Acquisition international May 2013 by AI Global Media

May 2013 /

IN THIS ISSUE/

DEAL GURU:

MERGER CONTROL REFORM:

FAST: Corporates Need to Focus on Software License Compliance.

Acquisition International Speaks to The Experts to Analyse How Reform Has Altered The Merger Control Landscape.

2013 Q1 REVIEW:

Acquisition International’s Quarterly Review Series.

DEAL OF THE MONTH - MTN NIGERIA / 81

VENDASTA — Jeff Tomlin, Co-Founder and VP of Marketing at VendAsta Discusses the Company’s Recent $8.25 million Funding From Vandege Capital and BDC Venture Capital. / 19 www. ACQUISITION-INTL .com

Resolving Transfer Pricing Disputes — Leading transfer pricing experts discuss resolving and avoiding transfer pricing related disputes. / 54 The Cross-Border M&A Specialist — Acquisition International speaks to leading M&A/investment specialists to analyse the major risks facing companies entering new markets and the greatest challenges to cross-border M&A in 2013. / 58

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

CONTENTS:

May 2013

Editors Comment Welcome to the May issue of Acquisition International.

CONTENTS — May 2013

In this month’s cover story, we speak to Jeff Tomlin, a Co-Founder and VP of Marketing at VendAsta, to learn more about the company’s recent $8.25 million funding from Vanedge Capital and BDC Venture Capital and to discuss VendAsta’s future – read more on page 19. In “Turkey: The Potential to Transform the MENA Economies”, we turn our attention to the country’s continued success and examine the possibility that it could be an inspiration to other MENA economies. The report features expert commentary from leading Turkish firms Baspinar and Partners and Gen & Temizer | Özer and can be found on page 40. “The Cross-Border M&A Specialist” begins on page 58, highlighting the major risks facing companies entering new markets and the greatest challenges to cross-border M&A. The panel also discuss investment trends, technological advances and predictions for 2013. Our 2013 Q1 Review continues this month, taking a closer look at the factors driving the global economy and examining some of the major findings of Q1 2013. Turn to page 62 for the major players’ expert opinions of the last quarter. This month’s comprehensive features also include an investigation of “Abenomics” impact on Japan (page 33), a detailed look at implementing anti-money laundering systems (page 50) and a guide to resolving transfer pricing disputes (page 54). 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 – VENDASTA RAISES $8.25 MILLION IN FUNDING: /19 Jeff Tomlin, Co-Founder and VP of Marketing at VendAsta Discusses the Company’s Recent $8.25 million Funding From Vandege Capital and BDC Venture Capital. NEWS: /04

The Latest News Stories From Around The World.

DEAL GURU: /13

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

SECTOR TALK: /14 Powered by Zephyr/ Bureau van Dijk

Q1 REVIEW: /62 Acquisition International’s First Quarterly Review of 2013.

DEAL DIARY: /78 @acquisition-int

ACQUISITION INTERNATIONAL

Introduced by Zephyr/ Bureau van Dijk.

6/ Hedge Funds News 8/ Eurekahedge 10/ Appointments 20/ Start Up Advisory Awards 21/ Due Diligence in the Ukrainian Subsoil Use Sector 23/ Investing in Municipal Bonds: Balancing Risk and Reward 24/ Resolving Financial Services Disputes 25/ Antitrust Litigation: Resolving Competition Disputes 27/ Navigating Indirect Taxes 29/ Cross-Border Business Crime: A Major Target of Enforcement 31/ A Step by Step Guide to Forming Companies 32/ Malaysia: Continued Growth for 2013 33/ A Brighter Future for Japan’s Economy 34/ New Zealand: FDI and its Impact on the Economy 36/ Resolving Disputes in the Franchise Industry 37/ Resolving Commercial Disputes through Mediation 38/ A Positive Outlook on Nigeria’s Economy for 2013 40/ Turkey: The Potential to Transform the MENA Economies 41/ Intellectual Property: The Importance of Protecting Intangible Assets 43/ Mauritius: Attracting Foreign Trade & Maintaining a Competitive Environment 45/ Corporate Immigration: Issues and Challenges in the Current Economy 46/ Avoiding and Resolving Disputes in the Aviation Industry 48/ Arbitrating Disputes in Cross-Border Transactions 50/ Implementing an Effective Anti-Money Laundering System 52/ Merger Control Reform 54/ Resolving Transfer Pricing Disputes 58/ The Cross-Border M&A Specialist

May 2013 /

NEWS:

from around the world

Ethics and trust high on the agenda at TMA Europe’s annual conference

The ethical responsibilities of businesses will be high on the agenda at Turnaround Management Association Europe’s annual conference in London next month.

– while still maintaining its duties to investors, is focusing management on a moral dimension to business management not seen in some industries for more than a generation.”

Adrian Doble, co-chair of the conference, said trust, conduct and personal responsibility will be among the core themes running through the debates at the event on Friday, 7 June, which will be attended by leading restructuring experts from across Europe.

The conference, being held at The Landmark Hotel on Marylebone Road, will focus on the ethical dimensions of business organisations and their activities, as part of the restructuring sector’s role in ensuring Europe’s economies and businesses emerge in a stronger and more sustainable shape.

Mr Doble, a partner at restructuring firm FRP Advisory, said: “Amid continuing economic fragility across Europe and a re-evaluation of the roles and responsibilities of political leaders, business leaders are being drawn to the challenge of how to address the role of ethical codes of behaviour within their own organisations. “Viewing a business as a social organisation - in the way it treats its staff, customers and suppliers

The conference keynote speaker Lord Glasman, founder of Blue Labour and advisor to Ed Miliband, will lead the debate by setting out what he thinks Europe’s economic priorities should be. Mr Doble added: “We have come full circle in looking at apportioning blame since the onset of the financial crisis just over five years ago. Only now, against a backdrop of a series of record penalties

levied by regulators against a number of institutions has a fundamental debate about trust and personal responsibility begun to emerge across the myriad of businesses that form the backbone of Europe’s economy. “We at TMA will take that debate to the core of our European conference. By the end we hope to have moved on from the starting point of “In whom can we trust” to “what do we want people to trust us for”? If we can pose those questions to ourselves and the businesses we advise then there is a good chance they can be restructured both financially and operationally so that they are fit to last to build a sustainable economic welfare to profit not just their owners, investors but also the wider European social economy in which we all operate and on which we all co-depend.” For full details of the conference programme, or to book online, see www.tma-europe.org

Thomas Eggar and Pritchard Englefield announce merger Law firm Thomas Eggar LLP has announced that it is to merge with City of London based firm, Pritchard Englefield. Thomas Eggar has been clear for some time about its intention to strengthen its London office as a part of its strategy to develop specialist teams and to give greater access to an international client base. Over the last year, Thomas Eggar has made a number of high profile lateral hires into its London office to develop an impressive international tax team. Pritchard Englefield is a long-established commercial law firm, which is highly-regarded both for its international and domestic work, particularly advising on Anglo-German and Anglo-French trade, finance and commerce. The merger between Thomas Eggar and Pritchard Englefield will add strength and depth to both firms’ current offering and will provide a strong base from which to develop additional specialist teams, including Financial Services. The London office will be operating under the name of Thomas Eggar incorporating Pritchard Englefield.

/ May 2013

The merger brings with it some strong international and European links, most notably in Germany, France, North America and Asia through which the combined firm can drive its business development activity. Together, the firm will offer a broader range of legal services to clients, and through Pritchard Englefield’s international connections, gain a strong profile in certain key jurisdictions.

Vicky Brackett

Thomas Eggar’s Managing Partner, Vicky Brackett commented: “This is a very exciting time for both firms. The culture and values of the firms are strongly aligned, the teams are technically excellent and the client base of both firms is very complementary. It is a merger which moves Thomas Eggar forward and gives us the base from which to further focus our offering to the market.” Ros Ashby, Managing Partner of Pritchard Englefield said: “Pritchard Englefield has been looking for opportunities to grow for a number of years. We strongly believe this merger is the best way to enable us to deliver an even better offering to our UK and international clients.”

ACQUISITION INTERNATIONAL

NEWS:

from around the world

S&P Capital IQ Equity Research: seeds of MENA recovery grow stronger as we head into 2014 2014 is set to be the first year where a credible recovery from the global recession takes place, according to S&P Capital IQ Equity Research.

in H2 2012, alongside the final deleveraging efforts of the European banks this year, should see credit conditions improve markedly as we head into 2014.

Speaking at an S&P Capital IQ hosted event in Dubai, Robert Quinn, Chief European Equity Strategist, highlighted that there are positive structural drivers on the horizon at both the local and global level. The US economy has proved surprisingly resilient to the fiscal cliff thus far with GDP growth in the first quarter of this year being upgraded to 2.1% from 1.5% yearon-year. The US private sector is also experiencing a return to health, with housing, energy dividend, and ‘pent-up’ corporate capital expenditure strengthening. The structural comparison to the UAE, and Dubai in particular, is that housing markets are once again ready to underpin a macroeconomic recovery. The US housing recovery is more advanced but housing price deflation in Dubai appears to have troughed.

In spite of this positive medium-term outlook, Quinn argues that there is no need to rush back into the equity market in the short-term. “We are heading into a seasonally difficult period for global equities while the Chinese and US pillars of growth are going through a temporaneous slowdown. Global equities have priced in significant gains already and hence we expect them to be range-bound for the foreseeable future.

At its worst points, the region combined the US housing price declines with the weakness of the European banking system, S&P Capital IQ noted. However, the greater provisioning by local banks

“Risk compression on improved fundamentals has been the driver of the recent rally; CDS spreads on Dubai have moved in tandem with those of Italy and Spain, tightening by a half since last Summer. It is difficult to see further yield compression and hence those companies able to grow their earnings, few of which have a great track record in recent years that will add alpha and we are not perturbed by the valuations on these names. We would favour the non-oil listed sectors.”

Clarke Willmott LLP advises on £250m Extra MSA Group acquisition National law firm Clarke Willmott LLP has advised on one of the largest acquisitions of 2013, supporting the Extra MSA Group to complete the £250 million purchase of nine Motorway Service Areas from Serena Properties Limited. Clarke Willmott’s Corporate and Real Estate Teams advised the Extra MSA Group, which is backed by equity investor M3 Capital Partners, on the acquisition of the nine motorway service areas across the UK.

its position in the current challenging economic climate.” The Extra MSA Group was established in 2010 by M3 Capital Partners and Andrew Long, CEO of Extra. The acquisition doubles the number of motorway service area assets that Extra owns and follows the

company’s successful development and opening of its new M25 Cobham operation in September 2012. M3’s current fund has equity capital commitments of $2.9bn and since the firm’s inception M3 has undertaken in excess of $83bn of real estate transactions.

Andrew Long, CEO of Extra MSA Group, said: “Extra and I are pleased to have worked with Clarke Willmott on this important and strategic transaction. This expands Extra’s investment ownership of substantial Motorway Service Areas to 18 key locations in the UK Motorway Network. Further acquisition transactions are also under consideration.” Andrew Beedham, Head of Corporate at Clarke Willmott’s Birmingham office and Relationship Partner for Extra MSA Group, said: “This is one of the largest deals of its kind in the UK so far this year and required support from across our corporate, banking, real estate, insolvency, planning & environmental and property litigation departments. This acquisition will enable the Extra MSA Group to significantly expand its business and strengthen

ACQUISITION INTERNATIONAL

May 2013 /

FUND NEWS:

from around the world

Schroders launches Flight Path Swift

Schroders has announced the launch of Flight Path Swift, a uniquely flexible defined benefit investment solution for small pension schemes, designed specifically to focus on increasing funding level protection. Made up of best practice investment building blocks of both growth and matching assets, Flight Path Swift provides an integrated decision making and investment framework. With Flight Path Swift, the scheme’s funding level is monitored daily against its pre-agreed triggers and action is taken when a trigger is met. A recent independent survey undertaken by UK pension scheme managers, trustees and independent consultants provides a key insight into pension scheme funding and decision making. The survey has provided further evidence as to the importance of trustees having a plan that allows them to manage

funding level risk effectively. Respondents were asked: “Has you scheme been fully funded over the last 10 years?” 44% of respondents said yes, 56% said that it had not. However, when asked “Is your scheme fully funded today?” only 6% said their scheme was fully funded, leaving 94% of the respondents with a short fall in their pension scheme. “How often do you monitor your scheme’s funding level?” Only 2% monitored daily, 7% weekly, 32% monthly, 46% quarterly, 12% annually and 1% only monitored their scheme’s funding level at triennial valuations. “How much time does it take for a strategy decision to be implemented?” 33% of the respondents answered within a month, 31% of respondents said within a quarter, 19% said longer, 11% said within a week and 6% said immediately.

Mark Humphreys, Head of UK Strategic Solutions, commented: “At a time when pension scheme trustees are looking for comfort that funding level risks are being managed, we have created a best practice investment solution at an affordable fee for pension schemes of all sizes – many of which historically would have been too small to access such a solution. We are able to do this by focusing on the core elements of the existing well-established Schroders Flight Path offering. The fee structure of Flight Path Swift is totally transparent, reflecting a building block design, with a low minimum fee. “Every element of Flight Path Swift has been designed with ease of use in mind, from the documentation to the straightforward way you can invest and change the strategy. Clients and their advisors are involved in the big decisions – we can take care of the rest.”

2013 valuation shows LPFA at close to full funding The London Pensions Fund Authority (LPFA) has announced indicative results of the 2013 valuation of its £4.7 billion fund. The funding level is anticipated to be around 95%, close to full funding, on the initial assessment carried out by Barnett Waddingham. The primary drivers behind the improvement are refinements to the asset and liability strategy, good investment returns over the inter-valuation period and appropriate management of interest rate and inflation risks. These factors have compensated for an increase in future improvements in mortality. The LPFA has hedged its inflation and interest rate risk through an active LDI strategy since 2006. In February this year it made a large tactical switch to reduce its interest rate hedge and increase its inflation hedge, crystallising a book profit of some £200 million, and reducing the negative impact of any future potential inflation increases.

/ May 2013

The LPFA’s active membership has declined by 12.5% over the inter-valuation period as a result of opt-outs and job loss occasioned by austerity measures, whereas deferred and pensioner members have increased by 2% and 3.5% respectively, leaving overall membership marginally down. The expected impact of the 2014 scheme changes has been factored into the valuation results, resulting in an overall reduction in the costs of future service for employers. However the impact varies across the 200+ employers in the LPFA, which include charities, universities and schools, as well as the residual liabilities from GLC times. Mike Taylor, CEO at LPFA, commented: “The positive indicative results of our 2013 valuation reflect the expertise and commitment of the entire team at LPFA. We have worked hard in recent months to refine our asset and liability strategy, and are delighted to see that these efforts are already paying dividends.”

ACQUISITION INTERNATIONAL

FUND NEWS:

from around the world

Foresight raises over £25 million for Foresight Solar EIS Fund 2 regulatory review under CP12/19, it is estimated that the VCT market for 2012/2013 (excluding Enhanced Share Buy Backs) will total c.£208 million, down 20% on the equivalent figure for 2011/2012, while around £170 million has been raised in EISs for tax year 2012/2013, giving Foresight a 16% market share of the EIS market.

Foresight Group (Foresight) is has announced another successful fundraising season for tax year 2012/2013, having raised a total of £50m+, with more than 50% of that figure accounted for by the £26m+ raised for Foresight Solar EIS Fund 2 between launch on 7th February and 5th April. Although the VCT and EIS market took a while to get going this season with the interruption of RDR implementation and the uncertainty caused by the on-going consultation relating to the FCA’s

Foresight Solar EIS Fund 2, and Foresight Solar VCT C Shares remain open for investment for Tax Year 2013/14, and capitalise on Foresight’s extensive experience in renewable energy. Funds will be invested in UK Solar Power Plants where investors can benefit from the enhanced revenue streams possible under the Government’s Renewable Obligation (RO) scheme. In addition to income derived from selling the generated electricity, generation plants accredited under the RO scheme receive 20 years of income from the sale of Renewable Obligation Certificates, which substantially increases the Solar Power Plants’ returns. Mike Currie, Partner and Sales Director for Foresight, puts the appeal of Foresight Solar EIS Fund 2 down to the combination of Foresight’s strong track record in Solar investing, an attractive target return of 120p in year 4, the CGT deferral and Income Tax reliefs that come with EISs, and the Individual Roll over option for investors who wish to remain invested.

Mr Currie commented: “Our Solar EIS has had immediate appeal for EIS investors with a healthy target return in year 4, in a maturing sector which offers index-linked revenue streams. We expect our Solar VCT – C Shares, which only had a 4 week period from launch to end of tax year, to fill up steadily as the attractions of Solar Investing become apparent. Our experience in infrastructure investing has been a telling advantage, with both our EIS and VCT offerings ranked highest among new offerings by Tax Efficient Review this season” Foresight has more than £60 million EIS funds under management and some £250 million of VCT funds under management, and a £310 million portfolio of solar assets in the UK, Italy and Spain. It recently opened a US office in San Francisco and is raising an institutional fund to acquire solar assets in North America. Ben Thompson, Group Marketing Director at Foresight added: “When you think that enough solar energy reaches the earth every hour to meet the world’s energy consumption for a whole year, it’s heartening to know that even with last year’s record rainfall in the UK, our solar assets in the UK are all generating ahead of base case, delivering strong returns for our investors. We expect the considerable interest in our Solar EIS Fund 2 and Solar VCT C Shares to be maintained into the 2013/14 tax year.”

Altius Associates: institutional investor demand for private infrastructure set to flourish Altius Associates Ltd. (“Altius”) anticipates that institutional investor allocations to private infrastructure funds will grow dramatically over the next decade, either as a stand-alone asset class or as part of a broader real assets allocation. In a new report entitled ‘Infrastructure as part of a global investment portfolio’, Altius states that institutional investors currently have less than 1% allocated to infrastructure but it expects this figure to increase to approximately 5% over the next decade. The report describes how a long term demand/ supply imbalance is creating strong fundamentals for infrastructure investments. Reyno Norval, Infrastructure Specialist at Altius Associates comments: “Governments at all levels throughout the developed world are simply unable to supply the capital required for public infrastructure projects because of large deficits and severe budgetary pressures. Increasingly, they are seeking to access private capital to build new assets, expand or renovate existing assets, and supply the provision of essential services.”

ACQUISITION INTERNATIONAL

According to Altius, the need for massive infrastructure investment is not in dispute. In its recent global infrastructure report, the OECD estimates that Asia/Pacific region will need US$15.6 trillion in infrastructure spending, Europe US$9.1 trillion, Latin/South America US$7.4 trillion and North America US$6.5 trillion through to 2030. The report notes that performance history for infrastructure investments is fairly limited on the listed side and non-existent for private funds. While it is too early for total return performance data to be available from this young asset class, Altius has started to see the best private infrastructure managers delivering their target yields. Moreover, comparing 10-year net returns of three traditional asset classes (US equity, non-US equity, and global fixed income) and three real asset classes (public energy, listed infrastructure and private energy), real asset classes have outperformed traditional asset classes.2 According to Altius, infrastructure will continue to gain importance and recognition among institutional investors because it provides:

• an attractive expected risk / return profile while also offering downside protection if implemented properly • an inflation hedge, demonstrated by the fact that public infrastructure and utility stocks have significantly performed world equities during periods of 3% or greater inflation1 • modest correlation with other asset classes thus providing good portfolio diversification • long-term positive cash flows, which closely mirror the long term liabilities of many institutional investors such as pension funds and insurance companies. Reyno Norval added: “Institutional private infrastructure is a relatively new investment area, although starting to mature. The momentum in the industry was temporarily slowed by the financial crisis, reaching a cyclical low point in 2009 however infrastructure demand and investment has rebounded and the outlook is positive. This asset class shares characteristics with several other asset classes such as fixed-income, real estate, and private equity.”

May 2013 /

FUND NEWS:

from around the world

EUREKAHEDGE Hedge Funds Continue On Positive Track, Global Index Up 4% Hedge funds posted positive returns in April as most markets trended upwards during the month. The Eurekahedge Hedge Fund Index was up 1.09% during the month, while the MSCI World Index gained 2.02% in April.

Regional Indices

Key highlights for April 2013: • Japanese hedge funds witnessed strongest April and 4-months on record returns, gaining 4.22% and 15.87% respectively • The Eurekahedge Billion Dollar Hedge Fund Index is up 4.01% April YTD with total assets standing at US$253 billion • Asia ex-Japan hedge funds outperformed underlying markets for second consecutive month • Eurekahedge is currently tracking more than 250 funds that have delivered over 15% year-to-date • Distressed debt funds extend their winning streak to 10 months, gaining 23% since July 2012 • The asset-weighted Mizuho-Eurekahedge Asia Pacific Index was up 6.89% in April YTD Regional Indices The start of the month witnessed some profit taking from the equity markets amid some disappointing global economic data. The S&P 500 dipped below the 1550 mark by mid-month amid news of less-thanexpected Chinese growth hit global markets. The markets however, brushed off initial disappointment amid the earnings season, some positive economic data from the US and the installation of an Italian government in Europe. Most major hedge fund investment regions delivered positive returns for the month, with Japanese managers posting the strongest returns for yet another month. The Eurekahedge Japan Hedge Fund Index was up 4.22% in April, bringing its year-to-date return to 15.87% and extending their winning run to eight consecutive months - making it the longest winning streak on record for Japanese funds. The Nikkei 255 was up 11.8% during the month. Asia ex-Japan managers also delivered positive returns in April with gains of 2.37%, outperforming the underlying markets for the second consecutive month – the MSCI Asia ex Japan Index3 was up 1.87% during the month. Managers investing in India witnessed the strongest returns with an average gain of 6.60% in April. North American managers posted returns of 0.76% in April as the market witnessed some trend reversals during the month – the S&P 500 increased by 1.81% in April. Strategy Indices All strategic mandates finished the month with positive returns, with event driven and distressed debt managers posting the strongest gains. Increasing corporate action including IPO volume and acquisition activity in the first quarter has been favourable for event driven managers. The Eurekahedge Event Driven Hedge Fund Index grew 2.90% in March, bringing its 1Q 2013 return to a strong 5.10%. Despite increasing risk aversion in Europe, distressed debt funds continued their strong run for the year with

/ May 2013

April

2013

2012

2013*

Returns

Eurekahedge North American Hedge Fund Index

0.76

4.07

7.92

Eurekahedge European Hedge Fund Index

0.16

2.67

6.84

Eurekahedge Eastern Europe & Russia Hedge Fund Index

-1.08

-1.64

6.73

Eurekahedge Japan Hedge Fund Index

4.22

15.87

6.20

Eurekahedge Emerging Markets Hedge Fund Index

0.60

4.04

11.10

Eurekahedge Asia ex-Japan Hedge Fund Index

2.37

6.13

12.40

Eurekahedge Latin American Hedge Fund Index

-0.02

1.39

10.40

Strategy Indices

April

2013

2012

2013*

Returns

Eurekahedge Arbitrage

2012

4.07

7.92

Hedge Fund Index

0.84

3.67

6.93

Eurekahedge CTA/Managed

-1.08

-1.64

6.73

Futures Hedge Fund Index

1.89

2.76

1.33

Eurekahedge Distressed Debt Hedge Fund Index

5.50

11.05

14.03

Eurekahedge Event Driven Hedge Fund Index

0.47

4.13

9.30

Eurekahedge Fixed Income Hedge Fund Index

0.49

4.36

10.84

Eurekahedge Long/Short Equities Hedge Fund Index

0.84

5.50

7.82

Eurekahedge Macro Hedge Fund Index

1.42

3.29

2.27

Eurekahedge Multi-Strategy Hedge Fund Index

1.09

3.35

7.77

Eurekahedge Relative Value Hedge Fund Index

-0.83

2.09

11.04

Mizuho-Eurekahedge Indices

April

2013

2012

2013*

Returns

1.94

4.03

5.93

Mizuho-Eurekahedge Index - USD Mizuho-Eurekahedge TOP 100 Index - USD

2.05

4.07

6.46

Mizuho-Eurekahedge TOP 300 Index - USD

2.02

4.13

5.99

gains of 1.72% in March. Managers were able to post gains from a rebounding housing market in the US as well as corporate issuances. The BofA Merrill Lynch High Yield Index4 was up 1.03% during the month. Among other strategies, long/short equity managers continued to deliver profits for the 10th consecutive month with gains of 1.01% in March. The mid-month volatility and divergent trends in global indices were helpful for relative value managers who posted returns of 1.04%. CTA/managed futures funds also posted positive returns of 0.45% with some managers reporting gains from the energy sector. Eurekahedge indices are available for download from www.eurekahedge.com/indices/hedgefundindices. asp and are updated with the latest fund returns at 23:30 GMT every day. Index values and data can be

downloaded for free and subscribers can download the full list of index constituents. Please contact indices@ eurekahedge.com for more information.

Company: Eurekahedge Email: indices@eurekahedge.com Web: www.eurekahedge.com Twitter: @eurekahedge Scribd: www.scribd.com/eurekahedge Telephone: +65 6212 0925

ACQUISITION INTERNATIONAL

APPOINTMENTS:

from around the world

NBGI Private Equity sets out sector focus, and recruits senior advisers

NBGI Private Equity (“NBGIPE”), a leading private equity investor focused on the UK lower mid-market, has announced an increased focus around three core sectors: Support Services, Healthcare and Food Manufacturing. As part of this initiative, the firm has appointed Sandy Young, a highly experienced leader in the business services field, as the first member of a panel of senior industry advisers across the three sectors. NBGIPE, which typically invests in UK businesses of between £5m and £50m in enterprise value, has historically taken a generalist approach to investment. Today’s announcement recognises that the firm has already built a strong track record and network of contacts in these three sectors – Support

Services, Healthcare and Food Manufacturing – and intends to build on this success.

and Food Manufacturing spaces, to be announced shortly.

At the same time, NBGIPE is announcing its intention to appoint Senior Advisers in each of these sectors, providing high-level strategic advice and in-depth industry knowledge. They will bring support across all investment activities from origination through to completion, covering strategic direction and advice on build-ups and as companies move towards exit. They will advise the investment team but not formally join the Boards of individual investee companies.

To date, in the UK alone, NBGIPE’s past Support Services investments have included Nationwide Autocentres and recruitment business Walker Hamill – which both achieved IRRs of more than 70%. Current investments include recruitment companies Ochre House and Change Recruitment Group, and Facilities Services Group, while last year the firm acquired oil and gas services business ATR Group, to which two add-on investments have already been made.

The first appointment is business services industry veteran Sandy Young. Young has had extensive experience in senior executive roles. Most recently he was CEO of Allied Healthcare International, a NASDAQ-listed provider of health and social care in the UK. During his three-year tenure, he repositioned the company into larger and profitable sectors, oversaw a number of acquisitions, and was instrumental in selling the business to SAGA Group at a 59% premium over its market cap. He began his career with Rentokil Initial, ultimately serving as Regional Managing Director for Northern Europe responsible for 12,000 staff, and later became the UK Managing Director of Chubb Electronic Security, leading a significant turnaround of the business. Young’s recruitment will be followed by the appointment of Senior Advisers in the Healthcare

Mark Owen, Founder Director at NBGIPE, commented: “Our skill set and expertise mean that Support Services, Healthcare and Food Manufacturing are the areas in which we have a strong competitive advantage and are able to deliver consistent, highquality results. Our track record in these sectors clearly demonstrates this, and with a new, formalised structure and the addition of Senior Advisers we are now ideally placed to exploit the many opportunities we are seeing. We are excited to be welcoming Sandy to the team and look forward to working with him.” Sandy Young commented: “I am delighted to be contributing my expertise and experience gained in over 30 years in the support services industry to NBGIPE, and look forward to working with the team. The opportunities in this sector in the UK, driven by outsourcing, innovation and globalisation, are enormous and I have great confidence in our ability to deliver results.”

HGF Law attracts legal heavyweights into Manchester Antony Gold and Janet Knowles have joined HGF Law from Eversheds in Manchester, where they were partners in the IP team. For many years they have led the IP team in Manchester the North West which was regularly placed in the top rank of IP practices in the region. Antony’s focus is on contentious IP, (where he has acted in many leading cases), and branding. As the partner who formed and led Eversheds’ top-ranked retail team, Antony has particular experience in working with retailers. Paul Sanderson, Managing Partner of HGF Law commented: “We are delighted that Anthony and Janet have made the decision to join the growing team at HGF Law. Their specialist knowledge and reputations in our key markets will further strengthen the team in Manchester.”

expertise in the areas on which we focus. HGF is a major player in the provision of specialist IP advice and we are looking forward to working within such a successful practice.” Janet added: “As a specialist within the life sciences and pharmaceuticals market I am delighted to be joining a team with such a strong reputation and level of expertise in these markets.” Both Anthony and Janet are listed in Chambers and Partners as key individuals: Antony Gold has recently been advising on the aforementioned High Court litigation between client Specsavers and supermarket giant ASDA. Janet Knowles recently advised Kurt Geiger on trade mark registration matters and design infringement action.

Antony said: “We are very excited to be joining a firm which has such an incredible depth of resource and

10 / May 2013

ACQUISITION INTERNATIONAL

APPOINTMENTS:

from around the world

Appointment of 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.

other publications include: Freedom for Public Services; The Costs of Regulation; and PRISM Explained – Implementing Risk Based Supervision.

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.

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.

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

“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.”

Premier Hytemp strengthens board Premier Hytemp, a global leader in the manufacture of quality engineered alloy components for the offshore and onshore oil and gas industry, has made a significant appointment to its board with the addition of Maurice McBride as non-executive chairman. Premier Hytemp was backed by Dunedin, the UK mid-market buyout house at the end of November 2012, in a management buyout of the business from its parent company in a £34.5 million transaction. Alongside Maurice McBride, the board of Premier Hytemp comprises of Donald Wilson CEO, Will Gold CFO, Doug Harrison COO and Dougal Bennett partner of Dunedin. Maurice has an impressive track record of success in a number of oil and gas related executive roles. For the past ten years he has held numerous nonexecutive positions and has been involved with some very successful private equity backed businesses.

Donald Wilson, the CEO of Premier Hytemp commented: “The business is in a robust position to deliver on our ambitious international growth plans, having recently completed our management buyout and now strengthening the board with Maurice’s appointment as non-executive chairman. Maurice’s track record and deep knowledge of the oil and gas sector, coupled with his experience of international growth management will be invaluable to the team at Premier Hytemp.” Maurice McBride, non-executive chairman commented: “This is an impressive business operating in a strong sector in which I believe my experience will complement and support the executive management team in its plans to expand the business on a global scale. I am very pleased to have joined the team and am looking forward to the challenge.”

Dougal Bennett, the partner of Dunedin who sits on the board of Premier Hytemp commented: “Not only does Dunedin offer financial backing and operational expertise to help the businesses we invest in to expand internationally, we also offer an extensive list of contacts at board level. We have been working hard to utilise our network and are pleased to have introduced Maurice to this new role as non-executive chairman of Premier Hytemp. We look forward to working with him and are confident that he will be an asset to the business.” Premier Hytemp is headquartered in Edinburgh with manufacturing facilities in Edinburgh, Sheffield and Singapore. Premier Hytemp also has operations in Calgary, Canada, Dubai and Aberdeen. Premier Hytemp was formed in 2008 when Premier Alloys Limited (established in 1985) acquired Hillfoot Steel Limited (which owned Hytemp Limited, itself established in 1976).

Squire Sanders promotes corporate finance specialist to partnership Squire Sanders is promoting Leeds-based corporate finance senior associate Paul Mann to the partnership. Paul’s promotion is part of a global promotional round in which a total of thirteen lawyers have been promoted as partners and principals within the firm.

work with a focus on private equity transactions. His recent experience includes acting for many of the region’s best known corporates and owner managed businesses on transactions in the UK and overseas. Paul’s promotion will take effect 1st May 2013.

developed from a promising trainee into a force in the Leeds corporate finance community. It is fitting that his talent, diligence and enterprise have been rewarded in this way and I expect to see him progress from here.

