one-stop IP service centre. “Our key skills, which are imperative in the industry, include being well-informed, knowledgeable, intuitive and having visionary foresight and problem solving experience.”

registration as it can further generate income though licensing and franchising,” he says. “For companies in manufacturing or R&D, they will be able to monopolise a certain technology for a certain period of time to maximise the value of the technology and they can also utilise their IP rights as a marketing tool; in positioning themselves as an innovation-driven company.”

Intellectual property rights are both a financial and intangible asset for any business, explains Lee, and he continues to explain how it can also be of value for company listing, funding and M&A. “IP does not stop at -----------------------------------------------------------------------Bernardo Herrerías Franco is Partner and Head of Intellectual Property at Barrera, Siqueiros y Torres Landa SC. ------------------------------------------------------------------------

“IP Rights are the ground in which the name, efforts, care, goodwill and prestige rests. Without these facts your IP rights have no value.”

“In my opinion, the first key needed is the knowledge of the law and local practice,” he says. “Other skills such as creativity, ability for understanding client´s needs and interests, and other personal skills acquired within the practice of Intellectual property help provide the expertise for attending different problems in the appropriate fashions.” IP rights are a valuable asset for any business and thorough IP due diligence in corporate transactions is what Bernardo describes as ‘the Rosetta Stone.’ “Due to the nature and value of IP Rights, by identifying if such rights are duly covered or if they have certain issues regarding their protection, you may avoid risks that in the future will represent high costs that could jeopardize the stability of a company. There are companies where the real value rest on IP rights.

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“I foresee that the Industrial Design Law in our region to be amended to be more conformed to the international standards; by having novelty requirements and more protection score for the applicants.”

Thorough IP due diligence in corporate transactions is important to identify and evaluate business risks and potential opportunities. It can also create innovative and unique products to differentiate from other competitors. Lee explains how his firm can assist management teams in maximising their business’s brand and ensuring their IP assets are protected. “We are able to conduct a registration, audit, monitoring and enforcement of their IPs,” he says. “We will also educate them about the importance of having their IPs protected and how they could do it. Lastly, we are able to evaluate the true essence of their brand and IP to optimise a strategy of creating a value from their brand and IP and it would be known as an IP Strategy.”

Bernardo, who has been at the firm Barrera, Siqueiros y Torres Landa SC for almost 30 years, begins by explaining the key skills he believes are required by an IP adviser.

With regards to the future, Lee has some predictions for intellectual property law and regulation in his jurisdiction over the coming 12 months.

Bernardo continues to explain how his firm can assist management teams in maximising business and ensuring their IP assets are protected.

Company: Intellect Worldwide Sendirian Berhad Name: Solomon Lee Email: solomon@intellect-worldwide.com Web: www.intellect-worldwide.com Address: IPeople House, 7A Clove Hall Road, 10050 Penang, Malaysia Telephone: +604-229 1100

“During the following 12 months, we will face different challenges related to our IP legal system, considering that on February 19, 2013 the Madrid System came into effect in Mexico through the Madrid Protocol,” states Bernardo, talking about the future in his firm. “Amendments and additions to our IP Laws will be implemented, derived in new criteria, judicial precedents and rules which certainly will bring us the subject matter for hours of study.”

“You need to understand the business and interest of your client in order to provide a cost-effective plan for IP Rights protection through the proper figures,” he urges. “If you do not take the time to understand your client’s needs, it is quite possible that your advise will not be adequate, and may result in unnecessary costs and disbursements, first for the unnecessary protection and second for fixing a possible mistake.” Business risk losing their IP rights if they are misused or improperly protected: “Your responsibility as IP Counsel is that your clients understand the importance of their intellectual property and due protection and the efforts that they have to put in obtaining and maintaining them. You need to be the eyes and guide, understanding that your clients are attending different issues related to their business and that is the reason for them to entrust the IP legal work to you.”

Company: Barrera, Siqueiros y Torres Landa Name: Bernardo Herrerías Franco Web: www.bstl.com.mx Address: Mexico City: Paseo de los Tamarindos 150-PB, Bosques de las Lomas, México Telephone: +52 (55) 5091 0000

March 2013 /

SECTOR SPOTLIGHT:

Intellectual Property: the Importance of Protecting Intangible Assets

OTHER EXPERTS IN THIS AREA

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

60 / March 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Intellectual Property: the Importance of Protecting Intangible Assets

Cheung Tong & Rosa Solicitors (CTR) is a Hong Kong-based law firm with a history of over 30 years. Today, CTR has established itself as a law firm with substantial practice in all aspects of Hong Kong law. Intellectual property (IP) rights help to differentiate one’s products and services from others and create loyal clientele. IP is hence an important tool in creating an image for a business in the minds of current and potential customers and in positioning one’s business in the market; it is also an important financial instrument as it can be sold, licensed, used as security for debt finance, or serve as a kind of contribution other than cash in joint cooperation. CTR, being a boutique law firm, has been practising in IP area since its early days and has been representing major brand names in different arrays of trades including international market leader in sporting goods, US-based fashions conglomerate, South Korean based fashion and catering conglomerates, the world leading door and security solutions enterprise, Europebased crystals and gemstones conglomerate, long-established local magazine and jewellery and watch conglomerate to seek protection, combat infringement and of and assert their IP rights in Hong Kong as well as in the Mainland China. -----------------------------------------------------------------------Jody H. Drake is a partner with Sughrue Mion, PLLC in Washington, D.C. Her practice includes trademark clearance investigations and expansion and management of global trademark portfolios and enforcement of trademark rights in the US and in foreign jurisdictions. -----------------------------------------------------------------------Drake begins by explaining what skills are required by intellectual property advisors. “Given the importance of patents and trademarks to a business and the complexity of both areas of law, advice and assistance should be obtained from patent and trademark lawyers who specialize in intellectual property,” she states. “Patents and trademarks are business assets, and value is maximized when owners and their counsel work together cooperating to develop an IP strategy. It is imperative IP counsel understand the nature of a client’s business, short term and long term goals, and any prospective consideration of possible expansion of a business globally. Any sound business plan must take into account targeted foreign markets so that IP rights may be secured as early in the expansion process as possible.” Drake continues to explain how important thorough IP due diligence is in corporate transactions. -----------------------------------------------------------------------Dr Chris Moore is a Partner and patent attorney at Harrison Goddard Foote, a law firm based in Birmingham in the United Kingdom. -----------------------------------------------------------------------HGF together with sister firm HGF law is currently the fastest growing firm of intellectual property specialists in the UK. The integrated approach to intellectual property of bringing patent and trade mark attorneys together with IP lawyers makes the firm distinctive in the market and provides clients with a complete and seamless service. The firm comprises over 70 professionals covering ten offices nationwide. Dr Moore explains what he feels gives HGF a competitive advantage over competitors. “HGF has a proven track record in forging successful, longterm relationships with clients across the technological spectrum,” he says. “Our focus is on delivering client-specific IP advice from teams of professional advisers chosen to meet the client’s technological and legal needs. Our highly regarded attorneys, commitment to client service and geographical profile ensure that HGF is uniquely placed to attend to high value and complex IP issues.” IP rights (be they trade marks, patents, designs, copyright or trade secrets) typically underpin and define the key

ACQUISITION INTERNATIONAL

Strong protection and enforcement of IP are important to our society – they provide an environment where creativity can flourish and innovation can be rewarded and assure both local and foreign investors a hospitable environment for trade and commerce; they also foster confidence of the consumers in ensuring the safety, reliability and high-quality of the goods that they recognise and expect. Whilst Hong Kong offers a rather comprehensive framework on IP registration, sustained efforts in protection, enforcement and public education will be crucial to maintaining Hong Kong as Asian financial centre. As far as the Mainland China is concerned, protection of IP rights is still full of challenges. The iPad case highlights the IP minefield in the Mainland China. Yet, Apple is just one of many multinational enterprises to have met with setbacks while trying to get through the rather complicated trade mark system. This case does not only give insights to trade mark squatting but also demonstrates the problem of insufficient IP due diligence in commercial deals. Unlike the US, both Hong Kong and the Mainland China adopt the first-to-file rather than the first-to-use trade mark registration systems. Whilst Hong Kong offers a system for “There is an evolving IP marketplace - IP is becoming a more recognized liquid asset,” she says. “In other words, there is a direction toward more monetization of IP, making it critically important to obtain and maintain patent and trademark rights. Internal audits of IP should be conducted on a routine basis so that a company can understand its IP value as well as reduce the risk that IP assets are not being properly obtained and maintained.” She adds that “in connection with M&A transactions, no potential buyer wants to buy expensive IP rights that cannot be successfully exploited, and no seller wants to discover in the middle of a transaction that their IP rights have not been properly maintained. IP due diligence in an M&A transaction should be undertaken early in the process of negotiation. So many times, the IP is overlooked until there is an impending deadline to close the deal. Naturally, late evaluation of IP can affect the transaction itself, causing the possibility of significant structural changes in a transaction. “It is always best to conduct IP due diligence at the very beginning of negotiations surrounding a transaction, reducing surprises to both the potential buyer and seller.” It is important for companies to establish style guides for their marks, internally educate personnel and licensees, and

differentiators of a company from their competitors. Accordingly, a company’s IP assets are the principal driver of value, and Dr Moore elaborates on their importance in corporate transactions. “It is IP rights which represent a large part of the value in any transaction. Without a clear understanding of the exact nature of those IP rights including their ambit, geographical reach and, very importantly, ownership via thorough IP DD it is difficult if not impossible to appropriately value a business. A purchaser/investor who fails to engage in appropriate DD may find that they over-value a proposed target or that they purchase/invest in a company which does not have all of the rights they thought formed part of the deal.” In the coming 12 months there will be significant changes in IP law, however Dr Moore is confident these changes are for the better. “Firstly, the USA America Invents Act will bring significant changes to US patent law, and will bring the USA more into line with patent protection in most other countries. I expect to see further cooperation between the major patent offices to ensure increased work-sharing between examiners, hopefully improving consistency and reducing pendency.

long-used unregistered marks to get registration by way of proving “honest concurrent use”, the Mainland China does not offer such an option. Therefore, foreign companies with wellknown brands are advised to come to Mainland China as soon as possible and register their trade marks well beforehand. To further enhance the protection, traders are advised to record their trade mark products with local customs authority in the Mainland China with a view to efficiently combatting counterfeit and unauthorised parallel import.

Company: Cheung Tong & Rosa Solicitors Name: Choy Fung Yee Joanne Email: contact@ctrlawyers.com.hk Web: www.ctrlawyers.com.hk Address: Room 501, 5/F., Sun Hung Kai Centre, 30 Harbour Road, Hong Kong Telephone: +852 2868 0393

to police trademarks properly through watch services and internet monitoring services, explains Drake.

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-----------------------------------------------------------------------Joanne Choy is a partner of Cheung Tong Rosa & Solicitors. ------------------------------------------------------------------------

If a mark is misused or is presented inconsistently, owners run the risk of chipping away at the brand, or in worst case, committing genericide, resulting in the abandonment of trademark rights.

Company: Sughrue Mion, PLLC Name: Jody H. Drake Email: jdrake@sughrue.com Web: www.sughrue.com Address: 2100 Pennsylvania Ave., N. W. Washington, DC 20037 Telephone: +1 202-775-7568

“The unitary European patent is likely to be ratified by enough EU states to ensure that it becomes law in 2014. “The UK Government will introduce a new corporation tax regime for patent generated profits and I expect this, together with uncertainty over enforcement of the unitary EU patent, will lead, in time, to increased patent filings at the UKIPO.”

Company: Harrison Goddard Foote Name: Dr Chris Moore Email: cmoore@hgf.com Web: www.hgf.com Address: 11 Waterloo Street, Birmingham, B2 5TB Telephone: +44 (0) 121 644 4960

March 2013 /

WELLINGTON | AUCKLAND

www.ajpark.com

AJ Park has a dedicated litigation and alternative dispute resolution team. Our team is one of the few intellectual property dispute resolution teams in New Zealand that has both the legal and technical qualifications to fully understand your intellectual property dispute. Our people have been involved in disputes on all kinds of intellectual property and regularly appear before New Zealandâ&#x20AC;&#x2122;s courts, the Commissioner of Patents, the Commissioner of Trade Marks and the Advertising Standards Authority. By understanding the strengths and weakness of the legal position and the commercial needs of a client we help them resolve intellectual property problems, whether through the courts or by negotiation. AJ Parkâ&#x20AC;&#x2122;s litigation team has been involved in many high profile cases where decisions have set important precedents for intellectual property law locally and around the world.

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SECTOR SPOTLIGHT:

Resolving Commercial Disputes Through Mediation

RESOLVING COMMERCIAL DISPUTES THROUGH MEDIATION l In recent years, the use of mediation as a form of alternative dispute resolution has been steadily gaining pace, saving time and money for the opposing parties. Mediation can be used to help settle disputes across a wide range of industries and in some cases, particularly in small claims; it has become a mandatory part of the dispute resolution process. Finding a neutral third party to facilitate the process can be challenging, especially finding one that all parties agree on. Until fairly recently, many mediators have not actively advertised their services, rather they have relied on gatekeepers and institutional clients to feed their supply of work. Acquisition International spoke to experts in mediation to learn more about the ADR technique and its advantages in commercial disputes. -----------------------------------------------------------------------Patricia Barclay is the Founder of Bonaccord Ecosse Limited. ------------------------------------------------------------------------

When is the best time to mediate? While speed and cost savings – the two not being unconnected - are often cited as the most significant reasons for choosing mediation over other forms of dispute resolution , mediation is often delayed because lawyers advise clients that the dispute is not yet “ripe”. This may reflect experience that there is often a point in litigation when the parties are so miserable that they will try anything to settle the case or perhaps concern that the “wrong” settlement may be reached unless the parties fully understand both their own case and that of the other party allowing them then to make assumptions about the likely outcome in court and so the parameters of any settlement. It may be much easier to reach a settlement at this point but by waiting the opportunity for major cost saving and the advantages of swift resolution will be largely lost. Can we redefine “Ripeness”? I would suggest a better test for “ripeness” is whether or not the parties are ready to look at a post dispute scenario. This may seem strange but it cannot be assumed that just because there is a dispute the parties are eager to resolve it. Some people may be in denial of the problem. Others may feel the current situation gives them some advantage. Still others may simply have lost hope and cannot visualise any way out. While any party remains attached to the status quo it is unlikely that the dispute will be “ripe” and settlement will remain unlikely however a skilled mediator may be able to assist the ripening process by helping the parties address their reluctance to move on and explore what opportunities might open to them if the dispute did not exist. Early mediation however also requires a shift in thinking away from the litigation rooted approach to a greater acceptance that commercial decisions are often taken quite satisfactorily without the luxury of complete knowledge. A Stepped Approach? Early settlement is generally harder to achieve but

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given that it will generally be in a client’s interest it may be worth exploring. One option may be to look at a stepped approach rather than the traditional method of trying to settle everything at one sitting. By breaking the dispute down into elements and even initially just looking at process or other subsidiary items we can often create a forward momentum that will make subsequent settlement easier. Why Bonaccord? Principal, Patricia Barclay’s background as a pharmaceutical general counsel gives her a valuable perspective on how business operates and what really matters. Her senior roles in a variety of very different businesses and international experience inform her mediation practice. She has a flexible and professional approach and should co mediation be required has an extensive international network across a number of sectors. She is a published author and popular teacher and has been recognised as a leader in her field by International Who’s Who of Commercial Mediation - www.whoswholegal.com/ profiles/47094/0/barclay/patricia-barclay For further information or to discuss your requirements in confidence and without obligation please contact Patricia Barclay on 0131 202 6527 or patricia@bonaccord.eu www.bonaccord.eu To subscribe to Bonresolve our newsletter for those involved in managing conflict please email us at enquiries@bonaccord.eu

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

March 2013 /

SECTOR SPOTLIGHT:

Resolving Commercial Disputes Through Mediation -----------------------------------------------------------------------Larry R. Rute is a partner and co-founder of Associates in Dispute Resolution, LLC, with offices in Kansas City, Missouri, and Topeka and Lawrence, Kansas. -----------------------------------------------------------------------Larry R Rute is a dispute resolution professional who has mediated more than 4,300 complex commercial matters including class/collective actions. He explains what he believes gives his practice the competitive edge. “I have more than 15 years of full-time experience mediating a wide variety of commercial law matters, including contract law, consumer protection, employment law, insurance bad faith, personal injury and other difficult high-profile cases. “The central feature of mediation is self-determination of the parties in which the final result of any resolution is not decided or imposed by the mediator. The mediation process provides a vehicle for parties and their legal advisors to shape creative outcomes in response to the dispute or conflict It is not unusual for the settlement outcome to exceed the remedies commonly available to a judge or jury.” Larry comments that one of the key benefits in hiring a mediator is to utilize a professional that is well-versed in the issues commonly faced by the business community, has significant training in mediation techniques, and the ability to work creatively with both sides to the dispute. -----------------------------------------------------------------------Jeffrey A. Hand is a Partner at Singleton Urquhart LLP. ------------------------------------------------------------------------

Business clients know the value of a mediated settlement to a commercial dispute. Mediation, more often than not, results in fast, cost effective, resolution of a dispute that would otherwise tie up company resources. They also recognise that mediation provides for private, confidential dispute resolution with the potential for creative solutions that may preserve ongoing business relationships. In Canada, Singleton Urquhart LLP has always been at the forefront of using mediation for business clients, having long ago recognised that many disputes can be more effectively resolved in mediation rather than following the traditional route of costly and time consuming litigation. To meet this need, Singleton Urquhart has an active alternative dispute resolution group which include members who are Chartered Mediators qualified both by the ADR Institute of Canada and the International Mediation Association. Two of its members, Jeffrey Hand and Barbara Cornish were both named to the 2012 Who’s Who Legal List of International Commercial Mediators.

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“An important technique in commercial mediation is for the mediator to contact each of the parties well in advance of the face-to-face mediation. In this way, there can be a customisation of the mediation process to meet the needs of both parties. During the mediation, sophisticated mediation users expect mediators to utilise a variety of proven analytical techniques. For example, mediators can be helpful by asking pointed questions in suggesting options for consideration. Some mediators are requested to given an assessment of strengths and weaknesses or recommend a specific settlement.” Larry has noticed changes to the volume of work he has been involved in within the last 12 months, not the least the fact that in the US the use of commercial mediation has grown exponentially. “In part, this is because modern contracts, particularly those including an arbitration clause, will use mediation as a first-step prior to engaging in the arbitration process,” he explains. “In a 2006 study by the American Arbitration Association, 73% of surveyed Fortune 1000 Companies attributed their use of mediation to court-mandated mediation programs. The combination of mediation contractual provisions coupled with US court-mandated mediation programs have dramatically increased the need for full-time commercial mediators.”

With regards to the future Larry has some predictions for the use of mediation in his jurisdiction during 2013. “Currently, mediation is in use in an increasingly wide variety of disputes including commercial, community, environmental, public policy, and international conflicts. In addition, the continued development of mandatory civil mediation programs by federal courts and state district and circuit courts will cause an increase in demand for the use of qualified civil mediators in the months and years to come.”

Company: Associates in Dispute Resolution LLC Name: Larry R. Rute Email: info@adrmediate.com Web: www.adrmediate.com Address: 212 SW 8th Avenue, Suite 102, Topeka, Kansas, 66603 Telephone: +1 785-357-1800

In the Province of British Columbia, the use of mediation for resolving commercial disputes has continued to grow in the past year. Many administrative tribunals in the Province regularly use mediation as a means for resolving disputes that come before various tribunals and there is both existing and proposed legislation to expand the use of mandatory mediation within the Court system. The Mediators at Singleton Urquhart have a wide range of experience in mediating claims involving insurance disputes, those involving design professionals and others involved in the construction industry, environmental, property and commercial disputes, employment law, workplace discrimination, and bodily injury claims. Please feel free to contact any of our Commercial Mediators: Jeffrey Hand, CMed, CArb; Barbara Cornish, C.Med, CArb, Mary Ellen Boyd, and Winton Derby, Q.C.

Company: Singleton Urquhart LLP Web: www.singleton.com Address: 1200-925 West Georgia Street, Vancouver, BC, V6C 3L2 Telephone: +1 604 682 7474 Name: Jeffrey A. Hand Email: jhand@singleton.com Name: Mary Ellen Boyd Name: Barb Cornish Name: Winton Derby

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving Commercial Disputes Through Mediation

Mediation is a vital tool in dispute resolution. To resolve differences, a neutral third party will help opposing sides to come to an agreement through discussion and structured negotiation. The prospects for achieving settlement often depends on the skills of the mediator. A good mediator will facilitate a negotiated settlement, providing parties with savings in the time and costs associated with court or arbitration proceedings. Mediation is a viable option for most businesses and offers a number of key benefits: • Confidentiality—While court hearings are public, mediation remains strictly confidential. Only the parties to the dispute and the mediator(s) know about the situation and what has been discussed. • Control—Mediation increases the control the parties have over the resolution and is more likely to produce a result that is mutually agreeable. -----------------------------------------------------------------------Brian H Speers is Senior Partner at CMG Solicitors, Belfast Northern Ireland. ------------------------------------------------------------------------

Senior Partner at Belfast-based CMG Solicitors, Brian H Speers, has been qualified as a solicitor for 32 years. “My work involves housing developments, commercial property, planning, family owned businesses, bank debt reconstruction and professional negligence and regulatory matters,” he says of his role. “I have a particular interest in mediation as a means of resolving commercial disputes and have been described as a ‘pioneer’ of mediation in Northern Ireland.” The role of mediator requires certain key skills, and Mr Speers believes it is the personal qualities which really make a difference. “Being approachable, patient, fluent in word and thought, persuasive and insightful - these qualities, allied to good commercial awareness and familiarity with the court process, enable a mediator to remain neutral and explore options and question positions taken by parties. In turn this enables greater understanding and focus on strengths and difficulties.” Mr Speers continues to describe his approach to the projects he undertakes. “Before any mediation I spend

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•

Relationship preservation—Parties to mediation are typically ready to work mutually toward a resolution, which can help to preserve the relationships.

Mediation clauses can be built into contracts to compel disputing parties to mediate before incurring the costs of litigation or arbitration. Such clauses provide contracting parties with a clear route to the resolution of disputes from the outset. Engaging a skilled mediator is crucial to ensuring a satisfactory result. The mediator should be experienced, calm and have excellent communication skills. You should look to appoint a mediator who is inventive, creative and flexible but above all someone who is committed to assisting and guiding the parties towards settlement. Peter Vinden, managing director of The Vinden Partnership, (TVP) is an adjudicator, arbitrator, mediator and expert witness. He trained in London, Rome and the USA and has completed in excess of 150 mediations with an exceptional rate of party time educating the parties of their advisers as to what to expect at a mediation. This ensures they are prepared and informed. At the mediation I will try to understand what it is that has both caused the dispute and what parties believe is required to resolve it. Often there are misunderstandings or incomplete knowledge and communications have been poor. “The value an independent neutral brings to a dispute should not be underestimated. Neutrality means you are not for or against any party. You are there to focus on the issues in dispute and why there is a dispute and what might resolve the dispute,” he adds. “Many contracts have standard arbitration clauses,” states Mr Speers, defining the importance of inserting mediation clauses into contracts. “A properly drafted mediation clause is just as enforceable and allows parties the chance to commit to a process which can and does work, is cost effective, is without prejudice and preserves all their options if agreement is not reached.” With regards to the future, Mr Speers predicts that there will be an increase in lawyers in practice seeking more knowledge about mediation and using it in suitable cases.

settlement. He is comfortable in high-pressure disputes and is also trained in hostage negotiation. TVP was established in 1994 to provide consultancy services to the construction sector. Led by an experienced board of directors, TVP specialises in dispute management, business consultancy, project management and a range of surveying services.

Company: The Vinden Partnership Name: Peter Vinden Email: tvp@vinden.co.uk Web: www.vinden.co.uk Address: Regent House, Folds Point, Folds Road, Bolton, BL1 2RZ Telephone: +44 (0) 1204 362888

‘‘

Over the past 12 months in Northern Ireland there has been a significant increase in interest from lawyers, parties, and government is using mediation or being trained in mediation – and the number of mediations I have undertaken has also increased –the vast majority with agreed outcomes satisfactory to all the parties. I can see this increasing further as 2013 progresses.

‘‘

-----------------------------------------------------------------------Peter Vinden is the Managing Director of The Vinden Partnership, which he set up in 1994 to advise clients involved in the holding and development of land and property assets. ------------------------------------------------------------------------

CMG Solicitors

Company: CMG Solicitors Name: Brian H Speers Email: brian.speers@cmgsolicitors.co.uk Web: www.cmgsolicitors.co.uk Address: 18-20 May Street, Belfast Telephone: 00442890234606

March 2013 /

SECTOR SPOTLIGHT:

Due Diligence and Operational Risk in Alternative Investments: A Source of Alpha

DUE DILIGENCE AND OPERATIONAL RISK IN ALTERNATIVE INVESTMENTS

A Source of Alpha

l A number of recent high-profile hedge fund manager misfortunes have highlighted the potential for serious structural inefficiencies to exist in hedge funds. Identification and analysis of operational weakness is always easier with hindsight, however this is a luxury that institutional investors, with heightened fiduciary responsibilities, can ill afford. The recent great recession caused continued economic uncertainty resulting in an investor confidence crisis and increased regulatory enforcement in the alternative asset industry. This convergence created a paradigm shift causing investors to demand better transparency and accountability. Most investment setbacks in the hedge fund world could have been avoided and picked up through more extensive operational due diligence, and in fact many of them have been caused by lack of attention to operational issues. It is therefore imperative that those involved seek the advice of leading experts who have the knowledge and know-how to help make the right decisions. Acquisition International speaks to a panel of expert firms and fund managers to discuss the impact of operational due diligence. -----------------------------------------------------------------------Aleksey Matiychenko is the Senior Partner and CEO at RiskAI, LLC. ------------------------------------------------------------------------

We focus our due diligence efforts on analysing risk management tools, policies and procedures of hedge funds, as well as on the role that risk manager plays in the firm. Given our quantitative focus, we often use the insights that we obtain from quantitative analysis in deciding which areas we would like to focus on during due diligence. 1. Is Risk Management function performed by a separate person from portfolio manager / trader? 2. Is the risk manager an employee or a partner at the firm? 3. Who does the risk manager report to? 4. What authority does the risk manager have in taking positions off or in putting on hedges? 5. What procedures exist if the portfolio manager or a trader disagrees with the risk manager? 6. Does the risk manager have a personality that enables him or her to override the portfolio managers? It is very common, that risk managers are employees and not the partners of the fund. This can often mean that the risk manager has little or no authority to make decisions that contradict the view of the head portfolio manager or trader. Even if such authority exists on paper, many risk managers may lack the personality that is needed to deal with “type A” people running the fund.

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One risk manager at a large firm actually told me that it was not his job to tell people how much risk to put on. We also focus on tools used to measure and analyse risk. Hedge funds range in sophistication from “knowing positions” to performing detailed quantitative analysis of every position on individual and portfolio basis. Even the most sophisticated tools, however, are only as good as their application in risk management process. One hedge fund’s stress test predicted significant losses during a certain interest rate scenario. When such scenario materialised, the fund’s stress tests proved to be extremely accurate, but the fund’s failure to pay attention to the stress tests caused the fund to go out of business. We often use our quantitative tools to raise questions that should be addressed during due diligence. A couple of examples include: 1. Hedge fund manager reported unusual number of months when the fund produced a flat return of 0.0% during significant stress events. When questioned the manager claimed that they were able go to cash at exactly the right time. The fund claimed to have audited financial statements, but failed to produce such them when questioned about this unusual return pattern. 2. Quantitative hedge fund that claimed low leverage and concentration produced an unusually high return during the quant crisis in August of 2007. We asked to review trading activity during this

month to determine how the returned was achieved. The fund’s story changed several times and the fund failed to produce any evidence that justified such abnormal returns. 3. Quantitative fund pursuing market neutral strategy presented very attractive return history that was generally consistent with the stated strategy and thus did not raise any flags. Due to distant location, the client decided not to pursue with onsite operational due diligence. Two months later the hedge fund manager was arrested and charged with fraud. We often tell people that analysing hedge funds is akin to solving a puzzle with missing pieces. Operational Due diligence is one of the tools required to find these missing pieces.

Company: Risk-AI, LLC Name: Aleksey Matiychenko Email: Aleksey@risk-ai.com Web: www.risk-ai.com Address: 14 Wall Street, 20 Floor, New York, NY 10005, USA Telephone: +1 212 618 1660

March 2013 /

SECTOR SPOTLIGHT:

Due Diligence and Operational Risk in Alternative Investments: A Source of Alpha

Is your Reputation at Risk? -----------------------------------------------------------------------Lachlan Roos, a Partner in the Tax practice of PwC, based in London, is the UK Tax Hedge Fund Leader. Moonir Kazi is a Senior Manager in PwC’s Investment Management tax team based in London ------------------------------------------------------------------------

As the Hedge Fund industry becomes increasingly global, and in the aftermath of the financial crisis, hedge funds are required to be increasingly responsive and pay greater attention to their operational tax requirements. Furthermore there is increasing pressure from all stakeholders of hedge funds to become socially responsible. The real question however is whether hedge fund managers are stepping up to meet these requirements, or are they just pretending there is no operational risk. The rise of emerging markets, such as South America, China and India, have given rise to further investment opportunities, yet bring with them increased tax burdens, and a need to understand the tax requirements of multiple complex jurisdictions. Furthermore, increased requirements by tax authorities to disclose offshore income has added to the reporting burden. US GAAP ASC 740 being a prime example. New regulation and taxes are rampant in the hedge fund industry. For example, the introduction of a new EU Financial Transactions Tax (“FTT”) is being used to recoup some of the €4.6 trillion used

Jakarta / Indonesia

to support the financial sector during the financial crisis. There is a need for hedge funds to pay more attention to the way they invest in order to ensure that they do not have undue tax exposure to underlying investments. Demand for transparency is a response to the public outcry for increased accountability and corporate social responsibility. Public attitudes towards tax are changing. In a recent PwC operational taxes survey, the industry felt that reputational risk, due to poor tax management, was now a key issue for the C-suite. As a result, Tax now demands a seat in the boardroom in most industries, and especially within Asset Management. In response to these new pressures within the hedge fund community, and taking its lead from the wider FS industry, the size and composition of tax departments is changing and more firms now have a dedicated operational tax department or outsourcing partner. These tax departments need to move away from their previous purely compliance based role towards more of a business consulting based approach. Tax departments need to be become more reactive in what has become an ever changing industry. From the results of our recent operational taxes survey, it is clear that, for many, there is necessary improvement in adapting the approach that hedge fund managers take towards their 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,” he explains. “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 law firm Lubis Ganie Surowidjojo based in Jakarta, Indonesia. ------------------------------------------------------------------------

Dr Ganie graduated from the Faculty of Law of the University of Indonesia and holds a PhD in Law from the University of Hamburg. Dr Ganie is also a Chairman of the Association of Indonesian AntiTrust 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 specialises in commercial transactions and commercial litigation, including alternative dispute resolution and has acted as an expert in a number court and arbitration proceedings. His expertise covers general corporate/company law, banking

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LGS has a distinct advantage over local and global competitors in its area of expertise, as Dr Ganie continues: “One of our unique selling points is the combination of our long-standing commercial law practice and our premier litigation department that has extensive experience in dealing with commercial disputes in the context of arbitration and alternative dispute resolution as well as litigation in the Indonesian courts. This allows our corporate transaction departments to benefit from such litigation experience, and from their own compliance work, to ensure that any transactions handled by the firm are carried out with a view to the potential for future disputes and any existing risks. “Due to recent client demand we have developed our compliance practice to offer a full range of advisory and representation services relating to the

operational taxes, in order to know what “good” tax management looks like. Please note that this content is for general information purposes only, and should not be used as a substitute for consultation with professional advisers.

Company: PwC Web: www.pwc.co.uk/asset-management/ hedge-funds.jhtml Address: 7 More London Riverside, London, SE1 2RT Name: Lachlan Roos Email: lachlan.j.roos@uk.pwc.com Telephone: +44 207 213 1309 Name: Moonir Kazi Email: moonir.x.kazi@uk.pwc.com Telephone: +44 207 213 3420

rapidly developing Indonesian regulatory regime and enforcement,” he adds. “In particular relating to anti-corruption and money laundering, which have long been an issue in Indonesia and have increasingly come to the forefront in recent times. Our work includes advice for foreign investors acquiring Indonesian businesses as well as for already operating businesses seeking to implement good corporate governance practices or deal with problematic situations that may arise in the course of operations. “Members of our compliance practice feature prominently in Indonesian business circles, including a number of commissioner roles in large listed companies, and have previously worked in, advised, and represented the Indonesian Corruption Eradication Commission (KPK), the specialist anticorruption prosecutor, and the Ministry of Law and Human Rights.”

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

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Due Diligence and Operational Risk in Alternative Investments: A Source of Alpha

The Role of Operational Due Diligence for Managed Accounts -----------------------------------------------------------------------Joshua Kestler is the Chief Operating Officer of HedgeMark. ------------------------------------------------------------------------

Since the Global Financial Crisis in 2008, institutional investors have become increasingly focused on operational due diligence as a key component of the manager selection process. HedgeMark, as a managed account and infrastructure platform provider with a deep commitment to position-level risk analytics, has a unique perspective on the role of operational due diligence in hedge fund investing. Specifically, we believe a core benefit of the managed account structure is the heightened fiduciary framework established by the separation of duties between the hedge fund manager, in its role as investment manager, and the managed account platform provider who oversees all operational functions. The hedge fund manager retains trading authority while the managed account platform provider is responsible for most day-to-day operational functions (including those which inherently introduce conflicts of interest when performed by the manager). These functions include, but are not limited to, oversight of fund accounting and administration, negotiating prime brokerage and ISDA agreements, counterparty monitoring, control of all cash and collateral movements, monitoring -----------------------------------------------------------------------Neil Brown is Senior Partner at Earth Capital Partners LLP, a company which specialises in sustainable projects, energy efficiency and renewable energy. ------------------------------------------------------------------------

“Earth Capital Partners aims to deliver attractive returns to our investors through projects, companies and financial instruments, which address Sustainable Development challenges, such as climate change, energy efficiency and socioeconomic development,” Brown explains of the firm. With a career in asset and risk management spanning thirty years, Brown started work as a broker and trader of derivative instruments, moving on to several years self-employed as a derivatives and risk management consultant, and eleven years as Global Head of Risk Management for HSBC Asset Management and Credit Suisse Asset Management, prior to his current role. It is this breadth of experience which Brown believes gives Earth Capital the edge over competitors.