Paul Mann completed his training at the firm in 2005 and has worked to develop a substantial client base. Paul works on all aspects of general M&A transactional

Speaking about the promotion, Leeds office Managing Partner, Jonathan Jones said: “I have been lucky enough to have had a ring side seat as Paul has

“Paul is a great example of the home grown talent which exists within our firm and which represents the future of legal services in the Yorkshire market.”

ACQUISITION INTERNATIONAL

May 2013 /

FAST

DEAL GURU:

FAST: Corporates Need To Focus On Software License Compliance

Corporates Need To Focus On Software License Compliance

-----------------------------------------------------------------------FAST identifies over £100,000 in unlicensed software following takeover at British private sector business. ------------------------------------------------------------------------

The Federation Against Software Theft is advising corporate UK to make sure they appreciate the value of their software assets and ensure their estates are compliant following a recent action which saw £113,222.24 spent in distress to rectify licensing shortfalls. Having contacted the business in question three times and receiving no formal response, FAST contacted the IT department directly to tackle the reported issues. In conversations with the head of IT it came to light that the department was in a state of flux following a recent acquisition valued at £17.5m. According to recent research by UHY Hacker Young, the accountancy firm, UK mergers and acquisitions in the private sector have recovered faster than in the listed sector and are now at a level not seen since the financial crisis began in 2008. The research shows that the value of M&A targeting private companies has risen by 50 per cent in one year, rising by £6.1 billion to £18.2 billion in 2012. The figure sits just below the £19.5 billion worth of private company acquisitions that was recorded in the year leading up to the collapse of Lehman Brothers. “The indications appear to be pointing to an upturn in activity and if this does turn out to be true then companies across the board need to know the value of their software estate and ensure their licenses are in order for the transaction,” stated Alex Hilton, Chief Executive, FAST.

ACQUISITION INTERNATIONAL

“Historically, there has been a tendency to gloss over the IT issues as being somehow peripheral to the main transaction. But this is 2013, and any significant business is going to be heavily dependent on its IT function and suppliers. Your preparations for any transaction have to include investigating the technology “fit”, but no less importantly verifying that the underlying legal entitlements to use that technology – hardware contracts, software licences and so on – are all in place, including post deal. “Often there is no time to sort matters out before completion as appears to be the case in the recent work we undertook with this business. In effect this means that during the period it takes to appraise and remedy the situation, the IT department had to work with illicit copies of software installed and in use by the business. The IT manager will be expected to adopt the attitude that ‘the show must go on,’ but this will attract civil copyright compliance risk – and possibly a criminal law liability to those in management who consent or connive, plus the company,” he added. “Everybody involved needs to be as certain as possible that the company’s software practices are sound to ensure compliance. In an ideal world, there would be ample time to conduct a thorough software audit during the course of the transaction, and then to review the results against the company’s formal documentation in order to identify and rectify any gaps. This doesn’t often happen when the wider commercial implications of the sale/purchase: corporate transactions often take place under enormous pressure and can be very disruptive for established management practices.”

Alex concluded: “The only real protection against these risks is putting in place sound management of software licensing, and taking steps to ensure that they are followed as well as even after the conclusion of the deal. Company directors must ensure that advisers fully account for, and consider the software asset position.” The Federation Against Software Theft was formed in 1984. FAST is a not-for-profit organisation limited by guarantee and wholly owned by its members. It aims to reduce, restrict and or lessen the incidence of unauthorised dealings in computer software. It works on many fronts to promote software compliance and protect its members’ rights through awareness, enforcement, lobbying and promoting standards and best practice in business.

Company: The Federation Against Software Theft (FAST) Web: www.fastiis.org Email: info@fast.org Telephone: +44 (0)845 521 8630

May 2013 /

SECTOR TALK:

Support Services l The support services sector has made a bright start to 2013, and stacks up well alongside results from previous periods. So far this year, 1,962 deals worth a combined USD 49,808 million have been recorded for the industry. 2012 finished promisingly for the support services sector, although the results were by no means the best of recent times. In the second half of the year, deal-making of USD 76,585 million was recorded across 3,426 transactions, marking a 35 per cent increase by value on the previous six monthly period, according to data from Zephyr, the M&A database published by Bureau van Dijk. In spite of the jump, the result is still some way down on the USD 122,552 million and USD 124,744 million posted in the H1 2007 and H2 2007, respectively. However, the first four months of 2012 appear to give some cause for optimism; so far 1,962 deals worth a combined USD 49,808 million have been recorded, which already represents 65 per cent of the result for the whole of H2 2012. That figure was also spread across a much larger number of deals (3,426), suggesting that a number of high value transactions are responsible for this year’s promising showing, which actually trumped the result for the first six months of 2009, when deals worth USD 42,700 were posted in the wake of the global financial crisis. Furthermore, the first six months of 2012 only marginally pipped this year’s opening four months with dealmaking worth USD 56,866 million.

Number and Aggregate Value (mil USD) of Support Services Deals Globally: 2006 - 2013 YTD (as at 01 May 2013) Aggregate deal value (mil USD)

2,677 2,538 2,753 2,530 2,311 2,023 2,075 2,204 2,267 2,210 2,341 2,684 2,909 3,426 1,962

80,994 88,120 122,552 124,744 87,288 67,458 42,700 66,431 70,693 84,563 77,298 71,673 56,866 76,585 49,808

Number and Aggregate Value (mil USD) of Support Services Deals Globally: 2006 - 2013 YTD (as at 01 May 2013) 140,000

/ May 2013

3,500

120,000

3,000

100,000

As mentioned, a number of relatively large deals have driven up values in the sector during the period between the 1st January and the 1st May. Most notable was an agreement by Beijing-headquartered petrochemical manufacturer China National Petroleum Corporation to buy a stake of just under 29 per cent

4,000

2,500 80,000 2,000 60,000 1,500 40,000

1,000

20,000

Aggregate deal value (mil USD)

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

Number of deals

Period

500

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

in Eni East Africa, a Mozambique-based oil and gas exploration company, for USD 4,210 million. This was closely followed by a USD 3,450 million spin-off of certain assets of photographic giant Eastman Kodak’s document imaging business. The operations were picked up by UK Kodak Pension Plan in

Number of deals

order to settle debts of USD 2.80 million owed to it by the US company. Other notable deals include a USD 2,900 million acquisition of Bermudaheadquartered drilling rig operator Seadrill’s tender rig business by oil and gas field services provider SapuraKencana Petroleum.

ACQUISITION INTERNATIONAL

SECTOR TALK:

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

2006

2007

2008

2009

2010

2011

2012

2013 YTD

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

65,414 24,401 63,655 4,135 2,032 3,140 9,434 1,051

81,750 46,913 57,877 30,673 1,906 20,774 8,515 2,015

58,604 19,549 46,422 5,913 674 4,431 15,605 1,672

35,089 26,452 27,122 9,209 781 1,678 7,038 1,096

44,345 30,680 51,438 12,763 5,650 2,064 8,388 1,212

65,106 27,382 29,711 15,706 2,705 1,429 7,199 367

51,905 22,232 23,289 20,134 3,851 3,792 7,004 1,836

17,002 10,634 7,956 5,674 4,299 2,667 1,695 125

Breakdown of Support Services Deals by Region: 2006 - 2013 YTD (as at 01 May 2013) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013 YTD

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

38% 14% 37% 2% 1% 2% 5% 1%

33% 19% 23% 12% 1% 8% 3% 1%

38% 13% 30% 4% 1% 3% 10% 1%

32% 24% 25% 8% 1% 2% 6% 2%

28% 20% 33% 8% 4% 1% 5% 1%

44% 18% 20% 10% 2% 1% 5% 1%

39% 17% 17% 15% 3% 3% 5% 1%

34% 21% 16% 11% 10% 5% 3% 1%

Breakdown of Support Services deals by Region: 2006-2013 YTD (as at 01 May 2013) 100% 90%

5% 2% 2%

3% 4%

12%

80% 70%

10%

5% 1% 10%

5% 3% 3%

3% 5% 10% 11%

20%

25%

30%

23%

5% 1%

15%

37%

60%

6% 2%

33%

17%

16%

18%

50% 14%

13%

19%

40%

17%

24%

21%

20%

30% 20%

38%

44%

38%

33%

32%

39%

28%

10%

34%

0% 2006 Middle East

2007 Oceania

2008 Eastern Europe

2009 Africa

2010

South and Central America

2011 Western Europe

2012 Far East and Central Asia

2013 YTD North America

NUMBER AND AGGREGATE VALUE (MIL USD) OF SUPPORT SERVICES DEALS BY DEAL TYPE: 2013 TO DATE (AS AT 01 MAY 2013) All deal structures

Number of deals

Aggregate deal value (mil USD)

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

1,073 850 44 5 1 1 7

25,739 18,493 5,736 0 0 0 0

ACQUISITION INTERNATIONAL

Of the USD 49,808 million invested across the support services sector in the first four months of 2013, 34 per cent targeted North America. The region brought in USD 17,002 million over the period – higher than any other geographical area in the same timeframe. This was followed by the Far East and Central Asia, which posted USD 10,634 million, and Western Europe with EUR 7,956 million. North America was by far the most frequently targeted region, with 920 deals – some way ahead of Western Europe, which placed second by volume with 482 transactions. The Far East and Central Asia’s impressive showing by value can be explained by a number of significant acquisitions, including the aforementioned Seadrill division sale and electronics behemoth Sony’s USD 1,410 million purchase of a 56 per cent share in Tokyo-based medical information services provider M3. These deals, among others, pushed value in the region up to an impressive result, although it only ranked third by volume, with a disappointing showing of 267 deals. Nevertheless, there is still a long way to go in 2013, and only time will tell how market patterns will develop in the next seven months. So far in 2013, deal-making worth USD 25,739 million was attributable to minority stake deals in the support services sector. This was spread across 1,073 transactions, coming ahead of acquisitions, of which there were 850 with a combined worth of USD 18,493 million. Institutional buy-outs were placed third with investment of USD 5,736 million spread across 44 deals. The same three came out on top between 2006 and the present day, but in a different order. Acquisitions topped the rankings with 16,502 deals worth USD 616,938 million, followed by minority stakes with USD 439,227 million across 18,902 million transactions. Institutional buy-outs numbered 907 valued at USD 132,689 million.

May 2013 /

SECTOR TALK:

Breakdown of Number and Aggregate Value of Support Services Deals Globally by Type: 2013 YTD (as at 01 May 2013) Deal Type

Number of deals

Aggregate deal value

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

54% 43% 2% 1% 0% 0 1

52% 37% 11% 0% 0% 0 0

100%

Breakdown of Number and Aggregate Value of Support Services Deals Globally by Type: 2013 YTD (as at 01 May 2013) 2%

11%

90%

Management buy-out Management buy-in

80%

Demerger

43% 37%

70%

Merger Institutional buy-out

60%

Acquisition Minority stake

50% 40% 30%

54%

52%

Number of deals

Aggregate deal value

20% 10% 0%

Number and Aggregate Value (mil USD) of Support Services Deals by Sector: 2013 YTD (as at 01 May 2013) Target Sector

Number Aggregate deal value of deals (mil USD)

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

/ May 2013

1,247 583 354 72 20 58 63 43 18 20 99 20 23 7 24 9 14 8 4 3 5 1 5 1

23,754 16,231 13,698 11,181 4,830 4,487 2,814 1,445 1,053 843 490 489 470 315 202 54 21 7 1 1 1 0 0 0

Perhaps unsurprisingly, computer, IT and internet segment of the support services sector was the most targeted division of the support services sector in the first four months of 2013, with a total of USD 23,754 million invested across 1,247 transactions. This was 46 per cent higher by value than its nearest rival, the personal, leisure and business services area, which recorded USD 16,231 million, spanning a much lower 583 deals. Other industries that performed well include transport, freight, storage and travel services (USD 13,698 million) and mining and extraction (USD 11,181 million). The latter is unsurprising, given that the first and third placed deals for the year to date were both in this sector and had a combined value of USD 7,110 million, accounting for USD 64 per cent of all oil and gas industry support services investment in 2013 so far. Top acquisitons in the computer, IT and internet services industry include the Kodak transaction, as well as investor CVC Capital Partners EUR 1,130 million deal for Italian business information database operator Cerved. In conclusion, it remains too early to say how things will pan out in the support services industry over the remainder of this year, but there does appear to be cause for optimism. The sector has started 2013 well and established a solid base to build upon in the remaining seven months, and if more high value deals should emerge there should be no problem in matching the growth achieved in the second half of 2012.

ACQUISITION INTERNATIONAL

SECTOR TALK:

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

Number of deals

Aggregate deal value (mil USD)

46% 22% 13% 3% 1% 2% 2% 2% 1% 8%

29% 20% 17% 14% 6% 5% 3% 2% 1% 3%

Breakdown of Number and Aggregate Value of Support Services Deals Globally by Sector: 2013 YTD (as at 01 May 2013) 50% 46% 45% 40% 35% 29%

30% 25%

22% 20%

20%

17%

15%

14%

13%

10%

8% 6%

3% 1%

5% 2%

0% Computer, IT and Internet services

Personal, Leisure & Transport, Freight, Mining & Extraction Industrial, Electric & Business Services Storage & Travel Electronic Services Machinery Number of deals

"Deal value Deal type mil USD" 1.

4,210

3,450

2,900

1,929

1,493

1,410

1,320

1,234

1,100

10. 1,000

Minority stake 28.57% Acquisition 100% Acquisition 100% Minority stake 35% Institutional buy-out 100%

Deal sub-type

Insolvency

Last deal status date

Pending - awaiting 13/03/2013 regulatory approval Pending - awaiting 29/04/2013 regulatory approval Completed

30/04/2013

Pending

01/04/2013

Secondary Pending - awaiting 02/01/2013 buy-out; Exit regulatory approval

Acquisition 55.8% Minority stake 48% Acquisition 100% Institutional buy-out 100% Minority stake

Deal status

Completed

11/01/2013

Completed

17/04/2013

Pending - awaiting 01/04/2013 regulatory approval Exit; Tertiary Pending - awaiting 08/04/2013 buy-out regulatory approval Announced 12/03/2013

ACQUISITION INTERNATIONAL

Wholesaling

Public Administration, Education, Health Social Services

Retailing

Communications

Others

Aggregate deal value (mil USD)

Target name

Eni East Africa SpA

Target business description

Oil and gas exploration services Eastman Kodak Com- Document and personal pany's Document imaging services Imaging business' certain assets Seadrill Ltd's tender Oil and gas drilling rig rig business operator Terminal Investment Container terminal Limited SA operator Cerved Group SpA Business information database developer and operator M3 Inc. Online medical industry market research services V Kontakte OOO Online social network operator BGC Partners Inc.'s Electronic US Treasury eSpeed platform busi- securities trading platform ness operator CompuCom Systems Information technology Inc. consulting services Salesforce.com Inc. Customer data management solutions online platform operator

Acquiror name

Vendor name

China National Petroleum Corporation UK Kodak Pension Plan

Eni SpA

SapuraKencana Petroleum Bhd Global Infrastructure Management LLC; Co-investors CVC Capital Partners Ltd

Seadrill Ltd

Sony Corporation

Eastman Kodak Company

MSC Mediterranean Shipping Company SA Bain Capital LLC So-Net Entertainment Corporation Mr Lev Leviev

Yunaited Kepital Partners Edvaizori OOO NASDAQ OMX Group Inc., BGC Partners Inc. The

Thomas H Lee Partners LP Court Square Capital Ltd

May 2013 /

ON THE COVER:

VendAsta Raises $8.25 Million in Funding

VENDASTA RAISES $8.25 MILLION IN FUNDING

-----------------------------------------------------------------------Jeff Tomlin is a Co-Founder and VP of Marketing at VendAsta. ------------------------------------------------------------------------

VendAsta was founded in 2008. In the summer of 2008, the company raised $3 million to help homeowners find and share trusted service providers. The idea would provide a social platform for homeowners and a simple reputation management platform for service providers. “Over the next year and a half the consumer side of the equation was dropped to focus 100% on reputation management as the market showed a huge need for such a solution,” explained Mr. Tomlin. “While there were mature social media products to help large brands like Starbucks listen to what people are saying about them online, there were almost no solutions affordable enough for small businesses to do the same. Furthermore, no platforms were detailed enough to help brands like Starbucks see what people are saying about their individual locations.” In 2010, VendAsta rolled out a white-label reputation management solution for companies that provided advertising and marketing solutions for small businesses. At the end of 2010, VendAsta signed its first channel partners, Ziplocal and Hearst Media Services. “These provided a solid springboard for growth,” continued Mr. Tomlin. “Today, we have over 250 media partners that serve over 100,000 local businesses on our platform. These local businesses include restaurants, retail, automotive dealers, medical professionals, lawyers, hotels, and much more.”

ACQUISITION INTERNATIONAL

Discussing how VendAsta differentiates itself, Mr. Tomlin noted that the founders have a long history ofworking with large complex organisations, such as the media partners the company has today. He added that “not all solution providers can provide the type of solutions and service to these institutions.” Another significant factor is the suite of solutions the company has built around reputation and social presence management, which are complementary and work seamlessly together. “One of the challenges that people in our space have is vendor clutter,” observed Mr. Tomlin. “If they can get more than one solution from a single vendor, it makes their life much easier.” A final factor is the company’s continual reinvestment in its software platform to stay out in front of the industry trends.

of several product opportunities on the software side of the business. On the sales and support side, we’ll be able to provide much more thorough product and sales training and ongoing support.”

VendAsta’s key measures of success for the funding are maintaining the company’s pace of new channel partner acquisition and introducing newly-planned products while preserving channel partner satisfaction levels. “If we do that well, the revenue will follow,” said Mr. Tomlin. “In the next 12 months, VendAsta will double its current team size. We will have a deep concentration of channel partners in virtually every media vertical (Newspaper, IYP, TV, Radio, Pure Play Digital),” he concluded.

This year, VendAsta raised $8.25 million in funding from Vanedge Capital and BDC Venture Capital. Commenting on the strategic reasoning behind the funding round, Mr. Tomlin explained that VendAsta had an enormous opportunity in front of it. “We were experiencing a lot of demand, and while we were building a great reputation in the industry, we had to develop our platform faster and do a better job at servicing our channel partners,” he stated. “The funding will allow us to increase the size of our technical teams and our sales, support and business development teams. We’ll be able to get out in front

Company: VendAsta Technologies Inc. Name: Jeff Tomlin Email: jtomlin@vendasta.com Web: www.vendasta.com Location: #405 220 3rd Ave. S., Saskatoon, Saskatchewan, S7K 1M1, Canada Telephone: +1 306 955 5512 x. 108

May 2013 /

2013 INTERNATIONAL START-UP ADVISORY AWARDS:

Start Up Legal Advisory Firm of the Year – Yemen - Luqman Legal Advocates & Legal Consultants

START-UP ADVISORY AWARDS Start Up Legal Advisory Firm of the Year – Yemen

-----------------------------------------------------------------------Abdulla Luqman is the Managing Partner of Luqman Legal Advocates & Legal Consultants. ------------------------------------------------------------------------

Mr Luqman completed his BSc in Mathematics from Imperial College, London, followed by a Master’s in Computing from Kent University, UK. He started his career with Unilever Arabia Group of Companies in Jeddah and Dubai as a Business Research Manager. In 1996, Mr Luqman joined the University of Kent in the UK where he completed his LLB. He then trained with Richards Butler International Law Firm in London, and then joined Al Tamimi & Company Law Firm in Dubai as a Legal Consultant. In 2004, he merged with Al Suwaidi & Company in the UAE to form Luqman Legal in Yemen. Mr Luqman explained that one of the firm’s approaches is to work closely with clients in order to satisfy their requirements in a comprehensive manner. As part of its continuous efforts to build and improve its relationships with clients, there are a number of fundamental guiding principles that it abides by: •

• • •

providing a comprehensive approach to problem solving which accounts for legal, commercial, economic and other important considerations of the client; providing a cohesive team with the breadth and depth of skills from various competencies that are required to address the client’s various issues; delivering practical advice in a cost-effective manner; Members of the firm are multilingual with international work experience. This enables them to communicate with international clients in their languages and provide them with international

20 / May 2013

quality service, which is a serious barrier to most firms in Yemen; Members of the firm are frequently invited to speak in international conferences in various fields of expertise which generate more clients interest; and; Being a member of a number of international networks and ranked by reputable organisations, bring high quality referrals to the firm.

clear growth in the fields of arbitration and oil & gas related work.

“We are pleased by the annual recognition we are receiving from various organisations and look forward to maintaining such recognition for all years to come,” said Mr Luqman.

In 2013, the firm aims to continue its good quality work and strengthen communication with clients. It also plans to play even more active roles in public speaking and contribution to international conferences.

One of the firm’s greatest achievements in 2012 was reinstating the team and operations of the Yemen office following the slow-down that occurred in 2011 due to political unrest in the country.

Mr Luqman concluded: “We are surely under great demand to expand the team and services we offer; part of which is of course recruiting high quality and western educated new members.”

•

Looking within the firm, Mr Luqman stated that an extremely high emphasis is placed on team culture. “We always work as a team and involve as many members as possible in any transaction,” he explained. “This is to enrich the outcome of the work.”

“We have secured very high level instructions in various fields with particular growth in arbitration and oil and gas related work,” he added. “We also believe that we have achieved higher market share of high level consultancy work.” Mr Luqman has witnessed an increase in start-ups in 2012, which he attributes to the firm’s “marketing efforts, delivery of high quality work which is well received and appreciated by clients and the resolution of the political unrest which took place in Yemen during 2011”. He stated that the most significant start-ups in 2012 were a number of entities relating to the telecommunication and oil & gas sectors, and added that the firm achieved

Company: Luqman Legal Advocates & Legal Consultants Name: Mr Abdulla Luqman Email: abdulla@luqmanlegal.com Web: www.luqmanlegal.com Address: 302 Eastern Tower, Sana’a Trade Centre, PO Box 15585, Sana’a, Republic of Yemen Telephone: +967 144 8440 or +9671 448 460

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Due Diligence in the Ukrainian Subsoil Use Sector

DUE DILIGENCE IN THE UKRAINIAN SUBSOIL USE SECTOR the production program or the agreement may ultimately lead to termination of the License. Recommendation 2 - Check the Operational Permits In addition to the License, a licensee should hold a number of other permits and approvals for operation of the production. This may include, inter alia, a mineral storage and/or distribution license, a waste disposal permit, an air pollution permit, permits from fire safety and labour safety authorities, and so on (the “Operational Permits”). If any of the Operational Permits are invalid, missing, or expired, the licensee may not operate the production and the appropriate public authority may shut down the mineral exploration.

-----------------------------------------------------------------------By Mykola Stetsenko, Managing Partner, and Gennadii Roschepii, Associate ------------------------------------------------------------------------

Ukraine is a well-known raw materials supplier and has substantial explored and proved reserves of saleable subsoil (including oil and gas). That is why more and more foreign investors investigate whether Ukraine is an attractive place to invest in the subsoil use sector. In order to use subsoil, an investor should have an exploration or production license (the “License”). This may be done only by: (a) obtaining the License from the state; (b) purchasing a company with the License; or (c) participation in joint activity with a License holder. Investors who dare to invest using options (b) and (c), and who conduct due diligence on the assets, should consider the following recommendations. Recommendation 1 - Check the License The ultimate goal of the investment is to operate under the License. Investors should carefully check to ensure that the License has been properly issued and that it is valid. In most cases, the License is issued after a public auction; otherwise it may be easily cancelled. It is also advisable to check media and internet reports (including the official sites of public authorities) to see whether there are any conflicts or historical problems with the License. Also, investors should investigate whether the licensee follows the production program and fulfils the license agreement. Non-compliance with either

ACQUISITION INTERNATIONAL

Apart from the Operational Permits, investors should carefully check all recent inspection reports. Investors should note that the “rules of good form” require that public authorities must find breaches of regulations and standards during each inspection of the licensee. Therefore, investors should not be surprised when almost every inspection report shows a number of violations. What investors should do is to check whether the breaches are material, what consequences for the production they may have, and whether the licensee is going to “cure” or remediate the breaches. Recommendation 3 - Check Production Facilities and Land Plots Even if a licensee holds the License and Operational Permits, it cannot produce minerals without appropriate production facilities (like processing plants, wells, pipelines, railways, or storage facilities). Unless an investor wishes to develop or use its own production facilities, it should check the titles to the licensee’s facilities and the underlying land plots. Investors should not be surprised that in many cases certain construction projects, like pipelines, railways, and storage facilities, and the underlying land plots are state-owned and the licensee only leases such assets. If this is the case, an investor should cross-check the terms and conditions of the leases, especially the payment adjustment and termination clauses. Recommendation 4 - Check Distribution and Transportation Contracts Successful production must be accompanied with the profitable distribution of minerals. Investors should at least review the major distribution contracts and pay attention to the contract’s terms, including the payment and termination clauses. In some cases, it is recommended to check the mineral transportation contracts. This is especially true in the oil and gas sector, as licensees are

normally connected to state-owned pipelines. Thus, an investor must be aware of the availability and conditions under which these connections may be utilised. Recommendation 5 - Check Conflicts Subsoil use is a rather politically sensitive matter and is an easy target for raider attacks. Unfortunately, there are many instances where the License was attacked by authorities or competing state enterprises. The most remarkable period in this regard was during 2006 and 2007, when around 1,000 Licenses were cancelled due to violations of the issuance procedure. Investors should double check whether there is any pending or potential litigation or claim. It would be also very useful to have a chart on the market and identify any competing interests with respect to the License, and how these competitors typically behave. Recommendation 6 - Check for Liabilities If an investor purchases a licensee, it should do the standard due diligence on the company, including checks on the corporate issues, outstanding loans, and other financial arrangements and liabilities, like corporate guarantees, pledges or mortgages. Investors should take it as a rule that “nothing should be blank” and should be aware of every aspect of the licensee’s history. Recommendation 7 - Do Technical Due Diligence Our final recommendation is to engage a local technical team to do technical due diligence. This is advisable because of the difference between local and international technical standards and methodology. There have been cases on the market where foreign investors were mistaken in their valuation of the profitability of particular subsoil reserves. Also, a local technical team would be helpful for analysing the facilities’ production capacity.

Company: Avellum Partners Name: Mykola Stetsenko Email: mstetsenko@avellum.com Web: www.avellum.com Location: Leonardo Business Center, 19-21 B. Khmelnytskoho Str., 11th floor, 01030, Kyiv, Ukraine Telephone: +380 44 220 0335

May 2013 /

SECTOR SPOTLIGHT:

Investing in Municipal Bonds: Balancing Risk and Reward

INVESTING IN MUNICIPAL BONDS Balancing Risk and Reward

l Municipal bonds can represent an attractive investment for individuals looking for assets that provide tax-advantaged income. For those in higher tax brackets such bonds are seen as a desirable way to invest in the hope that these will bring a steady tax free income. However while buying municipals bonds is viewed as a conservative investment strategy, it is certainly not without risk. If the issuer is unable to meets its financial obligations, it may fail to make scheduled interest payments and be unable to repay the principal upon maturity. The interest rate of most municipal bonds is paid at a fixed rate and does not change over the life of the bond. If interest rates rise, the owned bond will be paying a lower yield compared with that offered by newly issued bonds. Municipal bonds are often seen as low risk when compared to other bond types; the interest is usually lower than on taxable fixedincome securities such as corporate bonds but often the return is slow and steady. It is important for those looking to invest to ensure they choose the right option for them and be fully aware of the advantages and disadvantages of such an investment. Prospective investors are therefore advised to consult those in the know to ensure that this is the right avenue for them. Acquisition International speaks to Brian S. Fraser, Esq., a Partner at Richards Kibbe & Orbe LLP, to discuss the details of municipal bonds in the US. “A controversy has arisen over the ratings that the credit ratings agencies give to municipal issuers. Some issuers claim that defaults are rare and that the issuers deserve higher ratings. Other observers contend that municipal finances are opaque and subject to lack of disclosure, that pension and other long term liabilities have weakened the strength of municipal issuers and that defaults are now more likely.” Mr Fraser highlighted the relative lack of transparency and disclosure as the factor that sets municipal securities apart. Over the past few years, however, the SEC has attempted to improve its oversight of municipal finance despite limitations on its powers imposed by Congress in this area. “Indeed, among other enforcement efforts, on April 29, 2013, the SEC sued the California city of Victorville, along with an airport authority, a city official and an underwriting firm for defrauding investors in connection with a 2008 bond offering.” -----------------------------------------------------------------------Brian S. Fraser represents and advises clients in complex commercial and financial matters. In financial litigation, Mr. Fraser represents clients in litigation involving capital markets, mergers and acquisitions, derivatives, securities, including asset-backed securities, corporate governance and insurance. Mr. Fraser represents hedge funds, fund managers, institutional investors, insurers, investment banks, portfolio companies, trust boards and other clients involved in disputes arising from transactions or investments in the equity, debt, structured finance and derivatives markets. ------------------------------------------------------------------------

Richards Kibbe & Orbe LLP is a dynamic and entrepreneurial firm with deep experience and relationships in the financial markets and the business community. The firm conducts a highly collaborative practice through approximately 75 lawyers based in New York, Washington, D.C. and London.

ACQUISITION INTERNATIONAL

“We have represented and advised municipal bondholders and bond insurers for more than 25 years,” said Mr. Fraser. “Our experience with distressed municipal debt ranges from the bankruptcy of Orange County, California in 1994 to the bankruptcy of Jefferson County, Alabama today.” Mr. Fraser noted that the market for municipal securities in the United States is a $3 trillion market, but one that is lightly regulated when compared to other securities. There are more than 90,000 states and local governments that issue bonds, which range from traditional fixed rate bonds to complex structured transactions. More than two thirds of this debt is sold to individual “retail” investors. “Municipal securities are exempt from the registration and other requirements of the federal securities laws, with the exception of the anti-fraud provisions,” he explained.

“Municipal securities may seem like safe “plain vanilla” investments but caveat emptor still applies,” he concluded.

Company: Richards Kibbe & Orbe LLP Name: Brian S. Fraser Email: bfraser@rkollp.com Web: www.rkollp.com Address: One World Financial Center, New York, NY 10281-1003 Telephone: +1 212 530 1820

May 2013 /

SECTOR SPOTLIGHT:

Resolving Financial Services Disputes

RESOLVING FINANCIAL SERVICES DISPUTES l Thanks to the global financial crisis, the financial services industry is now a fertile breeding ground for disputes. The range of disputes is broad and at the top-end of the scale they involve claims for vast sums of money. Some of the more common include inquiries, fraud prevention, professional negligence, regulatory investigations and enforcement proceedings. As our global financial markets remain volatile, the level of risk faced by banks and other financial institutions remains high, and not only is there a growing potential for disputes but increased regulation to navigate. Disputes are costly, time consuming and damaging to the bottom line. When the stakes are high and the risks are great, when it comes to getting a resolution, most clients want speed, efficiency and minimal reputational risk. Acquisition International takes a detailed look at financial services disputes in China with Xin Zhang, a partner of Beijing Global Law Office (“GLO”), a leading PRC law firm established since 1984. -----------------------------------------------------------------------Abdulla Luqman is the Managing Partner of Luqman Legal Advocates & Legal Consultants. -----------------------------------------------------------------------Mr Luqman completed his BSc in Mathematics from Imperial College, London, followed by a Master’s in Computing from Kent University, UK. He started his career with Unilever Arabia Group of Companies in Jeddah and Dubai as a Business Research Manager. In 1996, Mr Luqman joined the University of Kent in the UK where he completed his LLB. He then trained with Richards Butler International Law Firm in London, and then joined Al Tamimi & Company Law Firm in Dubai as a Legal Consultant. In 2004, he merged with Al Suwaidi & Company in the UAE to form Luqman Legal in Yemen. Mr Luqman explained that one of the firm’s approaches is to work closely with clients in order to satisfy their requirements in a comprehensive manner. As part of its continuous efforts to build and improve its relationships with clients, there are a number of fundamental guiding principles that it abides by: •

•

According to Mr Zhang, there have been two significant changes in relation to China-related financial services disputes. Firstly, due to the slowdown of the Chinese economy and IPO process, a number of PE funds and financial investors are facing an increasing challenge on how to exit from their investments, and more disputes have arisen when the investees fail to reach their performance targets. “In addition to the classical PE investment disputes where the value of an investment is decreasing or a misrepresentation or even fraud by the investee is later discovered, other novel forms of investment such as convertible bonds, convertible loans and call and put option arrangements also encounter disputes nowadays,” he explained.