-----------------------------------------------------------------------Patric Wisard is founding partner of aicons AG, a Swissbased due diligence firm. ------------------------------------------------------------------------

Switzerland-based aicons AG was founded in 2002 and is today one of the leading due diligence firms for alternative investments. “For almost 11 years, aicons AG has served institutional investors with in-depth investment, operational and legal due diligence and monitoring on over 800 hedge funds, private equity funds and other non-traditional as well as traditional investments,” explains Wisard. “Well over $150bn has been invested based on aicons AG’s research and advice. Pursuing a low-profile approach with highest confidentiality, aicons AG supports institutional investors with a custom-made service, i.e. we often act as an “in-sourced” specialist team.” On the subject of standing out from the crowd, Wisard explains what sets aicons AG aside. “It is the people that make the difference,” he affirms. “aicons AG’s staff has a natural devotion to forensic-style

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of compliance with written investment guidelines, and independent performance and risk reporting. We believe that the segregation of investment and operational functions, which is the norm with traditional investments and a core component of HedgeMark’s managed account structure, eliminates many of the operational risks associated with hedge fund investing. Despite the protections afforded to institutional investors through a segregated managed account structure, we believe that operational due diligence will continue to play an important role in the investment process. In this respect HedgeMark does perform operational due diligence on all managers before such managers are approved for the HedgeMark platform, thereby minimising the work required of investors utilising our systems. HedgeMark, among other things, evaluates the managers’ capabilities with respect to trade processing, trade allocations, reconciliations, IT systems and business continuity to confirm that the manager has the ability to effectively run a managed account alongside other funds and accounts. We also conduct background checks on hedge fund management companies and their principals

During a long career in the industry, Brown has comes across various challenges when conducting risk assessment in complex alternative investments.

‘‘

Alternative asset managers face a major conflict of interest in the tension between the incentives available and the manager’s fiduciary responsibility; a sound risk assessment must address the scale of and the systems in place to manage this conflict.

to look for any red flags. HedgeMark believes that while operational due diligence remains an important tool, the use of a managed account structure can mitigate, if not largely eliminate many of the operational risks associated with hedge fund investing.

Company: HedgeMark Name: Joshua Kestler Email: jkestler@hedgemark.com Web: www.hedgemark.com Address: 780 Third Avenue, 44th Floor, New York, New York 10017 Telephone: +1 (212) 888 1300

Finally, Brown explains how due diligence could be the key to success. “Sound operational procedures are the key to the smooth operation of an alternative asset manager. They do not, of themselves drive return, but they do help to reduce the risks to investors of a manager that is unlikely to deliver the mandated product or where there are insufficient levels of segregation, oversight and control.”

“The complexity of the products available and the variety of asset classes are a minefield for a generalist. Knowing how and why misconduct might arise requires detailed knowledge and experience, coupled to a thorough investigation of processes and procedures. This requires detailed knowledge of industry best practice and the ability to investigate how and why these might be avoided.”

Company: Earth Capital Partners LLP Name: Neil Brown Email: neil.brown@earthcp.com Web: www.earthcp.com Address: Earth Capital Partners LLP, 3rd Floor, 34 St James’s Street, London, SW1A 1HD Telephone: +44 (0) 20 7811 4500

due diligence. Our team is truly multidisciplinary and each professional is capable of performing investment, operational and legal due diligence on virtually all strategies and structures. aicons AG is not a due diligence factory but a place to go for those who want to go at least one step further than others.”

industry to be more than 10 years behind the hedge fund industry. “Based on unanimous feedback from private equity fund managers, only very few investors actually perform operational due diligence on private equity funds,” he comments. “It could well be that the next “Madoff” will occur in the private equity industry!”

The use of an operational due diligence specialist has proved crucial on many occasions for aicons AG’s clients. “Over the last 11 years the firm has saved its clients from investing with managers which were later found to be fraudulent,” Wisard explains. “And further saved its clients various times from investing with managers which subsequently suffered heavy losses due to operational short-falls (for example, insufficient escalation process in risk management).” Looking to the future, Wisard states that he believes operational due diligence in the private equity fund

Company: aicons AG Name: Patric Wisard Email: patric.wisard@aicons.ch Web: www.aicons.ch Address: Bleicherweg 66, 8002 Zurich/ Switzerland Telephone: +41 44 283 20 83

March 2013 /

SECTOR SPOTLIGHT:

Corporate Governance and the Non-Executive Fund Director: The Train Has Left the Station…

CORPORATE GOVERNANCE AND THE NON-EXECUTIVE FUND DIRECTOR The Train Has Left the Station…

that its obligations to its shareholders and others are understood and met. Every company should be headed by an effective board, which is collectively responsible for the long-term success of the company.’ The UK code also refers to company’s values and standards to ensure that its obligations to its shareholders and others are understood and met. In Switzerland, the recently amended Collective Investment Schemes Act goes towards more regulation, with the supervision of investment managers. In particular, it imposes a separation between risk management activities and internal control and management decisions. The new regulation will undoubtedly strengthen nonexecutive functions and will necessitate the need for Independent Non-Executive Directors (‘NED’). -----------------------------------------------------------------------Philip Craig is the Principal of Craig Fund Consultancy which specialises in the provision of Independent Non-Executive Directorships to funds. ------------------------------------------------------------------------

The Alternative Investment Industry is moving in one direction and it’s towards increasing regulation and corporate governance. Politicians in the EU and US have heightened their focus on corporate governance (‘CG’). CG is becoming global and certain jurisdictions are under pressure to adhere to higher standards. The recent Weavering case, which highlighted the wilful neglect of its board directors, has accelerated this mounting pressure. The train has left the station and there seems no end to the journey. In the Cayman Islands where most of the world’s hedge funds are domiciled, the Cayman Islands Monetary Authority (‘CIMA’) has begun to consult with local industry associations and other interested stakeholders on CG proposals that aim to enhance and clarify CG standards. In its efforts to provide greater transparency, it will be interesting to see whether the CIMA creates a database that will list the funds’ directors. If this happens, it’s likely that directors with excessive fund directorships will be questioned on their ability to adhere to CG codes and best practices. It is also probable that investors will question whether their interests are protected and aligned with fund directors. Recent surveys have shown that investors rank CG highly when it comes to investing in funds and are well aware of the importance that fund boards play in terms of controlling and directing a fund. In more regulated jurisdictions such as Ireland, the CG Code for collective investment schemes

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and management companies aims to ensure that the board of directors of each fund/management company effectively oversees the fund’s activities. The Code covers guidelines on the composition of the board and guidelines on the activities that should be undertaken by the board including risk monitoring, compliance, accounting and pricing issues. Currently, it has become the norm for board directors to request gap analysis against the CG requirements. It is also becoming common in Ireland for boards to request its own company policies, for example, in the case of anti-money laundering. Notwithstanding the above, board directors should be qualified to identity and anticipate all risks pertaining to a fund including market, credit and operational risk. Directors should take a holistic approach to risk. For example, when reviewing VAR and stress testing of portfolios for worst-case scenarios, the other aforementioned risk factors should also be taken into consideration. In other jurisdictions such as Gibraltar with a growing funds industry largely based on their Experienced Investor Fund vehicle and the soon to be introduced AIFM Directive, greater emphasis is also being placed on CG. Gibraltar’s regulator, the Financial Services Commission, and industry representatives are working closely to ensure the highest standards of CG are met. In the UK, the UK Code of Corporate Governance (Sept 2012) clearly highlights the importance of having an effective board. It states that ‘The board’s role is to provide entrepreneurial leadership of the company within a framework of prudent and effective controls, which enables risk to be assessed and managed.’ It also states that ‘the board should set the company’s values and standards and ensure

The role of the NED has an integral role to play in creating such values and standards by acting as a custodian to the governance process. The NED should not be directly involved in the day to day discretionary investment management of a fund and is well placed in taking a holistic view in deciding on key decisions regarding the control and processes as well as the direction and future strategy of the fund. Obviously, as aforementioned, it is imperative for the NED to disclose any conflicts of interest as well as the time commitment that they will give to a fund. As well as disclosing any conflicts of interest it may have, the NED is well positioned to identity basic conflicts of interest between investors and the fund and its service providers, e.g. Investment Managers, to avoid future fund scandals. The NED is integral to the composition of a sound board, which in turn is responsible to the fund and ultimately its investors. It’s at the board of the directors that the train should stop…….

Company: Craig Fund Consultancy Name: Philip Craig Email: philip@craigfundconsultancy.com Web: www.craigfundconsultancy.com Address: Suite 1, Dublin Exchange Facility, IFSC, Dublin 1 Telephone: +353 86 819 2128

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Navigating Indirect Taxes

NAVIGATING INDIRECT TAXES

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

-----------------------------------------------------------------------Simeon V. Marcelo is a name partner of Villaraza Cruz Marcelo & Angangco. ------------------------------------------------------------------------

Mr Marcelo leads its Litigation & Dispute Resolution Department and was highly instrumental in the Firm’s success in the number of high-profile fraud and tax cases it has handled. His previous experience in the public sector, where he held the positions of Solicitor General (who represented the Government, including the tax bureaus and the Department of Finance) and later, Ombudsman, a constitutionallymandated independent Officer burdened with the duty of prosecuting corrupt government officials -----------------------------------------------------------------------Michael Boulanger is the Managing Director of RM Boulanger. ------------------------------------------------------------------------

RM Boulanger is a privately owned company specializing in customs and indirect taxes. We provide global assistance to foreign companies operating in the French market. Our services cover VAT representation, VAT refund claims, Intrastat compliance and audit of flows related to VAT and customs. Our company is fully accredited by the French Tax Administration since 1981 and is one of the largest and oldest companies in this field of activity. We believe that our main advantage consists in being an independent company fully dedicated to customs and indirect taxes. We strive to provide our clients with tailor made services and assistance. We have an excellent financial track record and are firmly established as a market leader. We understand

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(including the military and police) enabled him to develop a broader perspective of the relationship and interaction between the Government and the private sector, particularly in the field of taxation. This prior experience allows him to provide significant and meaningful legal advice in tax matters to his clients. He is supported by highly competent partners and associates who contribute their capabilities and efforts in providing clients with a full range of legal services drawn from collective experience and expertise in various fields of law. In the latter part of 2012, Republic Act No. 10351 was passed into law. Effective January 1, 2013, it provided for multi-step increases in the excise taxes imposed on tobacco and alcohol products under the National Internal Revenue Code. Recognizing that this piece of legislation, like all others involving indirect taxes, shall have significant impact not just on the economy but also other relevant national issues, Atty. Marcelo has monitored its progress in Congress from the time the bill was filed up to its signing into the importance of developing reliable partnerships and work closely with companies to help develop their international business. Regarding the tax environment, France has implemented significant changes since 2001. We have had 4 “French VAT revolutions” in 10 years and the aim of each one was to “simplify” VAT rules for Foreign companies… The main challenges Foreign companies have to face when they have commercial operations in France are “How my operations have to be considered from a customs and VAT perspective?”. “Do I have to charge VAT to my clients”, “How can I claim VAT back ?”, “What are my obligations regarding the Incoterms agreed with my clients ?” This is obviously always on a case by case basis that has to be analyzed and worked upon before the goods arrive in France. In addition to this, we have noticed that more and more French clients are imposing DDP terms of

law. Laws imposing indirect taxes, while primarily aimed at raising revenues for the Government, may also be simultaneously used to further other equally laudable state policies, such as, in this instance, the curbing of consumption of products harmful to one’s health, especially by the youth.

Company: Villaraza Cruz Marcelo & Angangco (CVCLAW) Name: Simeon V. Marcelo Email: sv.marcelo@cvclaw.com Web: www.cvclaw.com Address: 11th Avenue corner 39th Street, Bonifacio Global City, Metro Manila Telephone: +63 2 988 6088 delivery to their suppliers. As a result companies are responsible for the export procedure in their country, but also of the import into France and then of all VAT formalities in France. Our VAT expertise and international logistics experience can help find the right solution and RMBOULANGER streamline business processes when importing into France.

Company: RM BOULANGER SA Name: Michael Boulanger Email: m.boulanger@rmboulanger.com Web: www.rmboulanger.com Address: 96, Rue du Dronckaert, 59960 Neuville en Ferrain Telephone: +33 3 20 25 70 70

March 2013 /

SECTOR SPOTLIGHT:

Navigating Indirect Taxes

OTHER EXPERTS IN THIS AREA

Company: PricewaterhouseCoopers AG Name: Dr. Niklaus Honauer Email: niklaus.honauer@ch.pwc.com Web: www.pwc.ch Address: Birchstrasse 160, 8050 Zurich, Switzerland Telephone: +41 58 792 59 42

After studying law at University College, Dublin, and qualifying as a barrister in Ireland, Behan studied EU law at the University of Amsterdam. He founded Behan & Co in June 2010. Here, he explains what gives Behan & Co the advantage over the competition. “A high proportion of the practice is advising other advisers or working in larger teams of advisers. We focus on penalty and Tribunal work which allows us to help other advisers bridge the gap between technical advice and contentious work. Not only this, but we have considerable experience of work on VAT related to insolvency and corporate finance. We are a niche within a niche.” Behan believes that the key skills required of a tax expert, particularly when dealing with indirect taxes, include keeping abreast of developments in HMRC practice, and strong communication skills based on an understanding -----------------------------------------------------------------------Rune Plener is the Department Manager of the representation department at MomsPartner AS. ------------------------------------------------------------------------

MomsPartner AS is a Norwegian company specialising in international VAT. The firm has more than 13 years of experience in recovering VAT and is today a significant VAT representative for international companies and businesses. It has two locations: Oslo, the capital, and Narvik, a town in northern Norway. MomsPartner AS offers three products consisting of VAT representation, VAT recovery, and VAT consultation. The firm’s product VAT representation has grown considerably in the past year and includes many large international corporations. “MomsPartner AS has a professional, multilingual staff with specialised VAT training to ensure that we can handle the most challenging VAT scenarios,” commented Mr Plener. “Our staff has to be up-to-date with all new Norwegian laws and rules pertaining to international VAT and have on-going communication with Norwegian tax authorities in order for us to provide optimal service to our customers.”

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of the client’s outlook and the Revenue agenda. There has been an increase in indirect tax work in Behan’s jurisdiction, as he states: “We have seen a greater emphasis on penalties as well as particular problems in relation to the exemption for insurance agents and financial intermediaries. Distance selling rules are causing problems for B2C e-businesses and customs classification and antidumping are becoming more relevant for SMEs.” Indirect taxes pose challenges for businesses, particularly ones that operate across international boundaries. “The challenges include setting up robust, cost effective indirect tax compliance systems; dealing with conflicting views held by Revenue authorities in different countries, and managing tax risk in the supply chain. However, some of these can be overcome by building up long-term client relationships so that we get to understand the business and not just the tax.” Behan predicts that in the forthcoming 12 months, the trend towards increased activity in relation to penalties will continue and he also says: He explained that the Norwegian tax representative is responsible for keeping records of transactions involving both in- and outgoing taxes. MomPartner AS’ service provides simplified VAT accounting with a general ledger and statements. The firm also imposes VAT charges on outgoing invoices. “As a tax representative we are jointly and severally liable when representing your business, which often requires a bank guarantee from your business,” he added. When a business is registered in Norway it has the same rights and obligations as other Norwegian businesses. Mr Plener explained that businesses are required to report sales figures and necessary accrued taxes. Deduction of paid taxes will apply according to Norwegian tax laws. “In Norway there are six tax periods per year, with each period consisting of two months,” Mr Plener continued. “Deadlines for reporting and paying overdue taxes are one month and 10 days after each period has concluded.

“The anti-avoidance agenda will harden HMRC’s stance in many areas. Businesses will run the risk of getting dragged into arguments on avoidance if they cannot present their cases effectively to HMRC. We could also expect to see an increase in the use of the avoidance doctrine. We are beginning to see foreign tax authorities paying more attention to supply chain tax risk, particularly in Belgium and the Netherlands”

Company: Behan & Co Ltd Name: Paddy Behan Email: paddy.behan@behanandco.com Web: www.behanandco.com Address: 1st Floor, Vantage House, 1 Weir Road, Wimbledon, SW19 8UX Telephone: + 44 (0)20 3551 4483

‘‘

-----------------------------------------------------------------------Paddy Behan is a Director at Behan & Co Ltd, Indirect Tax Advisers, based in Wimbledon, London. ------------------------------------------------------------------------

These rules and deadlines often prove challenging for foreign businesses to keep track of and this is where MomsPartner can help. We take care of most of the paperwork involved in reporting taxes and therefore results in minimal paperwork on your part, he concluded.

Company: MomsPartner AS Name: Rune Plener Email: rune@momspartner.com Address: Dronningensgate 45, N-8514 Narvik, Norway, P.O Box 13, N-8501 Narvik, Norway Telephone: +47 918 00 293

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Cross-Border Business Crime: A Major Target of Enforcement

CROSS-BORDER BUSINESS CRIME

A Major Target of Enforcement provisions than the 2008 Directive. This Article briefly considers its key provisions. The fundamental change to evidence gathering in Europe will be a shift away from the old concept of Mutual Assistance Requests to demands for assistance which can only be refused in very limited circumstances. The whole of the existing mutual legal assistance structure will be swept away and replaced.