• •

•

of skills from various competencies that are required to address the client’s various issues; delivering practical advice in a cost-effective manner; Members of the firm are multilingual with international work experience. This enables them to communicate with international clients in their languages and provide them with international quality service, which is a serious barrier to most firms in Yemen; Members of the firm are frequently invited to speak in international conferences in various fields of expertise which generate more clients interest; and; Being a member of a number of international networks and ranked by reputable organisations, bring high quality referrals to the firm.

Mr Luqman is a holder of a Mathematics Degree and financially related work experience, which he believes enriches his understanding of financially related legal matters. He noted that a deep understanding of commercial and corporate transactions, in addition to international/ local legal knowledge, is necessary when dealing with financial services disputes. The firm has become under increasing demand over the past year following the resolution of the political unrest which took place in Yemen in 2011. While Mr Luqman cannot give

and financial institutions when they have to bring a litigation or arbitration to protect their interests in the disputed investment (especially if there is an exit issue or a misrepresentation issue back to the investment stage), or have to respond to the challenge made by a Chinese investor of their products (e.g. based on the allege of misselling).

Discussing resolution strategies, Mr Luqman concluded: “Amicable settlement through mediation is the best strategy we adopt. We try extremely hard to avoid litigation.”

Company: Luqman Legal, Advocates & Legal Consultants Name: Abdulla Luqman Email: abdulla@luqmanlegal.com Web: www.luqmanlegal.com Address: 302 Eastern Tower, Sana’a Trade Centre, Sana’a, Republic of Yemen Telephone: +9671 448 440 or +9671 448 460

increase of such disputes involving PE funds and financial institutions, mainly in two areas, as Mr Zhang concluded: “one relating to the recovery of a dissatisfied investment (including attending or even leading a restructuring process), and the other relating to the disputes on selling and liquidating financial products (especially if structured products are involved).”

“The most popular resolution strategy for China-related financial service disputes to date is the arbitration, either before a Chinese arbitration commission (such as China International Economic and Trade Arbitration Commission, known as CIETAC) or before an international arbitration body (HKIAC and SIAC are more often seen in practice),” explained Mr Zhang.

“Secondly, international and domestic banks have been active in selling various fund or derivative-based products to Chinese institutional and wealth investors. During the past one or two years, we have witnessed an increasing trend of disputes in these areas, especially with an investment product or an embedded derivative.”

“However, we have seen a trend an appetite for international investors and financial institutions to use the PRC courts as the forum of dispute resolution, especially if a tort of fraud claim is involved, which marks an increasing confidence in the competence and impartiality of the Chinese judicial system in resolving China-related financial services disputes.”

Discussing the most common disputes, Mr Zhang stated that GLO normally represents international investors

While GLO does not anticipate a large increase of financial services disputes in 2013, the firm does predict a steady

24 / May 2013

specific details, he stated that the firm has been involved in a number of international arbitrations and agency/ distribution related disputes.

Company: Beijing Global Law Office Name: ZHANG Xin Email: zhangxin@globallawoffice.com.cn Web: www.globallawoffice.com.cn Address: 15&20F, Tower 1, China Central Place, No. 81 Jianguo Road, Chaoyang District, Beijing 100025, PRC Telephone: +86 10 6584 6676

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Antitrust Litigation – Resolving Competition Disputes

ANTITRUST LITIGATION

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 Vincent Smith, a partner at Sheppard & Smith, to get his opinion on the key current issues.

-----------------------------------------------------------------------Sheppard & Smith is a specialist City law firm in London which focuses on EU, competition and regulatory law, offering competition advice and litigation services to companies, public bodies, trade and professional associations and to other law firms. ------------------------------------------------------------------------

“Our unique focus on competition and regulation allows us to give expert legal advice on all of the issues clients might have in this area,” said Mr Smith. “Our expertise – from trade regulation to State aid control, from competition litigation to mergers – is wide ranging and our profiles in these areas are based on our long experience in this field.” Mr Smith explained that competition litigators in Europe should: have a firm grasp of competition law: be aware of the different litigation procedures available across the Member States of the EU and in the European Court of Justice; be patient and tenacious; and have a strong ethical sense. In particular, Mr Smith stated that “a high degree of familiarity with regulation (in the broadest sense,

ACQUISITION INTERNATIONAL

including civil procedure) across the different Member States of the EU is essential.”

as the ‘go to’ forum for competition litigation not just in the UK but further afield.

“Most regulatory regimes change frequently to deal with new challenges – be up to date! Also, co-ordinating a multi-jurisdictional issue where regulators may have strongly differing polices, or even views of the evidence, is a challenge,” he advised.

“The continuing reduction in public competition and regulatory enforcement budgets, as well as an increased awareness of the damage done by competition and regulatory law breaches, inevitably means that the courts in Europe will see an increasing competition law case load,” he concluded.

Mr Smith highlighted an increase in the “acceptance of the possibility, and even the need, to seek compensation from companies breaking competition rules.” “In addition to actions for damages, injunction applications are also a continuing source of redress for victims of anti-competitive behaviour,” he continued. Looking ahead in 2013, Mr Smith anticipates deepseated change in the public enforcement landscape as the OFT and the Competition Commission prepare for institutional merger in early 2014; and legislation to reinforce the role of the Competition Appeal Tribunal

Company: Sheppard & Smith Name: Vincent Smith Email: vincent.smith@sheppardsmith.com Web: www.sheppardsmith.com Telephone: +44 (0) 20 3427 3527

May 2013 /

SECTOR SPOTLIGHT:

The Specialisation of the Oil & Gas Industry

Administrative and Regulatory International Trade and Financing Commercial and Civil Litigation Oil & Gas Labor Tax Environmental Intellectual Property Social Security

Profile

26 / May 2013

Vinhas e Redenschi Advogados - VRA, is a general practice law firm specialized in key areas of business law. The firm has a complete and wide-ranging operating structure, with offices located in Rio de Janeiro, S達o Paulo and a bureau in Madrid in association with an important local law firm. Besides that VRA has well a network of corresponding offices throughout the country and is part of LEGUS, an international association of law firms.

www.vradv.com.br

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.

-----------------------------------------------------------------------Adv. Dorot is an expert in indirect taxation and international trade in Israel, and acts as Co-Head of The tax department at Eitan, Mehulal & Sadot, Advocates & Patent Attorneys. ------------------------------------------------------------------------

In 2006, Adv. Dorot published the book “Customs and International Trade Law” (by the Chambers of Commerce Association), which is an essential guide for practitioners in the field. The tax department at Eitan, Mehulal & Sadot serves the firm’s clients in all aspects relating to indirect taxation and import taxes, both in civil disputes vis-a-vis the tax authority and the various ministries. The representation includes the filing of objections with the tax authority and representation before courts in tax appeals and in claims against the tax authority. In the field of import taxes, Eitan, Mehulal & Sadot represented importers and exporters for more than 50 years in civil disputes against the tax authority with respect to import taxes, i.e. customs, purchase tax and value added tax. In the field of international trade regulation, Eitan, Mehulal & Sadot represents local and international

ACQUISITION INTERNATIONAL

companies in all aspects of trade regulation vis-à-vis the various government ministries. In the field of trade levies, Eitan, Mehulal & Sadot represent both international and Israeli companies in investigations regarding anti-dumping duties and applications for protective levies. The firm has been involved in high-profile disputes in the field of import taxes in the last decade, representing major companies in the economy in tax disputes at very large scopes. A precedential judgment was given in 2013 by the Israeli district court in favor of importers represented by Adv. Dorot, regarding customs valuation of royalty payments made by importers to Trade marks owners. The importers filed a law suit against the demand of the Israeli tax authority to add the royalties’ fee to the transaction value of the imported goods, and their arguments were accepted by the district court. According to Adv. Dorot, 2013 is a challenging year in the field of indirect taxation and customs law, as a result of government’s intention to deepen the tax

collection in order to reduce the budget deficit. One step in this direction is the intention to raise the VAT rate from 17% to 18%, and the intention to impose excise duties of imports of luxury items, as privet airplanes and yachts.

Company: Eitan, Mehulal & Sadot, Advocates & Patent Attorneys Name: Avigdor Dorot Email: avigdord@ems-legal.com Web: www.ems-legal.com Address: 10 Abba Eban Blvd. PO Box 2081, Herzlia 46120, Israel Telephone: +972-9-9726000

May 2013 /

SECTOR SPOTLIGHT:

Cross-Border Business Crime: A Major Target of Enforcement

CROSS-BORDER BUSINESS CRIME A Major Target of Enforcement

l Globalised markets together with the increasing pressure to confront international fraud and money laundering has led to the inevitable development of international legal enforcement. Corrupt practices around the world, financial fraud, tax evasion, cartel offences and other forms of business misconduct are thought to be top targets for aggressive transnational prosecution. The criminal law in any jurisdiction gives a framework defining the boundaries to acceptable behaviour. Clear and consistent boundaries help to ensure that all businesses are held to the same standards of behaviour, so that appropriate business decisions can be made without the distortions that can result from inappropriate or unfair behaviour. The differences between jurisdictions as to how the law is defined and interpreted can make it difficult for cross-border commerce to develop with a common understanding of what is acceptable and what is not. In light of the escalation of business crime prosecution, those who are advising corporations and individuals in relation to such offences have to respond to the new challenges in order to protect their clients’ interests. Business crime defence lawyers and consultants need to act creatively in an environment plagued with risks, where long-cherished principles like commercial and banking secrecy are swept aside. Leading experts in the field give Acquisition International a detailed look at the key current issues in cross-border business crime.

Cross Border Investigations: New Challenges business. As international government authorities increase their cooperation, so should international defence lawyers in order to best serve their clients. Brown Rudnick’s White Collar Defence and Government Investigations practice offers and experienced team of lawyers and investigators from Washington, New York and London, who regularly represent companies and individual officers and directors in government investigations, legislative oversight inquiries, and trials, involving a wide array of criminal and regulatory investigative areas – anti-trust, financial fraud, securities, political corruption, environmental – in the Unites States, the UK and throughout the world.

-----------------------------------------------------------------------Mark Tuohey and Mark Beardsworth are Partners at Brown Rudnick LLP. -----------------------------------------------------------------------Cross border cooperation, while not new, is increasingly common and there has been a concerted international move to eradicate bribery and corruption in international business transactions over recent years. Thirty-nine countries, including the U.S. and the UK, had become signatories to the OECD Anti-Bribery Convention. The U.S. Department of Justice (“DOJ”) and the U.S. Securities and Exchange Commission (“SEC”) have frequently cooperated with foreign authorities when investigating allegations of violations of the Foreign Corrupt Practices Act of 1977 (“FCPA. Cross-border collaboration has occurred in the course of a number of FCPA investigations, some of the most notable being Siemens (“Siemens”), BAE, Innospec and Johnson & Johnson. During the Siemens investigation, for example, the SEC, DOJ and the Munich Prosecutor’s Office worked closely together, sharing evidence and information, and in so doing, set the standard for multi-national cooperation.

ACQUISITION INTERNATIONAL

With the more recent enactment of the UK Bribery Act 2010, the U.S. and UK will continue the growing trend of collaboration. The significant examples of cross-border cooperation, and the anticipated increase in collaboration between the UK’s SFO and its international counterparts, illustrate the necessity for business crime defence lawyers to understand when they are dealing with international authorities outside their practice area. Advisors should identify and monitor parallel proceedings in foreign countries, be aware of the stages of each foreign investigation and understand how information sharing amongst prosecutors may affect clients’ interests. For individual clients, counsel must be vigilant about the progress of investigations in all countries with jurisdiction, as the limitation periods and the pace of investigations may vary widely. Counsel must also be familiar with the varying rules on discovery, privacy and privilege in different jurisdictions when conducting investigations. With technological advances easing expansion, companies have been moving into emerging and frontier markets. Additional business opportunities expose companies to risk and a greater need to understand overseas compliance in the context of their

Company: Brown Rudnick LLP Web: www.brownrudnick.com Address: 601 Thirteenth Street NW, Suite 600, Washington, DC 20005, United States Name: Mark Tuohey Email: mtuohey@brownrudnick.com Telephone: +1 202 536 1740 Name: Mark Beardsworth Email: mbeardsworth@brownrudnick.com Telephone: +44 20 7851 6068

May 2013 /

SECTOR SPOTLIGHT:

A Step by Step Guide to Forming Companies

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

-----------------------------------------------------------------------Oblin & Melichar is a law firm practicing in the field of domestic and international commercial law and has particular expertise in dispute resolution. -----------------------------------------------------------------------The firm provides advice and representation with regard to all aspects of judicial and extrajudicial dispute resolution: out-of-court negotiations, litigations and arbitration proceedings as well as national and international enforcement proceedings. It also provides advice in the areas of domestic and international contract law as well as corporate law. The firm’s general commercial and corporate advice and M&A services include: • Advice and representation in all matters of general commercial- and contract law (including competition and intellectual property law); • Incorporation of private and public, unlimited and limited companies, setting up co-operations and partnerships; advice on articles of association, shareholders’ agreements, rules of internal procedures; • Structuring acquisitions, divestitures and sales under corporate law; joint ventures; conducting legal due diligence investigations. Dr Oblin explained that the limited liability company is the most common legal form for a company in Austria and can be established by a single shareholder. He noted that a limited liability company has few formal procedures and a high degree of flexibility. “This is particularly true when compared with the structure of a joint stock corporation,” he commented. “A supervisory board can be established for a limited liability company. However, except for large limited liability companies (which

ACQUISITION INTERNATIONAL

must exceed certain thresholds), a supervisory board is not required under mandatory law. Thus, the GmbH can, subject to the above-mentioned exception, operate without any worked representatives in the corporate bodies of the company.” Another feature of the limited liability company is that the managing directors must comply with the direct orders of the shareholder. Dr Oblin added that the foundation of a limited liability company is generally not more cumbersome than the registration of an Austrian branch office in the Commercial Register. An estimated time for the establishment of a company is approximately three weeks after receipt of all the required documents. For the purposes of preparing the foundation of a limited liability company, the following information is required: • Desired company name; • Business Address and Corporate Seat of the Company; • Information about the Shareholder(s); • Object of the Business; • Share Capital and Shareholders’ Contributions; • Business Year; • Name, Birth Date, Address and Power of Representation of the Managing Director. After receipt this information, the firm would prepare drafts of the following documents: • Register filing signed by all managing directors • Notarial foundation deed setting up the GmbH • Notarised document on the appointment of the managing director(s) • Notarised sample signature sheet • Confirmation by the managing directors that all

• •

necessary contributions have been/are at their free disposal Bank statement evidencing payment of the company‘s share capital Tax clearance certificate (Powers of attorney of the shareholders issued to the firm for the foundation of the company)

After the preparation of the draft documents, the following issues will be addressed: • Expert Opinion on Admissibility of the Firm Name • Foundation of the Company • Payment of the Share Capital • Signatures Required from the Managing Directors • Taxes • Registration • Notification of Tax Authority • Application for Trade Permit

Company: Oblin & Melichar Name: Dr Klaus Oblin, LL.M. Email: office@oblin.at Web: www.onlin.at Address: Josefstädter Straße 11, A - 1080 Wien, Austria Telephone: +43 1 505 37 05

May 2013 /

SECTOR SPOTLIGHT:

MALAYSIA Malaysia: Continued Growth for 2013

Continued Growth for 2013

l In spite of the present challenging global environment the Malaysian economy is projected to grow progressively in 2013. Last year the economy grew by 5.6% and this high growth is expected to continue into 2013 supported by strong domestic demand and a better global outlook. With improvements made on the export front and private investment; Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said “The continued investment activity, especially in high value-added and productive sectors, is expected to improve Malaysia’s competitiveness, sustain demand for exports, and improve our capacity in terms of imports for investment activity.” Performance in 2012 has proven that there is clear overall faith in improving this year’s economic development with all sectors expected to perform well. Exports from Malaysia, a key producer of electronics, oil and palm oil could rise 1.8% in 2013 as shipments of higher value manufactured products grow. CIMB Investment Bank Bhd economic research head Lee Heng Guie said “robust private investment growth and public spending would continue to fuel total investment growth.” Malaysia’s economy is flourishing; the country’s competitive cost of doing business and open policies such as the allowance of 100% foreign equity holdings makes it attractive for business expansion and ideal for foreign investment. However, as with any country there are still challenges to be faced, the central bank said Malaysia’s stock market benchmark is the only one in Southeast Asia to be down this year. Acquisition International examines the current investment opportunities and pull factors which are bringing foreign direct investment into the region in conjunction with some of Malaysia’s leading professionals. In order to overcome problems stemming from the challenging global economy, the Malaysian Government has been actively promoting Malaysia as a favourite investment location to various industries and companies. However, while the fragile global economy may have dampened some government initiatives, Mr Damodharan believes that Malaysia has not been badly affected.

-----------------------------------------------------------------------Ramakrishna Damodharan is the Managing Director of ADIPVEN (M) Sdn. Bhd., a boutique Intellectual Property (IP) Firm, headquartered in Kuala Lumpur, Malaysia. -----------------------------------------------------------------------Mr Damodharan described the current business environment in Malaysia as “definitely very positive”. He stated that the country enjoys a rather stable economic and political situation and as a result businesses find Malaysia to be an excellent choice as a destination from which to run their businesses. Based on the World Competitive Yearbook 2012, Malaysia is the 14th most competitive country in the world amongst the top 59. Also, the Global Competitiveness Report 2012-2013 by the World Economic Forum, which covers 144 countries, places Malaysia as the world’s 25th most competitive country. Mr Damodharan believes that the sectors that present the greatest opportunities for investors include: agriculture; manufacturing; tourism; logistics services; education;

32 / May 2013

“Malaysia has been strengthening deeper economic cooperation with other Asian countries such as Japan, China and India with the aim to reduce dependence on advanced economies such as the United States of America and Europe in order to address the global imbalance,” he explained. “It is noted that Malaysia’s foreign direct investment (FDI) is too dependent on the western world and therefore the Government has taken several initiatives to shift towards Asian economic integration so that Malaysia is in a good position to tap a portion of cross-border capital flows in Asia. health care; oil; gas and petrochemical; creative industries; electrical and electronics; financial services; palm oil; rubber; fishing and aquaculture.

“I do anticipate continued positive growth in Malaysia in 2013 and in coming years,” he concluded.

Discussing plans to maintain the country’s growth and to boost the stock market benchmark, Mr Damodharan highlighted the Economic Transformation Program (ETP) – an initiative launched on 21st September 2010 by the Malaysian Government to turn the country into a high income economy by 2020. “According to reports published by the Government, the ETP is a comprehensive economic transformation plan to propel Malaysia’s economy into a high income economy and to raise Malaysia’s Gross National Income (GNI) to US$523 billion by 2020, and raise per capita income from US$6,700 in 2010 to at least US$15,000 in 2020 thus meeting the World Bank’s threshold for a high income nation,” he commented. “It was reported in the media recently that the Government believes, based on the current economic growth, the developed nation status can be achieved as early as 2018.”

Company: ADIPVEN (M) Sdn. Bhd. Name: Ramakrishna Damodharan Email: info@adipven.com Web: www.adipven.com Address: A-33-3A, Menara UOA Bangsar, No. 5, Jalan Bangsar Utama 1, 59000 Kuala Lumpur, Malaysia Telephone: +603 2201 4023 & +603 2201 4026 Fax: +603 2201 4025

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

A Brighter Future for Japan’s Economy

A BRIGHTER FUTURE FOR JAPAN’S ECONOMY l Japan’s economy has struggled in recent years however current figures have revealed that the economy is set to brighten and show significant improvement for 2013. The number 3 global economy grew at an annual rate of 0.2% in the final months of 2012 and share prices have also improved; being at their highest level in over four years as investors bought export-related shares. The benchmark Nikkei-225 stock index gained 2.6 per cent and Toyota, Sony and Motor Corp have boosted the country’s export manufacturers strengthening Japan’s currency. Japan’s Prime Minister Shinzo Abe is certainly making waves in his approach to turning the economy around but on the whole he is well regarded, one of his supporters is Haruhiko Kuroda- president of the Asian Development Bank. The mix of policies introduced by Abe include monetary, fiscal and structural policies and their intended goal is to pull Japan out of almost 20 years of falling wages, price deflation, and depressed corporate profits. Acquisition International speaks to Piyasena Perera, a Senior Foreign Counsel at Anderson Mori & Tomotsune to examine the current economic situation and opportunities in the country.

Mr Perera began by noting that the business environment in Japan is showing some signs of improvement – in large part due to some recent economic and monetary policy initiatives of the Abe administration. “Despite some recent travails, Japan is still a leading industrial country and offers unique investment opportunities for astute and patient foreign investors,” he commented. “This paints a somewhat attractive picture, but for the inexperienced, Japan is still a difficult place to do business without expert advice.” Mr Perera describes ‘Abenomics’ as “a set of bold and perhaps overdue fiscal and economic policies that may stimulate meaningful growth in Japan”. He stated that the reaction to the policies has been generally positive, but concern has been expressed by other countries about the global effects of the weakening yen and whether that is a positive for everyone. “One key concern is that the yen could depreciate too much, which could have a negative impact on the costs of imports,” he observed. “For example, because of the nationwide shutdown of the nuclear power plants, Japan is currently importing virtually all of its energy needs.” Another key concern highlighted by Mr Perera is whether the

ACQUISITION INTERNATIONAL

Abe administration follows through on the third arrow of the Abenomics ‘growth quiver’ – structural reform. “The expressed intention to join the negotiations for the Trans-Pacific Partnership is a good start, but more concrete measures need to be started now with respect to making the domestic market more competitive and attractive to foreign investment,” he added. Discussing the idea that Japan could become a role model to western economies, Mr Perera stated that it could be an example of how to (or how not to) manage the transition from a high growth to a mature economy. While he acknowledges that there have been plenty of policy mistakes along the way and the pace of change has been sclerotic, he noted that there have been a number of subtle changes in Japan’s industrial economy since the bursting of the economic bubble in 1990 that have not been noticed by many outside Japan. “For example, over the last 20 years, there has been a fundamental repositioning of laws, rules and incentives faced by Japanese managers,” he explained. “Whether or not directly attributable to these changes, also in the last 20 years it has become clear to astute investors that the most interesting and profitable companies in Japan are no longer those that mass-produce high-end consumer

end electronics and other products, but companies that excel in input components and materials, many of which are unknown outside Japan, but play a vital role in the global supply chain. This trend is not limited to the electronics industry. There are many companies in Japan that occupy the ‘Number One’ position in global markets, including Keyence, Mabuchi Motors and Shimano.” In conclusion, Mr Perera stated that he is “cautiously optimistic” about Japan’s economy in 2013.

Company: Anderson Mori & Tomotsune Name: Piyasena Perera Email: piya.perera@amt-law.com Web: www.amt-law.com Address: Izumi Garden Tower, 6-1, Roppongi 1-chome, Minato-ku, Tokyo 106-6036 Japan Telephone: +81 (0)3 6888-1292

May 2013 /

SECTOR SPOTLIGHT:

New Zealand: FDI and its Impact on the Economy

NEW ZEALAND FDI and its Impact on the Economy l Although not as severe as Europe and the US, New Zealand’s economy is having to recover from one of the longest and most severe recessions in living memory. While recovery has been slow, the economy is now showing more positive signs. The country has maintained its third place world ranking in the International Finance Corporation (IFC) Doing Business Report for the fifth year running and placed first for investor protection in the 2013 Report. The banking system remains sound and the big four banks have retained their AA rating. The $30 billion Canterbury rebuild programme is set to spur economic growth further, making New Zealand assets – including the dollar – a good bet for international investors. FDI however is a highly sensitive topic for many in New Zealand with concerns over foreign investment in agricultural land and manufacturing plants sparking widespread debate about foreign investment rules, with calls for greater regulation over inward FDI to ensure it is directed towards creating opportunities, jobs and foreign exchange earnings. But are these fears of foreign ownership overstated? Despite a strong trading relationship with China it is not a major investor in New Zealand ranking only 11th among investing nations with a total of $1.8 billion by contrast, FDI from Australia was $52 billion and from the US amounted to $11 billion. With its Geographical proximity to the world’s fastest growing economies, New Zealand now needs to reposition itself to attract the ideas and capital brought by foreign investment Guy Royal, Managing Director at Tuia Group, discusses the opportunities for overseas investors to invest alongside indigenous interests in New Zealand.

Investing in Indigenous New Zealand – The Quiet Revolution Indigenous Māori – Key Facts • The Māori collective asset base is estimated to be approximately NZ$40bn.

-----------------------------------------------------------------------Despite on-going public debate in New Zealand about FDI there exists a great opportunity for overseas investors to invest alongside indigenous interests. This is in stark contrast to other countries where “local interest disruption” represents a significant risk. -----------------------------------------------------------------------Indigenous Māori make up 15% of the NZ population and are increasing proportionally. This large ethnic make-up combined with well-settled political and legal arrangements between Māori tribes and the settlor government sets the basis for modern New Zealand. The NZ economy is remarkably robust (NZ Govt forecasting a surplus in 2014/15) and indigenous Māori are fast becoming a cornerstone investor within it. This quiet revolution inside the NZ economy has happened relatively quickly over the last 10-15 years. As the NZ Government seeks to open up resources and opportunities for FDI off-shore investors are being actively

34 / May 2013

encouraged by Government to participate with Māori. Participation models with Māori range from mandatory consultation as part of regulatory consents through to coinvestment joint ventures with direct capital investment or service provision collaborative opportunities. Examples of FDI with Māori include, Accor (France) in hotel developments, Nissui (Japan) in commercial fishing, Trilogy (US) in mobile telecommunications, and Vinamilk (Vietnam) in milk processing plants. They were attracted by local long-term partners who are strongly values/principles based, have community well-being as their focus, and can help manage local issues. In turn Māori are seeking off-shore partners with capital and expertise to develop their commercial opportunities. There is also an on-going opportunity for private sector co-investment to develop Māori assets acquired through land-loss compensation claims and emerging Māori interests in natural assets (including newly identified resources such as frequency spectrum).

•

Balance sheet growth rate for Māori institutions is significantly high (18% vs 2% of the wider economy).

•

Māori groups have significant national stakes in various sectors including agriculture (NZ$788m), forestry (NZ$2.1bn), fisheries (NZ$1 bn) and the service sector including tourism (NZ$3.2bn).

•

Some individual tribal groups have close to NZ$1bn in assets with investments in commercial property, tourism ventures, agriculture and energy generation.

•

Māori make up 15% of the population and have large scale land and water assets and rights.

Tuia Group is an advisory firm specialising in indigenous economic development. We act for many off-shore investors into New Zealand. Through Tuia International we also operate in many countries in Asia-Pacific and apply our philosophy of collaboration through local engagement for economic prosperity. We pride ourselves on being “culturally driven, commercially focussed”.

Company: Tuia Group Name: Guy Royal Email: g.royal@tuiagroup.com Web: www.tuiagroup.com Address: Head Office, Wakefield House, 90 The Terrace, Wellington New Zealand Telephone: +64 4 499-4084

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving Disputes in the Franchise Industry

RESOLVING DISPUTES IN THE FRANCHISE INDUSTRY l Whilst of course so many franchisor/franchisee relationships work well if the original franchise agreement has been properly drafted, the fact that disagreements do arise is of little surprise given the complexity and the longevity of many franchise relationships. It is common for franchisors and franchisees to disagree at some point after a franchise agreement is first drawn up. Often circumstances and aspirations have changed over time and the appropriate documentation has not changed to reflect the situation. Both franchisors and franchisees alike should recognise that there is a likelihood of disputes arising and budget accordingly. Litigation can be hugely distracting for both parties as well as costly, It is therefore of the upmost importance that both franchisor and franchisee seek advice from those with specific knowledge of the complexities relating to the franchise industry. Acquisition International examines the key issues with commentary from Mr S.F. Wong and Michelle C.Y. Loi at Shearn Delamore & Co. The Franchise (Amendment) Act 2012 came into effect on 1 Jan 2013. Ms Loi noted that the amendments were introduced with the aim of extending the scope of the existing Franchise Act 1998.

-----------------------------------------------------------------------Mr S.F. Wong is the senior partner of Messrs Shearn Delamore & Co. and co-heads the Intellectual Property and Technology Department of the firm. He was the former managing partner of the firm. Michelle C.Y. Loi is a Partner in the firm’s Intellectual Property Department. ------------------------------------------------------------------------

“We provide legal assistance in all franchise issues including the preparation and completion of disclosure documents, registration of franchises with Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC), franchise agreements and are involved in the mediation and litigation of disputes over breaches of franchising agreements,” said Mr Wong. “We have been involved in significant transactions involving franchising in Malaysia and abroad in a variety of sectors both for foreign and home grown franchises.” Ms Loi believes that disputes between franchisors and franchisees can be avoided by facilitating greater and further understanding of both parties’ obligations towards one another. In this regard, she highlighted the pivotal role played by the Malaysian Franchise Association (MFA) , the functions of which can be found on its website – www.mfa.org.my The Franchise Unit of the (MDTCC), has identified the following as common complaints: (a) fee, payments and royalty (b) territorial right

36 / May 2013

(c) obligation of franchisor and franchisee under the agreement (d) fraud (e) non-registered franchisor (f) franchisee carrying on similar business (g) breach of compulsory practices under section 15 of the Franchise Act 1998 (h) franchisor offering packages pending approval (or unapproved packages) (i) miscellaneous including disputes over audit rights, unfair termination, discrimination between franchisees, breach of confidential information, exclusiveness of the franchised rights and others. Mr Wong added that “the identified franchise complaints are statutory requirements governing the roles of parties provided for in the Franchise Act which to an extent reflect the level of awareness of parties’ and their counterparts’ responsibilities.” He highlighted Rangkaian Hotel Seri Malaysia Sdn Bhd v Husni bin Hussain [2007] 8 MLJ 476 and Neeta’s Herbal (M) Sdn Bhd v Lim Bak Hiang [2000] 6 MLJ 321 as cases that reinforce the principle underlying franchise practises in Malaysia, i.e. that they continue to be regulated by franchisor-franchisee agreements, subject to compliance with the statutory provisions of the Franchise Act 1998.

“The amendments further impose additional and more defined obligations on franchisors, franchisees and franchise consultants,” she explained. These additional obligations include (i) compulsory registration of franchisees before they could operate franchise businesses; (ii) compulsory registration of franchisees; (iii) registration requirement for franchise consultants and extension of registration period for franchise brokers; (iv) requirement on the part of the franchisors to submit an annual report to the Registrar within 6 months from the end of each financial year of the franchising business; (v) requirement for Registrar’s prior approval for any change in the disclosure documents; (vi) imposition of broader confidentiality and non-compete obligations as well as; (vii) prohibition on termination by franchisees without good cause. Mr Wong is confident that franchises will continue to flourish despite the added regulations and requirements by the Franchise Act 1998 as amended by The Franchise (Amendment) Act 22012. “It remains to be seen whether the number of complaints and disputes will increase with the number of added more onerous regulations and requirements,” he concluded.

Company: Messrs Shearn Delamore & Co. Web: www.shearndelamore.com Address: 7th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala Lumpur, Malaysia Telephone: +603-2027-2727 Direct: +603-20709546 / +603-20272851 Name: Mr S.F. Wong Email: saifong@shearndelamore.com Name: Michelle C.Y. Loi Email: michelle.loi@shearndelamore.com

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving Commercial Disputes through Mediation

RESOLVING COMMERCIAL DISPUTES THROUGH MEDIATION

l In recent years, the use of mediation as a form of alternative dispute resolution has been steadily gaining pace, saving time and money for the opposing parties. Mediation can be used to help settle disputes across a wide range of industries and in some cases, particularly in small claims; it has become a mandatory part of the dispute resolution process. Compared to other methods, mediation is well suited to the current economic climate; it is cost-effective and non-confrontational, which makes it a popular choice for solving all manner of business disputes. Resolutions can often be met within a short time of meeting the mediator and it often provides a more satisfactory outcome for all parties due to the fact that everyone is empowered to negotiate, therefore terms are agreed to a greater extent than they are imposed. Finding a neutral third party to facilitate the process can be challenging, especially finding one that all parties agree on. Until fairly recently, many mediators have not actively advertised their services, rather they have relied on gatekeepers and institutional clients to feed their supply of work. Acquisition International spoke to experts in mediation to learn more about the ADR technique and its advantages in commercial disputes. Mr Bourne originally qualified as a Chartered Surveyor and became the Managing Director of a national firm of Chartered Surveyors. In 2011 he retrained as a Commercial Mediator. He also undertakes Pro Bono Community Mediations. Throughout his professional life, Mr Bourne has gained considerable experience in dealing with disputes. “I therefore understand the issues which arise in disputes and have the man management skills required to be a good mediator,” he commented. “Mediation is my full time role and so I am very flexible on availability and am prepared to travel extensively.” Mr Bourne explains that a mediator manages the negotiations between parties, noting that a good mediator has excellent listening and communications skills and a balanced mixture of professionalism and friendliness.

out of their control and under the jurisdiction of a third party,” he added.

more recognised and used within commercial disputes in the UK. Mr Bourne concluded:

When assisting business professionals with corporate disputes, Mr Bourne is able to listen to their explanation of the dispute and understand them.

“We need to make sure that when businesses use mediation they see the advantages of the process and this requires well trained, experienced and professional mediators, who will do a good job which will encourage people to consider using mediation in their next dispute.”

“I can then help them to take the emotion out of the dispute and realise that a settlement on acceptable terms is usually preferable to continuing the action to court. How the parties achieve this will depend on the dispute and what the participants perceive as an acceptable solution.” Mr Bourne stresses the importance of inserting mediation clauses into contracts since this would make the management of the dispute much easier to orchestrate.

According to Mr Bourne, the key benefits of hiring a third party neutral commercial mediator are: independence, confidentiality, speed and cost effectiveness.

Mr Bourne has noticed a significant increase in the volume of work he has been involved with in the last 12 months - a fact he attributes to “his profile becoming better known rather than an increase in the number of disputes being referred for mediation”.

“Parties remain in control of their destiny throughout the process whereas the outcome in a Court or Arbitration is

He anticipates an increase in the number of mediations in 2013, stating that mediation is on the brink of becoming

-----------------------------------------------------------------------Mark S. Bernstein is a Partner at Barack Ferrazzano Kirschbaum & Nagelberg LLP. -----------------------------------------------------------------------For 25 years, Mark has been helping clients resolve complex commercial disputes. As a partner in the Litigation Group of Barack Ferrazzano Kirschbaum & Nagelberg LLP, he helps clients manage and resolve disputes in a wide variety of circumstances, ranging from pre-litigation counseling to taking cases to trial. Mark’s comprehensive experience is highly effective in all forms of alternative dispute resolution, including arbitration, mediation and other forms of summary proceedings aimed at resolving disputes without formal court litigation. His substantial background in accounting is invaluable to clients, and their bottom line, when determining the best course of action for each issue. Mark is regularly retained to represent clients in commercial disputes that clients consider high stakes because they involve high dollar exposure, important customer or reputational issues or threaten the client’s ongoing business operations. On each matter he works with the client to identify the business issues that are implicated by the dispute and he analyzes and describes both the potential and likely outcomes to assist each client in developing the business objectives necessary to resolve each dispute. He then implements a cost effective strategy to achieve those objectives. Establishing the business objectives for each

ACQUISITION INTERNATIONAL

Company: Bruce Bourne Associates LLP Name: Bruce Bourne BSc MRICS MCIArb Email: bruce@bbamediation.co.uk Web: www.bbamediation.co.uk Address: 35 Hazel Way, Fetcham, Surrey, KT229QF Telephone: +44 (0) 1372 878841

dispute is essential so that all involved can evaluate the chosen strategy and adjust as the case develops or if the business or litigation environment changes.

trials and settlement trials with floors and caps. Many of our lawyers continually hone their skills and widen their perspectives by serving as arbitrators and mediators.

Barack Ferrazzano has assembled a group of highly skilled trial lawyers who represent clients, both forcefully and efficiently, in a broad range of disputes. We are always ready to try cases when necessary, but resolve them early and economically when appropriate. We understand when asked to help resolve business problems, a trial is only one potential solution. When the situation calls for it, significant part of our time is focused on strategic counseling and alternative dispute. Our clients rely on our ability to design thoughtful, cost-effective solutions to complex scenarios, and to determine when it’s the right course of action.

Clients count on Barack Ferrazzano for strategic counseling designed to minimize the likelihood of litigation or reduce the exposure to litigation when potential problems arise. Our litigators have the unequivocal experience for engagements requiring certain legal or industry proficiency to achieve the most effective results for clients’ needs.

Some of the world’s most prominent companies have selected Barack Ferrazzano for representation in their most significant legal disputes. Our clients include a diverse group of businesses, ranging from one of the world’s leading oil and gas suppliers to large financial institutions, major telecommunications services providers, REIT(s), motor vehicle manufacturers, hedge funds, law firms and consumer goods companies. Barack Ferrazzano trial lawyers are experienced in a broad range of alternative dispute resolution techniques, including mediations, binding and non-binding arbitrations, mini-

Company: Barack Ferrazzano Kirschbaum & Nagelberg LLP Name: Mark S. Bernstein Email: mark.bernstein@bfkn.com Web: www.bfkn.com Address: 200 West Madison Street, Suite 3900, Chicago, IL 60606, USA Telephone: +1 (312) 984 3214

May 2013 /

SECTOR SPOTLIGHT:

A Positive Outlook on Nigeria’s Economy for 2013

A POSITIVE OUTLOOK ON NIGERIA’S ECONOMY FOR 2013 l Nigeria’s economy is set to strengthen in 2013 with the IMF predicting over 7% growth. Reports form KPMG stated that the total financial value of merges and acquisitions in Nigeria surged by an impressive 379% to $7.415 billion in comparison to the $1.548 billion recorded in 2011. The oil and gas sector is doing exceptionally well accounting for 77% of the total value driven by local and foreign companies seeking to acquire upstream oil and gas assets of international oil companies. Nigeria is seen as an ideal location for foreign investment; the country is at an economic boom, and international companies are already investing in well performing industries such as oil and gas, China being the most recent. Performance in other sectors has been rather positive with real gross domestic product growth rising to 6.3% and this figure is further expected to increase throughout 2013.

EXPERTS IN THIS AREA

Company: Alex Izinyon & Co Name: Alex Izinyon Email: alexsecond@alexizinyon.com Web: www.alexizinyon.com Address: Plot 1 Kinshasa Street, Wuse Zone 6, Abuja, FCT – Nigeria Telephone: +234 9 5234117

38 / May 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

TURKEY Turkey: The Potential to Transform the MENA Economies

The Potential to Transform the MENA Economies l Turkey is currently ranked among the world’s best performing countries after achieving economic growth of 2.5% in 2012. With the rest of Europe struggling to achieve even 1% growth and the fact that the IMF predicts Turkey to reach 3.4% in 2013, the statistics speak for themselves. Turkey’s stock market outpaced Europe with a positive performance of 58% and the country has had continued high GPD growth, low indebtedness and attractive valuations making it an ideal location for foreign investments. The continued success of Turkey could be inspirational to the MENA economies and the rest of the developing world. Turkey has managed to introduce economic and political reforms simultaneously and this progress has been noticed by the World Development Bank acknowledging Turkey’s success on the areas of regulatory quality, government effectiveness, control of corruption and the rule of the law. The decade ahead is set to see a renovation for the country with the main focus being on systematic transformation in political and economic realms. Turkey has hopes of becoming the ‘China of Europe’, however how realistic is this goal? And further, will surrounding countries have potential to achieve the same economic success? -----------------------------------------------------------------------Edmund Emre Özer is a partner at Gen Temizer Özer law firm. -----------------------------------------------------------------------Gen Temizer Özer is an Istanbul full service law firm providing premium advice on transactional and commercial matters across various sectors. The firm’s partners have over 30 years’ combined experience in global law firms, more than any other leading independent Turkish firm. The firm has a unique ability to manage cross border transactions from a local base in Turkey providing both Turkish and English law expertise. Partner, Edmund Emre Özer, begins by describing the current business in Turkey. “It has improved significantly over the last 10 years,” he states. “We have a strong and stable government that is pro-business. Much of the best practice deriving from EU principles (such as capital markets regulations, governance models) has been implemented in Turkey providing a more transparent measurable corporate governance framework for Turkish business. “Turkish companies are becoming more professionally run and structured, and the interesting development is that they are expanding regionally across different sectors from construction to retail.” -----------------------------------------------------------------------Gökmen Başpinar is a Partner at Baspinar & Partners. -----------------------------------------------------------------------At Baspinar & Partners, we believe that the quality of our work enables us to meet the needs of our clients efficiently and with the success that they are accustomed to. Approximately two thirds of Baspinar & Partners’ clients are international corporations investing in Turkey. Our local client base is a who’s who among the largest companies in their industry. The value of the transactions and the disputes under litigation being handled by Baspinar & Partners during 2011 – 2012 exceeds EUR 2 billion. (Real estate: € 1.14 billion, International Arbitration & Litigation: € 790 million, € M&A: 70 million). Turkey at a Glance Turkey has the world’s 18th largest nominal GDP and 15th largest GDP by PPP. The country is a founding member of the OECD and the G-20 major economies. Since Turkey is also a part of the EU Customs Union. Economists and political scientists often classify Turkey as a newly industrialized country; while Merrill Lynch, the World Bank and The Economist magazine describe Turkey as an emerging market economy. The World Bank classifies Turkey as an upper-middle income country in terms of its per capita GDP.

40 / May 2013

Edmund continues to explain what the main pull factors for the country are, and why investors are drawn to it. “The main pull factors for Turkey: high annual GDP growth for the past 10 years (from just over USD 3,000 in 2001 to over USD 10,000 in 2011), large size of the economy and the domestic market, demographics (young growing and educated population), with rising per capita income fueling consumption. “For investors “hot” sectors are those that are consumer driven, in particular retail, healthcare, construction materials, auto parts, energy, power and logistics. We see these in the cross border M&A transactions that we have acted on, including recently for example Danone’s acquisition of a majority stake in Sirma, the leading bottled water brand. These are driven by the pull factor of a dynamic consumer base.” Turkey’s continued success could be an inspiration for other MENA economies although Edmund believes that not many of them have the same drivers as Turkey. “In terms of size and potential, Egypt is the only comparable market, but first it needs to achieve stability,” he explains. Edmund believes the year 2013 is a difficult one to predict. “MENA is still in turmoil, especially Egypt and Syria. Not

AKP, one party government since 2002, has completely renewed the financial structure including the regulation of banks which comprises the main section of the financial reform after the crisis. Nowadays, it turned out to be a fact accepted by the world’s economical environment that Turkey has a strong financial structure which helped Turkey to avoid the destructive effects of the latest economical crisis and reduce the negative impact of the crisis on Turkey. i.e. In 2012, the net profit of Turkish banks reached TL 23.6 billion (USD 13.1 billion) which corresponds to a 12.6% annual growth and total net assets of the banks hit up to USD 766 billion. The Turkish Stock Market and credit rating agencies have responded positively to Turkey’s steady and constant growth after the economical crisis in 2001. International credit rating agency Moody’s upgraded Turkey’s rating with a notch. Fitch also upgraded Turkey’s credit rating to investment grade to BBB- and long-term local currency IDR was upgraded to BBB after an 18-year gap. During these days where almost the whole world is struggling with the economical crisis, Turkey is being pointed as an example of economical success and still keeps its growth between 3 – 4 %. Turkey is economically a very attractive

sure if and when stability can be achieved. In Turkey, the success or failure of the peace process will have wider implications. Eurozone developments may impact Turkey since it remains Turkey’s largest trading partner. Finally, Turkey will have municipal and presidential elections in 2014, as well as parliamentary elections in 2015, which may prompt the government to adopt populist policies going into the election season.”

Company: Gen & Temizer | Özer Name: Edmund Emre Özer Email: eozer@gentemizerozer.com Web: www.gentemizerozer.com Address: Beyazgul Caddesi No. 32 Arnavutkoy Besiktas / Istanbul Turkey Telephone: +90 212 260 34 00

and promising country; and forms a path in Europe opening to Asia and Middle East for its investors. As a constantly developing economy Turkey has a significant need of energy. Energy is one of the fields with investment opportunities with the legal regulations at EU standards. Real estate, retail and heavy industry can be also identified some other promising fields to invest in Turkey.

Company: Baspinar & Partners Name: Gökmen Başpinar Email: gokmen.baspinar@baspinar.av.tr Web: www.baspinar.av.tr Address: İstiklal Cad. No:163, Mısır Apartmanı, Kat:6 No:23-24, Beyoğlu, Istanbul, Turkey, 34433 Telephone: +90 212 465 66 99

ACQUISITION INTERNATIONAL

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. A number of leading professionals give Acquisition International their expert opinion on the importance of protecting IP. -----------------------------------------------------------------------Manuela Macchi is a Partner at Keltie LLP. -----------------------------------------------------------------------Ms Macchi began by stating that legal and technical knowledge are essential prerequisites of an intellectual property advisor. However, she believes that advisors should also have knowledge of the particular sector or technology and take the time to understand the commercial issues and aims behind the protection. “Asking clients the correct questions and taking time to understand the client’s business are fundamental to providing the best advice in each instance,” she commented. Discussing the value of intellectual property assets, Ms Macchi noted that successful businesses are built on IP of some sort – whether that is brands, designs or patents – and improper protection can result in the loss of a competitive edge. “Some recent high street administrations are a great example as the brand was often the most valuable asset the administrators had to sell,” she observed. “Patents and registered Designs protect and make tangible companies’ investment in Research & Development and registered Trade Marks protect and make tangible companies’ marketing investment and their goodwill. “Having an IP strategy is vital, especially for companies with an International outlook. IP is protected –with few -----------------------------------------------------------------------Nicholas D. Wells is the founder and principal attorney of Wells IP Law. -----------------------------------------------------------------------Wells IP Law is focused on Intellectual Property law. The firm, with offices in New York, has particular experience with assisting non-U.S. clients with complex U.S. trademark matters; something that Mr Wells feels is unusual compared to most other firms. “Unfortunately, many U.S. IP lawyers limit their skills on international intellectual property matters to having a roster of strong foreign associates that they work with. While that is critical, I’ve taken extra efforts to obtain an LL.M in international intellectual property from the University of London. It seems few U.S. lawyers have a sound understanding of the Madrid Protocol.” Mr Wells noted that IP rights are a valuable asset for any business and that it is important to understand how IP assets differ from tangible assets, stating that IP rights can be replicated or licensed - and thus monetised - with virtually no cost, becoming a tremendous source of profit. However, he warned that they can also be more easily stolen, transported to jurisdictions where they are not protected, or misused by employees and customers, and that managers that understood the distinct risks and benefits of IP rights

ACQUISITION INTERNATIONAL

exceptions – on a Country by Country basis, but no business can afford to neglect the international aspects of their IP portfolio from the outset as this can affect future expansion plans.” Before committing to a trade mark, investing in developing designs and technology, or registering a trade mark or patent, thorough searches must be carried out. Ms Macchi explained that the existence of prior third parties’ rights can prevent registration of a trade mark, patent or design and the marketing of a related product. She stated that any applications filed should be carefully drafted to ensure they actually cover what the business needs to protect. International marketing plans must also be taken into account as IP protection might be necessary in foreign jurisdictions, and potential future product development should be considered in so far as possible. “Enforcement of IP rights is crucial to retain its value,” she continued. “IP enforcement can be an expensive business and it is important to have monitoring measures in place to nip conflicts in the bud and, if this is not possible, pick the right battles.” Looking ahead, Ms Macchi noted that significant moves have been made within the European Union in the last year to create a single unitary EU patent. This this new legislation may come into force within the next 18 months

would be better able to create strategies to protect them and to leverage their value to the business. Mr Wells noted that beyond a deep understanding of the law, the most critical skill required of an intellectual property adviser is to listen to a client’s goals rather than merely applying the same stock answer to every problem. “Too many attorneys simply say “you can’t” instead of listening carefully and seeking a helpful solution to the client’s concerns. Being sensitive to costs and to seeking creative solutions within a budget is also increasingly important.” He went on to describe IP due diligence as “critical”, stating that incorrectly assigned patents, unregistered trademarks and IP assets that were not transferred and recorded fully as part of a transaction could easily diminish the value of a transaction by millions of dollars. Mr Wells explained the importance for management teams to maximise their business brand and protect their IP assets. “Managers must consider the brand as a valuable asset and not take its existence for granted. Then they must find collegial, reasonably priced legal assistance and involve them early - and regularly - to create strategy and review deals.”

and companies that use the patent system will need to be aware of how to use the new system effectively. “There is also significant expectation on a new Chinese Trade Mark law currently being discussed by the Chinese legislators, which should be a step forward in protecting foreign brands from opportunistic registrations by Chinese individuals/companies who have made a business out of registering their marks in China before them and hoping to sell them back to the ‘legitimate’ owner. This is not a UK or EU law development but will be relevant to most UK and EU trade mark owners,” she concluded.

Company: Keltie LLP Name: Manuela Macchi Email: manuela.macchi@keltie.com Web: www.keltie.com Address: Keltie LLP, Fleet Place House, 2 Fleet Place, London, EC4M 7ET, United Kingdom Telephone: +44 (0)20 7329 8888

When asked about the risks of businesses underusing or improperly protecting their IP, he said: “In the modern world, neglect of IP assets will cause almost any business to atrophy and die.” Mr Wells concluded by stating that significant changes in U.S. patent laws will come into effect in 2013 that will affect every business that develops or uses technology, or relies on innovation.

Company: Wells IP Law, PLLC Name: Nicholas D. Wells Email: nwells@wellsiplaw.com Web: www.wellsiplaw.com Address: 245 Park Ave., 39th Floor New York, NY 10167

May 2013 /

SECTOR SPOTLIGHT:

MAURITIUS Mauritius: Attracting Foreign Trade & Maintaining a Competitive Environment

Attracting Foreign Trade & Maintaining a Competitive Environment

l According to statistics released by Thomson Reuters, Mauritius’ economy is expected to expand at a faster pace in 2013 spurred by growth in manufacturing and financial services; it is estimated that GDP could rise as high as 3.7%. Positioned strategically between Africa and Asia, Mauritius offers some unique investment opportunities to foreign investors; no longer a monocrop economy depending mainly on sugar, it has diversified its economic activities into offshore banking, business outsourcing, luxury real estate and medical tourism. However, despite the positivity, there are a number of challenges confronting Mauritius; the EU represents the country’s main export market and its largest source of FDI, hence the primary challenge is further economic deterioration within European markets. Acquisition International speaks to Mauritius’ leading legal and financial experts to examine the country’s economy and prospects for 2013.

OTHER EXPERTS IN THIS AREA

A M Johri Associates Ltd Company: A M Johri Associates Ltd Name: Mr A.M. Johri Email: amjassociates@yahoo.com amjassociates@orange.mu Address: Level 4, Max Tower, Jummah Mosque Street, Port Louis, Mauritius Telephone: +230-2175424

“Looking back, looking forward Mauritius Miracle may lie in its distance past” -----------------------------------------------------------------------Druvnath Damry (Vimal) BA, DIP (ITM), LLB (Hons.), TEP- Vimal is the Managing Director of Premier Financial Services Limited. -----------------------------------------------------------------------Mauritius Mauritius has, over the years, emerged as a competitive destination for foreign investment. Strategically situated in the Indian Ocean between Africa, Asia and Australia, the tropical paradise island offers a successful business base for both regional and international trade. Mauritius actively seeks foreign investment and prides itself on being open to foreign investment. Foreign investors can use Mauritius as a platform since the country has preferential access to markets worth several hundreds of millions of consumers, through its membership in the SADC, COMESA, ACP and an extensive network of Double Taxation Treaties. Mauritius is one of the biggest investors in India and Africa which makes it an ideal choice as a regional holding centre. It offers a range of corporate vehicles, including the standard holding company, open and closed-ended investment funds, protected cell companies and trusts. Premier Financial Services Limited Premier Financial Services Limited is a fast growing licensed and regulated Management Company/trust company by the

ACQUISITION INTERNATIONAL

Financial Services Commission. Premier group companies and associates are based in Mauritius, Singapore, Seychelles, London and Hong Kong. Premier is also a full member of the INAA Group represented by more than 70 firms in more than 50 countries worldwide. INAA is ranked 12th in the list of associations and alliances by Accountancy Age magazine. Premier’s Promoters and Directors have been in financial services for more than a decade, and have managed companies and trusts holding assets of more than US$1 billion in aggregate. Premier brings together a team of experienced and dedicated professionals combining their expertise to offer a top-quality personalized service which allows international clients to benefit from the unique advantages of the variety of entities available in Mauritius (including the two kinds of Global Businesses – those holding the GBL1 and GBL2 licences as well as funds, protected cell companies and trusts). Mauritius Entities & Laws We have two kinds of Global Business Companies which offer unique investment advantages for establishing a Mauritius offshore company, including confidentiality protected by law. There are also significant tax benefits (including an extensive array of over 35 tax treaties with

other countries), an advantageous tax regime and no foreign exchange controls. We also have modern laws such as the Companies Act 2001, Trusts Act 2001, Foundations Act 2012 and Securities Act 2005.

Company: Premier Financial Services Limited Name: Druvnath Damry (Vimal) BA, DIP (ITM), LLB (Hons.), TEP Email: vimal@premier.mu Web: www.premier.mu Address: Premier Business Centre, 10th Floor, Sterling Tower, 14, Poudriere Street, Port Louis, Mauritius Telephone: +230 245 6703 Fax: +230 245 6704

May 2013 /

SECTOR SPOTLIGHT:

Corporate Immigration: Issues and Challenges in the Current Economy

CORPORATE IMMIGRATION Issues and Challenges in the Current Economy

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

OTHER EXPERTS IN THIS AREA Company: CanApprove Immigration consulting services (p) Ltd. Name: Adv.Binoy Email: info@canapprove.org Web: www.canapprove.org Address: Haya Tower, 6th Floor, TC/21408 (42), West Fort, Achuthamenon Road, Thrissur, Kerala, India Telephone: +91 487 3100112

-----------------------------------------------------------------------Anne O’Donoghue is the Director and Principal Lawyer at Immigration Solutions Pty Ltd. ------------------------------------------------------------------------

She is an accredited specialist in immigration law and registered migration agent (MARN: 938943), with over 20 years of experience in the field. She has been instrumental in developing the field of immigration law in New South Wales and was an executive member and founding vice president of the Immigration Lawyers’ Association of Australasia (ILAA) (now known as the Migration Law Committee of the Law Council of Australia (LCA)). Anne’s expertise lies in assisting Australian and multinational companies in their employment of skilled workers of overseas nationals as well as business professionals interested in investing in the Australian economy. Her approach to advice is centered on collaboration, tailoring advice to clientele on a case-to-case basis, ensuring that the technicalities of each situation are properly addressed in the advice. Corporate immigration in Australia is currently undergoing significant changes, both in terms of policy and in terms of public perception. Australia’s skilled migration system was recently streamlined in 2012,

ACQUISITION INTERNATIONAL

ensuring that greater consistency existed between those sponsored on skilled temporary visas and their ability to gain permanent residency. This streamlining process allows for a greater degree of certainty to skilled workers in Australia who have been successfully sponsored on a temporary visa. The system that governs these temporary visas is called the 457 program. This allows businessmen to establish a competent business in Australia, providing a possible avenue to gain work rights and possible residency in Australia. Federal Government’s proposed reform on the current temporary skilled workers (sponsored) scheme seeks to strengthen the integrity of the visa program. Further, in November 2012, the Government sought to capitalize on Australia’s strategic positioning in the AsiaPacific by introducing the ‘Significant Investor Visa’(SIV). This visa is designed to attract business professionals and entrepreneurs who are looking to invest in the Australian economy. This visa requires applicants to invest at least AUD5 million in the Australian economy and be nominated by a state or territory government. Each Australian state and territory government has their own specific requirements in relation to the applicant as well as requirements as to how the investment is targeted. The benefit of the SIV for eligible parties is that it provides

significant concessions in the pathway to permanent residency. These concessions include, but are not limited to, a relaxed English language requirement and the absence of an age threshold.

Company: Immigration Solutions Lawyers Pty Ltd Name: Anne O’Donoghue Email: anne@immigrationsolutions.com.au Web: www.immigrationsolutions.com.au Address: Suite 1304, 87-89 Liverpool St, Sydney NSW 2000 Telephone: +61 (02) 9264 6432 Who’s who profile: www.whoswholegal.com/ profiles/41931/0/o%27donoghue/ anne-odonoghue/

May 2013 /

SECTOR SPOTLIGHT:

Avoiding and Resolving Disputes in the Aviation Industry

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

-----------------------------------------------------------------------Chris Christodoulou is a partner specializing in aviation and corporate and commercial law in the Johannesburg office of Christodoulou & Mavrikis Inc. Chris holds a Masters degree in Aviation law from the University of London and is a qualified Solicitor in England & Wales. ------------------------------------------------------------------------

Christodoulou & Mavrikis Inc is a full service law firm with a focus on aviation law and all forms of litigation. The firm is based in Johannesburg and has an office in Athens, which is managed by George Mavrikis and Themis Liacopoulos. The firm’s clients include commercial and private aircraft owners, insurance brokers, charter and leasing parties, aircraft maintenance organizations, commercial operators, government agencies, commercial aviation industry groups, recreational aviation associations and private pilots. The firm’s in depth knowledge of all aspects of local and international aviation law and Chris’ past experience as a non-executive director of a regional commercial airliner sets the firm apart from its competitors. Avoiding disputes within the aviation industry firstly requires an understanding of the regulatory and legal framework pertaining to the aviation industry. Advisers with industry knowledge together with a commercial understanding of the business challenges of the client will ensure that disputes are avoided or resolved efficiently.

46 / May 2013

The fact that the aviation industry operates in an international environment brings into play trans jurisdictional aspects of law incorporating numerous international conventions and regional directives such as those pertaining to the European Community. A wide choice of legal forums and rules and dispute resolution forms such as court-based mediation may also assist the parties in resolving aviation disputes. Amongst the preventative measures that prospective clients can take are to employ law firms with a proven network of associate firms in the major aviation centers such as London, New York and the Asian Pacific hubs, as knowledge of local laws is essential. Carefully drafted agreements are paramount to avoiding and resolving disputes. Furthermore, carefully assessed and formulated security arrangements such as mortgage registration under the Convention on International Interests in Mobile Equipment, and the Protocol thereto on matters specific to aircraft equipment (“the Cape Town Convention”) is essential. The introduction of the Cape Town Convention has had a significant effect on the security measures taken over aircraft, and early stage due diligence when considering finance arrangements on behalf of both client and financiers is advised. Regarding insurance claims and passenger rights, European Directives have to a large extent clarified the legal position of parties, whilst in

developing regions such as Southern Africa, heightened government involvement in all sectors of the aviation industry has led to increased regulatory activity and legislated consumer protection laws. In the commercial aviation sector, competition law complaints by low cost carriers against state owned airlines is on the increase and continued foreign ownership limitations continue to be a barrier to market entry.

Company: Christodoulou & Mavrikis Inc Name: Chris Christodoulou Email: chris@oraclelegalservices.com Web: www.oraclelegalservices.com Address: Unit 1, Virgin Atlantic Building, 50 Sixth Road, Hyde Park 2196. Johannesburg. South Africa. PO Box 413163, Craighall. Johannesburg 2024. South Africa. Telephone: +27 (0)11 325 4201 Mobile: +27 (0) 823776631

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Avoiding and Resolving Disputes in the Aviation Industry

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

Şafak Herdem is the founding and managing partner of HERDEM&Co. and leads the practice groups of the firm as directly responsible to the board. He is also an arbitrator of the American International Commercial Arbitration Court. ------------------------------------------------------------------------

HERDEM&Co is an Istanbul based law firm with offices in four other cities of Turkey and one affiliate in the UK. The firm provides legal and taxation services for national and international companies and individuals in transactions where one party is Turkish.

“We believe that the disputes in the aviation industry shall be classified,” commented Mr Herdem. “Disputes in company management and disputes with authority. It is quite important for professionals to know the local aviation rules. Even the aviation world seems as standardised; the local legislations may differ in some certain issues. İn this context, we require to say that each and every professional is expected to know the legal environment in general to avoid disputes.”

“Our firm mainly focuses on corporate and commercial matters in regulated markets such of aviation and aerospace, finance, banking, capital markets, pharmaceutical, energy and telecommunication” said Mr Herdem.

Mr Herdem stated that the main challenges related to these types of disputes can be dilemmas, due to the frequent changes in regulations and the requirement of adapting the 30 year old laws that refer to the aviation industry. He advised that having local consultants is quite important to overcome these challenges.

The client base of the firm’s global practice spans airline air taxi; air ambulance; MROs; flight training organisations; and aerospace companies both private and public – worldwide.

“75% of our firm’s service is based on advisory services not to get any of our client to be party of any dispute,” continued Mr Herdem. “It is a reality that; if anyone involved to litigation nothing to do in first

ACQUISITION INTERNATIONAL

stage than fulfilling the procedural requirements which means waste of time and money. “Our approach is quite understandable; As long as you have a trusted and well equipped advisor knowing the industry it means that the client will not be subject any dispute,” he concluded.

Company: HERDEM&Co. Name: Şafak Herdem Email: safak.herdem@herdem.av.tr Web: www.herdem.av.tr Address: Uprise Elite Tower Floor 27 No 234, Kartal 34880, Istanbul, Turkey Telephone: +90 216 290 1277

May 2013 /

SECTOR SPOTLIGHT:

Arbitrating Disputes in Cross-Border Transactions

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

-----------------------------------------------------------------------Dr Heiko Büsing, LL.M. (University of Georgia) is a German lawyer working in the Hamburg office of the international law and tax firm Rödl & Partner. -----------------------------------------------------------------------After graduating from University of Göttingen School of Law, he obtained his doctorate by writing a thesis on international trade law. Moreover, Heiko Büsing earned a Master of Laws degree in US law from the University of Georgia School of Law. He is Co-Head of the Dispute Resolution Practice and advises and represents clients in the fields of (international) litigation and arbitration. In the recent years, Heiko Büsing has represented clients in arbitration proceedings conducted inter alia under the ICC, SCC, LCIA, CIETAC, DIS and GMAA rules. He has also served as an arbitrator in commercial disputes, in particular involving parties from East Asia. Another focus of his practice are shareholder disputes and Post-M&A-Disputes. How can you help businesses facing risks and disputes in cross-border commercial transactions? It is always better to avoid disputes, but since you can never rule out a conflict, it is important to be prepared for

48 / May 2013

a potential legal battle. Here, it is crucial that companies consider the questions as to where and how potential disputes are going to be resolved very early, that is to say already when they are negotiating the terms of the contract. Companies have to choose whether they opt for arbitration or state courts as the forum for potential disputes. The advantage of arbitration is that an international arbitral award can usually be recognised and enforced in the country of the defendant whereas foreign state court decisions might face a denial of recognition in many countries. Moreover, it is important to carefully decide which arbitration rules of what particular arbitration institution might best fit the parties´ interests considering their respective background.

Apart from that technical legal issue, one has to consider that the place of arbitration should be acceptable for both parties in order to secure that a potential defendant also takes part in the arbitration proceedings. Since in many cases at least one arbitrator might come from the country where the arbitration proceedings take place, one has to take into account whether there is a sufficient number of arbitrators and lawyers with the required experience and education available in such country.