-----------------------------------------------------------------------Collingwood Thompson QC is a Barrister at 7 Bedford Row. ------------------------------------------------------------------------

The fight against trans-national organised crime within Europe is likely to receive a considerable boost with the introduction of the European Investigation Order in criminal matters, which is currently in its final stages of discussion and amendments within the European Parliament. However it is also likely to create as much controversy in the United Kingdom as the European Arrest Warrant has; opponents will undoubtedly point to a further erosion of British Sovereignty if the measure is implemented. The European Investigation Order (“EIO”) has been gestating over the last 10 years. It will entirely replace the Framework Decision on the European Evidence Warrant which was promulgated in December 2008, but never implemented. It is far more radical in its

The E10 is firmly based on the concept of mutual recognition within Member States of the EC. Once an appropriate authority has issued a request in the proper form, the executing state will have to act on it. It is mandatory, not discretionary. This is far reaching. The assumption will be that the issuing authority has properly considered issues of proportionality and human rights. If there is any legal challenge to the validity of the request, it will have to be mounted in the issuing state, not the criminal execution state. This is in complete contrast to the current system of mutual assistance requests, which can be refused on a multiplicity of grounds. In this regard the E10 is very similar to the European Arrest Warrant. It is also very wide. It will apply to almost any criminal investigative measure. It could therefore relate to requests to search premises, seize documents, question suspects, victims or witnesses. It could also be used to obtain information on bank accounts and financial transactions. It will permit hearings by video-conference, and even the transfer of suspects to the issuing state for questioning.

São Paulo Law School in 2007 with the thesis The typification of criminal organisation. He is currently involved in a PHD program at Coimbra University.

-----------------------------------------------------------------------Antonio Sérgio Altieri de Moraes Pitombo is a business crime lawyer and founder of the law firm Moraes Pitombo Advogados. ------------------------------------------------------------------------

Mr Pitombo graduated from the University of São Paulo (USP) Law School in 1993, and specialised in civil procedural law at the Centre for University Extension in 1994. He gained a Masters in penal law from the University of São Paulo Law School in 2000, with the thesis The typification of previous crime in money-laundering offence, and concluded his doctoral studies in penal law at the University of

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Mr Pitombo is renowned in his field as an exceptional business crime lawyer who has tried numerous highprofile cases and has represented corporations and individuals, including presidents, directors and officers in federal or state matters for the past 15 years. He is also renowned for his successful work in international cooperation procedures involving the United States of America, Great Britain, Switzerland and Luxemburg, among other countries. He is the author of “Money laundering: the typification of previous crime”, Revista dos Tribunais, 2003. He is the author of “Criminal organisation: the new legal type persepctiva”, Revista dos Tribunais, 2009. He was also coordinator of Special Criminal Courts: interpretation and criticism Malheiros, 1997,

In addition this power will be, available to a wide body of authorities. It can be exercised by a Judge, Court, investigating Magistrate or a Public Prosecutor, or any other “competent authority” as defined by the issuing state, although in the latter case the request will have to be validated by a Judge, Court, investigating Magistrates or a Public Prosecutor. It is clear, therefore, that requests may be issued without any judicial intervention. Finally, in this brief review of the main features, the Request will have to be responded to within clear time limits to prevent unnecessary delays in transmitting the evidence. Whilst efficient cross-border evidence gathering is crucial in the fight against serious crime, some may argue that the E10 is a step too far because of the erosion of the executing states authority over requests.

Company: 7 Bedford Row Name: Collingwood Thompson QC Email: cthompson@7br.co.uk Web: www.7br.co.uk Address: 7 Bedford Row, London WC1R 4BS, UK Telephone: +44 (0) 20 7242 3555 and “Comments on the Companies’ Recovery and Bankruptcy Law”, Revista dos Tribunais, 2005. He is also a member of the Brazilian Institute of Criminal Sciences (IBCCrim); of Institute Manoel Pedro Pimentel, related to the Department of Penal Law, Criminology and Forensic Medicine at the University of São Paulo Law School; of the National Association of Criminal Defence Lawyers; and of the Association Internationale Droit Pénal.

Company: Moraes Pitombo Advogados Name: Antonio Sérgio Altieri de Moraes Pitombo Email: apitombo@mpp.adv.br Web: http://moraespitombo.com.br Telephone: São Paulo: +55 11 3047 3131 Brasília: +55 61 3322 7690 Rio de Janeiro: +55 21 3974-6250

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Cross-Border Business Crime: A Major Target of Enforcement

-----------------------------------------------------------------------Juergen Wessing is a Senior Partner at WESSING & PARTNER, a law firm solely practicing in criminal law. -----------------------------------------------------------------------WESSING has been active as defence counsel for 30 years, and for 20 years exclusively in the field of white collar crimes and tax evasion cases, amongst the first to implement compliance with companies. The firm handles cases of personal defence as well as corporate defence in national and international cases. Contrary to most criminal law boutiques in Germany, which normally have up to five lawyers, WESSING & PARTNER can handles cases on a much larger scale with 14 lawyers, its own IT-specialist and several paralegal as well as staff assisting it in scientific projects relating to practical criminal law questions. “We have more expertise in the field of cross border and company related criminal cases than almost all our competitors,” said Mr Wessing. “Our lawyers are specialised in most of the company related areas of criminal law: tax, banking, corruption, international trade, IT, and antitrust. We are multilingual and can correspond in German, English, French, Spanish, Russian and Turkish.” Wessing & Partner has experience not only in representing companies but also in courtroom defence, so the firm is able -----------------------------------------------------------------------Anthony Riem is a Partner at PCB Litigation LLP. ------------------------------------------------------------------------

Commercial fraud is usually committed on an international basis, with a plan to defraud a victim being hatched in one country, the fraud itself being committed in another country and the proceeds of the fraud being hidden in several offshore jurisdictions with the fraudster living in yet another country. It is a common misconception that in these circumstances, victims are left with no redress. However, the courts of many countries can assist by enabling the victim to identify and freeze assets on an international basis before the fraudster is notified that this has happened. PCB Litigation LLP was established in 1979 as a specialist commercial litigation and arbitration practice with a particular focus on recovering assets on a worldwide basis for victims of fraud. Over the years, we have successfully identified, frozen and recovered stolen assets by obtaining Court Orders in many countries around the world. We act for many financial institutions, corporates and hedge funds.

ACQUISITION INTERNATIONAL

to identify existing criminal law problems not only from theory by from practical knowledge.

may arise outside our boundaries. The cases of Siemens, Daimler, MAN show this very clearly.”

“From defending and investigation numerous cases we have – besides knowing the rules of specialised fields also – developed a sense for the real, not the theoretical problems,” explained Mr Wessing. “Also we have developed programs that not only help to audit compliance but are able to detect already existing problems. If possible we isolate the problem to the affected jurisdiction, otherwise we coordinate an international defence.”

Mr Wessing stated that clients wish for representation with an overview of all problems from a criminal problem in a company. “Not only the mere questions of a criminal case have to be considered, ramifications of all kinds – starting with labour law and not ending with administrative consequences – have to be taken into account and solved often with the help of specialised counsel in the respective field.”

Discussing the difficulties relating to enforcement and the detection of corporation crimes when businesses operate across a number of jurisdictions, Mr Wessing stated that it starts with the language and with different requirements of the respective laws. “Also the idea and consequentially the practice of corporate as well as individual defence have a tendency to be quite varied between the legal systems of countries,” he added. “What is positive action in one jurisdiction may be negative in the next.” “We consider knowledge of international laws essential for our work. No criminal case in Germany of importance can be handled without paying regard to the consequences that

To recover assets successfully, it is necessary to plan a strategy that makes effective use of the arsenal of remedies that a court may deploy in preventing a fraudster from ultimately benefiting from his wrongdoing. We understand how search orders may be obtained as a method of obtaining vital information on the whereabouts of assets; how disclosure orders can be used to glean further details from third parties; how freezing orders can be implemented to prevent assets being salted away and, most importantly of all, how to effectively manage the underlying case so as to ensure those assets are returned. An example of one such case involving allegations of deceit against a prominent Kazakh family, we obtained search orders that were executed simultaneously at 3 different premises at the same time that freezing orders were served, as well as third party disclosure orders against various banks, solicitors and internet service providers. In another case acting for one of Russia’s largest banks in a USD350m claim against a high profile businessman, we obtained a worldwide freezing order in England for USD200m and managed the substantive

Company: WESSING & PARTNER Name: Prof. Dr. Juergen Wessing Email: info@strafrecht.de Web: www.strafrecht.de Address: Rathausufer 16; 40213 Düsseldorf; Germany Telephone: +49 211 16844200

litigation and ancillary freezing order proceedings in various offshore jurisdictions. For another bank, we have obtained a worldwide freezing order in support of foreign proceedings against an individual who had apparently sought to hide his assets in a complex structure of offshore companies and trusts, requiring co-ordination with lawyers in those jurisdictions and the development of an effective global strategy.

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

March 2013 /

SECTOR SPOTLIGHT:

Cross-Border Business Crime: A Major Target of Enforcement basis in protecting them against fraud, bribery and corruption. Chambers also provides ad hoc advice on specific compliance issues as well as an audit of a business’ compliance procedures followed by a tailored programme of improvements and training with on-going periodical reviews to ensure that changes in regulation are incorporated. Mr Mitchell noted that there are a series of issues in enforcing and detecting corporate crimes when businesses operate across a number of jurisdictions. These can include such matters as local employment law, data protection, complex corporate structures, lack of control by senior members of staff, corporate liability vs. individual liability, lack of bookkeeping records, etc. Commenting on the increase in cross border deals, Mr Mitchell noted that that the UK Bribery Act is intended to be cross border, adding that “breaches of economic sanctions and the activities of some regulators to pursue corporate entities outside of their own jurisdiction where they feel they have the power has blurred the distinctions between national borders”. Mr Mitchell observed that the downturn in the world economy has led to a closer inspection of working practices and an increase in action as Governments and regulators seek to use commercial wrongdoing as a way of raising extra public money.

-----------------------------------------------------------------------Andrew Mitchell is the Head of Chambers at 33 Chancery Lane the Chambers of Andrew Mitchell QC. ------------------------------------------------------------------------

Mr Mitchell specialises in advising people and entities concerned with “commercial wrongdoing” and is also considered pre-eminent in the field of the recovery of the proceeds of crime, advising alleged wrongdoers, governments and third parties. His practice engages him internationally and domestically. Mr Mitchell lectures and has acted as a consultant for many training programmes worldwide in the areas of bribery and corruption and the proceeds of wrongdoing. He has trained and mentored the judiciary on these issues in England, the Caribbean, Australasia, Sri Lanka and Africa. His Chambers has a history of Business Crime representation, including Claimants and Respondents, Defence and Prosecution, individuals and companies – advising and litigating on issues relating to bribery and corruption, fraud and money laundering. The Chambers of Andrew Mitchell QC currently represent prosecuting agencies within the UK as well as representing clients worldwide seeking to repatriate their assets.

stands out from the competition as it provides the skills and experience essential for domestic and international litigation involving commercial and wrongdoing of any type”. He believes that there is now an increased need for international legal enforcement across businesses, noting that “as companies become global in their reach so the need to have access to lawyers with transnational experience becomes acute”. A typical Claimant will consider the commercial reality of the pursuit of their ‘lost’ assets. Mr Mitchell stated that, in these lean times, they will need to consider the time and cost of pursuing a Respondent and the likelihood of either success in the proceedings or the practicality as to whether they will be able to recoup their losses following litigation. Similarly, a Respondent will need to consider the time and financial cost of defending proceedings. “The process of litigation can have a major impact on the ability to efficiently run a business,” he explained. “Stricter regulation means that clients need to make sure that they have up-to-date compliance systems in place in order to avoid falling foul of regulators and facing the negative commercial implications of publicised breaches of money laundering or bribery rules.

In addition, Mr Mitchell has recently been developing a partnership of international lawyers and investigators that specialise in sovereign stolen asset recovery. The partnership intends to assist states with a combination of technical assistance and capability building to train the local officers and aid them in repatriating sovereign wealth that has been stolen through bribery and corruption by public officials.

“Fines can be in the GBP millions and more importantly confiscation can deprive the company or individual of everything it obtained as a result or in connection with the criminal conduct without any deduction for anything that might have been paid away (tax, costs of sales etc.) – it is a factor of what is obtained not what is retained.”

Discussing the Chambers’ distinguishing features, Mr Mitchell stated that “the Chambers certainly

In this rapidly evolving legal market, Chambers is able to assist prospective clients on a direct access

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“As a result of the downturn, and like with all industries affected, clients are wanting more for less – as a result the Chambers model of legal practice is more attractive due to much lower overheads for a high level of expertise,” he concluded. Some of the current cases in which Mr Mitchell is involved are: Innospec: Prosecuting in the UK a company for bribery and corruption in Indonesia including making payments to public officials to secure contracts or to make adverse findings against competitor businesses. Lawrence Duprey/CL Financial – Commission of Inquiry: Representing the former Chairman and CEO of a major Trinidad financial institution further to the collapse of the multi-billion dollar Group. Evidence has been given that hundreds of millions of dollars were handed out in loans to former company executives. Mora Oil Ventures: Representing an oil company in an action against a bank that were the registrars of the shares and allowed two cheques to be specially cleared following a hostile takeover when signed by the ousted directors.

33 CHANCERY LANE

Company: The Chambers of Andrew Mitchell QC Name: Andrew Mitchell QC Email: arm@33cllaw.com Web: www.33cllaw.com Address: 33 Chancery Lane, London WC2A 1EN Telephone: +44 (0) 20 7440 9950

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Relocating Expertise

RELOCATING EXPERTISE

l Despite the on-going challenges associated with the fragility of the global economy, there continues to be an increased appetite for cross-border deals as businesses seek growth outside their home markets. This growth pushes individuals and teams around the world as corporations move their most talented employees both domestically and to foreign locales in order to ensure the success of a recent merger or acquisition. Moving people requires more than just booking a flight; it involves the upheaval of families and possessions and the navigation of complex fiscal, legal and visa restraints. It can be quite a daunting process for the individual involved, so much so that a whole industry is based around helping professionals and their families to relocate. Acquisition International spoke to a panel of relocation experts to analyse current trends and discuss projections for 2013. -----------------------------------------------------------------------Maddalena Michieli is the Founder and Managing Director of Professional Relo SRL in Italy. -----------------------------------------------------------------------2012 was a very successful year for Professional Relo with continued growth in business turnover. Ms Michieli stated that implementing the relocation tracking system adopted in 2010 enabled the firm to improve an “end-to-end” management for each relocation, from order to invoicing, thus strengthening the firm’s position in the B2B market. “Immigration represents a significant part of our business and working in this domain is always challenging and exciting,” she commented. “In 2012 Italy finally approved the EU rule allowing non-EU nationals to be directly hired when possessing a university degree; we therefore expect a growing immigration trend for talented people intending to perform highly qualified work in Italy.” In terms of immigration, Ms Michieli believes that the main challenges are represented by the long processing time required, together with the number of documents and information to be submitted to Authorities by the Employee, the Home Employer and the Host Employer. “Entrusting reliable and knowledgeable experts to manage the immigration matter is the winning tool used by Corporations -----------------------------------------------------------------------Bard Vos is a Marketing Executive at The Apartment Service. ------------------------------------------------------------------------

With more than 31 years’ experience in providing temporary Serviced Accommodation for any type and length of stay, The Apartment Service is a valuable asset to its clients when it comes to assisting them with the complex issues surrounding the sourcing of short term serviced accommodation for its relocation assignees. Through an initial consultation with the client we ascertain the exact requirements for the relocation, based on location, budget, length of stay and number of assignees relocating. At all times using an empathetic approach, because we appreciate that the move to another country or city is a stressful and daunting experience for anyone. Our main objective is always to ensure that we work in partnership with the client and the assignee for the transition to be seamless and stress free. Through our many years of operating as provider and booking agent for serviced accommodation

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to plan the arrival of the Employees and Co-workers in a reasonable and foreseeable time scale,” she observed. Professional Relo has managed many hundreds of files throughout Italy since 1994. Ms Michieli highlighted the firm’s “deep acquired expertise, daily presence at appointed Authorities, constant training and updating of personnel uniquely and exclusively dedicated to immigration, and relocation tracking software technology in use” as the main factors which enable it to “concretely and essentially support its corporate clients moving non-EU talented Human Resources to Italy”.

known and appreciated by both corporate HR and Assignees. What is determining, though, together with the choice of the right destination service provider, is the choice of the right manager, especially if accompanied by family members. “At Professional Relo we do understand Relocatees’ difficulties related to business and family concerns: working with us indeed allows them to settle smoothly while being back to productivity in no time,” she concluded.

In terms of relocation, Ms Michieli stated that the most common challenge is all about Assignees’ capability for adjustment and settling-in, adding that moving abroad for business reasons is not just a matter of holding the required expertise. “It also, or mainly, is a matter of Cultural Intelligence, which is the ‘ability to combine several types of intelligence in order to behave more appropriately and interact more effectively in any social and cultural setting’,” she explained. “Nowadays the benefits deriving from entrusting relocation professionals at the country of destination to support managers and high-qualified workers moving internationally are well

we have built up an extensive portfolio of our own corporate housing apartments in London, the South East of England, Madrid and Lisbon. Plus we have access to thousands of properties worldwide from an established network of providers. This enables us to offer the whole spectrum of solutions which best match the requirements of the client and the assignee. The Apartment Service continues to support the assignee once settled in through its attentive after care service which involves regular and clear communication with the assignee from the day of arrival right through to the day of departure. The Apartment Services commitment to its own staffs training and development is reflected in the high level of service that is received by its clients. It realises the value of its staff and is therefore able to appreciate the value of its client’s assignees. Our extensive knowledge and experience in the industry enables us also to provide accommodation in areas where there are no ready-made solutions available for our clients. If a client has a requirement

Company: Professional Relo srl Name: Maddalena Michieli Email: mmichieli@professionalrelo.com Web: www.professionalrelo.com Address: Centro Direzionale Colleoni, Palazzo Orione 3, I - 20864 Agrate Brianza (MB), Italy Telephone: +39 039 63460 22

in a previously un-sourced location, we will go the extra mile to source and find this accommodation. Why not give us a ring for an initial consultation, to introduce the serviced apartment concept to you and to show you where you can save money. You will receive a 5% discount on your first booking with us. Please quote AI-2013.