How important is location? Location is very important. In order to obtain the advantages of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the legal seat of the arbitration must be outside the country of the defendant or, respectively, the country where enforcement measures are realistically expected. Otherwise, a successful claimant has to rely on the national laws of the defendant´s home country which sometimes do not provide sufficient protection.

Company: Rödl Rechtsanwaltsgesellschaft Steuerberatungsgesellschaft mbH Name: Dr Heiko Büsing Email: heiko.buesing@roedl.de Web: www.roedl.de Address: Kehrwieder 9, 20457 Hamburg, Germany Telephone: +49 – 40 – 22 92 97 740

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Arbitrating Disputes in Cross-Border Transactions

-----------------------------------------------------------------------Igor Ellyn, QC, CS, FCIArb. is the senior partner of ELLYN LAW LLP. The firm is a member of the prestigious International Network of Boutique Law Firms (inblf.com). ------------------------------------------------------------------------

Toronto has become one of the best locations in the world for conducting international commercial arbitration. Igor Ellyn and ELLYN LAW LLP are actively involved in all aspects of this growing field locally and globally and accept engagements as counsel or arbitrator. An advocate for 40 years, Igor Ellyn heads a capable and experienced five-lawyer group, whose focus is the efficient resolution of complex business disputes by arbitration or litigation. Mr. Ellyn is also a Chartered Arbitrator and Mediator. Mr. Ellyn is Chair of the Business Litigation & Arbitration Practice Group of INBLF. He is active in the

ACQUISITION INTERNATIONAL

Toronto Commercial Arbitration Society and a director of the Toronto chapter of the Chartered Institute of Arbitrators. ELLYN LAW LLP is INBLF’s international commercial arbitration law firm in Toronto. ELLYN LAW has demonstrated its expertise in international arbitration not only by the cases on which its lawyers have acted as counsel or arbitrator but also by authoring key publications, including The Role of Arbitration in International Business, Effective Advocacy in Commercial Arbitration, Liability of Corporate Directors and Tension between Choice of Law and Mandatory Rules in International Arbitration. These articles and books are accessible online. Igor Ellyn is an ICC accredited arbitrator and was also counsel on a leading international arbitration case in the English High Court. Another mark of

ELLYN LAW’s international focus is its lawyers’ ability to serve clients and colleagues in English, French, German, Romanian, Spanish, Armenian and Hebrew.

Business Litigation & Arbitration Lawyers

Company: ELLYN LAW LLP Name: Igor Ellyn, QC, CS, FCIArb. Email: iellyn@ellynlaw.com Web: www.ellynlaw.com Address: 3000 - 20 Queen Street West Toronto, Canada M5H 3R3 Telephone: +1 416-365-3700

May 2013 /

SECTOR SPOTLIGHT:

Implementing an Effective Anti-Money Laundering System

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

-----------------------------------------------------------------------Stefan Wieland is Managing Director at Business Integrity Management GmbH, Member firm of Crowe Horwath International, and Head of Anti-Money Laundering (AML) / Regulatory Services. ------------------------------------------------------------------------

Regulated companies in Germany continuously have to deal with the challenges of the changing regulatory environment. The Evaluation Report of the Financial Action Task Force (FATF) from 2010 uncovered some crucial deficiency, which resulted in modification of the German Anti-Money Laundering regime. The upcoming 4th Anti-Money Laundering Directive (“4th AMLDirective”) will impact on national AML-legislation. Financial institutions which already achieved a high standard of their anti-money laundering system struggle setting up a compliance organization which also reflects the requirements to prevent fraud by establishing a coordinating a “Central Function”, to implement a Compliance Function in regard to the “Minimum Requirements for Risk Management” (12 /2012) and in case of falling under the German Securities Trading Act to implement a “Compliance Officer” (last modifications 11/2012). Therefore the biggest challenge for them

50 / May 2013

will be to reorganize all compliance related functions assuring a cost effective compliance environment and preventing overlapping responsibilities. The 4th AML-Directive and the reinforced supervision of so-called “Designated Non-Financial Businesses and Professions” (DNFBP) in Germany will show its impact. Especially real estate agents, trust and company service providers, gambling casinos, insurance brokers as well as many companies trading in goods have to analyse if they are vulnerable in terms of money laundering and terrorism financing. So in the very near future they should take care about adequate implementation of AML-systems and at least conduct a basic AML risk analysis, which will be requested by the competent regulatory bodies in the future. At least if a foreign company acquires a German based AML-regulated entity for the parent company as the group leader it is required to assure that both national and foreign AML / other compliance safeguards will be obeyed. Whether implementation of safeguards, adjustments within the AML-system or conducting in-depth

investigation in allegations connected with fraud or money laundering, Crowe Horwath International with its multinational expertise and presence in more than 100 countries will support their clients with up-to date knowledge, broad experience and a clear focus on cost effectiveness. Therefore Crowe Horwath International is The Unique Alternative® to the Big Four firms.

Company: Business Integrity Management GmbH, Member firm of Crowe Horwath International Name: Stefan Wieland Email: stefan.wieland@crowehorwath-ffm.de Address: An der Dammheide 10, D-60486 Frankfurt am Main Telephone: +49 69 97886-0

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Implementing an Effective Anti-Money Laundering System -----------------------------------------------------------------------James Tebbs, a Director in PwC’s Forensic Services practice, is based in Qatar. He talks to AI magazine about the current climate in the anti-money laundering industry. -----------------------------------------------------------------------James Tebbs is a Director in PwC’s Forensic Services practice and leads the Forensic team in Qatar, Bahrain and Kuwait, as well as being the Forensic team’s financial services specialist. Prior to joining PwC in the Middle East James was a Director in PwC’s Forensic team in London, where he also focused on financial services. PwC has extensive relationships with financial services organisations across the Middle East region and has acted on a number of high profile projects in recent years. “We regularly provide advice to a wide range of financial services clients on their anti-money laundering (AML) and KYC policies and procedures,” comments Tebbs regarding his work. “We work closely with MLROs and internal compliance teams on a range of compliance and regulatory matters and also assist organisations in need of support with their KYC remediation programs.” The PwC team in the Middle East includes AML and CFT subject matter experts, including serving MLROs with direct experience of local regulation and former AML compliance staff from local Middle Eastern banks. The team includes Arabic, Urdu, Russian and Hindi speakers, Certified Anti-----------------------------------------------------------------------Dr Adrian W. Kammerer works as partner at the law firm of Niederer Kraft & Frey Ltd (“NKF”), one of Switzerland’s largest tier 1 law firms. -----------------------------------------------------------------------Internal anti money laundering regulation of any Swiss domiciled, respectively, resident, and therefore supervised financial intermediary (FI) must mirror the Swiss regulation on the combat of money laundering and terrorist financing. Such exercise may prove somewhat burdensome in that (i) it must be tailor made to in fact be in line with the business conducted by the respective FI and (ii) the Swiss regulatory framework provides far-reaching instruments for preventive measures under administrative law, repressive measures under penal law and law enforcement, international cooperation measures and soft law regulation such as the Swiss Bankers’ Association’s ‘Agreement on the Swiss banks’ code of conduct (CDB 08) and the anti-money laundering regulations of the various self-regulatory organisations (SROs). In 1998 Switzerland enacted its own anti-money laundering law, the Federal Act of 1997 on Combating Money Laundering and Terrorist Financing in the Financial Sector (AMLA). The AMLA is based on the respective provisions set forth in the Swiss Penal Code (PC) that define money laundering as any act that attempts to conceal the origin, or prevent the discovery or the confiscation of assets, whereby the offending person knows or has to assume that they derive from a criminal offence (article 305bis PC). A major part of the AMLA provisions detail the due diligence duties in connection with a FI’s handling of third party assets (ie, assets that are not owned by the FI). Among others, the

Money Laundering Specialists, Certified Fraud Examiners, Chartered Accountants and Certified Public Accountants. James continues, explaining what makes the company stand out from the competition. “In addition PwC has a global network of specialised AML professionals with extensive experience on global projects with the world’s largest financial institutions and regulators. Our Middle East team can draw on this expertise to help our clients on a global basis.”

“Particularly following the recent well documented failures in AML programs at leading global financial institutions,” he adds. “In addition FATF continues its on-going review of strategic compliance with AML/CFT standards, and is working for instance with Kuwait on developing its AML/CFT controls. We must expect this trend to continue in the coming years given the increasing significance of Middle Eastern institutions in global financial markets.”

The key to implementing an effective and sustainable AML system is early integration and coordination of all relevant parties across the business combined with effective risk assessment. “Whilst compliance may retain ownership of the process, any properly designed AML system will incorporate a thorough consideration of the range of clients, types of products and services, differing markets and patterns of customer transactions which the business faces on a daily basis,” says Tebbs. “Properly understanding this takes coordination between differing stakeholders – getting it right up front will make for a leaner and more efficiently designed AML system and will ultimately save cost in the long term.” With regards to predictions for AML in 2013, James expects to see much closer global scrutiny of financial services institutions in developing markets in the coming year.

AMLA obliges the FI to duly identify the contractual party and to duly determine the beneficial owner (BO), if any. In connection with the determination of the BO, the CDB 08’s very detailed provisions (although originally not an official legislatory act but a code of conduct privately agreed among the Swiss banks) represent the de facto minimal standard that an FI is well advised to implement, monitor and adhere to. The SROs’ regulations follow, as a rule, the system of the CDB08 and the Swiss Financial Market Supervisory Authority (FINMA) declared it is part of the supervisory standard that needs to be adhered to by each bank and securities’ dealer. The AMLA’s provisions are further detailed in a variety of directives, ordinances, circulars and explanatory notes issued by FINMA. The most important respective acts are the FINMA anti-money laundering ordinance (GwVFINMA), the ordinance on professional practice of financial intermediation (VBF), and the FINMA-Circular 2011/1 Financial Intermediation under AMLA. Furthermore, Switzerland is a member of the Financial Action Task Force on Money Laundering (FATF) since the latter’s creation in 1989. Switzerland has actively participated in the work involved in revising the 40 Recommendations. The Federal Council appointed an interdepartmental working group under the leadership of the Federal Department of Finance which published recommendations on implementing the revised FATF recommendations and a consultation draft on 27 February 2013; the consultation period will end by 15 June 2013. Industry experts state that the revised recommendations will only require minor amendments of the existing Swiss anti-money laundering regime.

Company: PricewaterhouseCoopers Qatar Name: James Tebbs Email: james.tebbs@qa.pwc.com Web: www.pwc.com Address: Tornado Tower, PO Box 6689, West Bay, Doha, Qatar Telephone: +974 4419 2715

FINMA is in charge of the enforcement of Switzerland’s anti-money laundering regulation in the banking sector. FINMA analyses the applicable anti-money laundering regulations and takes the appropriate steps to amend these where deemed necessary by the authority. For the nonbanking or para-banking sector, self-regulatory bodies – the aforementioned SROs – are in charge of supervising the FIs. The latter are obliged to apply for membership within an SRO in the absence of which the FI is not permitted to conduct financial intermediation services. The 11 currently available SROs in Switzerland are licensed and supervised by FINMA. If an FI in the para-banking sector prefers, he, she or it may also apply for direct supervision by FINMA as a so-called directly subordinated financial intermediary (DSFI).

Company: Niederer Kraft & Frey Ltd. Name: Adrian W. Kammerer Email: adrian.kammerer@nkf.ch Web: www.nkf.ch Address: Bahnhofstrasse 13, CH-8001 Zurich Telephone: +41 (0)58 800 8000

Veris Consulting Cost of Anti-Money Laundering Compliance Survey -----------------------------------------------------------------------Sven Stumbauer is a Managing Director with Veris’ Financial Forensics and Dispute Resolution practice and leads the Miami office, as well as client services in Latin America. -----------------------------------------------------------------------The cost of Anti-Money Laundering (AML) compliance is increasing dramatically, with the extent of the expense being underestimated by many financial institutions. With a desire to provide a timely global benchmark on how financial institutions are managing the changing regulatory environment, Veris Consulting recently executed the Global Survey of The Cost of Anti-Money Laundering Compliance. Over the last decade, financial institutions have and continue to face unprecedented scrutiny and pressure to be the first line of defense against money laundering and

ACQUISITION INTERNATIONAL

the possibilities of terrorist financing. At the same time financial institutions around the globe have made significant investments in resources and human capital to strengthen their compliance efforts. However, many of these financial institutions continue to incur fines by various regulatory bodies for AML compliance failures. The Veris Consulting Global Survey of The Cost of AntiMoney Laundering Compliance explores how financial institutions are coping with the evolving regulatory demands placed on them, while facing budgetary constraints and would like to thank the nearly 300 participants globally for their participation in our survey. We invite you to receive a complimentary copy of the survey results by emailing info@verisconsulting.com.

Company: Veris Consulting, Inc. Name: Sven Stumbauer Email: sstumbauer@verisconsulting.com Web: www.verisconsulting.com Telephone: +1 (404) 402 8578

May 2013 /

SECTOR SPOTLIGHT: Merger Control Reform

MERGER CONTROL REFORM l As many business owners are acutely aware, the preparation of merger control notifications to the appropriate authority in respect of M&A transactions requires a considerable amount of effort by in-house teams and external legal and financial advisers. This effort results in significant costs both in professional fees and management time. In recent years there has been a global overhaul of the rules and regulations that govern the merger control process and this reform has had an impact on the ease of doing business and investor appetite in various countries around the world. Many of the changes have focussed on simplifying the law and this has been welcome news for businesses as it reduces the workload and costs involved in seeking clearance for transactions which require notification, but do not raise competition law issues. Another driving force behind regulatory changes has been the growth in the number of multi-jurisdiction merger reviews; many antitrust authorities have increasingly cooperated with counterpart agencies both bilaterally and through multilateral organizations, to promote cooperation and convergence toward sound merger review policies and practices internationally. Acquisition International speaks to the experts to analyse how reform has altered the merger control landscape. -----------------------------------------------------------------------Christophe Rapin is a Partner & Pranvera Këllezi is an associate with Swiss law firm Meyerlustenberger Lachenal ------------------------------------------------------------------------

Mr Rapin explained that, under the Federal Cartel Act (RS 251), mergers are subject to a prior notification and authorisation system if the aggregate turnover of the participating undertakings exceeds two billion Swiss francs worldwide, or 500 million Swiss francs in Switzerland, and the individual turnover of at least two participating undertakings exceeds 100 million Swiss francs. “In addition, any merger involving a company which has been held dominant in Switzerland in a final and nonappealable decision of the Swiss Competition Commission shall be notified prior to its realisation irrespective of the turnover of participating companies,” he commented. “Calculation of thresholds and procedural rules are defined in the Merger Control Ordinance (RS 251.4). One month from the complete notification, the Swiss competition Commission decides whether to engage extended investigation procedure, which may last up to four months. Parties may request a provisional authorisation. “A copy of the notification of bank mergers is sent to Swiss Financial Market Supervisory Authority (FINMA), which has exclusive jurisdiction to assess the merger if it raises creditor protection issues.” Dr Këllezi highlighted a new bill amending the Cartel Act, currently under discussion before the Swiss Parliament -----------------------------------------------------------------------Matthew O’Regan is a Partner in the Competition Unit of Burges Salmon LLP. ------------------------------------------------------------------------

The UK merger control regime will change in April 2014. The Office of Fair Trading (a first stage authority) and the Competition Commission (a second stage authority that reviews mergers the OFT identifies as potentially problematic) will combine to create the Competition and Markets Authority. The two-stage process will remain, as will the lengthy review periods (two months in Phase I and up to 32 weeks in Phase II). In the UK, mergers can close without obtaining clearance. Voluntary notifications are common: the OFT routinely investigates non-notified mergers and several are referred to the CC each year. Completion without clearance involves risk: the CC prohibits some completed mergers (which must be unwound) and the authorities require significant remedies in others. They routinely impose ‘hold-separate’ obligations to prevent integration before clearance and can require mergers to be unwound: the CMA will have broader powers to do so. The lengthy Phase II process means that some referred mergers are abandoned (three in 2012), although many CC reviews are cleared unconditionally (half in 2012).

52 / May 2013

that would, if adopted, substantially modify the Swiss merger control. Firstly, the new bill provides for unique notification to the European Commission for mergers concerning relevant product markets covering Switzerland and the European Union and exceeding the thresholds of the EU Regulation 139/2004. Parties should only provide the Swiss Competition Commission with a copy of the EU notification. Secondly, the substantive test would be aligned to the EU test on substantial lessening of competition (SLC). “The bill expressly introduces an efficiency defence for mergers capable of driving verifiable efficiency gains. Such an amendment is expected to significantly reduce the companies’ burden on multijurisdictional mergers, and to align the assessment of mergers with that prevailing in the EU,” she added. Mr Rapin noted that, currently, the Swiss Competition Commission liaises informally with other competition authorities, without however exchanging information regarding a specific notification. Parties may grant a waiver on the exchange of information between competitions authorities involved in their merger notification. “The Swiss Competition Commission cooperates formally with the European Commission in the air transport sector and they may therefore conduct investigations on behalf the each other, however the agreement does not Merger risk is further increased by: • the wide concept of a ‘merger’, including acquisitions of: minority shareholdings, even in listed targets; a bankrupt company’s assets; and management contracts • the ‘share of supply’ jurisdictional test, capturing mergers in local markets (including casinos, buses, fuel distribution and cinemas) or small markets that are a small part of the parties’ overall businesses • the UK agencies reaching different conclusions from international counterparts (Akzo/Metlac was prohibited despite approvals in seven other jurisdictions) • the relatively low threshold (that it is plausible that the merger may harm competition) for referring a merger to the CC, with referrals with small increments in market share, effects only on certain local markets and even if larger competitors exist, if the OFT fears post-merger price rises. This means either a full CC investigation or remedies in lieu (eight in 2012) • the agencies requiring ‘up front’ buyers in divestment remedies (six in 2012) The CMA’s creation will cause procedural and substantive uncertainty, until it issues new guidance, ‘finds its feet’ and

cover expressly exchange of information (see Agreement between the European Community and the Swiss Confederation on Air Transport, OJCE 2002 L 114),” he continued. “In 2012, Switzerland and the European Union signed an Agreement concerning cooperation on the application of their competition laws, which is expected to be ratified by both parties this year.” Mr Rapin concluded: “The Parliament is expected to vote a significant reform of merger control in 2013. As explained above, this reform will definitively change the merger control landscape in Switzerland.”

Company: Meyerlustenberger Lachenal Name: Christophe Rapin & Pranvera Këllezi Email: Christophe.rapin@mll-legal.com Web: www.mll-legal.com Address: 65 rue du Rhône, cp 3199, 1211 Geneva 3 Telephone: + 41 22 737 1000

exercises its new powers (including to require businesses to be held separate and remedies). The UK agencies will actively enforce merger laws, including in small markets and new areas, notably healthcare. Parties contemplating mergers must consider carefully, and take legal advice at an early stage to identify and mitigate, the risks inherent in merger control, even if active only in small or local markets.

Company: Burges Salmon LLP Name: Matthew O’Regan Email: matthew.o’regan@burges-salmon.com Web: www.burges-salmon.com Address: One Glass Wharf, Bristol BS2 0ZX, United Kingdom Telephone: +44 117 939 2000

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Merger Control Reform

-----------------------------------------------------------------------Siri Teigum is a Partner and heads Thommessen’s competition practice. Kirti M Thomassen is a Senior Associate in the competition practice. -----------------------------------------------------------------------“Thommessen knows how competition rules may be used to achieve commercial and strategic objectives,” began Ms Teigum. The firm assists clients in connection with their day-today business, drafting of business terms and agreements, mergers, acquisitions and other transactions, and contact with the competition authorities. It also assists clients in connection with investigations by the Norwegian Competition Authority and the EFTA Surveillance Authority and litigation before Norwegian courts, the EFTA Court and arbitration tribunals. Thommessen has been involved in most major competition law cases in Norway in recent years. The Norwegian merger control regime is laid down in the Norwegian Competition Act and regulations issued pursuant to it. Ms Thomassen explained that a concentration must be notified in Norway if the undertakings concerned have a combined annual turnover in Norway of NOK 50 million or more. “However, notification is not required if only one of the undertakings concerned has an annual turnover in Norway exceeding NOK 20 million,” she continued. There -----------------------------------------------------------------------Keum Seok Oh is a Partner, and heads the Antitrust Practice Group at Bae, Kim & Lee LLC. -----------------------------------------------------------------------According to Mr Oh, the most common merger control issue in South Korea is how to define a relevant market (including relevant product market and relevant geographic market). He explained that, usually, the broader the market is defined, the lower the anti-competitive effect is. “Therefore the parties want the market defined as broad as possible, in order to make the KFTC determine that the underlying transaction is not anti-competitive,” he commented. “In defining the relevant market, the SSNIP (Small but Significant and Non-transitory Increase in Price) test is also used in Korea.” At the end of 2011, the KFTC amended the Merger Review Guidelines to keep abreast of global standards. Mr Oh explained that, in particular, the guidelines enable substantial review of the proposed mergers even if the company does not take full control over another. “In other words, the KFTC can review adverse competitive effects for mergers where companies can flex power over existing shareholders by holding on to appointment rights of the board, or veto power to key business decisions, even if the acquiring company is not the largest shareholder of the -----------------------------------------------------------------------Mrs Pallavi S. Shroff is the National Head of the Competition Law Practice at Amarchand & Mangaldas & Suresh A. Shroff & Co. ------------------------------------------------------------------------

According to Mrs. Shroff, the Indian merger control regime increasingly has wide coverage and care needs to be taken in assessing the applicability of the Indian merger control regime to even foreign to foreign transactions. This is especially so when one of the parties to the transaction is present in India and the jurisdictional thresholds are met (taking care that in certain cases the seller/transferor entity’s assets and turnover is considered) or where transactions lead to an indirect acquisition of shares, voting rights, assets or control in India. “Awareness of these issues is still not very prevalent in the international business and legal community and as a result, parties may find themselves in breach of the 30 day statutory filing obligation.” In the recent case of Titan International/Wheels India, the CCI has imposed a penalty of INR 10,000,000 (USD 182,715) in a case relating to belated filing in an offshore to offshore acquisition, where the direct acquisition itself was not notifiable under the Competition Act but the resultant indirect acquisition of shareholding in an

ACQUISITION INTERNATIONAL

is no deadline for filing, but the Competition Act prohibits a concentration from being implemented before it has been notified and reviewed by the Competition Authority. A Norwegian merger control procedure is normally initiated by a rather brief “standardized notification” and most transactions are cleared automatically upon expiry of the 15 working days deadline triggered by such a notification.

the proposed amendments will come into effect as of 1st January 2014,” she conluded.

“Submission of a complete notification (following an order to that effect from the Competition Authority or voluntarily) initiates a case handling period consisting of two phases. Phase 1 lasts 25 working days. If the concentration is not cleared during phase 1, maximum duration of phase 1 and phase 2 combined is 125 working days counted from the submission of the complete notification.” According to Ms Teigum, the very low jurisdictional thresholds imply that relatively many transactions, including foreign transactions, are caught by the Norwegian merger control legislation. However, she stated that the risk of being caught is about to change following a proposal of March 2013 by the Ministry of Government Administration, Reform and Church Affairs to inter alia increase the jurisdictional thresholds to NOK 1 billion/NOK 100 million. “Under the presumption that future notified concentrations are likely to be more complex, it is inter alia also proposed to introduce more comprehensive requirements to the content of a ”standardized notification. It is expected that

acquired,” he observed. “Moreover, the guidelines also set out that the possibility of a price increase will also be a factor considered by the KFTC since competition may be weakened in the relevant market by the proposed merger transactions.” Taking effect from 22 June 2012, all notifications (both premerger and post-merger notifications) are subject to a 30day waiting period after the filing date. The waiting period may either be shortened or extended by up to 120 days where the KFTC deems it necessary. Mr Oh noted that, during the waiting period for a pre-merger notification, consummating activities such as the transfer of stocks, registration of ownership and full payment of the purchase price are prohibited. “The KFTC may file actions against companies that close their transactions before clearance,” he continued. “In such cases the KFTC asks the court to invalidate the completed underlying transactions. In practice, the KFTC imposes an administrative fine of up to 100 million won on the company responsible for filing. This sanction is enforced without fail as long as the violation is detected. The KFTC has imposed administrative fines totalling 317.1 million won on 34 companies that violated the regulations on business combination report in 2012. However, there are no recent cases that have been reported to have closed during the waiting period before clearance.”

Indian entity crossed the 25% shareholding safe harbor in Item 1 of Schedule I of the Combination Regulations and therefore, necessitated a notification to the CCI. The CCI took serious note of the fact that the filing had been made after consummation of the transaction, and that appears to have weighed with them. Changes have also recently been made to the categories of ordinarily exempt transactions which need not normally be notified to the CCI including (a) creeping acquisitions of up to 5% between 25% to 50% shares; (b) intra group mergers and amalgamations where either the parties are more than 50% owned by enterprises within the same group or have more than 50% shares in one another; or (c) intra group acquisition of shares, voting rights or assets provided that the target is not jointly controlled by more than one group. A key theme emerging out of the latest round of amendments is that transactions where there is some form of acquisition or change of control are likely to not be exempt. Mrs. Shroff believes that clarity has begun to emerge as a result of the recent cases and amendments, with the CCI on the one hand, ceding jurisdiction over transactions which their experience has shown are unlikely to cause an

Company: Advokatfirmaet Thommessen AS Web: www.thommessen.no Address: Advokatfirmaet Thommessen AS, Haakon VIIs gate 10, PO Box 1484 Vika, N-0116 Oslo, Norway Name: Siri Teigum Email: ste@thommessen.no Name: Kirti Mahajan Thomassen Email: kmt@thommessen.no

So far, the KFTC has imposed one prohibitive measure on the anti-competitive transaction among foreign-toforeign company mergers. In addition, the KFTC imposed administrative fines on five foreign companies which violated the regulations on business combination report in 2012. “In 2013, it is expected that the KFTC will actively review the anti-competitiveness in the foreign-to-foreign company mergers and impose corrective measures against transactions that is anti-competitive,” he concluded.

Company: Bae, Kim & Lee LLC Name: Keum Seok Oh Email: kso@bkl.co.kr Web: www.bkl.co.kr Address: 133 Teheran-ro, Gangnam-gu, Seoul 135-723, Republic of Korea Telephone: 82-2-3404-0148

appreciable adverse effect, but, on the other hand, making its bite felt for those who fail to observe its rules. “The recent trends of imposing fines for belated filings even when they are made voluntarily after the expiry of the statutory 30 filing period is a cause for some concern. As a result, careful analysis of the Indian merger control implications needs to be undertaken in a timely manner,” she concluded.

Company: Amarchand & Mangaldas & Suresh A. Shroff & Co. Name: Ms. Pallavi S. Shroff Email: pallavi.shroff@amarchand.com Address: Amarchand Towers, 216 Okhla Industrial Estate Phase 3, New Delhi – 110020, India Telephone: +91 11 4161 4093

May 2013 /

SECTOR SPOTLIGHT:

Resolving Transfer Pricing Disputes

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

A Practical Guide to Transfer Pricing 2013 -----------------------------------------------------------------------Michael Stirling is the Head of Transfer Pricing at TP Mapping. ------------------------------------------------------------------------

For any business that has operations in more than one country, how it manages its transfer pricing is central to that group’s profitability. Transfer pricing rules require companies that are under common control to transact with one another on the same terms as independent companies. This requirement affects all transactions from the provision of inter-finance to the supply of goods and services, as well as the use or sharing of intellectual property. Improving group profitability The companies that outperform their peers in achieving better after tax profits have their tax advisors collaborating with their board of directors on the group’s business strategy. Tax and transfer pricing affects the amount of money that is available for reinvestment within the group for growth and for distribution to shareholders. The challenge of transfer pricing Most countries follow the transfer pricing guidance provided by the Organisation for Economic Cooperation and Development (OECD). However, the interpretation and implementation of these rules varies between countries. You may therefore wish to seek local advice.

54 / May 2013

How to be effective To create an efficient but compliant tax structure, a company should start from the premise that all tax planning must have good commercial reasoning. If your tax planning is motivated to avoid paying tax rather than supported with good business rational, tax authorities will set it aside. Typically, a group which is under common control is able to plan how related party transactions can occur. As part of this process, it can influence: • The legal capacity in which each group entity contracts with another entity • The action taken to avoid creating a Permanent Establishment (PE) • The risks each entity assumes • The value each entity provides in the supply chain

Managing the relationship and remaining credible in the responses you provide to the tax authorities, supported by facts and evidence significantly assists in resolving a dispute. Unless there is a specific uncertainty on a point of law, it is generally advisable to seek to resolve a tax dispute without allowing the matter to escalate to a tax tribunal. Each case is dependent on its own facts and it is always best to obtain advice from an advisor who is familiar with local rules. Michael Stirling is listed in the Guide to the World’s Leading Transfer Pricing Advisors and highlighted in the Financial Times Innovative Lawyer Category for his ability in managing Dispute Resolution in relation to Transfer Pricing

By planning and modelling different supply chains one can select a method that is most effective by ensuring the facts support the outcome to mitigate the tax burden. Tax Enquiries and Dispute Resolution Economic austerity has accelerated a trend of an increase in transfer pricing tax audits by tax authorities. Often disputes occur due to a misunderstanding of the facts or by companies having insufficient policies to mitigate tax risk. This can be resolved through the provision of information to satisfy the tax authority.

Company: TP Mapping Name: Michael Stirling Email: michael.stirling@tpmapping.com Web: www.tpmapping.com Location: United Kingdom, London Telephone: +44 (0) 207 629 3030

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving Transfer Pricing Disputes

Mr Godoy stated that deep comprehension of the client and industry are a must when dealing with a transfer pricing related dispute. “Whenever a strategy is being defined to present a defence in the context of transfer pricing audits, our expertise goes beyond the knowledge of transfer pricing regulations and we are able to provide a complete understanding of the client’s business creating value at the time of setting a position before the authorities; thus, the defence will consider transfer pricing technique, situation of the industry and relative position of the client, accordance with the actions taken by competitors, etc,” he commented.

-----------------------------------------------------------------------Milton González Malla is a Transfer Pricing Partner and Pablo Godoy a Transfer Pricing Manager at Ernst & Young Argentina. Milton and Pablo belong to the largest Ernst & Young transfer pricing department within the South America region and one of the main practices in the Argentine market. -----------------------------------------------------------------------“Our practice comprises specialists including economists, accountants, and others with an extensive experience and expertise in preparing transfer pricing documentation and planning on a global, regional and local basis”, said Mr González Malla. “Among others, we are leaders in the Agribusiness and Pharmaceutical industries in terms of transfer pricing documentation and controversy resolution counting on the expertise of our tax litigation practice staffed with skilled lawyers experienced in the judicial procedures which transfer pricing dispute resolution entails. In addition, we take part of extensive global network which grants us access to the support of our Global Transfer Pricing Controversy and Dispute Resolution area.”

actions taken by the tax authorities are expected to continue and are aggravated by a weak institutional environment, including but not limited to courts independence concerns and the lack of jurisprudence or definitive precedents on grain transfer pricing matters as of today. “Some grain exporters have received in the first months of 2013 formal requests of information with the intention to challenge the substance of the international intermediaries involved in the transactions and looking for deemed undervaluation of the export prices (such intention has come to light because of the clear exchange of information between Customs authorities of Argentina and Spain),” he concluded.