Company: The Apartment Service Name: Bard Vos Email: bardv@apartment.co.uk Web: www.apartmentservice.com Address: 5-6 Francis Grove, London, SW19 4DT Telephone: +44 (0) 208 944 1444

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Meet the Experts - Ukraine & the Green Tariff Law

MEET THE EXPERTS

â&#x20AC;&#x201D; Ukraine & the Green Tariff Law

l Ukraine is a very promising emerging market for photovoltaic energy investments. On the 1st of December Ukrainian President Viktor Yanukovych signed off a new law concerning incentives for production of electric power from alternative sources of energy. On the 1st of April 2013 most of the provision of the law will enter into force and a gradual reduction of feed-in tariffs will begin. Currently the tariff for electricity produced from ground-mounted solar power plants is one of the highest in the world. The lower tariff for solar ground-mounted installations will not be as attractive as before, but it will be offset by the decline of solar components prices that the market experienced in the last few months. The Law is a major development for the renewable energy industry and the future for the renewable market looks positive.

Company: Nexia DK. Auditors & Consultants Name: Andriy Andreykiw Email: AndriyAndreykiw@dk.ua Web: www.nexia.com Address: 4 Harley Street, London, W1G 9PB Telephone: +44 (0)20 7436 1114

80 / March 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world

DEAL DIARY — Deal index 83

CURANUM AG

HELLAS SAT

4PROJECTS HOLDINGS

KARSTADT DEPARTMENT STORE

ADYOULIKE

KAZAKH KMG EP

AES

KEY TRUST COMPANY

ALTECH

LUX ASSURE

AUSFUEL

MURRAY & ROBERTS

BTX GROUP

NIHOT RECYCLING TECHNOLOGY

CELERANT CONSULTING

OCB

CHINALCO MINING

ORASCOM

CREDIT SUISSE

OTI GREENTECH

DYNAMIC ROCK SUPPORT

projectiondesign®

EAST COAST AIR CHARTER

RIDGEWIND

ENTRIS BANKING IT

SAVANNAH SUGAR COMPANY

EUREKO

SEATAINERS GROUP AS

EVAC OY

SERABI GOLD PLC

GEOLID

SKY DEUTSCHLAND

GRAINGER

ST GILGEN INTL SCHOOL

GREENSTAR

TROAX

HARRISON MURRAY

WEBEX INC

82 / March 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world 4PROJECTS

CURANUM AG l Korian, a European leader in the field of comprehensive dependent care, has announced through its fullyowned subsidiary, Korian Deutschland AG, that a voluntary takeover bid will been launched to shareholders in Curanum, a company with its registered office in Munich, Germany and whose stocks are primarily listed on the Frankfurt and Munich stock exchanges, with a view to acquiring their Curanum shares at a price of €2.50 per share (the ’Takeover Bid’).

l August Equity LLP (“August Equity”) is delighted to announce that it has realised the investment in 4Projects Holdings Limited (“4Projects”) in a trade sale to TA Associates-backed Coaxis, Inc (“Coaxis”).

In connection with this Takeover Bid, the Korian Group has signed agreements with several of Curanum’s main shareholders, holding approximately 54% of Curanum shares in circulation, under the terms of which these shareholders are irrevocably committed to tendering their shares into the Takeover Bid.

4Projects is a leading provider of secure online collaboration solutions for the building and infrastructure sectors. Its web-based solutions are delivered to a large, international, blue chip customer base via a pure multi-tenanted Software as a Service (“SaaS”) model. Its software has been used on large scale projects such as the Olympic Park main stadium and media centre, Emirates Stadium, the OCS Stand at The Brit Oval and the London Array.

The Takeover Bid offers a premium of 14% on the price of Curanum shares valued at €2.19 on 7 December 20123 and a premium of 33% on the weighted average trading price of shares over a period of three months. The Takeover Bid will be conducted in accordance with German regulations on takeover bids and will be subject to acquiring authorisations from the competent competition authorities, to a minimum threshold of 75% as well as other conditions usual and customary for this type of transactions. All terms and conditions of the Takeover Bid will be included in the offer document. The offer document and further information relating to the Takeover Bid will be published on the website: www.groupe-korian.com/Finance2/Offre-Curanum. Yann Coléou, CEO of Korian stated: “This major acquisition would make Korian a European leader in the three biggest markets – Germany, France and Italy. Our aim is to enable every resident and patient of our facilities to profit from Europe-wide best practices in care provision by implementing operational synergies”. The Management Board and Supervisory Board of Curanum are viewing the takeover offer as positive in the context of its likely effects on Curanum, its future business activities and strategic alignment, its employees and conditions of employment as well as its sites. They welcome the offer from a corporate point of view. In addition, the Management Board and Supervisory Board view the offer price as appropriate after taking into account the fairness opinion of Freitag & Co. GmbH and the overall balance of the factors and assessment criteria named in this statement. As a result, the Management Board and Supervisory Board recommend that shareholders accept the offer.

Corsis provided IT Due Diligence Auditing of the acquisition, evaluating the scalability and growth potential of 4Projects’ project collaboration software and infrastructure. The Corsis assessment team applied the Corsis Confidence Index℠ against two audit tracks, Software Architecture and Network Infrastructure. Corsis auditors evaluated the feasibility of integrating 4Projects software into the Viewpoint Construction Software suite, and assessed the potential of deploying it across a large-scale global SaaS infrastructure. The Corsis IT Due Diligence Audit team was led by Thomas J. Shelford, Partner, Audit & Advisory Services. www.linkedin.com/in/shelfordthomas/ Corsis represented the interests of Thomas J. Shelford Coaxis, the acquirer, and was referred by Updata Partners, an investor and member of the Board of Directors.

About KORIAN The Korian Group, founded in 2001, is the European market leader in temporary and permanent comprehensive care. A private group employing over 15,000 people, Korian has three platforms established in France, Italy and Germany. At 30 June 2012, Korian’s 249 facilities represented a combined total of 24,438 beds in operation.

The Corsis assessment team utilized the Corsis Confidence Index℠ during the due diligence process. The Corsis Confidence Standard™ is a proprietary auditing standard for information systems that evaluates policies, procedures and system architectures against industry best practices. More information: www.corsis.com/confidence

- In France: 129 nursing homes, 37 follow-up care and rehabilitation clinics, and seven psychiatric clinics for a total of 14,846 beds.

Web address: www.corsis.com Twitter: www.twitter.com/corsis

- In Europe: 31 facilities in Italy with a total of 4,349 beds and 45 facilities in Germany for a total of 5,243 beds in operation. The company has been listed on Euronext Paris NYSE Eurolist Compartment B since November 2006.

KORIAN TAKEOVER BID FOR CURANUM

About CURANUM The Curanum Group is one of the leading German operators of senior citizens residences and care centers with a comprehensive geographic network made up of 77 facilities with some10 150 beds as of December 2011 and employs more than 7 000 people. 2011 consolidated revenues amount to €266m and operating EBITDAR before one-off effects to €81m.

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AUGUST EQUITY EXITS 4PROJECTS INVESTMENT IN US TRADE SALE IT Due Diligence Provider

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March 2013 /

DEAL DIARY:

M&A from around the world ADYOULIKE

AES

ALTECH

l Adyoulike unveils the concept of Native Advertising in Europe and announces raising a SeriesA of €1.2 million with Banexi Ventures Partners.

l The AES Corporation (NYSE: AES) recently announced that it has agreed to sell its two power distribution businesses in Ukraine to VS Energy International. Under the agreement, AES will sell its 89.12 percent equity interest in AES Kyivoblenergo, which serves 881,000 customers in the Kiev region, and its 84.56 percent equity interest in AES Rivneoblenergo, which serves 412,000 customers in the Rivne region.

l Liquid Telecom today announced a deal to acquire the East African telecom assets of The Altech Group (JSE code: ALT).

The French Ad Network Adyoulike, specilazed in innovative and interactive formats, has performed beyond expectations in 2012, delivering more than 30 million display and video Advertising Captchas for hundreds of Premium websites, generating a turnover of nearly €1 million. Due to success of these Advertising Captchas, Adyoulike closed € 1.2 million in Series-A funding with Banexi Ventures Partners, in order to support the company’s growth in France and Europe. The Ad Network is now upgrading its offer, bringing to Europe a brand new advertising concept coming straight from the US : Native Advertising. This advertising revolution delivers interactivity and efficiency to brands thanks to an obvious solution : integrating the ad directly into the editorial content, making it unique and native advertising experience that is a 100% user initiated, on exclusive spaces, for quality brand content. Thanks to this innovative and interactive approach, Adyoulike offers brands a place for user engagement and sharing, providing higher results that other advertising formats.

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Julien Verdier, CEO od Adyoulike:

We are eager to evangelize the concept of Native Advertising because it is the clear continuity of Advertising Captcha. It perfectly fits market expectations, in terms of both efficiency and innovation. We are happy to rely on Banexi Ventures Partners for experience and support.

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Philippe Herbert, Banexi Ventures Partners:

We have been seduced by the Adyoulike team and its ability to grow fast through innovative advertising formats. Adyoulike’s Native Advertising strategic positioning perfectly fits our search for future leaders of interactive advertising bringing creativity, interactivity respecting the content for the users. D’Alverny Avocats partner Guillaume Schmitt and associate Véronique Mervoyer represented Adyoulike in its €1.2 million Series-A funding. www.dalverny.com

“We continue to exit markets that are not part of our strategic vision,” said Tom O’Flynn, AES Executive Vice President and Chief Financial Officer. As a Ukrainian legal adviser, Lexwell represented VS Energy International B. V., a client we have a longstanding relationship with, in acquisition of AES Kyivoblenergo and Rivneoblenergo with AES Corporation. Lexwell team was led by its partner Andrey Kolupaev. Being a cross-border transaction, it required applying multi-jurisdictional approach as well as involving advisers from different fields of expertise (i.a., legal, tax, and finance consulting). Since the target companies’ place of business is Ukraine, Ukrainian law issues were key to resolve. Traditionally, such transactions encounter obstacles related to the Ukrainian corporate and foreign exchange regulatory restrictions, and therefore the acquisition was structured through offshore holding vehicles outside of Ukraine. IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk. IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents.

ADYOULIKE CLOSES € 1.2 MILLION SERIES-A FUNDING WITH BANEXI VENTURES PARTNERS

AES AGREES TO SELL ITS UKRAINE ASSETS

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The deal will create Africa’s largest single fibre network spanning Kenya, Uganda, Rwanda, Zambia, Zimbabwe, Botswana, DRC, Lesotho and South Africa. This network will provide reliable, high-speed, cost-effective connectivity to carriers, ISPs, homes, financial institutions and businesses of all sizes. Nic Rudnick, CEO of Liquid Telecom, said: “Liquid has been building and investing in a high-quality pan-African fibre network for many years and this deal will accelerate our progress by enlarging our network footprint and complementing our existing product portfolio. We are a strong and ambitious company and have a long-term investment plan for all the companies we are acquiring. Like us, KDN has built the largest fibre network in East Africa and we believe that it is a company with huge potential. I strongly believe that its people, its network and its customer base will all add value and opportunity to our current operations.” Altech Group CEO, Craig Venter, said: “The Liquid transaction opens a positive new chapter for Altech in partnership with a group with proven expertise in its sector.” The deal has to be approved by various regulatory authorities and whist these approvals are pending, neither Altech nor Liquid will be able to comment further on the deal. Chris Boulle, one of two senior partners at HR Levin Attorneys, was the commercial attorney representing Altech responsible for structuring the transaction and drafting and commenting on the agreements which were prepared in respect of the transaction. Chris Boulle has a relationship of twelve years with Chris Boulle Altech and the founding partner of the firm, Mr HR Levin, has a relationship of more than thirty five years with Altech and its holding company Altron. chrisb@hrlevin.co.za

LIQUID TELECOM ACQUIRES EAST AFRICAN ASSETS Legal Adviser to the Vendor

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DRAGON CAPITAL

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Debt Providers

Banexi Ventures Partners Legal Adviser to the Purchaser

Khan Law 84 / March 2013

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Coulson Harney Advocates Financial Adviser to the Purchaser & Commercial Due Diligence provider

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DEAL DIARY:

M&A from around the world AUSFUEL l Puma Energy has agreed to buy independent Australian fuel distributor and retailer Ausfuel from private equity firm Archer Capital, the companies said on Monday, in a deal media reported could be worth up to A$650 million ($676 million). In a statement, Puma Energy, which is a subsidiary of Dutch independent commodity trader Trafigura Beheer B.V., said the deal would make it Australia’s largest independent fuel retailer. Stephen Weir, Executive Director at RFC Ambrian led the advisory team on the deal. He commented: “RFC Ambrian was acting for Puma Energy, a subsidiary of Trafigura. RFC Ambrian has a long standing relationship with Trafigura.” http://www.rfcambrian.com/team/Corporate%20 Finance

Tim Dowle

WSP acted as Environmental Consultant to Archer Capital and Ausfuel and was led by Tim Dowle as Project Manager. WSP has supported Ausfuel since 2007 as their key advisor for undertaking environmental due diligence and ongoing management of their environmental risks and liabilities.

WSP prepared an Interim Portfolio Review to support the sale – a ‘health check’ to demonstrate that the portfolio is being managed to industry best practice from environmental, regulatory and budgetary perspectives. Whilst the portfolio size and due diligence period time constraints represented a challenge – our review could be carried out quickly and efficiently based on the portfolio’s online ‘Environmental Data Management System’ (EDMS) developed by WSP Digital. The EDMS also provided the bidders with a powerful, transparent and user-friendly tool for conducting their reciprocal environmental due diligence. WSP Environmental website: http://www.wspenvironmental.com/

BTX GROUP

CELERANT

l EQT IV has signed an agreement with an affiliate of Sun European Partners, LLP (“Sun European Partners”), the European advisor to Sun Capital Partners, Inc., to sell BTX Group (“the Company” or “BTX”).

l Hitachi Consulting, a subsidiary of Hitachi, Ltd (TSE: 6501) and a leading provider of IT consulting and management consulting solutions and services, today announced that it has acquired Celerant Consulting, a worldwide leader in business operations consulting. This latest acquisition will further enable Hitachi Consulting to serve its clients throughout an entire business transformation life cycle, while continuing to focus on delivering successful, sustainable change for its clients. Additionally, this acquisition will expand Hitachi Consulting’s European, North American and South American presence.

Horten Law Firm acted as lead legal advisor to Sun Capital throughout the whole process assisting in negotiations and drafting the legal documentation both with respect to the acquisition of BTX Group and the financing of the acquisition.

Jim Oeksnebjerg

Horten’s team was led by M&A partner Jim Oeksnebjerg who was assisted by banking and finance partner Claus Bennetsen.

Sun European Partners, LLP, the UK based investment bank, and a subsidiary of Sun Capital Partners, Inc., the US based private equity firm acquired BTX Group A/S, the Denmark based company that designs, produces and markets apparels, from EQT Partners AB, the Sweden based private equity firm, for an undisclosed consideration. Plesner Law Firm represented and acted as legal advisor to EQT in connection with the share sale and purchase. Plesner assisted EQT in negotiating and drafting of the transaction documents and work related hereto. The deal included an extensive due diligence and disclosure exercise from the team at Plesner which was led by Tue Ravnholt Frandsen. He was assisted by corporate partner Torben Nørskov, both Attorney-at-law and Partners at Plesner Law Firm. IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk. IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents.

“We are very pleased to have Celerant Consulting as a part of the Hitachi Group. As Hitachi’s largest in-house company, Hitachi Information & Telecommunication Systems Company (“ITSC”) is targeting to grow revenue from the consulting business to 130 billion yen ($1.5 billion) by fiscal 2015. Under Hitachi’s Social Innovation business initiative and global growth strategies, we expect sales of 800 billion yen ($9.6 billion) from overseas markets by fiscal 2015; 35% of consolidated ITSC revenues. We believe the acquisition of Celerant Consulting is key to accelerating achievement of these KPIs, and provides Hitachi with the ability to offer our customers deeper knowledge and expertise in Social Infrastructure fields including energy, mining, and various industrial sectors,” said Shinjiro Iwata, Senior Vice President and Executive Officer, President CEO of Information & Telecommunication Systems Company of Hitachi, Ltd. “Hitachi Consulting is committed to pursuing acquisitions that enable us to deliver a complete range of strategy, implementation, and technology services for our clients. Celerant already has a proven track record for designing and implementing value-based operational strategies for Fortune 500 companies on a global scale, and will therefore enable us to enhance the services that we can offer in this area,” said Phil Parr, President and CEO of Hitachi Consulting. “As such, we are confident that this acquisition will enable us to deliver measureable, high value results, as well as sustainable benefits that will generate a strong return on investment for our clients. By leveraging the power of Celerant’s unique capabilities, Hitachi Consulting is well positioned to assist business leaders to prepare for strategic transformations, to complete successful organizational change programs, and to deliver significant benefits to their bottom line as a result.”