“Moreover, a multidisciplinary team including economists, accountants and lawyers is recommended given that it allows preparing responses to the tax authorities which will defend the transfer prices under discussion but also will handle the judicial procedures from the beginning of the process; a benefit that may ultimately settle the dispute in favour of the client.” Mr González Malla noted that the last 12 months have shown intense activity of the Argentine Tax Authorities in terms of aggressive audits imposed on taxpayers in the Agribusiness industry. Main grain and related products exporters and agriculture manufacturers have experienced challenging transfer pricing audits and a heavy scrutiny on its intercompany exports when an international intermediary is involved. “Likewise, the same period has shown a regular activity in terms of jurisprudence including rulings on transfer pricing disputes within industries such as Pharmaceutical, Oil & Gas, Automotive, and Services, besides the already mentioned Agribusiness,” he added. Looking ahead in 2013, Mr Godoy anticipates the trends observed in 2012 will persist and increase. He stated that

Company: EY Buenos Aires -Argentina Web: www.ey.com/ar Address: 25 de Mayo 487 – Buenos Aires – (1001) Argentina Name: Milton González Malla Email: milton.gonzalez-malla@ar.ey.com Telephone: +54-11 4318-1602 Name: Pablo Godoy Email: pablo.godoy@ar.ey.com Telephone: +54-11 4875-4806 in March 2013, which finally resulted in the cancellation of the full amount of JPY 122.3 billion in the two-stage administrative appeals processes. Another focus by the Japanese tax authorities has been on restructurings, whereby risks and functions originally assumed by Japanese entities are removed and transferred to non-Japanese entities. Faced with the restructurings to that effect, the Japanese tax authorities may seek a way to impose, so to speak, an “exit tax” on corporate tax payers on a theory backed by Chapter IX of the 2010 OECD Guidelines. As the Japanese tax authorities’ much attention to intangibles is unchanged, the appropriateness of consideration for the intangibles should be cautiously documented.

-----------------------------------------------------------------------Atsushi Fujieda and Shigeki Minami are Partners at Nagashima Ohno & Tsunematsu, Japan. -----------------------------------------------------------------------Nagashima Ohno & Tsunematsu, with offices located in Tokyo, New York and Singapore, has earned an extremely strong reputation as a leading tax law firm in Japan, ranked as Tier 1 (Band 1) by a number of well-known legal publishers, including Chambers Asia, The Asia Pacific Legal 500 and the Tax Directors Handbook, and we are highly recommended by Asialaw. Mr. Atsushi Fujieda and Mr. Shigeki Minami, authors of this article, were named Tax “Best Lawyers” by the Best Lawyers 2013 Tokyo. Nagashima Ohno Tsunematsu’s transfer pricing practice, led by Mr. Fujieda, covers effectively every aspect of transfer pricing, including general advice, auditing, APA and, with special emphasis, disputes. Enriched by Mr. Fujieda’s more than 20 years of experience in the field, the firm has been involved in a number of ongoing administrative appeals and litigation matters for various clients. The firm’s advice extends to local issues as well as international issues. The firm’s recent achievements include cancellation of a correction in the amount of more than USD 100 million for a Japanese pharmaceutical

ACQUISITION INTERNATIONAL

company. The following highlights summarize the recent transfer pricing trend in Japan. The transfer pricing rules were overhauled in 2011 in response to the amendments of OECD Transfer Pricing Guidelines in 2010. The newly introduced “most appropriate method” confirmed and has furthered the prevalence of the transactional net margin method (TNMM). On the other hand, the new rule codified the two-stage residual profit split method (RPSM) possibly with a wider scope of application. The 2013 amendment has adopted the Berry ratios as another net profit indicator, which may help certain distributors. Turning to enforcement, the Japanese tax authorities have tended to apply the RPSM to large Japanese companies to allocate considerably low operating margins to their nonJapan subsidiaries, resulting in a recalculation of a very large amount of income for the Japanese parent. The trend received a significant blow when Takeda Pharmaceutical Company Limited, the largest Japanese pharmaceutical company, achieved cancellation of a correction in the amount of JPY 24.6 billion by the National Tax Tribunal

Company: Nagashima Ohno & Tsunematsu Web: www.noandt.com/en/ Address: Kioicho Building, 3-12 Kioicho, Chiyoda-ku, Tokyo 102-0094, Japan Telephone: +81-3-3288-7000 Name: Atsushi Fujieda Email: atsushi_fujieda@noandt.com Name: Shigeki Minami Email: shigeki_minami@noandt.com

May 2013 /

SECTOR SPOTLIGHT:

Resolving Transfer Pricing Disputes “Transfer pricing audits in Brazil typically involve multimillion dollar assessments. It is key for taxpayers to identify and engage service providers with significant knowledge and expertise in the transfer pricing area. Deloitte, for example, has an extensive track-record which includes assisting hundreds of multinational corporations in dealing with the RFB.” The main challenges faced in these types of disputes highlighted by Alexandro include, but are not limited to: compiling the data requested by the Brazilian tax authorities in a timely and organised manner; being able to support the tax positions that were taken by the taxpayer; being able to prove that profits were not shifted to foreign jurisdictions through intercompany pricing. He stated that these challenges can be overcome through: • • -----------------------------------------------------------------------Alexandro Tinoco is a Transfer Pricing Senior Manager at Deloitte São Paulo, Brazil. He has been with Deloitte since 2000, when he joined the Brazilian firm as a corporate tax trainee in the Rio de Janeiro office. -----------------------------------------------------------------------Alexandro explained that double-taxation is a significant problem in Brazil. Brazil does not follow the Organisation for Economic Cooperation and Development (“OECD”) transfer pricing guidelines, and that alone makes the process of establishing efficient intercompany pricing policies challenging for most international groups.

“Multinational corporations operating in Brazil are subject to a significant level of scrutiny by the Brazilian Revenue Services (“RFB”),” he commented. “The application of the Brazilian transfer pricing legislation is heavily enforced by the RFB. The proactive development of an efficient transfer pricing policy is necessary to mitigating any double taxation issues.

•

Developing an intercompany transaction inventory; Assessing the more appropriate transfer pricing method to document intercompany transactions based on facts and circumstances; Assessing the possibility of managing intercompany prices within the fiscal year to either mitigate or zero any Brazilian transfer pricing adjustments; Assessing whether the relevant intercompany transactions are memorialised in intercompany agreements; and Preparing transfer pricing analyses and reports documenting the relevant intercompany transactions.

Discussing recent trends, Alexandro noted that the Brazilian tax authorities have been relying heavily on technology to identify transfer pricing exposures. “The RFB created a sophisticated structure that allows it assess taxpayers on the go,” he said. “The new trend is technology being used to generate tax income.” He explained that, since Brazil does not follow the OECD Guidelines, the odds for a Brazilian taxpayer entering into

cross border intercompany transactions that have transfer pricing exposures (even though the economic group is compliant in other tax jurisdictions) are significant. “Ideally, the best way to mitigate transfer pricing disputes is through transfer pricing planning and compliance. “Unfortunately, taxpayers tend to play catch up when it comes to transfer pricing,” said Alexandro. “Proactively devising and implementing efficient transfer pricing policies is the best strategy to avoid future disputes.” Looking ahead in the year, given recent changes in the Brazilian transfer pricing rules, Alexandro expects a lot of transfer pricing disputes arising from taxpayers operating in the commodity business. “We also believe that service transactions, either inbound or outbound, are a new niche for the Brazilian tax authorities, which until recently were more concerned about tangible good transactions,” he concluded.

Company: Deloitte Touche Tohmatsu Consultores Ltda Name: Alexandro Tinoco Email: atinoco@deloitte.com Web: www.deloitte.com.br Address: Rua Alexandre Dumas, 1981 – São Paulo, Brazil – 05724-003 Telephone: +55 11 5186-1660

Transfer Pricing Risk in 2013 In most countries, penalties are 25% or less of the increased tax, but MNCs face greater risk in some countries. For example, the risk is higher in Argentina, Brazil, China, Colombia, Ecuador, Finland, Hungary, Indonesia, Italy, Kazakhstan, Malaysia, Mexico and Venezuela because of high penalty rates, a greater willingness to impose penalties, or both. Recently in the US, penalties have been imposed in up to 25% of transfer pricing adjustments. US MNCs There have been a number of changes in the IRS following the creation of the position of Director of Transfer Pricing Operations in 2010. Since the IRS reorganization, we have seen an increased number of transfer pricing examinations including a number of relatively small taxpayers.

-----------------------------------------------------------------------Ross B. Newman is the CEO of Altus Economics, Inc. -----------------------------------------------------------------------MNCs Face High Risk The transfer pricing environment for multinational corporations (MNCs) has changed in recent years, as tax authorities around the world focus more resources on transfer pricing. Most developed countries have increased their transfer pricing staffing, and countries like the US have reorganized their organization to more effectively address this area. Tax authorities have adopted increasingly sophisticated audit techniques to address transfer pricing issues, including a limited number of joint audits between foreign tax authorities. Formal opposition to net margin methods has ceased in most jurisdictions.

56 / May 2013

The risk to US taxpayers is also increasing because of the requirement to disclose uncertain tax positions on tax returns, which was required for certain taxpayers starting in 2010. In the 2014 tax year, the threshold for this requirement is lower and more taxpayers will be subject to disclosure rules. While taxpayers can obtain relief from double taxation under mutual agreement procedures, the process is slow. As an example, for a US taxpayer the average time for a case to be resolved in 2011 was 849 days. M&A Transactions Transfer pricing is a significant risk for firms making international acquisitions. Improper or inadequate documentation of intercompany pricing often is the largest element of tax exposure for companies acquiring a multinational business. In cases where a target company has documentation, an independent review can determine if the documentation is adequate or if there is tax exposure. In light of the potential for significant tax and

penalty liabilities, the due diligence for every acquisition of a multinational business should begin with a thorough review of the target’s transfer pricing documentation. This is particularly significant in cases where a division is being spun off. If there are errors in transfer pricing, the profitability of the division may not be correctly reflected on the parent’s books. Dispute Resolution With the risk of double taxation growing, the best approach to reducing the risk of a transfer pricing dispute is transfer pricing documentation. In the US, taxpayers that have an adequate transfer pricing study completed before they file their tax return have penalty protection under the §1.6662-6 regulations. The greatest value of having this ‘contemporaneous documentation’ is this provides the best approach to dealing with an IRS transfer pricing examination and avoiding a dispute.

Company: Altus Economics Inc. Name: Ross B. Newman Email: altus.info@altusecon.com Web: www.altuseconomics.com Address: 195 South C Street, Suite 110, Tustin, CA 92780 Telephone: +17147316093

ACQUISITION INTERNATIONAL

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

www.valkypa

r tners.sk

The law office VÁLKY PARTNERS s.r.o. can be reached at: Muškátová 36 821 01 Bratislava Slovakia office@valkypartners.sk +421 905 941 274 Ladislav Války Managing Partner ladislav.valky@valkypartners.sk

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

www.pelargoscapital.com

SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist

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

-----------------------------------------------------------------------Mr Andre Nunes is the Managing Director of Avance International Capital. -----------------------------------------------------------------------Mr Nunes stated that the key skills required of a crossborder M&A specialist include: managing cultural differences; integrating across borders; and establishing a clear organisational structure and lines of responsibility for the firm’s team as well as the client. “Differences in international laws, taxes, currencies, negotiation culture, and many other issues that may arise during a cross-border transaction require our advisors to have extensive international experience and skills,” he commented. Over the past two years, Avance has witnessed a surge in cross-border transactions, not only limited to multinational companies attempting to establish a footprint in Latin America’s prosperous market, but also from established Latin American companies looking to capitalise on distressed, undervalued assets in struggling, developed economies in addition to diversifying their revenue streams. “The globalisation of business over the past decade has spawned the search for a competitive advantage that is worldwide in scale,” observed Mr Nunes. “Companies are following their customers – who are going global themselves

58 / May 2013

– as they respond to the pressures of obtaining scale in a rapidly consolidating global economy. In combination with other trends such as increasing deregulation, privatisation and corporate restructuring, globalisation has spurred an unprecedented surge in cross-border merger and acquisition activity.” One of the main challenges faced in cross-border deals is the barrier created by distance. Mr Nunes noted that it is extremely difficult to be on the same page and fully coordinated with one another if you are separated by over 3,000 miles of land. “One way to mitigate this barrier is by scheduling a consistent amount of conference calls between the two teams while meeting face-to-face as many times as your hectic schedule permits,” he explained. Another significant challenge is differences in culture. While Avance has a multi-cultural staff which enables it to mitigate this barrier between the firm, the client and the investors, this does not mean that it will be a smooth ride between the client and investor. “It’s important to gauge an understanding of the basic rules that govern how business is done in different cultures and pass your knowledge on to your client and investor,” added Mr Nunes.

In the past few years Latin America has experienced a surge in M&A activity. Mr Nunes explained that, historically, Brazil received most of this activity due to the vast geographical and resourceful assets it possesses. However, as of late, thriving economies such as Colombia, Peru and Mexico have received a significant amount of interest from strategic and financial investors looking to diversify and strengthen their portfolios. “The consumer sectors are gaining momentum in these markets as these economies continue to grow and strengthen their population’s buying power, especially that of the middle-class. The Energy, Mining & Utilities sector is still the strongest in the region, delivering 81 completed transactions in the region for 2012,” he concluded.

Company: Avance International Capital Name: Mr Andre Nunes Web: www.avancecap.com Address: 168 SE 1st St Suite 704, Miami, FL, 33131

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Cross-Border M&A Specialist -----------------------------------------------------------------------Jens Chr. Hesse Rasmussen and Jacob Hjortshøj are M&A Partners at Bech-Bruun. ------------------------------------------------------------------------

According to the statistics published by the international bureau, Mergermarket, Bech-Bruun acted in 2012 as legal advisor on more transactions than any of its peers, not only in Denmark but in the entire Nordic region. “Bech-Bruun’s top ranking in Mergermarket’s Nordic League Table is the result of many years of M&A specialisation and commitment,” said Mr Hjortshøj. “Our expertise within M&A transactions is unmatched. Our significant volume enables us to handle very large transactions, as we are able to appoint the right people, at the proper level, from within our own ranks. This, combined with our considerable experience and knowhow, implies that we can render legal assistance at competitive prices.” Mr Rasmussen explained that Denmark is currently experiencing an increase in M&A transactions, including cross-border M&A transactions, whereas the European market witnessed a decline in activity in 2012. In 2012, the Danish M&A market experienced a 9% increase -----------------------------------------------------------------------David Morales, Founder and Managing Director of Morales & Co. spent his entire investment banking career exclusively in the international corporate finance and global M&A departments of such firms as Credit Suisse, Barclays, JP Morgan Chase, ING, Credit Agricole and the once venerable Baring Brothers and was based in New York, London and Paris, although he mostly found himself on a plane to somewhere, he remarks. -----------------------------------------------------------------------Today, David is based in Atlanta, with excellent access to Latin America, as well as Europe, currently the two geographical areas of major focus for the firm. “Having worked for the larger global investment banks for clients all over the world, as well as having covered a very broad set of industries, we can bring this expertise to the smaller and medium-sized international client and provide the high level of service they require in the global marketplace,” said Mr Morales. “For example, when representing an M&A client where the counterparty is a multinational corporation or other large global player represented by a large global bank, we are able to handle the requirements of such an asymmetry precisely because we were on the other side before.”

in the number of transactions, compared with 2011. Foreign private equity funds as well as strategic buyers have been major contributors to the growth in crossborder M&A transactions. “One reason for the increased activity is that several sale or acquisition plans that were previously shelved because of the financial crisis have been activated again,” observed Mr Hjortshøj. “As a result of the crisis, the difference between buyers’ and sellers’ price expectations began to widen considerably, resulting in a “back-log” of unrealised M&A deals. The activity we are seeing now is spurred by a re-activation of the shelved projects.” Mr Rasmussen added: “We are still experiencing substantial interest from Chinese enterprises looking to invest in Denmark, particularly in the energy sector and in businesses with strong brands. At the European market the Asiatic investors still play a significant role within M&A.” “The upward trend, however, continues for Bech-Bruun in the first half of 2013 and is supported by what we

look to Mexico as their first international “M&A beachhead”, even more so than Europe currently.

“The answer is often a cross-border mid-sized acquisition of an established company in a new market that is already set to provide those products or services,” he explained. “Often, the large global investment banks are not set-up to finding and executing a smaller or mid-sized transaction like we are.”

“We are highly active in Mexico right now with both buyside and sell-side mandates there. Mexico has the enviable position of being an economy with a growing middle class and purchasing power, as well as competitive production and transportation costs vs. China. We are seeing numerous companies consider Mexico as an alternative manufacturing location to China right now”, he concluded.

According to Mr Morales, being based in the U.S. is often a great attraction to Latin American clients that require a highly discreet and confidential management of their M&A process, particularly a sell-side mandate. He added that discretion is directly tied to personal security issues, particularly surrounding the sale of a family-owned company and the liquidity event that it represents. “To the extent that the local market is managed on a “need to know” basis while a global sale process unwinds from outside the local market, selling shareholders are often more confident that such information dissemination is minimised locally and security is enhanced,” he commented. Mr Morales highlighted Mexico’s position as a natural trading partner due to the NAFTA (North American Free Trade Agreement), noting that the political and currency stability of this economy has led many U.S. companies to

-----------------------------------------------------------------------Stephen B Lewis is the Founder and Managing Director of Cross Border Strategies LLC. ------------------------------------------------------------------------

when doing a deal in another jurisdiction is a recipe for increased cost and a high degree of frustration if not outright disappointment.”

“Which institutions have the wherewithal, appetite and skill sets necessary to provide the required financing at any given point in time changes rapidly in today’s economic environment so it is critically important to stay on top of market trends and who is active in the market so that time and money is not wasted chasing a lender who has little interest in supporting the transaction,” continued Mr Lewis. “In addition, a willingness to listen and the ability to understand that the method of doing business in a country other than one’s home country is not wrong, it is just different and needs to be understood is critical to the success of a transaction. Technical expertise can only be brought to bear if the differences are understood. Assuming something is done the same way as it is done in one’s home country

ACQUISITION INTERNATIONAL

Company: Bech-Bruun Web: www.bechbruun.com Name: Jens Chr. Hesse Rasmussen Telephone: +45 25 26 35 60 Name: Jacob Hjortshøj Telephone: +45 25 26 36 00

to follow an important multinational client across the globe and service them seamlessly.

Mr Morales stated that there is no doubt that there is a need to service the mid-sized company on an international scale. He noted that, today, mid-sized companies may need

Mr Lewis opined that, with specific focus on the area of sourcing and arranging the debt financing necessary to complete a cross-border M&A transaction, it is necessary to have a granular understanding of local financing markets and the financing products on offer in the relevant jurisdictions along with a strong familiarity with the providers of financing and their relative strengths and weaknesses.

interpret as a higher degree of confidence among business executives that the Nordic region is heading away from the crisis economy towards a more stable and predictable future.”

Mr Lewis explained that one of the biggest risks faced by companies entering new markets, from a financing perspective, is consensus risk. “What I mean by that is if, for example, a US domiciled company buys a German company and finances the acquisition with debt provided by a domestic German lender, it is entirely possible that the German lender to the German company and the US based lender to the US company could become at odds with one another at some point in time when one side of the Atlantic or the other is not doing so well and is looking for support from its affiliate on the other side of the Atlantic,” he observed. “Not having a financing program that is integrated into the way the business operates as a whole can make the management task daunting to say the least.” Looking ahead, Mr Lewis anticipates an increase in middle market cross-border M&A from 2012. He attributes the pressure to do deals to the banks being required to shed assets; the “dry powder” at the disposal of private equity houses; and the cash on corporate balance sheets.

Company: Morales & Co. Name: David Morales Email: dm.contact@moralesandco.com Web: www.moralesandco.com Address: 7878 Stratford Lane Atlanta, GA 30350 U.S.A. Telephone: +1 (917) 829 6828

“Further, if anything good came out of the financial crisis it was the realisation that the economy has become global and that opportunities for business expansion are not confined to local economies. Having said that, proper planning for the execution of these deals has never been more important and that creates opportunities for firms like mine,” he concluded.

Company: Cross Border Strategies LLC Name: Stephen B Lewis, Managing Director Email: stelewci@gmail.com Address: 55 E Monroe Street, Suite 3300, Chicago, IL 60605 USA Telephone: +1.312.201.3962 (O), +1.312.493.0402 (M)

May 2013 /

SECTOR SPOTLIGHT:

-----------------------------------------------------------------------Valery Papakul is the Managing Partner of Stepanovski, Papakul and Partners. ------------------------------------------------------------------------

Mr Papakul stated that a cross-border M&A specialist requires: first-hand experience of participation in crossborder M&A deals; constant follow-up on new tendencies, arising nuances and opportunities for clients; an experienced, well built up team containing specialists of different expertise; knowledge of market, state structures; and the skill to foresee possible risks and consequences of deals. The demand for the firm’s services in relation to crossborder M&A has certainly increased. Mr Papakul noted that, as the national law firm, it is constantly approached by many international law firms with associated requests. However, he added that “such an interest is mostly related to the increase of interest of investment in local markets”. One of the main challenges in cross-border deals highlighted by Mr Papakul is the incomprehension of the specification of peremptory rules by clients and big law firms. “One of the ways that we tend to avoid such challenges is by providing our clients with as much information as -----------------------------------------------------------------------David W.M. Harvey is the President and Founder of Harvey & Company, a leading buy-side acquisition search firm that develops and executes acquisition strategies in partnership with private equity funds and acquisitive corporations. Founded in 1998, the firm has initiated 160 acquisitions, including 33 in the last two years. ------------------------------------------------------------------------

What gives you an advantage over local and global competitors in your areas of expertise? The senior professionals at Harvey & Company possess on average 15 years of buy-side experience and they lead industry specialized teams focused on the following sectors: industrial and business services, niche manufacturing, healthcare, value-added distribution, energy, consumer and financial services. We have over 30 professionals, plus significant research staff, that allows us to quickly generate attractive acquisition opportunities for our clients. In addition, we have developed and refined systems, procedures, and best practices as well as created a proprietary database of over 135,000 companies that gives us a substantial edge over our competitors.

possible regarding the situation based on the previous experience, as well as by suggesting them the best option for an action,” he commented. Another obstacle is the misunderstanding of the fact that different investments require different opportunities. “For example, the production of goods is associated with free economic zones, the development of software is associated with the High Tech Park,” continued Mr Papakul. “The way to overcome it is by applying clients’ interests according to peculiarities of national market to the interest. In the Belarusian situation, this is the market which is prone to crisis (like the recent triple devaluation) which has to be considered when predicting risks. So we are the lawyers who help our clients to build up a solid business model.” Looking ahead, the first prediction that Mr Papakul would make is the rich becoming richer and the poor becoming poorer. He also expects to witness or participate in large deals, among which acquisitions will prevail over mergers. “The most common scenario will be the situation when a company in financial straits will be seized by stronger companies and not always amicably.

What are the main challenges faced in sourcing cross-border deals? How can they be overcome? Oftentimes, it can be difficult to get business owners comfortable with the prospect of selling to a foreign firm. However, there are many benefits to a cross-border deal like access to international markets, increased and possibly cheaper manufacturing capabilities, crossselling opportunities, and the prospect of changing a domestic business into one with a very real global presence. Our job is to portray these benefits in the best light to prospective target companies and we have been very successful historically in persuading business owners to engage in discussions with our clients. Another hurdle we often face is cultural norms and language barriers but we continue to learn new markets and have initiated over a dozen cross-border deals including very recent transactions in Eastern Canada and Germany. Tell us about the other side of Harvey & Company and the value proposition offered by Harvey CEO. Harvey CEO specialises in recommending talented executives with vision for value creation that oftentimes

OTHER EXPERTS IN THIS AREA

‘‘

The structure of the global economy is dynamic. We are at the threshold of a new division of the market with new changing market deals. Growing global monopolies are the new challenge, as national antimonopoly institutions are not adapted to handle crossborder giants, he concluded.

‘‘

The Cross-Border M&A Specialist

Company: Stepanovski, Papakul and Partners Name: Valery Papakul Email: v.papakul@spplaw.by Web: www.spplaw.by Address: 16 Kuibyshev Street, 4th Floor, 220029 Minsk, Belarus Telephone: +37517 2094483

serve as a catalyst for new investment searches by private equity funds. The private equity field has become much more competitive over the years and good returns are no longer generated solely through financial engineering. Funds must focus on operational improvements and we are there to support those efforts with stellar operating executives and in many cases provide the support necessary to conduct a proactive search for new platform investments.

Company: Harvey & Company Name: David W.M. Harvey Email: dharvey@harveyllc.com Web: www.harveyllc.com Telephone: +1 949-757-0400 Fax: +1 949-757-0404

OTHER EXPERTS IN THIS AREA

Crawford Bayley & Co Company: Crawford Bayley & Co Name: Sanjay Asher Email: sanjay.asher@crawfordbayley.com Web: www.crawfordbayley.com Address: State Bank of India Buildings, NGN Vaidya Marg, Fort, 400 023, Mumbai, India Telephone: +91 22 2266 3353

60 / May 2013

Company: Loze & Partners Name: Janis Loze Email: janis.loze@loze.lv Web: www.loze.lv Address: Kr.Valdemara 33, Riga, LV-1010, Latvia Telephone: +371 677 44444

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

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

M&A Growth – A Recipe for Success, or Failure? -----------------------------------------------------------------------Acquisition International speaks to Rolf Straume, Owner and Managing Partner of Infima AS, for his insight into M&A growth. -----------------------------------------------------------------------Mr Straume stated that most large corporations are a function of successful M&A growth, noting that many companies and their shareholders have benefitted from huge value creation. While M&A growth is a possible recipe, Mr Straume is sceptical about the current global focus solely on the positive aspects of M&A growth. “To be successful, you need to follow a good recipe,” he observed. “What I would like to warn against is blindfolded M&A growth, not using a recipe at all. To carry out M&A transactions without an M&A strategy well aligned with the company’s overall growth strategy is high risk. Without a clear objective for target search and evaluation, the probability of failing is high. In fact 75-80% of all M&A transactions do not add value, and too many destroy significant value for the shareholders.” If Mr Straume was to single out one reason for most transaction failures, it would be that most companies are reactive and not proactive. They are presented good ideas from investment banks and react on them, instead of proactively searching for the right targets anchored in their own strategy. To avoid failure, Mr Straume recommends starting with the question “what do we want to achieve?” “It may be technology, competence, market, product, size,” he explained. “The key is that you have defined what you need to support your overall strategy, and consequently you know what to look for. Asking this simple question, you will be able to formulate your selection criteria much better. This will increase your awareness and focus in the target selection process. And you will make better acquisitions.” Discussing his “winning formula”, Mr Straume highlighted Infima’s MOSAIC concept – a method which will significantly increase the probability of a successful transaction. However, he warned that there are no guarantees or formulas that fit all projects. “Every transaction is different, and there are so many variables in a dynamic environment, that the method is more a set of checklists and guidelines,” he commented. MOSAIC is an abbreviation for the six most important success criteria: Management, Objective, Structure, Analysis, Implementation and Challenger. “We have already talked about the O, which is the answer to the overall important question: What do we want to achieve? This is the reasoning for the transaction and how the target will add value for the company,” continued Mr Straume.

62 / May 2013

“Second most important is probably Implementation. Without a well thought through and planned implementation, a plan prepared in advance of closing, ready to be launched at closing, you lose valuable time and momentum. To prepare the ownership and implementation is an integral part of the acquisition/merger process. In practice we see too many companies short-cutting or delaying this important work.”

“However, I will not only promote the project manager, but also the manager in charge of the implementation,” he continued. “The role is equally important, and the sooner the implementation manager is involved in the project, the better it is. If you do not have management to be in charge of the acquisition process and the implementation, do not start.”

In Mr Straume’s opinion, it is unfortunate that some believe and behave like dealmaking is an art. He, however, believes that M&A is simply hard work, with a lot of preparation, planning and analysing.

Infima promotes itself as a project manager for hire as well as an M&A advisor. The company can support the buyer in all phases of the process and may also take on a project manager role to add necessary capacity and competence to the team at the most critical phases in the process. However, Mr Straume advised that this role should not be fully outsourced, adding that the responsibility has to stay in the organisation with the project owner. Infima may be more of an assistant and coordinator.

“You have to understand the competition, the seller, your merger partner,” he opined. “You have to understand the stakeholders and market dynamics. You have to be sure that you will achieve your Objective; you have to be sure that you will successfully implement the transaction.” MOSAIC is much more than just a list of key success criteria – it takes a holistic view on the total acquisition process. Infima have divided the five phases of an acquisition/merger process into 40 activities. Mr Straume explained that this is a kind of checklist to make sure that you have thought about the most important issues and made a plan for how you should approach them. “You need a Structure,” he commented. “An added advantage is that you are better prepared to meet time constraints, which unfortunately most acquisition processes are full of. And making sure that activities are initiated and carried through in the right order and at the right time. Most activities demand some kind of analytical work and therefore are time consuming.” Commenting on the Challenger role, Mr Straume stated that, unfortunately, most acquisitions fail due to a lack of opposition and should have been aborted or not started at all. He noted that too many transactions – and more than we may like to believe – are carried out for reasons other than to add value for the shareholders, namely due to power, fright or fascination. “Well under way, too many managers fall in love with projects they have initiated or worked with,” he observed. “The more time and money they spend, the more committed they become. The organisation needs someone to challenge the project, asking the key questions: do we achieve our objective? The challenger has to be brave and have a good standing in the organisation – an important role.” Mr Straume also promotes the project manager role as a key success criteria. He stated that a transaction is a huge, complicated project with significant implications for the future of the company. The project manager is a key role and requires someone with sufficient experience, dedication and time available to manage the project.

“INFIMA aims to be recognized as the most experienced practitioners of the more complex and challenging transactions,” he commented. “This is good news for Private Equity firms, who often lack the necessary industry insight and operational experience. But also for industrial players who prefer to work with advisors who understand their industry and challenges and who speak their “language”. Mergers and more complicated transactions typically involve managing a range of delicate employee, customer and supplier relationships or other complex issues. Infima has always an industry expert, a sector specialist, on the team. “By combining operational and financial skills, its unique mix of relevant industry and M&A experience, Infima is a catalyst for identifying the potential for value creation, preparing for implementation and thereby increasing the probability of a successful transaction,” concluded Mr Straume.

Company: Infima AS Name: Rolf Straume Email: rolf.straume@infima.no Web: www.infima.no Address: Lysaker Torg 8, 4. etg, Postboks 449, NO-1327 Lysaker, Norway Telephone: +47 97 65 98 54

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

that competitiveness of Spanish companies is dramatically improving,” said Mr Martos. Discussing the ease of doing business in Spain, Mr Martos stated that access to banking and financing facilities is still improving slowly for Spanish companies, although credit is starting to slowly flow in the in the market in the first quarter of 2013. “Notwithstanding the aforementioned, investment is being attracted to Spain driven by the opportunity to set a foot on a large and profitable market in Europe at prices which are specially adjusted these days due to the past absolute restriction of credit to companies,” he commented.