PUMA ENERGY TO BUY AUSTRALIA’S AUSFUEL FROM ARCHER CAPITAL

EQT IV SELLS BTX GROUP TO SUN EUROPEAN PARTNERS’ AFFILIATE

HITACHI CONSULTING ACQUIRES CELERANT CONSULTING

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March 2013 /

DEAL DIARY:

M&A from around the world CHINALCO MINING

The unit of China’s biggest aluminum producer sold about 1.76 billion shares at HK$1.75 apiece, the people said, asking not to be identified because the information is private. The shares were offered at HK$1.52 to HK$1.91 each, according to a prospectus for the IPO. Chinalco Mining is raising funds with the Bloomberg World Mining Index down about 7.4 percent in the past year amid expectations of slowing growth in China, the world’s largest consumer of copper and iron ore. The company sold $240 million of shares, or more than half the total, to five cornerstone investors, including Rio Tinto Group (RIO) and Trafigura Beheer BV, the prospectus shows. Owned by Beijing-based Aluminum Corp. of China, the company plans to use the funds for its Toromocho copper project in Peru, and to buy and develop non-ferrous and non-aluminum projects, the sales document shows. Aluminum Corp., known as Chinalco, is investing in copper, coal, iron ore and rare earths as overcapacity and rising power costs shrink profit margins from aluminum smelting. BNP Paribas SA and Morgan Stanley are among banks managing the sale. Chinalco Mining plans to start trading on Jan. 31, the prospectus shows. The IPO is the largest first-time share sale by a mining company in Hong Kong since Inner Mongolia Yitai Coal Co. (900948)’s $903 million offering in July 2012. Yitai is up about 3 percent since its offering. Carlos Granda

Rafael Alcázar

Cornerstone investors get guaranteed allocation of the IPO in return for a pledge to hold their stock typically for six months. Rafael Alcázar and Carlos Granda, attorneys at Rebaza, Alcazar & De Las Casas were responsible for the transaction.

CHINALCO MINING SAID TO RAISE ABOUT $397 MILLION IN IPO

DYNAMIC ROCK SUPPORT

l Asia Growth Capital Advisors (“AGCA”), announced recently the acquisition of a portfolio of seasoned private equity investments in Asia from Credit Suisse, its affiliates and other investors in Credit Suisse Private Equity Asia Partners, L.P. (“CSPEA”). Hugh Stacey, Managing Director, Asia led Augentius’ involvement and was supported by, Will Fung (Associate Director, Augentius, Singapore).

Hugh Stacey

Augentius, has been working with AGCA since early 2011, and supported the team throughout the transaction.

The challenge was to ensure that all the accounting issues during the transition were dealt with in a practical and timely manner. This was very successfully achieved, allowing for the smooth take-over of the portfolio by AGCA.

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l Chinalco Mining Corporation International raised about $397 million in an initial public offering in Hong Kong, two people with knowledge of the matter said.

CREDIT SUISSE

Hugh Stacey commented,

It was fantastic to work so closely along-side such an experienced team and to achieve a successful conclusion to the transaction. Leading Walkers was Laura Rogers, Senior Counsel at their Singapore office.

“Walkers acted as Cayman Islands Counsel to Asia Growth Capital Advisors in connection with the HarbourVest led acquisition of a portfolio of private equity investments in Asia from Laura Rogers Credit Suisse, its affiliates and other investors in Credit Suisse Private Equity Asia Partners, L.P. This was Walkers’ first appointment as Cayman Islands counsel for Asia Growth Capital Advisors” she commented. She added “The transaction involved complicated legal issues, however the parties worked together to facilitate a smooth closing. We are very pleased to have the opportunity to act for Asia Growth Capital Advisors and we look forward to working together with the Asia Growth Capital team in the future.”

ASIA GROWTH CAPITAL ADVISORS ACQUIRES PORTFOLIO OF INVESTMENTS FROM CREDIT SUISSE

l Normet Group Oy has acquired the shares in Dynamic Rock Support AS in Norway. The acquisition broadens Normet’s offering for rock reinforcement with the new generation, energy absorbent D-Bolt system. Thor Egil Five, Chairman of Dynamic Rock Support AS, explains: “DRS is a spin-out from the NTNU and was founded in 2008. It is always gratifying to see technology developed in a start-up company and then take the next step in contribution to industry and society.” The company’s main focus is on providing reliable technology that ensures safety and gives cost savings for underground mines, particularly where challenging ground conditions involve squeezing or dynamic risk management. DRS has developed the D-Bolt which is a novel rock bolt specifically designed for efficient and reliable rock reinforcement in squeezing and burst-prone strata. The patented technology was developed by Professor Charlie C. Li at NTNU. “This acquisition is a good strategic fit to Normet as it broadens our offering to underground customers and reinforces our aim to be a total solution provider especially in ground support and rock reinforcement”, Tom Melbye, President of Normet Group, says, “With the D-Bolt system, together with our sprayed concrete, grouting and injection technologies and products, we can now help our customers to make underground mines and tunnels safer, even in difficult strata and high stresses and deformations.” “We believe that Normet, which shares DRS’ focus on quality and improving the safety of underground workers is a very fitting host for DRS”, says Gisle Østereng, CEO of Dynamic Rock Support AS, “With the backing of Normet’s worldwide organization, the technology and expertise fostered by DRS will continue to impact mining and tunneling operators with world-class ground support and rock reinforcement products.” Dynamic Rock Support AS will be part of Normet’s Rock Reinforcement Business Line, managed by Mike Rispin, Senior Vice President of Normet Group. Rispin explains: “Focus will be maintained on bringing the innovative technology of the D-Bolt to our existing and new customers. Blended with our expertise in resin and cementitious based bolt grouts, and coupled with a proven track record in rock mass reinforcement via injection, we offer an unparalleled array of solution offerings.”

NORMET ACQUIRES DYNAMIC ROCK SUPPORT Legal Adviser to the Vendor

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March 2013 /

DEAL DIARY:

M&A from around the world EAST COAST AIR CHARTER

ENTRIS BANKING IT

EUREKO

l XPO Logistics announced it has acquired the operating assets of Statesville, North Carolina-based East Coast Air Charter Inc. (ECAC), a nonasset, 3PL focused on expedited air charter brokerage.

l Swisscom IT Services has acquired Entris Banking’s IT outsourcing business, which employs around 250 people. The move paves the way for the Swisscom subsidiary to set up an industrial processing centre with a view to positioning itself as an innovative and trusted business partner for banks in Switzerland. The deal is expected to be concluded by the end of March 2013.

l Aegon has announced that it will take over Eureko’s life insurance and pension business in Romania, further strengthening Aegon’s position in the Central and Eastern European region. Eureko is fully owned by Achmea.

In an interview with Logistics Management, XPO Logistics Chairman and CEO Brad Jacobs said that bringing ECAC into the fold first very well with XPO’s Express-1 division, which focuses on expedited transportation services. “We were doing a lot of business with ECAC through our expedited group, and we said we should bring it in house and start cross-selling it across all of our 59 locations,” said Jacobs. “That is what the plan is. They are a longterm partner, and we have been doing business with them for most of the time they have been in business.” The XPO top executive also cited ECAC’s proprietary technology, which he said was impressive and geared towards air charter shippers as it gives them visibility into air carriers’ selection process. Going forward, Jacobs explained that XPO’s plan for ECAC is not to keep it as a $43 million business. Instead, he said the plan is to cross-sell air charter expedited services through all 59 XPO locations, which is happening effective today. “We have customers in auto, defense, pharmaceutical, healthcare, and oil and gas, which are all big sectors that need and use domestic air charter services and now we will be able to go deeper into them,” said Jacobs. Alan Clark, Founder and Principal of The Hatteras Group, was engaged by East Coast Air Charter (ECAC) to represent the business for sale or private investment to strategic buyers and private equity groups in order to execute an exit plan. Clark has worked on several projects in the past with ECAC which Alan Clark included advisory services related to a strategic acquisition on 2010. XPO saw synergistic value in adding the expedited air charter services of ECAC to their growing business unit Express-1. The transaction was completed within 4 weeks of an indication of interest and ECAC key management will remain with XPO to integrate their offerings and grow their businesses.

XPO LOGISTICS ACQUIRES EAST COAST AIR CHARTER INC.

The move, which will allow the Swisscom subsidiary to expand its banking expertise, will see the company acquire Entris Banking’s business platform, using which 41 banks with a total balance sheet value of CHF 50 billion process their banking transactions, from payment transactions, credit business and securities trading to e-Banking. The highly standardised, multi-client enabled business platform comprises some 35 peripheral systems in addition to the Finnova banking solution. Thanks to standardisation, automation and high volumes, banks benefit from a good price-performance ratio. Processing centre of the future Swisscom IT Services is keen to connect others banks to the platform, combine additional volume and thereby further reduce processing costs. The business platform which has been acquired from Entris Banking will therefore be expanded in close collaboration with strategic partner Finnova to become a processing platform offering customers a flexible way of purchasing business services. Thanks to its open architecture, Swisscom can create an attractive offering for both retail and private banks. Alexander Gut (Managing Partner) and Marc Berger (Partner) lead the team at Gut Corporate Finance AG, representing the seller, RBA-Holding AG, a company that they have had a long-standing working relationship with. www.gutcf.ch

Following the transaction, Aegon Romania will become the country’s third largest pension provider, with approximately 650,000 pension fund members, and its life insurance portfolio will become one of the ten largest in the country. Advising Eureko (part of Achmea Group) in relation to the sale of their insurance and private pension portfolios in Romania were CMS, led by Horea Popescu and John Fitzpatrick, Partners and Co-Heads of the Corporate practice in Romania. Horea Popescu

They commented: “We have a longstanding relationship with Achmea BV and have been involved in various other transactions for them in Romania.

The transaction was a very technical one and actually involved three different parts: the transfer of a life insurance portfolio, as well as of two John Fitzpatrick separate private pension funds (pillar II and pillar III). It was one of the largest deals in the life insurance and private pensions sectors in Romania to date. The CMS team was able to overcome the challenges that this complex transaction presented through its technical expertise and exposure to similar transactions in the past. CMS has a wealth of experience in the insurance and pensions sectors. That market knowledge and expertise is of paramount importance to our clients and means we are prepared to tackle complex transactions such as this. We have an extensive track record advising insurers, reinsurers, life companies, brokers, insurance intermediaries and sector representatives (such as the ABI) across Europe and, as you would expect, we advise some of the sector’s major players. We have made it our business to know the sector inside-out and our regular secondments help us to keep this knowledge up-to-date.” The deal, which is subject to regulatory approvals in Romania, is expected to complete in the second half of 2013.

SWISSCOM IT SERVICES PRESSES AHEAD WITH INDUSTRIALISATION OF BANKING

AEGON ADDITION OF EUREKO’S LIFE AND PENSION BUSINESS

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M&A from around the world EVAC OY

GEOLID

GRAINGER

l Macquarie Lending and Tikehau Investment Management (Tikehau IM) have provided a €53 million unitranche financing to support Oaktree Capital Management’s acquisition of Evac Oy, the global leader in waste and wastewater collection and treatment solutions for the marine and building markets.

l CDC Entreprises, Hi Inov and A Plus Finance have invested in Geolid, pioneer of online communication solutions for craftsmen, small and micro businesses.

l Dutch asset management giant APG has entered the UK residential property market, acquiring part of a £350m (€416m) portfolio with local property company Grainger.

With its geographical location in six French regions (Rhône-Alps, Ile de France, Nord-Pas de Calais, PACA, Midi-Pyrénées and Aquitaine) only four years after its establishment, Geolid has achieved 4 million turnover in 2012 (a growth of 120% compared to 2011, 640% compared to 2010).

The €325bn manager said in a joint statement that it had invested £158m in a new unit trust, GRIP, to buy part of G:res1, one of Grainger’s property funds as well as an additional £9.1m in equity, resulting in a £59m commitment.

The transaction follows the launch of Macquarie Lending and Tikehau IM’s French Credit Programme in July 2012, which is designed to deliver reliable lending products to borrowers with speed, simplicity and certainty of execution. Under the French Credit Programme, Macquarie Lending and Tikehau IM will invest up to €200 million per transaction across a variety of sectors in the French mid-cap market. Florian Herold, Co-head of Macquarie Lending Europe said: “We are pleased to announce our first financing in co-operation with Tikehau. The Oaktree transaction is an excellent example of how we are able to provide innovative and flexible financing solutions to clients.” Mathieu Chabran CIO of Tikehau IM said: “This first transaction with Macquarie reinforces our common conviction that our cooperation can add significant value for our clients. We are looking forward to developing this relationship in the long term as our joint pipeline grows.” Macquarie Lending provides finance to corporates and selectively invests in debt trading in the secondary debt markets. Since 2009, Macquarie Lending has made over $A18 billion of new lending commitments globally, with over €2.7 billion currently committed in Europe. Tikehau IM currently manages over €1.3 billion of assets focused on credit strategies. On its Private Debt business, Tikehau IM offers a wide range of private financing solutions from unitranche to preferred equity. Leading the deal at Estin & Co. were Marco Maeder, Vice President and Frederic Milgrom, Vice President.

MACQUARIE AND TIKEHAU IM LEAD ACQUISITION FINANCING FOR EVAC OY

“We have the ambition to become a leader of local communication on the Internet,” says Gautier Cassagnau, President and co-founder of Geolid. “To achieve our goal, we will recruit more than 100 people in 2013.” “In a market undergoing reconstruction with the decline of historical actors, Geolid offers highly innovative and effective solutions for small businesses. We firmly believe that Geolid has the know-how to become a major player,” says Valerie Gombart, Hi Inov CEO. “Through this investment, we now wish to support long-term growth and more jobs in the region,” added Xavier Deleplace Director of investment at CDC Entreprises. “We are pleased to reaffirm our commitment to Geolid, which has already demonstrated the ability to generate rapid and healthy growth,” said Jean-Michel Pimont, Managing Partner of A Plus Finance.

Christophe Combier

Christophe Combier, Partner and co-founder at 2cfinance commented: “we represented CDC Entreprises who have several times called us to perform financial due diligence in the frame of an investment. The main challenge we faced on this deal was meeting the time schedule given to us.”

ccombier@2cfinance.net www.2cfinance.net

GEOLID RAISES 3 MILLION EUROS TO STRENGTHEN ITS LEAD TECHNOLOGY Accounting and Financial Audit

Commercial Due Diligence Provider

2CFinance

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GRIP will be granted first right of refusal over a set number of properties, in line with its Greater London-centric investment criteria and will continue to be managed by Grainger. The unit trust will pay management fees to the company it said were “broadly in line” with market rates, with the potential to earn additional performance-related fees. Robert-Jan Foortse, APG’s head of European real estate, said the asset manager had a long history of investing in residential property, although its exposure had largely been gained from Dutch holdings to date. “Prospects for the Greater London rental market are promising, and we are enthusiastic about adding this exposure to our portfolio,” he said, adding that the manager had been a shareholder in Grainger for several years prior to the current partnership. “This transaction demonstrates our willingness and aptitude for working with investment managers to modernise, recapitalise and extend the life of existing vehicles owning good quality real estate,” he said. Grainger’s investment in GRIP will be a pre-requisite for its acting as the portfolio’s property manager. However, chief executive Andrew Cunningham highlighted the long-term investment opportunities that came through partnering with the Dutch pension manager. “We see APG’s commitment as a clear acknowledgement of UK residential property’s growing appeal as an institutional asset class,” he said.

APG ACQUIRES PART OF A £350M (€416M) PORTFOLIO WITH GRAINGER Independent Valuation Adviser to Vendors

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March 2013 /

DEAL DIARY:

M&A from around the world GREENSTAR

HARRISON MURRAY

HELLAS SAT

l Waste Management, Inc. (NYSE: WM) has announced that its subsidiary, WM Recycle America, L.L.C., has acquired Greenstar, LLC from NTR plc. The acquisition will provide Waste Management’s customers with greater access to recycling solutions by adding the operations of one of the nation’s largest private recyclers to Waste Management’s already extensive recycling network.

l The Nottingham Building Society has announced that it has acquired East Midlands estate agents Harrison Murray as part of its long term strategy.

l Arabsat is pleased to announce that it has today signed an agreement with the Hellenic Telecommunication Organization (”OTE”), one of the largest telecom groups in South Eastern Europe, for the acquisition of its 99.05% equity participation in Hellas-Sat Consortium Ltd (“Hellas Sat”).

“Acquiring Greenstar advances our growth and transformation strategy to extract more value from the material that we manage. We have a stated goal of managing 20 million tons of recyclable material by 2020. With these assets, we have the capacity to achieve almost three quarters of that goal and extend our ability to provide the recycling services that customers want,” said William Caesar, President of Waste Management Recycle America and Organic Growth. Caesar concluded, “The Greenstar material recovery facilities complement our existing recycling assets, and their managed services business will expand our brokerage and national account service offerings. We are excited about adding Greenstar’s team to ours and continuing to provide exceptional service to our customers as we execute our transformation strategy.” Greentech Capital Advisors advised NTR plc on the sale of Greenstar, LLC to WM Recycle America, LLC a subsidiary of Waste Management. The Greentech team, led by Partner Heather Smith, worked closely with NTR and Greenstar in all phases of an extensive due diligence process. Greentech applied its negotiation and structuring expertise to help NTR secure an upfront payment of $180 million for Greenstar with upside potential to capture additional value through earnout payments of up to $40 million in the future. The sale enabled NTR to unlock the value of the Greenstar platform for shareholders and to complete its planned exit from the sustainable waste management sector. www.greentechcapitaladvisors.com heather@greentechcapital.com

WASTE MANAGEMENT ACQUISITION OF GREENSTAR, LLC FROM NTR PLC Financial Adviser to the Seller

David Marlow, Chief Executive of The Nottingham, said, “Following a period of strong performance by the society in difficult market conditions, this acquisition is part of our strategy to grow both our profile and reach. This is good news for local customers and staff of both organisations, as we combine our complementary capabilities and locations to improve the range of great value products and services on offer through an enlarged network. This move will allow us to strengthen our estate agency offering, for example giving us an ability to offer lettings for the first time, whilst also providing opportunities for us to introduce building society services in a number of new locations, providing more choice for our increasing membership and attracting new customers from further afield.” Nick Salmon, Managing Director of Harrison Murray Ltd, added, “We are extremely excited to become part of The Nottingham family. Like The Nottingham, we have performed well in a tough market and we believe this move strengthens our position further. There are strong synergies from becoming part of a larger group with complementary skills, which undoubtedly will bring new opportunities and stronger choice for customers. The acquisition will make the new group the largest independently owned estate agency in the East Midlands with further presence in East England and the Home Counties. The new estate agency group with 32 branches will truly be a force to be reckoned with in our chosen markets.” The Directors of Harrison Murray Ltd were advised by David Hope, Senior Partner at Clear & Lane Chartered Accountants in Leicester. “Having acted for the Company since it was acquired by David Collins & Simon James in 1996, from the Alliance & Leicester Building Society, it is very pleasing to David Hope see the successful development of the business and the ultimate reward being achieved by the owners”. Clear & Lane were able to assist in devising a deal structure that suited both parties.