-----------------------------------------------------------------------Rodrigo Martos Prat is the Founding Partner of Gallego, Martos & Quadra-Salcedo and the Leading Partner of the M&A and Restructuring practice. -----------------------------------------------------------------------According to Mr Martos, global tendencies appear to indicate that companies with an appetite for M&A transactions could be increasing in number. He noted that the Spanish market has suffered from severe labour and financial restructurings which have led to companies with a lower equity/EBDITDA/debt ratio. This may entail a better position to carry out acquisitions during 2013. “This fact with a global tendency that shows that confidence is slowly returning to European markets leads the players in the market of corporate finance to foresee an increase in the

ACQUISITION INTERNATIONAL

In conclusion, Mr Martos highlighted the signs of recovery that are starting to be noticed in the Spanish market: “The stock exchange IBEX 35 has been consistently, although slowly, growing, Spanish Debt Bonds have been allocated in April with the lowest interest rate since 1990, exports are growing, companies have restructured their workforces, the financial system has been restructured and the Spanish strong and solvent financial entities are prepared to start financing projects, etc.” M&A transactions in Spain by local players,” he observed. “In addition, companies with restricted access to bank financing may still be a very interesting opportunity for foreign investors with available equity or with the capacity to obtain financing to acquire very interesting companies in Spain and consolidate their business in Europe.” The firm is of the opinion that the Spanish market is an opportunity for investors with sufficient equity or available financing to carry out acquisitions either for restructuring or already in their recovery phase. “The flexibility of the labour market in Spain today offers opportunities for companies to adjust their human resources needs and to hire new qualified employees with confidence and the raise of the exports in the last year proves

Company: Gallego, Martos & Quadra-Salcedo Name: Rodrigo Martos Prat Email: rodrigo.martos@gmqabogados.com Web: www.qmqabogados.com Address: C/ Santa Engracia 122, 3ºA, 28003 Madrid, Spain Telephone: +34 914 585 777

May 2013 /

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

From when Strachan Partners was established in 1991, by the founding partner Charles Adeyemi Candide-Johnson Esq., SAN, Strachan Partners has consistently insisted on proffering commercially-focused legal advice to facilitate legal solutions second to none and as such is known for taking an innovative approach when advising institutions on their most challenging commercial transactions and dispute resolution matters. Such dedication has commanded a high success rate together with commendable global recognition & awards. Our Expertise: Banking & Finance Business Establishment & Corporate Immigration Company Secretarial Services Corporate Advisory (including Foreign Investments & Acquisitions) Energy & Natural Resources Intellectual Property Insolvency & Debt Recovery Labour & Employment Matters Litigation, Arbitration & Alternative Dispute Resolution Maritime Project Finance Real Estate Regulatory Compliance Telecommunications

www.strachanpartners.com

SECTOR SPOTLIGHT: 2013 Q1 Review

Because of its independence, the firm regularly receives instructions from other law firms, both locally and internationally. Damien Laracy has an active arbitration practice and sits as an arbitrator. Categories of Work • • • • • • • • • • •

Dispute Resolution Shipping Insurance (contentious and regulatory) Personal Injury Criminal Corporate/Commercial Property//Conveyancing Corporate/Commercial Employement Trusts and Wills Regulatory (HKEX, SFC)

-----------------------------------------------------------------------Brian S. Fraser is a Partner at Richards Kibbe & Orbe LLP. ------------------------------------------------------------------------

Brian S. Fraser represents and advises clients in complex commercial and financial matters. In financial litigation, Mr Fraser represents clients in capital markets, merger and acquisitions, derivatives, securities, including assetbacked securities, corporate governance and insurance litigation. Mr Fraser represents hedge funds, fund managers, institutional investors, insurers, investment banks, and other clients involved in disputes arising from transactions or investments in the equity, debt, structured finance and derivatives markets. Richards Kibbe & Orbe LLP is a dynamic and entrepreneurial firm with deep experience and relationships in the financial markets and the business community. The firm conducts a highly collaborative practice through approximately 75 lawyers based in New York, Washington, D.C. and London. “RK&O’s key attribute is the ability to find thoughtful, creative solutions to the hardest legal problems, in a manner carefully tailored to our clients’ objectives,” said Mr Fraser.

Areas of practice The firm handles complex international commercial litigation and arbitration as well as more straightforward domestic disputes. It assists with insolvency and debt recovery matters, banking disputes, sale of goods disputes, shareholder disputes, joint venture disputes, and interim relief applications (including Anton Pillar orders and Mareva injunctions).

In a regulatory context, Laracy & Co advises company directors and others involved in the management of listed companies. On the non-contentious side, Anthony Jex (also a Notary Public) has practised in Hong Kong for 24 years. His team advises clients in relation to corporate/commercial matters, trusts and wills, employment issues, and insurance regulatory matters.

The firm can provide preliminary advice on the validity of arbitration clauses and the enforceability of Judgments and arbitration Awards. Clients also deploy Laracy & Co in respect of negligence and mis-selling claims, employment disputes, and business diversion and fraud claims. On the shipping side, Laracy & Co handles cargo loss/ damage claims, misdelivery claims, ship mortgage enforcement, charterparty disputes, and Admiralty work generally. The firm advises banks, traders, ship owners, charterers, underwriters, and the International Group of P&I Clubs.

Discussing the last quarter for the USA, Mr Fraser noted that hedge fund AuM broke through the $2 trillion barrier, with expected 10% growth in 2013 (to $2.42 to $2.50 trillion). He anticipates that large investors will focus on pricing, transparency and liquidity, including an increased ability to withdraw capital on demand and get it back in cash. He added that more than 1,500 new private fund advisers were registered with the SEC in 2012. He highlighted alpha opportunities with European credit, real estate or distressed debt.

Company: Laracy & Co Email: info@laracyco.com Web: www.laracyco.com Address: Room 2102, Tower Two, Lippo Centre, 89 Queensway, Admiralty, Hong Kong Telephone: +852 2525 7525

He concluded with an observation on the overall attitude regarding growth and deal opportunities in the USA:

‘‘

-----------------------------------------------------------------------Best known for its expertise in the areas of commercial litigation, international arbitration, and contentious shipping and trade matters, Laracy & Co also has non-contentious capability. ------------------------------------------------------------------------

Increasing regulatory burden, combined with investor pressure to provide greater transparency and reduce fees, amounts to a new operating reality for hedge funds.

“There are also opportunities in structured credit, frontier market debt or other illiquid fixed income instruments,” he added. “Compliance is now a critical component of a hedge fund’s culture, perhaps as important to their survival as investment performance,” continued Mr Fraser. “Compliance integrates governance, controls, supervision, operations and technology, with a dedicated chief compliance officer.” Mr Fraser noted that the Dodd-Frank Act is a significant change in regulation, with 70.1% of the 398 total rulemaking requirements having been passed as of 01/04/13.

Company: Richards Kibbe & Orbe LLP Name: Brian S. Fraser Email: bfraser@rkollp.com Web: www.rkollp.com Address: One World Financial Center, New York, NY 10281-1003 Telephone: +1 212 530 1820

Challenges in post-revolution states -----------------------------------------------------------------------Iliyas Campbell is the Managing Director of Diligence Management Consultants. ------------------------------------------------------------------------

With a number of states in the Middle East and North Africa (MENA) region transitioning from a period of revolution new and challenging opportunities are opening to international investment. Many of these states have historically been reported as having heightened levels of corruption, or other illicit dealings, that could be looked upon negatively under current compliance regulations. Moving into these markets, due diligence becomes critical to any business transaction. With newly formed governments still in their infancy, state institutions damaged and many records either destroyed or stolen, the process of due diligence throws up a number of challenges but is still achievable. Clearly there may be little information gleaned from database or other desktop research and as such as different approach is required. Indeed, the same practice can also

ACQUISITION INTERNATIONAL

be replicated in other relatively stable areas of MENA where, although security may be better, other local complexities alter the traditional due diligence process. Whilst it may be a relatively easy process to verify the credentials of major businesses in the post-revolution countries, understanding the markets, their dynamics, influencing factors and risks remain critical to any investment there. Stepping beyond this, and in particular when compliance is concerned, obtaining a concise profile of an individual’s or entity’s reputation can only truly be achieved by speaking to trusted sources within these markets with detailed local knowledge. These are all areas in which Diligence Management Consultants have excelled. Gaining access to trusted local sources to develop a clear and concise picture of an individual’s or entity’s credentials and reputation in these markets has been a core competent of our business over the past decade. We have been successful

in providing complete market entry support across the Middle East, Africa and Pakistan including those states currently transitioning from revolutions and conflicts.

Company: Diligence Management Consultants Name: Iliyas Campbell Email: icampbell@diligence.ae Web: www.diligence.ae Address: 9th Floor, One Sheikh Zayed Road, Dubai, United Arab Emirates Telephone: +971 4 3050849

May 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

Laracy & Co. services a diverse range of institutional, corporate, and private clients, both in Hong Kong/ Greater China and globally. In addition to our recognised expertise in the areas of commercial litigation, international arbitration, contentious shipping and intellectual property, the firm also has strengths in the areas of general commercial practice and employment related disputes.

- Arbitration - Corporate/Commercial - Criminal/Fraud - Dispute resolution - Employment

Categories of Work - Insurance (contentious and regulatory) - Property/Conveyancing - Regulatory (HKEX, SFC) - Shipping - Trusts and Wills

Room 2102, Tower Two, Lippo Centre, 89 Queensway, Admiralty, Hong Kong Phone: +852 2525 7525 Fax: +852 2525 7526 E-mail: info@laracyco.com

www.laracyco.com

66 / May 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

-----------------------------------------------------------------------Eason Tee is the Business Strategy Director, Malaysia at Al Mazuma Corporate Consultancy, a global extension of Remit Now International Limited. K.C Lim is the Client Services Director, Malaysia. ------------------------------------------------------------------------

“According to BNM, the construction sector is expected to grow the most at 15%p.a. in 2013 on the implementation of major infrastructure projects,” added Mr Lim. “Most major deals are carried forward from 2012.”

Remit Now has been providing international incorporation, bank account opening and intellectual property registration for a decade. Al Mazuma is specialised with a focus on Malaysian clients/products.

BNM also expects the net export of goods and services to contract by 19.1% in 2013, and Mr Lim noted that the depreciation of Japanese Yen is a contributing factor to this change.

Commenting on notable deals for the firm in Q1, Mr Lim said: “We have been busy to assist a few of our clients from Mainland China to incorporate LLPs in Malaysia (without residency requirement), applying for manufacturing licenses and certificates of origin as well as tax planning at both corporation and individual levels.

Discussing the ease of doing business in Malaysia, Mr Tee stated that the recent launch of LLPs in Malaysia is a “huge step forward”.

Mr Tee noted that Bank Negara Malaysia (BNM) expects Malaysia’s GDP to grow by 5-6% in 2013, with a fiscal deficit of 4%. -----------------------------------------------------------------------Zacharias Sundström is the Managing Partner at Nordic Law Attorneys-at-Law. ------------------------------------------------------------------------

Nordic Law Attorneys-at-Law Oy Ab is a part of the Nordic Law Group with offices in Helsinki, Brussels and Geneva. The Group also maintains a strong presence in South Africa through Nordic Law Consultants CC. Nordic Law Helsinki is a member of the International Alliance of Law Firms with carefully selected member firms throughout the world. Nordic Law was founded in Brussels in 1972. In the mid-70s the Finnish office was established and in the early 80s the office in Geneva was added along with the Stockholm office. For a short while Nordic Law had a joint venture partner and a presence in Nigeria along with an office in Washington, USA. The membership in the International Association of Law Firms with offices around the world has made maintaining of its “own” office network, unnecessary. Hence, only Helsinki, Brussels and Geneva remain permanent locations in the Nordic Law Group. -----------------------------------------------------------------------Mauro Moroni is the CEO of Moroni & Partners. ------------------------------------------------------------------------

Moroni & Partners is one of the largest and most active Italian energy engineering consultants. A team of more than 50 professionals with an experience of 700 MW works on Engineering and Technical Advisory Services for energy production and distribution at national and international level. Since its born in 2004, the turnover of M&P has doubled every year. In 2012, in spite of a market downturn of 69%, the company has almost kept its business volume, registering a 2% decrease in respect of previous year. During the first 2013 quarter M&P has carried out its grown and reinforcement strategy focusing on some reference markets. Q1 Italian Market: leader in the verification and optimisation of renewable energy plants, M&P has registered an increase in orders in respect of the same period of previous year. Secondary market is the driving force, thanks to the acquisition from important

ACQUISITION INTERNATIONAL

‘‘

“With most of the government turning to digital, application and approval are fast,” continued Mr Lim, discussing the time deals are taking to complete. “Some approvals are on the spot (e.g. LLP registration) while some take 30, 45 or 90 days. Non-residents can choose to remit in local currency or any major currency.”

Foreigners can wholly own LLPs in Malaysia without appointing strangers as resident directors, he added. Looking ahead, Mr Tee noted that the country’s GDP growth for 2013 is pillared by major infrastructure projects, costs of capital, and the availability of resources. “Having two non-resident legal entities, e.g. Belize IBC’s structured as partners of LLP in Malaysia are most welcome by our clientele in respects of tax planning, estate planning and private and confidentiality,” concluded Mr Lim.

Nordic Law has always, as the above indicates, been active in the international field especially in contract law (with a special competency to attend to the comparative and conflict solving aspects of international contracts and corporate establishment and further development). Since the early days of the Firms presence in Brussels, the Firm maintains a special expertise in European competition law. The Firm continues to counsel clients in African matters, especially today, South African legal matters. Among its other major practice areas may be mentioned Corporate and Commercial Law, Tax Law, especially international tax, Maritime Law, Air Law and European Law (Our senior partner is a Board Member of the European Air Law Association and a past President of FIDE and a member of the Finnish branch of Committee Maritime). The Helsinki Office maintains a litigation practice in addition to the specialized areas of law mentioned above. The firm has been active in significant arbitration cases both ad hoc and institutional. In investment funds of clusters of operating plants, and the FAC and “Plant Inspection” services are significant as well. The 2013 represents a pivotal year for FAC service (Final Acceptance Certificate) of many PV systems and M&P helps investors and banks to verify the quality of their plants before the expiry-date of the warranty terms agreed with the EPC.

Company: Al Mazuma Corporate Consultancy Email: almazuma@remitnow.biz Web: www.remitnow.biz Address: A-5-10 Empire Tower, SS16/1, 47500 Subang Jaya, Selangor, Malaysia Name: Eason Tee Name: K.C Lim

terms of the value and international complexity of an arbitration case it is believed the Firm holds something of a record, in the field, in Finland. The firm also litigates at the Court of Human Rights (several pending cases) and the European Courts in Luxembourg.

Company: Nordic Law Attorneys-at-Law Oy Ab Name: Zacharias Sundström Email: zacharias.sundstrom@nordiclaw.fi Web: www.nordiclaw.fi Address: Erottajankatu 5 A 7, 00130 Helsinki, Finland Telephone: +358 9 682 9340

to build big projects with competence and speed, lending institutions and investors. M&P is now operating in Romania and Greece and it will be soon ready to work in Saudi Arabia, EAU, Australia, Serbia, Poland and Chile. M&P trusts in the future, thanks to the awareness of its force coming from the specialistic know-how and the partnership with important market players in Italy and wherever needed.

Other important and strategic markets for M&P are Biogas (in partnership with Ricicla Group of University of Milan), hydroelectric, wind and HCPV and CSP plants. Regarding energy efficiency M&P has created a full service package called “Check Up Your Plant – Industrial Application” that provides solutions to bring consumptions down for industrial and commercial operators and for public entities. Q1 International Market: M&P is approaching foreign markets in cooperation with specialised EPC Contractors operating on a worldwide scale, important companies of General Contracting that need the specialistic know-how

Company: Moroni & Partners Name: Mauro Moroni Email: moroni@moroniepartners.it Web: www.moroniepartners.it Address: Via del Commercio 14 A, 60021 Camerano (AN) Italy Telephone: +39 071 895023

May 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

1 1/2 Miles Northern Highway P. O. Box 1922 BELIZE CITY, Belize, C.A. Telephone:501-223-2144 Fax: 501-223-2143 Email: info@remitnow.biz

Remit Now

International Limited

Your Registered Agent, Nominee, Trustee, Family Officer: Offshore Company Incorporation & Bank Account Opening From OFFSHORE COMPANY, OFFSHORE BANK ACCOUNT OPENING, PROPERTY, MIGRATION, TAX PLANNING to ASSET PROTECTION Combined with decades of cross border experience, we provide business savvy or user-friendly corporate, trust/foundation structure which maximizes returns to our clients. We are also registered agent in Belize, Delaware, Hong Kong, New Zealand and Singapore. Our clienteles are lawyers, accountants, company secretaries, private bankers, financial planners etc who in turn provide professional services to high net worth individuals. We also provide family office service to qualified high net worth individuals directly.

www.remitnow.biz 68 / May 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

‘‘

2013 Q1 Review

In the present market environment, active commodity strategies should outperform the more passive long-only strategies as the markets normalise and underlying fundamentals gain importance versus the macro environment, he concluded.

Mr Bonnefous has been involved in commodity derivatives trading throughout his career and participated in the development of the OTC derivative market in oil, natural gas and base metals from the early 1990’s. The Tellurian Commodity Ascend Fund is the firm’s flagship product.

Prior to Tellurian, Mr Bonnefous was the Global Head of Commodity Derivatives at BNP Paribas until 2006, based in New York and London. In this capacity, he built and managed the commodity trading business at BNP Paribas across a wide range of commodity assets including: oil; natural gas; power; emissions; coal; metals; and agricultural commodities.

Discussing Q1, Mr Bonnefous noted that investments into commodities as an asset class have been slowing down somewhat from Q4 2012. He attributed this to investors deciding to “rotate ‘en masse’ into US equities, where they were notoriously underweight”. However, Tellurian was able to grow assets due to the strong performance over the last three years.

-----------------------------------------------------------------------Frederick Anning is the Executive Director of Freann Financial Services Limited, in charge of Funding, New Business Development and Recovery and the general administrative welfare of the organisation. -----------------------------------------------------------------------Mr Anning stated that Ghana’s growth outlook has been consistent over Q1. The outlook in 2012 and 2013 remains positive, with projected GDP growth of 8.3% (7.6% nonoil) and 7.7% (6.3% non-oil) in 2012 and 2013 respectively.

“A key risk to the fiscal outlook for 2012 is the possibility of higher public spending pressure due to the elections and wage pressures from the implementation of the new pay policy,” he commented. “The population in the 15-24 age group has an unemployment rate of 25.6%, twice that of the 25-44 age group and three times that of the 45-64 age group.” Freann Financial Services Limited has spearheaded various transactions in Q1; including the provision of intercity STC buses for the country’s Intercity transport company, which is near collapse. The transaction is approximately 90% complete, as Freann awaits a financial proposal from the supplier as the package was backed by a financial proposal from the supplier as key in the supply process. -----------------------------------------------------------------------Chiagozie F. Hilary-Nwokonko is the Managing Partner at Streamsowers & Köhn. ------------------------------------------------------------------------

“Another yet to be finalised project is the revival of the country’s airlines, which collapsed a few years ago,” explained Mr Anning. “In collaboration with an aviation partner from the UK, talks are in place to provide wet and dry lease for the Airline Company to revive its operations. “Another important project which is also in place is the provision of speed trains for the rail services, which has also collapsed; we are finalising this deal flow to commence operations by the rail company.”

Company: Tellurian Capital Management LLP Name: Jean-Marc Bonnefous Email: jean-marc@telluriancapital.com Web: www.telluriancapital.com Address: 22 Arlington Street, London SW1A 5RD Telephone: +44 (0) 207 042 0900

Looking ahead, Mr Anning stated that Real Gross Domestic Product (GDP) is projected to remain robust in 2012 and 2013. “Major risks to the fiscal outlook for 2013 lie in forthcoming elections and wage pressures from the implementation of the new pay policy. Young people are increasingly forced to rely on economic opportunities created by themselves in the informal sector, this I believe is quite comparable on an international level,” he concluded.

Discussing the length of time required for deals to complete, Mr Anning highlighted Freann Finance’s various collaborative networks and links internationally. “What we do is connect with our partner with regards to the particular line of request and we roll it through,” he explained. “Considering the nature of the request it sometimes takes a year or less to underwrite and or arrange a deal. Always deals put across come along with terms of funding, normally government projects require that the supplier and or provider of service to provide it funding source, so we collaborate with the supplier of whatever the project may require to find a financier.”

Streamsowers & Kohn is a full-service commercial law practice established in 2006 following the merger of two Nigerian firms.

According to Mr Hilary-Nwokonko, transactions in Nigeria are typically completed within six to twelve months depending on a number of variable factors including the level of technical expertise required and the nature of the transaction including whether it is centred in the public or private sector.

The firm is currently involved in a minimum of five transactions relating to the transfer of interest in oil fields located in the Niger Delta area of Nigeria on behalf of two of its clients, including Doors Island and Tsekelewu marginal fields. The firm is also involved in a rights issue by a major cement manufacturing outfit.

“Funding for transactions is acquired from the public sector or private financing or a mixture of both whether in the form of equity financing, debt financing or mezzanine financing,” he explained. “The level of involvement from the public or private domain will turn on the factors mentioned earlier.”

The National Bureau of Statistics published figures showing that growth levels forecast for the Nigerian economy shrank between 2011 and Q4 2012 from 7.43% to 6.58%. This was predicted to continue into Q1 2013, and Mr HilaryNwokonko noted that the contraction of the petroleum sector is considered to be a major contributory element to this decline.

Mr Hilary-Nwokonko stated that E-commerce has dominated financial news media headlines. In particular, Jumia, the online retail company, announced a significant cash injection from a recent funding round which included a multi-million dollar equity investment by the American bank, JP Morgan. This deal follows a spate of investments in the sector of late.

“However, growth forecasts in Nigeria remain robust, outstripping the forecast for advanced economies of the world contained in the International Monetary Fund’s (IMF) World Economic Outlook update by more than five percentage points,” he added.

Discussing changes in regulation, Mr Hilary-Nwokonko highlighted The Appropriation Bill 2013 which was signed into law to become the Appropriation Act of February 25th, 2013 by President Goodluck Jonathan.

ACQUISITION INTERNATIONAL

‘‘

-----------------------------------------------------------------------Jean-Marc Bonnefous is the Founder and Manging Partner of Tellurian Capital Management LLP, an investment management firm created in 2006 and specialising in energy & commodity investment strategies. ------------------------------------------------------------------------

Company: Freann Financial Services Limited Name: Frederick Anning Email: ceo@ffslgh.com Web: www.ffslgh.com Address: P.O.Box GP 21361, Accra, Ghana – West Africa Telephone: +233 0302335179

“This Act regulates the budget of the Federal Government of Nigeria and its constituent states,” he commented. “As the official legislative instrument which governs capital expenditure in the public sector, the Act is a vital determinant of growth levels. “There have been no major changes to the regulatory structure or procedural mechanisms for doing business in Nigeria in the last quarter. For this reason, doing business in the country has remained fairly consistent with indices recorded in the recent past,” he concluded.

Company: Streamsowers & Köhn Name: Chiagozie F. Hilary-Nwokonko Email: chiagozie@sskohn.com Web: www.sskohn.com Address: 16D Akin Olugbade Street, Victoria Island Lagos Tel: +234 1 271 2276, 271 3846, 461 1820, 461 3582

May 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

70 / May 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

“Our clients are the well-known leaders in their fields frequently spearheading the boom in commercial and financial developments throughout the region. Often involved in complex matters and proudly act for major corporations and banks, private and public institutions, individuals as well as governmental and quasi-government bodies.”

“With over 20 years of experience, our team of legal practitioners and professionals continues to provide distinguished and target oriented legal services for a wide array of clients, accomplished at the highest legal service standards”, said Mr Al-Hadidi.

A notable recent deal saw the firm serving as local legal counsel for an 117Mwatt wind farm in the south of Jordan. The project company is a consortium of multinational leading companies in the Energy and Renewable Energy Sector.

The firm has well-established relations with offices in: Saudi Arabia, Kuwait, Qatar, Syria, Iraq, Egypt, Oman, the United Arab Emirates, and Lebanon. It also has associate offices in most of the Middle-East countries, North Africa, as well as Western Europe and North America. “With a vast array of practice areas and a strong performance, Hadidi & Co has taken a leading position in representing and acting as counsel for a wide spectrum of leading local, regional, and international clients,” continued Mr Al-Hadidi. “The track record is reflected in the trust and the quality of the clientele base which we have built and established over the years.

Mr Al-Hadidi stated that the length of time taken for deals to complete is highly dependent on the source of funding and the conditions precedent set by financers to financial closing. He observed that complex deals with foreign funding tend to take an average of 12-16 months, while private sector deals are more flexible and require much less time. “The renewable energy sector is most promising,” he commented. “There are three major projects with a total of 300+ Mwatt that are currently being negotiated with the government at execution level. Other projects are yet at submission and approval stages.”

Clermont Energy Partners, LLP (Clermont) is a London-based investment advisory firm specialised in the oil and gas sector with focus on frontier markets. Acting under the classic merchant banking model, Clermont uses its network and experience to associate clients and relevant interested parties to development of attractive investment projects. In particular, Clermont will be instrumental in aligning the interests of foreign investors and local entrepreneurs. Cedric Weber / Shutterstock.com -----------------------------------------------------------------------Jean-Michel Doublet and Jean-Louis Salas are Partners at Clermont Energy Partners LLP. ------------------------------------------------------------------------

Mr Doublet and Mr Salas were formerly MDs at BNP Paribas (Corporate Finance/Oil Finance). They founded Clermont in 2008, gaining FSA approval in January 2009. -----------------------------------------------------------------------Jean-Claude Gonneau is the Managing Director of Camden Associates. ------------------------------------------------------------------------

Camden Associates focusses on international transactions with a particular emphasis on mining, tech and biotech. “Even if the UK remains more active than the Eurozone, things are every bit as difficult as expected at the end of Q4 2012!” began Mr Gonneau. In Q1 2013, Camden Associates has been involved with a fairly difficult transaction involving two mining companies - a Canadian company and one based in Australia – where Camden is representing the Canadian party. Mr Gonneau stated three to six months currently seems to be the time necessary to bring a deal to completion. He describes Q1 overall as a “sea change” compared to Q1 2012, stating that mining is currently viewed negatively when tech and biotech seem to be enjoying a real revival. “These trends were starting to appear in Q4 2012,” he observed. “In a sense it is reassuring to see a rotation towards a more positive outlook on the future.”

ACQUISITION INTERNATIONAL

Clermont is a limited liability partnership registered in England and Wales. Registration Number: OC 338442. Clermont is approved and regulated by the FCA. Mr Doublet noted that growth is currently flat in the UK; however Clermont works in the international (independent) upstream oil industry, which is experiencing substantial growth.

There have not been any recent changes in regulation which have impacted activity levels, and Mr Gonneau noted that the very difficult business conditions are having more of an impact on activity than regulation. “The sentiment remains very cautious when it is not outright negative,” he explained. “In fact business confidence seems to gather momentum but remains well below pre-crisis levels. In other words, the feeling is that things will finally turnaround but the upside is not yet in sight. This remains fairly difficult for the exit market. “Things remain sluggish with most investors showing extreme caution,” he continued. “Private equity is witnessing an exodus from a number of large institutional players which, in a way, is good for smaller firms like Camden dedicated to private equity.” Mr Gonneau noted that GDP growth for the UK is predicted to be flat to down in 2013. However, an analysis of Camden’s activity by region shows that the UK and Ireland remain more active that the larger economies of Europe. He added that Canada and Australia are far more upbeat than Europe.

Commenting on recent changes to regulation, Mr Al-Hadidi highlighted the introduction of the renewable energy and energy conservation law and subsequent directives, which are aimed at facilitating foreign direct investments in the renewable energy sector. In conclusion, he described the overall attitude regarding growth and deal opportunities in the region as “very positive,” and stated that the ease of doing business has definitely improved in the last quarter.

Company: Hadidi & Co. Law Firm Name: Rami Al-Hadidi Email: Rami.Hadidi@hadidilaw.com Web: www.hadidilaw.com Address: 12 Marouf Al-Rusaafi Street Amman 11194, Jordan

The main deals observed by My Salas are currently equity fundings for smaller exploration companies. He stated that the firm’s focus is on emerging and frontier markets, adding that Africa is an especially promising area. Looking ahead, Mr Doublet predicts subdued growth in the oil sector. However, he believes that Exploration and Production in Africa (particularly East Africa) is very promising.

Company: Clermont Energy Partners LLP Name: Jean-Michel Doublet Name: Jean-Louis Salas Email: info@clermontenergy.com Web: www.clermontenergy.com Address: 58 Grosvenor Street London W1K 3JB

‘‘

While the outlook looks dire, the reality is that a number of countries have put policies in place which will permit this cycle to take off. The worst decision would be not to look at major opportunities unfolding: oil and gas in West Africa, potash and nickel in Brazil and medtech and biotech in the Eurozone, particularly France, he concluded.

‘‘

-----------------------------------------------------------------------Rami Al-Hadidi is the Founder & Managing Partner at Hadidi & Co. Law Firm. -----------------------------------------------------------------------Hadidi & Co. Attorneys and Counselors at Law is one of the fastest growing pro-active law firms in the Hashemite Kingdom of Jordan. The firm was founded in the year 2000 by Founder and Managing Partner Mr Rami Al-Hadidi, a practicing Attorney at Law since 1987.

Company: Camden Associates Name: Jean-Claude Gonneau Email: jcg@camdenassociates.co.uk Web: www.camdenassociates.co.uk Address: 27 Hill street London W1J 5LP Telephone: +44 (0) 20 7290 9812

May 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

Villaraza Cruz Marcelo & Angangco (CVCLAW) Name: Simeon V. Marcelo Email: sv.marcelo@cvclaw.com Web Address: www.cvclaw.com Address: 11th Avenue corner 39th Street, Bonifacio Global City, Metro Manila Telephone: +63 2 988 6088

‘‘

Our people are our greatest assets, our competitive edge

Founded in 1980 by now Supreme Court Justice Antonio Carpio, CVCLaw provides a full range of legal services. With its Litigation and Dispute Resolution Department, led by Simeon Marcelo, former Solicitor General and Ombudsman with a sterling record of legal victories in private law and public interest litigation, CVCLaw is the top choice of clients for critical and high-stakes litigation. This reputation was built on the diligence, expertise and ingenuity that have become the hallmarks of the Firm. Its list of clients includes not only the country’s top corporations but also top multinational companies doing business in the Philippines.

Professionalism

Flexibility

Credibility

Personal Approach WELCOME TO ATTORNEY-AT-LAW OFFICE GÜRLICH & Co.

www.akrg.cz 72 / May 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

The Torre Agbar - Barcelona Christian Bertrand / Shutterstock.com

Across Legal provides legal advice to companies in all areas of law (commercial, civil, industrial and intellectual property, litigation, insolvency, etc). “In Across Legal we are dedicated to our profession,” said Mr Lacasa. “We work in highly motivated teams, dealing with a constantly changing legal world.”

-----------------------------------------------------------------------Ignacio Lacasa is a Founding Partner of Across Legal SLP. ------------------------------------------------------------------------

Ignacio Lacasa is specialised in International Business law and corporate law in general. He advises entrepreneurs, business angels and venture capital investment in operations and M & A, combining this activity with advice on international operations, particularly related to the U.S.A.

“Our clients are the focus of our activity,” he continued. “Our intention is to be with our client to face the day to day challenges, especially in times of difficulty. We strive to maintain at all times a positive attitude and to provide our clients with assistance in decision making, conflict resolution and business development. The experience of our team allows us to provide as overview and innovative approach to any situation with legal implications that could affect our clients. This means going beyond the mere understanding of the law. It is to understand our clients’ needs now and in the long term, in order to succeed in their business. “In Across Legal we are committed to results and clients’ growth. We value the entrepreneurial spirit, so we support and advise many start-ups. Through our presence on various Boards of Directors, we are able

and Caxias do Sul, the two main economic centres in Rio Grande do Sul.” “In order to meet the demand for its services, ZNA has been doing business throughout Brazil and in South America, United States and Europe, direct or indirectly, in partnership with other law firms.”

-----------------------------------------------------------------------Zulmar Neves is Director of Zulmar Neves Advocacia, based in Brazil. -----------------------------------------------------------------------Originating from a firm founded in 1983, Zulmar Neves Advocacia (ZNA) is recognised as one of the most widely renowned law and consulting firms in the corporate field in Rio Grande do Sul, providing services to companies of various sizes and lines of business all over Brazil. Director, Zulmar Neves, explains a little more about the firm: “It was established simultaneously in Porto Alegre -----------------------------------------------------------------------Yanos Gramatidis is the Managing Partner of Bahas, Gramatidis & Partners, one of the leading law firms in Greece. ------------------------------------------------------------------------

As well as being Managing Partner of Bahas, Gramatidis & Partners, Yanos Gramatidis is also the President of the American-Hellenic Chamber of Commerce which is the largest bilateral chamber in Greece and one of the three largest American chambers in Europe. Here, Yanos Gramatidis provides a brief history of his experience and the law firm. “I have been practicing law since 1978. Our firm has been established in 2002 as a result of a merger between Bahas, Gramatidis & Associates, the Law Offices of Spyros Alexandris and the Law Offices of Nassos Felonis,” he states. “The firm is primarily engaged in the practice of corporate and commercial law with particular emphasis in privatization, banking and finance, labor, tax, aviation, administrative, product liability, franchising and distribution law, and in dispute resolution including private and commercial litigation, mediation and arbitration.” Regarding recent growth forecast Greece is running its sixth year of recession due to heavy austerity measures aiming at fiscal consolidation and in the frame of memoranda of

ACQUISITION INTERNATIONAL

to bring new solutions to companies both new and well established, as well as family businesses. Our network of external partners is there to provide whatever is required by our clients to offer high quality advice and service. In Across Legal we are committed to results and clients growth. “Across Legal work is rigorous and strives for excellence,” concluded Mr Lacasa.