The share purchase agreement was signed upon an aggregate consideration of €208 million, representing the 99.05% of an enterprise value of Hellas-Sat, amounting to €157 million, which corresponds to 7 times the EBITDA of Hellas-Sat for 2012 and the cash held by Hellas-Sat on the date of completion of the transaction, estimated at €53.4 million. Alexandros Economou; Partner, Corporate/Commercial Department at CD&co. commented: “we represented the Seller, Hellenic Telecommunications Organisation S.A. (OTE) whom we have had a long-standing relationship with. Time was of the essence A. Economou and time-constrains were resolved through the effort and cooperation of both the legal teams and the parties themselves.” IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control over information. Through the IntraLinks platform, companies, partners, and third parties can share and work together on even the most sensitive documents — while maintaining compliance with policies that mitigate corporate and regulatory risk. IntraLinks has more than 15 years of experience, and a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion. IntraLinks is the proven provider of enterprise strength collaboration solutions, and is headquartered in New York City. In addition the company operates eleven offices on four continents. www.demetriades.com Alexandros.Economou@demetriades.com

THE NOTTINGHAM BUILDING SOCIETY ACQUISITION OF HARRISON MURRAY

ARABSAT ACQUIRES MAJORITY STAKE IN HELLAS-SAT IN A €208M DEAL

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90 / March 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world KARSTADT DEPARTMENT STORE

KAZAKH KMG EP

KEY TRUST COMPANY

l Global alternative investment manager The Carlyle Group (‘Carlyle’) announces that it has completed the acquisition of a 17,000 m² department store, operated by leading German retailer Karstadt, in the city of Esslingen in southern Germany.

l BUDAPEST (Portfolio.hu) – Hungarian oil and gas group MOL has on Thursday successfully closed a previously announced deal with JSC Kazmunaigas Exploration and Production (KMG EP) for the acquisition of 49% of shares in JSC Karpovskiy Severniy, holder of the North Karpovsky exploration license in Kazakhstan, the company announced in a statement on the website of the Budapest Stock Exchange (BSE) on Friday.

l Jersey based trust company, Hawksford, has acquired trust and corporate services provider, Key Trust. The acquisition forms a part of the company’s growth strategy and follows its recent expansion in Jersey, the Middle East and Switzerland.

“We are pleased to announce that we can commence our work in another exploration block in Kazakhstan, in a country where we have already achieved exploration successes in the neighbouring Fedorovsky block,” commented József Molnár, Chief Executive Officer of MOL.

Baker & Partners carried out a client due diligence review on Key Trust for Hawksford, which involved viewing a sample of Key Trust’s client files in order to understand client backgrounds, the client risk ratings process and compliance with the AML/CFT regime in Jersey. The process involved a review of files and interviews with senior management. The objective was to gain an understanding of the level of AML/CFT and associated regulatory risk attached to the client base.”

The property was sold by the Highstreet consortium (Highstreet A Portfolio GbR) and the Stuttgart-based Nanz Group. The transaction was carried out in joint venture with Frankfurt based developer PBG and retail experts 3W Immobilien. Carlyle has made the investment on behalf of its CEREP III fund. The investors plan to undertake a refurbishment of the existing building, working closely with Karstadt to minimize disruption, and also to expand the retail offer by 11,000 m² and create new residential accommodation on the site, which is prominently located in Esslingen, on a prime pitch. The total investment in the site, including the acquisition and development costs, will be approximately €70 million, with financing secured from Kreissparkasse Esslingen-Nürtingen. Karstadt Warenhaus AG is a long term tenant of the site, with 13 years remaining on its lease. The letting agent for the new retail space is Colliers International in Stuttgart.

‘‘

“We hope that the already on-going first and the second exploration wells on the North Karpovsky block will bring us similar successes. We are proud to join hands with KMG EP, a strong, well-known partner from the Fedorovsky joint venture.”

Jouke Brada

Commenting on the scheme, Alexander Strassburger at The Carlyle Group, said:

This acquisition and new joint venture with two well-respected local partners represents an exciting opportunity to create value for our investors, as we work alongside the existing tenant and the city to maximize the potential of the site. I look forward to working with our partners to progress the refurbishment and creation of new living space, and bring in new retail brands to the city.

‘‘

THE CARLYLE GROUP ACQUIRES A KARSTADT DEPARTMENT STORE IN ESSLINGEN (DE)

The transaction team of Brada LLP led by Jouke Brada (senior partner) and Gerben den Hertog (partner) advised together with Morgan Lewis & Bockius LLP, MOL Hungarian Oil and Gas (MOL) on the acquisition of a 49% stake from KazMunaiGas in the Dutch joint venture company KS EP Investments and its Kazakh subsidiary Karpovskiy Severniy, which owns the North Karpovsky exploration licence in Kazakhstan. The joint venture aims to explore, drill and exploit the oil and gas field.

Gerben den Hertog

Brada LLP has a long-standing working relationship with MOL.

The deal was, after nine months of negotiations, closed mid November 2012.

MOL ACQUISITION OF 49% OF SHARES IN JSC KARPOVSKIY SEVERNIY

Ed Shorrock, director of regulatory services at Baker & Partners commented: “Baker & Partners represented Hawksford with whom we have an exsisiting working relationship providing similar regulatory due diligence services AML/ CFT training and general regulatory advice in Jersey.

As professional insurance advisors to Hawksford since 2009 Arthur J. Gallagher International was engaged by both parties to provide a robust insurance solution covering any past and future liabilities. The Gallagher team, led by Toby Shackcloth & Alex Phillips - Client Executives to Hawksford, faced the challenge of sourcing insurance market capacity for run-off insurance over and above the existing level of cover maintained by the vendor and improving policy terms and conditions to eradicate potential issues identified in an earlier due diligence exercise. Gallagher’s expertise in this area meant they delivered a solution that allowed Hawksford to close the deal with confidence. Led by Paul Wilson, a partner in the Corporate department and assisted by Chantelle Foster, an associate in the Corporate department, Martin Le Boutillier, a partner in the Property Department and David Dorgan, a senior associate in the Fiduciary department, Collas Crill acted for the sellers of the Key Trust group. Hogan Lovells International LLP advised its long-standing client, Hawksford Holdings Limited on the acquisition of trust and corporate services provider Key Trust. The Hogan Lovells team was led by co-head of private equity, Alan Greenough and supported by Of Counsel, Amanda Onions and associate, Suzy Penney. Obrar were commissioned by Hawksford International to conduct a full technology audit of the Key Trust technical infrastructure and applications. The assignment was lead by David Hopkins who is a senior director within the Obrar business.

HAWKSFORD ACQUIRES KEY TRUST Risk and Insurance Due Diligence Provider

Debt Providers

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92 / March 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world LUX ASSURE

MURRAY & ROBERTS

l LUX is excited to announce that we have received £3.25m in investment to transform the company from a technology development business to a service provider for the oil and gas industry.

l Murray & Roberts has announced the disposal of the business of Union Carriage & Wagon Company (“UCW”) to the CTE Consortium, a consortium including CTE Investments (Pty) Ltd (“Commuter Transport Engineering”) or (“CTE”) and the Industrial Development Corporation (“IDC”), for an undisclosed amount.

Laurence Ormerod, Chairman, said; “This major investment will allow LUX to capitalise on the excellent chemical monitoring products developed by the company. CoMic™ and OMMICA™ products have been very well received by the industry so this seems to be an appropriate time to dedicate the company to growing sales, both within the UK and overseas. We are delighted to have ConocoPhillips and Statoil as new shareholders.” Commenting on the business angel investment, Andy Laing, Investment Executive at Archangels said: “This has been a welcome opportunity for Archangel to support LUX Assure’s continued growth and to demonstrate that business angel groups can successfully co-invest with venture capitalist firms. This level of investment, coupled with the skills and experience across the shareholder base, substantially increases the likelihood of commercial success for LUX and strong financial returns for investors.” Martin Quinn and Mairi-Claire Dougan both partners at Edinburgh Corporate Solicitors (“ECS”) were delighted to act for Statoil Technology Invest AS and ConocoPhillips Company in this matter. They commented: “We have a long standing relationship with the team at Statoil Technology Invest AS and were pleased to add ConocoPhillips Company as a new client to ECS.” Maclay Murray & Spens LLP act for Scottish Enterprise of the Scottish Investment Bank. Kimberley Goh, Senior Solicitor in the Corporate department at MMS, who regularly advises SIB on its investments into Scottish companies, particularly in the Technology, Life Sciences, Renewables and Oil and Gas sectors, led on the transaction for SIB, which involved negotiating and completing a total investment of £3.25m by the Scottish Enterprise - Scottish Venture Fund alongside funding from regular co-investment syndicate partner Archangel Informal Investment Limited and private funding from Statoil Technology Invest AS and ConocoPhilips Company into Lux Innovate Limited. http://www.mms.co.uk/VerySmartPeople/FindSmartPeople/Kimberley-Goh.aspx?PeopleAZCategory=G&dosea rch=y&author=KZG

£3.25M INVESTED IN LUX ASSURE

Commuter Transport Engineering was established in 1999 with the primary aim of refurbishing commuter rail coaches and is the first black woman-owned refurbishment company to enter the South African rail industry. The company’s operating divisions include CTE Touws River, CTE Durban, CTE Engineering Services and CTE Projects with operations in Durban, Cape Town and Touws River. TGR attorneys acted as Legal Advisors to the Purchaser (a consortium made up of the industrial development corporation of South Africa Limited, commuter transport engineering investments proprietary limited (CTE) and S Investments Proprietary Limited). our role involved putting together the consortium agreements, drafting, reviewing and negotiating the acquisition agreements and assisting with financing aspects of the transaction. Sandanathi Gwina (director and project leader), assisted by Matodzi Ratshimbilani (director) David Wanda (senior associate) and Busi Mbokazi (candidate attorney) led the team at TGR acting on behalf of the purchaser. Commenting on the deal S. Gwina they said: “we have a long-standing relationship with the industrial development corporation of south africa limited.” The main challenge we faced was trying to get a deal that works for all parties under extreme time pressures. we had to spend nights and weekends turning around documents quickly to make sure that the timelines were met.” They added: “TGR attorneys is excited to have been part of the creation of this new rail giant.”

NIHOT RECYCLING TECHNOLOGY l Eugene, Oregon-based Bulk Handling Systems (BHS) has acquired Nihot Recycling Technology BV (Nihot), an Amsterdam- based company that designs and manufactures air sorting and separation equipment for the solid waste and recycling industries, among others. The team at Kennedy Van der Laan was originally in the LOI phase lead by Louis Bouchez, partner in the Corporate/ M&A department, but as from the start of due diligence, through the SPA negotiations and up to Closing the lead was taken over by Hans van Ramshorst, also Hans van Ramshorst partner in the Corporate/M&A team of Kennedy Van der Laan. They continued: “We were representing the Buyer, Bulk Handling Systems. For BHS this was their first acquisition in Europe and so for us it was the first opportunity to work for this client.” “Because the Target was part of a larger group of the Seller, there was a relatively large number of disentanglement issues, varying form group financing with banks and related security to continued use of computer software. By taking an active role on behalf of Byer we were able to find efficient solutions for the release of security and continuation of certain services.” They concluded: “For BHS this acquisition creates a welcome addition to existing product lines and a solid base for further expansion into Europe.” www.kvdl.nl hans.van.ramshorst@kvdl.nl Mazars was requested by Bulk Handling Systems to advise them on the Dutch tax aspects of the acquisition. The Dutch tax team was led by Frederik Habers, Director Tax (Mazars the Netherlands). Other members of the team were Erik Stroeve (responsible partner). Commenting on the deal they said: “The challenge was to structure the acquisition in the most tax efficient way. Not only the Dutch tax aspects, but also the US tax consequences were taken into account. In this respect, Mazars closely worked with its Praxity member firm Moss Adams LLP, to give an integrated advice to Bulk Handling Services.” www.mazars.nl frederik.habers@mazars.nl

CTE CONSORTIUM ACQUIRES UNION CARRIAGE & WAGON FROM MURRAY & ROBERTS

BHS ACQUIRES NIHOT RECYCLING TECHNOLOGY BV

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March 2013 /

DEAL DIARY:

M&A from around the world OCB

ORASCOM

OTI GREENTECH

l Gulf Capital, a leading private equity firm in the Middle East, said it had invested in a significant majority stake of OCB Oilfield Services, a major oil and gas crew supply and related logistics provider in the Middle East, South East Asia and Africa.

l Allen & Overy (A&O) and Debevoise & Plimpton are among a raft of law firms leading on the $9bn (£5.7bn) public takeover offer of Orascom Construction Industries (OCI), in a deal backed by Microsoft co-founder Bill Gates.

OCB is specialized in supplying rig crews to offshore oil and gas drilling companies, including in the Kingdom of Saudi Arabia, Qatar and the the UAE.

The deal has seen the Egyptian construction and fertiliser group secure $2bn (£1.3bn) in investment, including $1bn (£640m) from US investors led by Gates’ holding company, Cascade Investment.

l OTI Greentech Group AG, a leading provider of sustainable cleantech solutions successfully closed a round of expansion financing, raising a total of CHF 4 million (EUR 3.3 million). The funding was led by Wermuth Asset Management’s Green Gateway Fund, which invests in best-in-class energy and resource efficiency growth companies throughout Europe. The funding marks a solid base for the long-term expansion plans of the company. In total, the financial commitment of Green Gateway Fund is CHF 7.2 million. The second tranche is expected in 2013.

Deloitte Corporate Finance Limited (“DCFL”) assisted Gulf Capital on their majority acquisition of the trade and assets of the OCB Oilfield Services FZCO (“OCB”) and Offshore International Management Private Limited (“OIM”). DCFL provided financial and tax due diligence, as well as tax structuring and sale and purchase agreement support on the deal. The transaction was led by Richard Clarke, Managing Director and Raj Mehta, Director, in Deloitte’s Middle East Transaction Services practice having previously advised Gulf Capital on their acquisition of Reach Group and Sakr Energy Solutions. DCFL worked alongside both the vendor and Gulf Capital to help facilitate the negotiation process, which ultimately led to the successful closing of the deal. Ravi Chidambaram, President, TC Capital commented: “We are very pleased to have advised OCB Oilfield Services in the successful completion of Gulf Capital’s investment in company. Elliott Setiawan, an Executive Director in TC Capital, and myself have been Ravi Chidambaram working closely with both Vaibhav Kanade and Richard Dallas for the past year to complete this transaction. We feel that TC Capital played a significant role in negotiating and developing a transaction structure that effectively addresses both Vaibhav Kanade’s and Gulf Capital’s transaction objectives. Beyond just the numbers, a successful M&A transaction also requires a strong cultural fit between the two principals, which we strongly believe has been realized. We are confident that the partnership between Vabhav Kanade and Gulf Capital will yield great success going forward.” ravi@tccapital.com http://www.tccapital.com

A&O advised OCI NV on the transaction with a team led by Middle East head of corporate Andrew Schoorlemmer (pictured), which also comprised Abu Dhabi corporate partner Nick Stuart, Amsterdam corporate partners Tim Stevens and Robert Jan Lijdsman, London capital markets partner Robert Williams and US head of M&A Eric Shube. Hashem Law led by Yasser Hashem, Managing Partner represented The Funding Banks He commented: “There were excessive challenges many of which were due to the complexity of the transaction itself. However, such were handled and resolved by our vast experience, having represented clients in all major takeover bids in Egypt over the past few years.” www.Hashemlaw.com Sarie-Eldin & Partners (SE&P) acted as sole Egyptian counsel for OCI N.V., a publicly traded company listed on Amsterdam EuroNext, in relation to its USD 9.0 billion Exchange offer to acquire the outstanding capital of Egypt’s Orascom Construction Industries S.A.E., a company listed on the Egyptian Exchange and London Stock Exchange. The offering included the GDRs listed and traded on the LSE and the ADRs listed on NYSE. OCI N.V is in process of obtaining approvals for the Egyptian tender offer. The working team at SE&P comprised Dr. Hani Sarie-Eldin (Managing PartDr. Hani Sarie-Eldin ner), Motaz El Dreny (Partner), and Ahmed Farahat (Associate).

GULF CAPITAL TAKES KEY STAKE IN OCB OILFIELD SERVICES

A&O AND DEBEVOISE ADVISE ON $9BN FOREIGN DIRECT INVESTMENT INTO EGYPT

Financial Due Diligence Provider & Tax Adviser

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Mountain Club AG advised OTI Greentech in respect of this funding round. They were led by Peter E. Braun (49). Peter is the Co-Founder and CEO of Mountain Club AG, based in St. Gallen, Switzerland. (www.mountain-club.ag, pb@ Peter E. Braun mountain-partners.ch) Mountain Club is an exclusive network of qualified, entrepreneurial investors looking for disruptive technology investment opportunities with high growth potential. Mountain Club developed and operates a proprietary software platform to provide the investment targets to their clients in a uniquely convenient way. Through it’s corporate finance arm, Mountain Club helps later stage transactions, in particular with their global expansion plans. Mr. Braun said: “Trust is the key ingredient for success. We have established long-term relationships with all parties we represent.” Commenting on the deal he explained: “The process went for over one year. We advised the company in the price building and the overall structure of the deal. But we also introduced the OTI Greentech AG to important customers, particularly in the Middle East. From hands-on help in completing a power point investor deck to strategic advice on the legal negotiations, we’re focussed on getting the job done.”

OTI GREENTECH COMPLETES EXPANSION FUNDING WITH GREEN GATEWAY FUND Financial Adviser to OTI Greentech & Virtual Data Room Provider

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94 / March 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

M&A from around the world projectiondesign®

RIDGEWIND

l Barco, the Belgium-headquartered global leader in digital visualization, announced today that it has acquired 61% of the shares of projectiondesign®, a Norway-based leader in projection technology, from private equity fund Herkules Capital. The remaining shares of projectiondesign® are held by minority shareholders.

l RidgeWind is delighted to announce that we are joining forces with Blue Energy, one of the UK’s leading developers of renewable energy infrastructure.

The combination of Barco and projectiondesign® creates a market leader in projection solutions for both large- and mid-venue markets. The transaction advances Barco’s strategy to expand into the mid-segment of its target markets and to strengthen its number one position in high-performance projection technology. Projectiondesign®: state-of-the-art projection technology Projectiondesign® develops and manufactures compact projectors for a variety of professional markets including training and simulation, visitor attractions (museums, theme parks), scientific visualization, collaboration rooms (Corporate AV) and control rooms. The compact projectors are equipped with high-quality optics, high resolution and LED illumination, and feature quiet operation. The company custom-designs and develops all optics, hardware, software and industrial design for each projector model in-house. Founded in 2001, projectiondesign® is headquartered in Fredrikstad, Norway, and has 17 international offices. Projectiondesign® employs about 200 people and achieved sales of approximately €57 million in 2011. Increased market share in the mid-venue market “Projectiondesign® is a very well respected leader for projectors in the below 10k lumens range for professional markets. The company enjoys an enviable reputation for combining innovative technology with leading design,” comments Eric Van Zele, Barco’s CEO and President. “This investment clearly underscores our determination to pursue global growth in all mid-segment markets. With projectiondesign®, we will expand our portfolio to offer state-of-the-art solutions for the Simulation, Virtual Reality and Corporate AV markets as we continue to leverage our global sales coverage and our channels in Asia and Latin America in particular.”

BARCO ACQUIRES MAJORITY SHARE IN NORWAY’S PROJECTIONDESIGN®

Blue Energy expects to invest £250million to acquire RidgeWind and build its development portfolio. The RidgeWind team will be integrated into Blue Energy. Development of RidgeWind’s existing projects will continue uninterrupted and new projects will be developed under the Blue Energy banner. Collectively the members of the RidgeWind and Blue Energy teams have over 80 years of energy development experience. Blue Energy CEO Chris Dean said: “This transaction is an important milestone for the growth of Blue Energy and demonstrates our strong commitment to the UK onshore wind sector. Blue Energy has ambitious growth plans and RidgeWind gives us a strong portfolio and an experienced development team who have pioneered innovative community benefit schemes, which are so important in winning local support for wind farms.” Colville Partners acted as financial adviser to Blue Energy offering valuation and transaction support and arranging part of the acquisition funding, the team was led by Thijs Bauer, Managing Partner. Thijs Bauer

Mr. Bauer commented: “We represented Blue Energy with whom we have been working for a year” White & Company, led by Ben White (Partner) acted as the lead corporate financier, accountant and tax adviser to Blue Energy on the transaction. The deal involved a complex acquisition structure, which White & Company assisted to formulate to meet the requirements of the purchaser, financiers and vendor. BLUE ENERGY ACQUIRES RIDGEWIND

SAVANNAH SUGAR COMPANY l Dangote Sugar Refinery (DSR) Plc, a publicly quoted subsidiary of Dangote Industries Limited (DIL) has formally acquired 95 per cent of the shares of Savannah Sugar Company Limited (SSC). The transaction, according to DSR will enhance its production capacity and boost profit. Vetiva Capital Management Limited (Vetiva) acted as Financial/Lead Transaction Adviser on the transaction with Chuka Eseka, Managing Director/CEO leading the transaction team. Vetiva was primarily responsible for advising on the structure, modality, planning and implementation of the transaction; preparing a financial model; determining an appropriate valuation for the shares of Savannah Sugar and recommending a valuation/ purchase price range; facilitating and obtaining relevant regulatory approvals; and ensuring seamless execution of the transaction. Chuka Eseka

Vetiva has remained the trusted adviser to Dangote Group providing strategic advisory services for its various businesses across sectors and industries. Banwo & Ighodalo (B&I) has a longstanding relationship with the Dangote Group. and has advised on various aspects of its group wide restructuring. B&I acted as legal advisers to DIL and SSC on the transaction, with responsibility for managing the due diligence Asue Ighodalo process, drafting all transaction documents, making requisite corporate filings and facilitating and ensuring general compliance with due process and regulatory requirements. Asue Ighodalo, a partner in the firm and the head of the firm’s Corporate Securities and Finance Practice Group, led the transaction team. In the course of the transaction, it was necessary to secure the buy in of the Bureau of Public Enterprises (BPE) to allow the transaction to be deemed an indirect listing of SSC. DIL had originally acquired the SSC shares from the BPE in 2003 under the Nigerian Federal Government privatization programme, which mandated the subsequent listing of SSC but due to the depressed state of the Nigerian capital market, SSC had ultimately not been listed.

DSR ACQUIRES 95% STAKE IN SAVANNAH SUGAR COMPANY

Financial Adviser to the Purchaser

Colville Partners

Legal Adviser to Vendor

Financial Due Diligence Provider

Legal Adviser to the Purchaser & Tax Adviser

White & Co. Legal Adviser to the Purchaser

Transaction/Lead Adviser

Legal Adviser to the Vendor & Vendor Due Diligence Provider

Financial Adviser to the Vendor

RBC

Legal Adviser to Purchaser

Virtual Data Room Provider

ACQUISITION INTERNATIONAL

March 2013 /

DEAL DIARY:

M&A from around the world SEATAINERS GROUP A/S

SERABI GOLD PLC

SKY DEUTSCHLAND

l The services portfolio of Seatainers Group include warehousing/logistics solutions and road, air and sea freight services and the acquisition will thus add value to all DSV Divisions. Seatainers Group specialises in project logistics and performs large and complex transport projects, e.g., for the renewable energy industry.

l Serabi Gold plc (“Serabi”), the AIM and TSX listed gold exploration and development company, has raised £16.2 million by a placement of Ordinary Shares in order to finance the development and start-up of underground mining operations at its Palito gold mine.

l News Corporation today announced it has reached an agreement with Sky Deutschland AG (“Sky Deutschland”) and its new bank syndicate to support both a new financing structure and the issuance of €438 million of new equity.

The agreement is subject to approval by the competition authorities. The parties have agreed not to disclose the transaction price. The Ernst & Young team provided financial and tax due diligence to DSV with a focus on the significant value drivers and risks in the financial development of the company. Industry expertise was leveraged in bringing relevant insights to DSV in making their decision. The Ernst & Young team was led by Jakob Fogt leader of transaction services in Denmark. The transaction concerns the markets for freight forwarding by road, sea and air and for general contract logistics services. Plesner represented the acquirer (DSV Air & Sea Holding A/S) in carrying out due diligence and is representing it in obtaining the relevant merger control clearances in the transaction. Plesner has a long-standing working relationship with the DSV Group. Plesner’s team in the transaction was led by Esben Kjær and Gitte Holtsø, who are both partners at Plesner.

DSV ACQUIRES SEATAINERS GROUP A/S

Fratelli Investments Limited (“Fratelli”) had agreed to underwrite this placement of Ordinary Shares and therefore, in order to ensure that Fratelli was not required to make a mandatory offer for the shares in Serabi under the Takeover Code, the approval of The Takeover Panel and the independent shareholders of Serabi was required (a whitewash procedure under the Takeover Code). As a result of the placement, Fratelli now controls approximately 51.1% of the Ordinary Shares. Fratelli also provided an interim secured short term loan facility of US$6 million to the Company to provide additional working capital to the Company and to enable the Company to commence the necessary mine development and plant refurbishment works.

“We have always believed in Sky Deutschland’s ability to transform the pay TV experience in Germany and Austria and this new financing structure further validates that longstanding commitment,” said Chase Carey, President and Chief Operating Officer, News Corporation. “News Corporation’s continued investment underscores the value we see in Sky Deutschland and the significant market opportunities it faces, and reflects our confidence in its management team and their strategies for growth.”

Corporate partner Richard Lane, who led the Farrer & Co team on this transaction representing Serabi, commented:

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We very much value our long standing relationship with Serabi, having advised the company on a number of matters since its admission to AIM in 2005. This transaction clearly represents another positive step in the company’s return to gold production and demonstrates Serabi’s ability to attract investment to allow it to pursue its corporate strategy.

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Seatainers Group has 180 employees, of which 150 are employed in Denmark. Seatainers Group has offices across the globe in the USA, China, Singapore, Australia and Latvia. The activities of Seatainers Group are expected to generate annual revenue of approx. DKK 1.0 billion, the project activities expecting to account for 60% of revenue.

The new bank financing, which will be guaranteed by News Corporation, will replace Sky Deutschland’s current bank debt facilities. Additionally, News Corporation will guarantee certain rights payments associated with Sky Deutschland’s Bundesliga broadcasting license and support the raising of additional funds of €438 million (which includes the outstanding €144 million of equity under the capital measures announced by Sky Deutschland on February 2, 2012) to support Sky Deutschland on the continuing execution of its strategy.

Karl Bergbauer

Karl Bergbauer, MD, Head of Media led the team at Unicredit Group. He commented: “UniCredit has always been a core bank to Sky Deutschland with a long-lasting relationship since 1993. UniCredit had inter alia leading roles in all ECM transactions of Premiere/ Sky Deutschland.”

He continued: “It was a complex transaction with a tight timetable considering equity and debt measures. High qualified and experienced teams ensured efficient processes internally and all involved parties worked closely and very professionally with each other in this multi-product and cross-border transaction.” He concluded: “UniCredit is pleased to be once again one of Sky Deutschland’s financing partners of choice and to close the first transaction with Sky Deutschland’s main shareholder News Corporation.” karl.bergbauer@unicreditgroup.de www.unicreditgroup.eu

FRATELLI INVESTMENTS LIMITED FILES EARLY WARNING REPORT

NEWS CORPORATION INVESTMENT IN SKY DEUTSCHLAND AG Debt Provider

Financial and Tax Due Diligence Provider

Legal Adviser to Serabi

Legal Adviser to the Purchaser

Legal Adviser to Fratelli

Sole Financial Adviser to Sky Deutschland

Legal Adviser to the Purchaser

Financial Adviser to Serabi Legal Adviser to the Vendor

ACQUISITION INTERNATIONAL

BEAUMONT CORNISH LIMITED

Sole Financial Adviser to News Corp

Financial Adviser’s to the Vendor

March 2013 /

DEAL DIARY:

M&A from around the world ST GILGEN INTL SCHOOL

StGIS is one of Europe’s leading international schools dedicated to its mission of offering a balanced and challenging international education to motivated and talented students. Equipped with a world-class faculty and an industry leading student to teacher ratio (4:1), the school is committed to academic excellence, guaranteeing small class sizes and a highly personalised approach to teaching. The school offers a diverse and rigorous curriculum, with all grade 11 and 12 students undertaking the International Baccalaureate (“IB”) diploma. Academic courses are taught in English, with German, Spanish and other languages on offer. Results for the IB are amongst the highest in Europe and students are made offers by top universities around the world including Harvard, Stanford, Yale, Columbia, Oxford and Cambridge. PwC supported H.I.G. Capital by providing Financial and Tax Due Diligence as well as Real Estate Valuation services.

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Troax is a market leader in its niche, with flexible, high quality solutions and very satisfied customers. We see an exciting opportunity to work together with management to further internationalize and grow its operations, says Partner Peter Möller from FSN Capital.

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Troax’s CEO, Thomas Widstrand, comments on the proposed acquisition by FSN Capital: We look forward to working with FSN Capital and leveraging their experience in taking Nordic companies outside their borders. Troax is already an international company, but further internationalisation requires a different skill set, and here FSN Capital has a strong track record, he says.

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H.I.G. is partnering with StGIS’s founder, Dipl. Ing. Alexander Serda, a renowned Austrian Architect and entrepreneur, who will retain an ownership stake in the school. StGIS is the founding school of the Academos Group, a newly established platform through which H.I.G. intends to establish a group of premium international schools around the world. The transaction is subject to approval by the relevant regulatory authorities.

l FSN Capital has signed an agreement to acquire Troax Group AB from Accent Equity. Troax produces machine safety solutions for automated and robotized processes as well as solutions for the warehousing and logistics sector including partition wall and collapse protection systems.

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l H.I.G. Europe (“H.I.G.”), the European arm of global private equity firm H.I.G. Capital, today announced that it has completed an investment into St. Gilgen International School (“StGIS”), a prestigious, international day and boarding school for grades 4 to 12, located in the lakeside town of St. Gilgen, near Salzburg, Austria.

TROAX

Troax is today present in 26 countries around the globe, with 6 distribution hubs enabling rapid delivery to the customer.

The PwC team comprised: Overall project responsibility: Frédéric Vilain, Partner in Transaction Services. Financial Due Diligence: Alexander Horn, Manager and Anna Kohlhaus, Senior Consultant. Tax Due Diligence: Bernd Hofmann, Tax Partner; Rupert Wiesinger, M&A Tax Director and Alexander Wagner, Senior Manager. Real Estate Valuation: Wolfgang Vejdovsky, Director/Head of Real Estate Advisory and Julia Grillmair, Senior Consultant.

WEBEX INC l Bertram Capital announced today its acquisition of Webex, Inc. a leading manufacturer of precision engineered rolls and specialized systems for web handling and converting applications. Hirschler Fleischer served as legal counsel to Bertram Capital in the transaction. Andrew Lohmann, Chairman of HF’s Mergers & Acquisitions Group, led HF’s deal team. Mr. Lohmann noted, “Hirschler Fleischer congratulates Bertram Capital on its acquisition of Webex. We are excited to assist Bertram in another acquisition of a strong platform business and are proud to contribute to Bertram’s tradition of closing expeditiously and efficiently. We believe the partnership we have built with Bertram over the past five years has enabled us to proactively address both legal and business issues, thereby helping our client to focus on core business and strategic considerations and details. We look forward to seeing Webex continue to prosper through Bertram’s proven investment approach.” Apex was hired to perform Phase I Environmental Site Assessments and Environmental Compliance Reviews on five WebEx properties in Massachusetts, New Hampshire, and Wisconsin. The Apex team was led by Russell K. Balderson, a Program Manager based in the company’s Midlothian, Virginia office. Apex represented Bertram Capital Management in the deal. Apex has represented Bertram Capital Management during acquisitions of several industrial facilities throughout the past three years. During the course of finalizing the deal there were no challenges experienced by Apex on the environmental side. Leading the transaction at Livingstone were professionals Steve Miles, Partner, and Karl Freimuth, Vice President. They commented: “Livingstone represented Webex, Inc., a portfolio company of PE firm Wynnchurch Capital, Ltd. We have maintained a strong working relationship with Wynnchurch for over six years.” They continued: “During the sale process, Webex completed the consolidation of its Nim-Cor operation. Management executed an efficient and transparent consolidation process, while Livingstone successfully positioned the benefits of the operational consolidation to prospective buyers. Webex marked Livingstone’s 10th niche manufacturing transaction in 2012, following recent sales of Double E to Incline Equity Partners, Koontz-Wagner Custom Controls to Global Power Equipment Group, Cableform to Hubbell, Applied Kilovolts to ITT Exelis and WEENER Plastik to Lindsay Goldberg.” www.livingstonepartners.com miles@livingstonepartners.com freimuth@livingstonepartners.com

H.I.G. EUROPE BACKS ST. GILGEN INTERNATIONAL SCHOOL IN AUSTRIA

FSN CAPITAL ACQUIRES TROAX GROUP AB

BERTRAM CAPITAL COMPLETES ACQUISITION OF WEBEX, INC.

Financial Due Diligence Provider / Tax Adviser / Property Valuer

Virtual Data Room Provider

Legal Adviser to the Purchaser & Legal Advisers to the Debt Provider

Debt Providers

Legal Adviser’s to the Purchaser

Insurance Due Diligence Provider to the Purchaser

Financial Due Diligence Provider

Environmental Due Diligence Provider

Environmental Due Diligence Provider to the Purchaser

Risk & Insurance Due Diligence Provider

Risk & Insurance Due Diligence Provider Commercial Due Diligence Provider to the Purchaser

98 / March 2013

ACQUISITION INTERNATIONAL