Company: Across Legal SLP Name: Ignacio Lacasa Valls Email: ilacasa@acrosslegal.com Web: www.acrosslegal.com Address: Rambla de Catalunya, 86, 1º 1ª, 08008 Barcelona, Spain Telephone: +34 932 724 837

“In this first quarter of the year it was possible to feel that our region suffered economy stagnation and a strong reduction in business.” Regarding the future, Zulmar has some predictions for the industry. “Our expectation of GDP growth of the south of Brazil is in the percentage of 3.5%.”

The firm’s inclination towards corporate law has its origins in the expertise of Zulmar, its founder, who has garnered years of experience in major tax and corporate consulting companies. Neves noted that the market in Rio Grande do Sul needed a firm to provide reliable solutions for legal issues in business, litigation and tax law, based on the highest ethical standards and an innovative stance. Deals in this jurisdiction can take a varying time from inception to completion, as Zulmar comments: “The applicable time needed depends on the complexity and size of the deal, but we can say that from the beginning of the negotiations until its conclusion it takes about 6 months.” “The most searched sectors are infrastructure, education and consumer products”, he continues and goes on to explain how business is currently faring.

agreement with its international creditors being IMF, ECB and EC. It is expected that this recession will last up to mid 2014. Despite the turbulent economy, Yanos and his firm have seen plenty of activity, as he explains further. “Bahas, Gramatidis & Partners advised the Greek government on the privatization of State Lottery which is the first project of the kind completed thus far in Greece, and still advises same on the privatization of state owned real estate. In parallel, the firm represents Syntez Group in relation to the privatization of the state owned natural gas distribution network, one of the largest privatization projects in Greece. Finally, the firm advises Attica Bank in its recapitalization procedures, while it advised Savings Bank in the acquisition of Aspis Bank.” The energy and agricultural sectors have shown the most promise of late and, together with IT and tourism, seem to be quite attractive for FDI. In this frame Philip Morris agreed to absorb half of the entire Greek tobacco production for a period of years. Certain regulations have affected growth levels in the country recently, and Yanos tells us more about these reforms. “In the frame of the reforms program of the Greek government

Company: Zulmar Neves Advocacia Name: Zulmar Neves Email: zneves@zna.adv.br Web: www.zna.adv.br Address: Avenida Cristóvão Colombo, Nº 3084, 6º andar, Higienópolis, CEP 90560-002, Porto Alegre, Rio Grande do Sul, Brasil Telephone: +55 51 3019 8566

easing of doing business is attempted namely by means of liberalization of a big number of professions and services, new laws relating to facilitation of investment and to simplification of business licensing procedures have been introduced, while e-government is gradually introduced in various sectors of public administration. Finally, the recapitalization of the Greek banks expected to create access to banking and credit facilities together with many other reforms are expected to affect growth levels in Greece.”

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

May 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

Dr. Kornélia Nagy-Koppány - Dr. István Varga - Co-Managing Partners | KNP LAW Nagy Koppány Varga and Partners

KNP LAW is built on traditional values, and unparalleled educational and professional foundations. Our clients benefit from the wealth of knowledge, practical experience and professional accomplishments of co-managing partners Kornélia Nagy-Koppány and István Varga and their legal teams. MAHART HÁZ, 6th Floor H-1051 Budapest, Hungary, Vigadó utca 2. | Phone: +36 1 302 9050 | Fax: +36 1 302 9060 | Web: www.knplaw.com

info@impulsacapital.com www.impulsacapital.com

Impulsa Capital is a financial advisor specialized in the private equity sector

Impulsa Capital is formed by a team of professionals with proven experience and knowledge in investment banking and private equity We have a comprehensive knowledge of the sector and provide distinct, high-quality and customized services

74 / May 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

-----------------------------------------------------------------------Reinier W.L. Russell is the Managing Partner of Russell Advocaten. -----------------------------------------------------------------------The Netherlands and Dutch law Despite the current economic climate, the Netherlands remains a perfect business location for foreign entrepreneurs. Amsterdam now hosts 2,000 foreign subsidiaries, employing 140,000 people. Our country is the gateway to densely populated Western Europe and has excellent logistics and a well-developed technological infrastructure (Amsterdam Schiphol Airport, Port of Rotterdam).

of the ‘Flex BV’ grants entrepreneurs even more leeway in establishing a business. On top of that, a highly skilled, multilingual and flexible work force and favourable tax regulations for businesses makes the Netherlands an interesting place for foreign companies.

The Dutch have been a trading nation since the 17th century. Today we still have a good environment for foreigners to live in: a stable economy, a stable government and a good infrastructure. Especially the metropolitan area offers attractive perspective to foreign investors because of the country’s extremely favourable business climate. We have twelve “Fortune 500” listed companies, and major IT and data centre companies have already set up their businesses here.

Russell Advocaten Russell Advocaten is located in Amsterdam. Amsterdam is the financial heart and capital city of the Netherlands and reflects the international character of the Dutch economy. Russell Advocaten is a full service law firm, providing prompt, high-quality legal services and able to provide its clients with all-round legal assistance and practical and immediately applicable solutions for their day-to-day business in the Netherlands. Our main areas of expertise are: corporate, business formation and reorganization, real estate and lease, labour/employment, commercial contracts and (commercial) litigation. Among our clients are domestic and foreign (stock exchange listed) companies, local and national authorities, and foreign embassies and consulates.

The Dutch economy is open to foreign investors and not restricted by specific government regulations. The situation has continued to improve in 2012, as since then it is allowed to make use of the internationally common one-tier board system in the Netherlands. In addition, the introduction

Our expertise has not gone unnoticed: Over the last few years, Russell Advocaten has received awards for Best Employment Firm, Best Real Estate Firm and Best Commercial Law Law Firm in the Netherlands. Furthermore, Russell Advocaten has been recognised by Martindale Hubbell and listed in

Millennium Bridge / Manchester

The European Legal 500 for many years. More information: www.russell.nl. Concluding remarks The Netherlands is an appealing place to conduct business, particularly with a qualified lawyer steering you through the rules and regulations of Dutch law. For this reason many (foreign) companies that set up their business in the Netherlands have chosen to seek assistance from Russell Advocaten.

Company: Russell Advocaten Name: Reinier W.L. Russell (managing partner) Email: r.russell@russell.nl Web: www.russell.nl Address: P.O. Box 87400, 1080 JK Amsterdam, The Netherlands Telephone: +31 20 301 55 55

Mr Ruben gained his 20 years’ industry experience at international insurance brokers and a major banking group. Mr Warburton has over 30 years industry experience gained at Lloyd’s of London, international insurance brokers and a major banking group. 2012 was an exciting year for Bridge. In April we were selected by Equity Risk Partners Global (ERG) to become their sole UK broker partner for the provision of Insurance and Due Diligence services to the Private Equity industry on cross-border deals. The selection of Bridge recognised our extensive past experience and the strength of our M&A Team in Manchester and London.

-----------------------------------------------------------------------Gavin Ruben BA (Hons) and Peter Warburton FCII, Chartered Insurance Broker are Directors at Bridge Insurance Brokers Limited. ----------------------------------------------------------------------------------------------------------------------------------------------Franz Pöltl is Managing Director of EHL Investment Consulting GmbH. ------------------------------------------------------------------------

Founded in 1991 EHL is one of the leading real estate service providers in Austria, covering all segments of real estate consulting. Franz Pöltl, Managing director of EHL Investment Consulting, explains more about the company and its structure. “The particular strength of the company forms the investment business where EHL occupies a team of 10 professionals with more than 100 years of experience.” Franz continues to explain the sectors which have seen the most activity recently. “The office and retail investment segment, as well as hotels, are very dynamic of late,” he says. “Investors are showing slightly more risk appetite as the pipeline of core assets is very limited.” Whilst deals are taking between 6 months to two years to complete, with larger transactions taking the longest, the overall attitude regarding growth and deal opportunities in this sector remains strong. “In 2012 the real estate market in Austria performed well and a lot of transactions were concluded,” comments Franz. “The first half of the year was compared to the second relatively calm, but a strong

ACQUISITION INTERNATIONAL

1. Globally ERG was involved with ninety eighty deals – Of those ninety eight, a number had significant multistate risk and of those Bridge was the lead advisor on a significant proportion. There were also a number of UK only deals. 2. In QI 2013 deal activity has been relatively quiet but Bridge has already provided insurance due diligence in respect of: a. 2 separate buy-outs from a multinational accounting software business one of which is cross border b. Loan fund finance deal c. Buy out from a multi-national US HQ’d of a UK domiciled manufacturer.

Company: Bridge Insurance Brokers Limited Web: www.bridgeinsurance.co.uk Address: Cobac House, 14-16 Charlotte Street, Manchester, M1 4FL. Telephone: +44 (0) 161 236 6969 Name: Gavin Ruben Email: gavin.ruben@bridgeinsurance.co.uk Name: Peter Warburton Email: peter.warburton@bridgeinsurance.co.uk

year-end really compensated for the slow beginning. Due to the strong demand from both domestic and foreign investors we expect this development to continue during 2013.”

which is also very robust in a European comparison, it will outperform other continental European real estate markets.

One such notable deal for EHL involves the firm advising on the largest shopping centre transaction in Austria, as well as having assisted in a number of office sales. Currently the firm is working on the disposal of 48 supermarkets throughout Austria and the Warburg-Henderson portfolio consisting of 10 assets and a volume of roughly 220 million Euros. “The strong investor appetite for Austrian real estate is still facing a lack of appropriate investment opportunities,” says Franz. “The equity is prepared to take the necessary risk portion, though the debt providers do not yet comply with this development what prevents an even stronger rebound of the market.” With regards to the future, Franz has some predictions for the Austrian real estate market. “Though GDP growth will only remain at or slightly below 1% we do expect the Austrian real estate investment to continue to perform relatively well. Together with the German market,

Our continuous discussions with market participants and the feed-back on the opportunities we currently offer show that based on the sound economic environment the Austrian real estate investment market will continue to be one of the most attractive hot spots within Europe.”

Company: EHL Investment Consulting GmbH Name: Franz Pöltl Email: f.poltl@ehl.at Web: www.ehl.at Address: Prinz-Eugen-Straße 8-10, 1040 Wien Telephone: +43-1-512 76 90

May 2013 /

SECTOR SPOTLIGHT: 2013 Q1 Review

76 / May 2013

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: 2013 Q1 Review

-----------------------------------------------------------------------Antônio Sérgio Altieri de Moraes Pitombo the founder and partner of the law firm Moraes Pitombo Advogados. -----------------------------------------------------------------------Moraes Pitombo Advogados was founded in 2001, with the scope of harmonically combining two different qualities of contemporary legal practice: personally tailored client service – which is characteristic of small Law Firms - and the cutting-edge technology and organisation of big Law Firms. “We strongly believe that this combination is the key to success in the practice of the law today, as we are able to dedicate special attention to each and every one of our clients, while relying on the resources that can only be found in larger firms,” said Mr Pitombo. “Accordingly, the firm provides expert legal services in litigation, mainly in the criminal area, focusing on whitecollar crimes, money laundering and corporate-related issues. Most of our clients are companies, although we also represent individuals, acting on behalf of either defendants or victims of crimes.” The attorneys at Moraes Pitombo Advogados act at federal and state courts, before trial courts and courts of appeals, as well as the Superior Courts of the country. The firm is also specialised in international cooperation, having dealt with several cases involving international

mutual legal assistance, working with top firms from the United States, United Kingdom, Switzerland, Cayman Islands, Bahamas, among others.

“Our practice is distinguished by our ethical conduct, technical acuity and discretion,” concluded Mr Pitombo.

The firm is based in Sao Paulo, the financial capital of Brazil. It has also offices in Rio de Janeiro, important hub in the infra-structure area, and in Brasilia, DF, where all the Superior Courts are located, allowing it to have a much closer contact with the development of the appeals, original actions and the Court sessions. “In the past 10 years, we have earned a nation-wide reputation as a leading practice in the field,” continued Mr Pitombo. “We have worked in high profile and mediatic cases, including a recent famous trial at the Supreme Court, being recognised for our dedication, best knowledge of the cases and skilled performance.” The attorneys at Moraes Pitombo are all recruited from the best law schools in Brazil and dedicate themselves to improve the technical quality of the specialised services rendered. They are also encouraged to engage in international experiences, such as LLM courses and internships abroad. The main partners at the firm graduated at the Law School of the University of Sao Paulo, where they also received their PhD degree, after submitting a thesis on their field of expertise.

OTHER EXPERTS IN THIS AREA

Company: Moraes Pitombo Advogados Name: Antônio Sérgio Altieri de Moraes Pitombo Email: apitombo@mpp.adv.br Web: www.moraespitombo.com.br Address: São Paulo: Rua Pequetita, 215, 8th floor, Zip Code 04552-060, São Paulo, SP. Brasília: Setor de Autarquias Sul, Quadra 01, Bloco N, offices 410/411, Zip Code 70070010, Brasília, DF. Rio de Janeiro: Rua Da Assembléia, 10 Conj. 3520, Zip Code 20011000, Centro, Rio de Janeiro, RJ. Telephone: São Paulo: +55 11 3047-3131 Brasília: +55 61 3322-7690 Rio de Janeiro: +55 21 3974-6250

OTHER EXPERTS IN THIS AREA

Crawford Bayley & Co Company: Law Office of Eric B. Darnell Name: Eric Darnell Email: edarnell@darnell-lawfirm.com Web: www.darnell-lawfirm.com Address: 1017 Montana, El Paso, Texas, USA Telephone: +1 915 313 0000

Company: Crawford Bayley & Co Name: Sanjay Asher Email: sanjay.asher@crawfordbayley.com Web: www.crawfordbayley.com Address: State Bank of India Buildings, NGN Vaidya Marg, Fort, 400 023, Mumbai, India Telephone: +91 22 2266 3353

OTHER EXPERTS IN THIS AREA

Paramo Capital Company: Paramo Capital Name: Emilio Martin Email: emartin@metropolitanc.com

ACQUISITION INTERNATIONAL

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

May 2013 /

DEAL DIARY:

Introduced by Zephyr/Bureau van Dijk

Consumer sector l The consumer sector has made a reasonable start to 2013, but does not look likely to top last year’s results if the period from January-May is any indication. In 2013 to date, 1,241 deals worth a combined USD 56,794 million have been recorded. 2012 was a reasonably good year for the consumer services sector, with dealmaking worth a total of USD 202,011 million posted across 4,216 transactions over the course of the year, according to data from Zephyr, the M&A database published by Bu-

reau van Dijk. Of this amount, USD 97,256 million was ploughed into 2,170 deals in the second half of the year, representing a 7.2 per cent drop by value from the period between January and June 2012. Nevertheless, results for the 12 months were still

up on the USD 194,708 million spread across 4,285 deals in 2011. However, in spite of the promising upturn in activity, results from 2007 and 2008 remain some way ahead.

Number and Aggregate Value (mil USD) of Consumer Sector Deals Globally: 2006 - 2013 YTD (as at 13 May 2013) Aggregate deal value (mil USD)

2,093 2,114 2,447 2,291 2,275 2,031 2,303 2,546 2,280 2,185 2,192 2,093 2,046 2,170 1,241

63,758 92,278 163,105 146,347 154,199 163,366 70,310 99,768 90,244 92,600 111,899 82,809 104,755 97,256 56,794

Number and Aggregate Value (mil USD) of Consumer Sector Deals Globally: 2006 - 2013 YTD (as at 13 May 2013) 180,000

3,000

160,000 2,500 140,000 120,000

2,000

100,000 1,500 80,000 1,000

60,000 40,000

Aggregate deal value (mil USD)

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

Number of deals

Period

500 20,000 0

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

2013 seems to be off to a reasonable start. With 1,241 deals worth USD 56,794 million having been recorded by the 13th May, results are slightly down on both volume and value in the second half of last year, although there is still around six weeks to go until the year’s mid-point, so a few high-value

announcements could yet see numbers rocket. Inevitably, a number of deals have contributed more than others to the results, most notably April’s USD 9,833 million agreement by Dutch investor Oak Leaf to pick up tea and coffee producer Master Blenders. Other significant transactions include a USD

Number of deals

7,850 million purchase of Singapore-headquartered beverage maker Fraser & Neave by a British Virgin Islands-based acquisition vehicle, and Belgian beer producer Anheuser-Busch InBev, which is being bought by BlackRock for USD 4,450 million.

Number and Aggregate Value (mil USD) of Consumer Sector Deals by Region: 2006 - 2013 YTD (as at 13 May 2013) Deal yearly value (Announced date) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013 YTD

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

65,630 25,113 41,655 8,714 4,983 1,773 164 4,308

106,528 45,935 116,840 18,272 7,135 668 2,091 5,552

141,919 32,736 117,373 13,014 4,644 1,789 384 6,574

42,734 51,942 32,302 21,976 8,329 4,955 746 8,875

62,699 38,529 43,213 20,917 3,709 3,580 966 9,212

63,937 33,195 35,550 30,925 18,788 2,311 1,482 6,814

47,583 54,706 39,225 32,493 3,951 3,177 795 4,397

24,718 16,148 6,184 3,758 1,290 969 689 597

Of the consumer services sector deals recorded so far this year, western Europe has been the most commonly targeted world region, with dealmaking worth USD 24,718 million, representing 45.0 per cent of all global investment in the industry. This was followed by the Far East and Central Asia, which accounted for 30.0 per cent of the investment with USD 16,148 million. In 2012 this region topped the table with investment of USD 54,706 million, ahead of Western Europe, which

78 / May 2013

placed second with USD 47,583 million. It remains to be seen if the Far East and central Asia will be able to climb back onto its perch by the end of 2013. Unsurprisingly, given that the year’s biggest deals so far have been buyouts, acquisitions topped the ranks by both volume and value when it came to transaction types. Of all deals recorded, 50.0 per cent were acquisitions, accounting for 622 worth USD 30,410

million. This was closely followed by minority stakes, which took up 45 per cent of the transactions (564 worth USD 19,973 million). Institutional buyouts also made a decent showing, with 43 valued at USD 6,299 million, making up 3 per cent of the deals recorded. Less common types included MBOs, mergers and demergers.

ACQUISITION INTERNATIONAL

DEAL DIARY:

Introduced by Zephyr/Bureau van Dijk

Breakdown of Consumer Sector Deals by Region: 2006 - 2013 YTD (as at 13 May 2013) World region (target)

2006

2007

2008

2009

2010

2011

2012

2013 YTD

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

43% 16% 27% 6% 3% 1% 1% 3%

35% 15% 39% 6% 2% 0% 1% 2%

45% 10% 37% 4% 1% 1% 0% 2%

25% 30% 19% 13% 5% 3% 0% 5%

34% 21% 24% 11% 2% 2% 1% 5%

33% 17% 18% 16% 10% 1% 1% 4%

26% 29% 21% 17% 2% 2% 1% 2%

45% 30% 11% 8% 2% 2% 1% 1%

To sum up, if the first five months of the year have been any indication, the consumer sector looks to make a slightly poorer showing for H1 2013 than H2 2012. Dealmaking worth USD 40,462 million would be necessary in the next six weeks to see the region reach the USD 97,256 million recorded in the second half of last year, and given that thus far only USD 56,794 million has been generated, this looks unlikely. However, the industry canâ&#x20AC;&#x2122;t be written off just yet â&#x20AC;&#x201C; there is still a chance that some mega deals could cause a jump in values.

Breakdown of Consumer Sector deals by Region: 2006-2013 YTD (as at 13 May 2013) 100% 90%

11%

13%

80% 27%

70%

17%

11%

16%

37%

39%

24%

19%

21%

60%

30%

18% 16%

50%

10% 21%

15%

40%

17%

30%

29%

30% 45%

43%

20%

45%

35%

34%

33%

2010

2011

25%

10%

26%

0% 2006

2007

Eastern Europe

2008

Middle East

Number and Aggregate Value (Mil USD) of Consumer Sector Deals Globally by Type: 2013 to date (as at 13 May 2013)

Africa

Oceania

2009

South and Central America

North America

2012

Far East and Central Asia

2013 YTD Western Europe

Breakdown of Number and Aggregate Value of Consumer Sector Deals Globally by Type: 2013 YTD (as at 13 May 2013)

All deal structures

Number of deals Aggregate deal value (mil USD)

Deal Type

Number of deals

Aggregate deal value

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

622 564 43 6 5 2 1

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

50% 45% 3% 1% 1%

54% 35% 11% 1% 0%

100%

30,410 19,973 6,299 125 0 0 0

Breakdown of Number and Aggregate Value of Consumer Sector Deals Globally by Type: 2013 YTD (as at 13 May 2013) 3%

11%

90%

MBI / MBO Demerger

80% 70%

45%

Merger

35%

Management buy-out Institutional buy-out

60%

Minority stake Acquisition

50% 40% 30% 50%

54%

20% 10% 0% Number of deals

ACQUISITION INTERNATIONAL

Aggregate deal value

May 2013 /

DEAL DIARY:

M&A from around the world

DEAL DIARY — Deal index 81

DEAL OF THE MONTH: MTN NIGERIA

INDUSTRIAL DEALS

CONSUMER DEALS

ADAM SA

ABSORPTION CORP

BSM VALVES

COPEINCA

DUPLOMATIC OLEODINAMICA

D.E. MASTER BLENDERS

GEBR. BRINKMANN GMBH

DRAKE & MORGAN

LABORATORIUM ZEEUWS-VLAANDEREN

HELP-LINK

SLM SOLUTIONS

KIDSUNLIMITED

KRONFÅGEL GROUP AND CARDINAL FOODS

CAN FIRST

LIVESTOCK FEEDS PLC

CHIGACO RIB SHACK

NECKERMANN B.V

INDUSTRIAL PROPERTY IN LAVAL

SOUTHERN CROSS BOTANICALS

WHITE SQUARE OFFICE COMPLEX

REAL ESTATE DEALS

ENERGY & RESOURCES DEALS

SUPPORT SERVICES DEALS

AFRICAN STELLAR HOLDINGS MOZAMBIQUE ASSETS

CALA GROUP

BP AND MASANA PETROLEUM

CHANGEGROUP NEW ZEALAND

GENSER ENERGY

IPES

MOOMBA-TO-ADELAIDE PIPLINE

MICRO LIBRARIAN SYSTEMS

PETROCHEM CARLESS HOLDINGS

TMT DEALS

FINANCIAL SERVICES DEALS

ALEDIA

ARAG INSURANCE

ATIA COMMUNICATIONS

NATIONAL FINANCIAL PARTNERS CORP

AUPEO

NMB HOLDINGS

COLLECTIVE BIAS

PEGASUS FINANCIAL SERVICE

GENTICEL

HEALTHCARE DEALS

JIGSAW24

AURIS MEDICAL

LEMAN MICRO DEVICES

MEDDAY

LILIEN LLC

SALMOIRAGHI & VIGANÒ

NEONET

80 / May 2013

ACQUISITION INTERNATIONAL

DEAL DIARY:

Deal of the Month: MTN NIGERIA GETS $3B LOAN FROM CONSORTIUM OF BANKS TO EXPAND NETWORK l The MTN Nigeria announced a US$3 billion restructure and additional loan which was arranged internally for the funding of MTN Nigeria’s network infrastructure expansion.

MTN NIGERIA Debt Providers Brett Goschen

The telecommunication industry in Nigeria has experienced astronomical growth with its penetration currently approximately 60% of the addressable market and contribution to GDP of about 7%. This is testament to the growth potential within the industry, and the need for MTN Nigeria to strengthen its leadership position and achieve its medium term corporate objective. The additional financing and restructure will enable MTNN to invest over US$ 2 Billion on the network over the next 2 years. This should result in a marked improvement in network quality, modernisation and penetration over the geographical spread of the country.

Andrew Bing

Brett Goschen, Chief Executive Officer of MTN Nigeria says “Today’s event is another successful landmark in the history of MTN and the Nigerian banking industry in collaboration with international financial institutions. The restructured and additional facilities will enable us to continue with the aggressive investment in our network...over US$1.5 Billion in 2013 alone, to take advantage of the demands of our customers and the growth opportunity. With Mobile Penetration still relatively low, sound economic growth, lower cost of ownership for consumers and the insatiable demand for data services, the growth story continues.”

MTN Nigeria expects the total market size in Nigeria to increase to 120 million subscribers by 2014 from a total of over 100 million in 2012. Therefore, “enhancing our network quality is also a key focus of the investment as we lead the delivery of a bold new digital world for our customers.” says Brett Segun Odusanya

FSDH

Merchant Bank Ola. Olabinjo

Philip Ikeazor

MTN Nigeria’s Chief Financial Officer, Andrew Bing says “Today’s event is another successful landmark in the history of MTN and the Nigerian banking industry in collaboration with international financial institutions. We have built up a track record of successful partnerships together and some notables include: Our US$395 million arrangement in 2003 was the largest African telecoms funding deal to close outside of South Africa. In that year, it won Project Finance magazine’s “African Telecoms Deal” In 2007, MTN Nigeria again partnered with various local and international financial institutions to raise USD 2 Billion. Once again, in 2010 MTN Nigeria partnered with 15 local financial institutions and 2 international lenders to raise another USD 2 Billion. It was described as the largest corporate financing deal in the whole of sub-Saharan Africa. In that year, it won the ‘African Deal of the Year’ by the EuroMoney Magazine.” This recent deal was raised from outside of Africa, Asia, Europe and North America. At a size of US$ 3 billion, it is clearly the largest deal from Sub Saharan Africa. This syndication is not only a loud “vote of confidence” in MTN Nigeria, but it also showcases the strength of the Nigerian financial institutions and their ability to stimulate significant economic growth. “The interesting thing about this deal is that it was arranged internally. This is testament to our evolving expertise.” says Andrew FCMB participated in the N470Billion ($3Billion) as one of the Nigerian lenders in the transaction. FCMB participated in the syndication to the tune of N15billion ($94.3million).

Dr Muhammad

Omotayo Ajani

FCMB commenced banking relationship with MTN in 2010 through its participation in the round of financing which took place that year . The FCMB team was led by the Deputy Managing Director, Segun Odusanya (Segun.odusanya@firstcitygroup.com) and Ola. Olabinjo , Divisional Head Corporate Banking (Ola.Olabinjo@firstcitygroup.com) . The Bank did not experience any challenges in participating in the deal due to its rich background in corporate banking. Keystone Bank Limited participated in the dealand was led led by: Philip Ikeazor-MD/CEO (philipikeazor@keystonebankng.com); Dr Shehu K. Muhammad-ED, Corporate, Investment and International Banking (shehumuhammad@keystonebankng.com); Omotayo AjaniDivisional Head, Corporate Banking (omotayoajani@keystonebankng.com); Udiba Udiba, Group Head, Telecoms, Media & Technology (udibaudiba@keystonebankng.com); and Roland Nwachukwu, Relationship Officer (rolandnwachukwu@keystonebankng.com). Keystone’s relationship with MTN dates back to 2002 through its Legacy bank Habib Bank Ltd, to BankPHB and now Keystone Bank Ltd. “MTN is an outstanding brand with proven track record in the Nigeria telecommunication and banking space,” said Udiba Udiba.

Legal Adviser to the Purchaser

Aluko & Oyebode

Udiba Udiba

Financial Adviser to the Purchaser & Arranger of the Deal

MTNN Internal Team

They commented: “RMB has a long-standing relationship with MTN across the Group. RMB is banker to MTN in Nigeria, Ghana, Zambia, Uganda and South Africa.”

Vendors on the Deal

“MTN Nigeria arranged the deal involving 17 Nigerian and 7 multi-national banks from South Africa, China, Canada and Europe.” Ayodele Olajiga

Legal Advisers to the Debt Providers

Keith Webb

UUBO

Sinosure

Global Facility Agent

Virtual Data Room Provider

“RMB as Facility Agent, coordinated the $300m US Dollar Syndicated Medium Term Facility and funded US$200million across USD and Naira facilities.” “As the only party with exposure to the USD and NGN tranches, RMB had to ensure that the USD syndicated loan interfaced with the Common Terms required by Local Lenders as well as address specific issues the USD lenders from multiple jurisdictions required.”

Export Credit Agencies on the Deal

Anthony Eke

ACQUISITION INTERNATIONAL

Ayodele Olajiga, Head of Coverage and Origination (Ayodele.Olajiga@rmb.com.ng) and Keith Webb, Head Telecoms Infrastructure Finance (Keith.Webb@rmb.co.za) led the team at Rand Merchant Bank, a division of FirstRand Bank Limited and Rand Merchant Bank Nigeria Limited (“RMB”).

RMB is one of the largest lenders (5th biggest commercial bank). The naira facility is the first deal on RMB Nigeria’s balance sheet. Rand Merchant Bank South Africa www.rmb.co.za Rand Merchant Bank Nigeria www.rmb.com.ng Anthony Eke (aeke@diamondbank.com) of Diamond Bank Plc commented: “As the Head of the Telecoms Group in the bank, I co-led the bank’s team in the syndicated deal together with the Divisional Head Infrastructure and Transport, Ehianeta Ebhohimhen (eebhohimhen@diamondbank.com). We had no challenges completing the deal due to our thorough understanding of MTN’s business. Diamond Bank being one of MTN’s foremost bankers has a long standing relationship with MTN dating back to 2001 (12years)”. www.diamondbank.com

May 2013 /

DEAL OF THE MONTH

Deal Of The Month

DEAL DIARY:

Consumer Deals

CONSUMER DEALS

ABSORPTION CORP

COPEINCA

D.E MASTER BLENDERS

l Absorption Corp has announced the sale of its parent and operating companies by private equity firm Kinderhook Industries, LLC (“Kinderhook”) to multinational manufacturing company J. Rettenmaier & Söhne Group (“JRS”). Financial terms of the transaction were not disclosed. Absorption Corp had been a portfolio company of Kinderhook since 2010.

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

l Oak Leaf B.V. (the “Offeror”), a newly incorporated company that is wholly owned by a Joh. A. Benckiser (“JAB”) led investor group (the “JAB Investor Group”) and D.E MASTER BLENDERS 1753 N.V. (“D.E MASTER BLENDERS 1753”, “DEMB” or the “Company”), have jointly announced that they have reached conditional agreement in connection with a public offer by the Offeror for all issued and outstanding ordinary shares in the capital of D.E MASTER BLENDERS 1753 at an offer price of €12.50 (cum dividend) in cash for each D.E MASTER BLENDERS 1753 ordinary share (on a fully diluted basis), subject to customary conditions (the “Offer”).

Absorption Corp is best known to consumers and customers for its portfolio of pet care brands CareFRESH®, Healthy Pet® and CritterCare® sold through pet-specialty, mass merchandiser and grocery retailers. The company’s portfolio of premium pet care products is marketed throughout North America, Europe and Asia and includes a complete range of small animal bedding, food, habitats, and enrichment as well as a rapidly growing line of natural cat litter. JRS is a leading global manufacturer of sustainable, plant based fibres operating 23 facilities serving the pet care, food, nutrition, pharmaceutical, chemical and construction industries in 19 countries. JRS’ pet care offerings include both pet litter and pet bedding products, well known in Europe for their top-selling Cats Best® line of natural cat litters. “Absorption Corp is very pleased to be joining forces with J. Rettenmaier & Söhne to help drive our next phase of growth,” said Ted Mischaikov, CEO of Absorption Corp. “JRS ownership is an excellent fit with its 135 year operating history, large manufacturing base and pet industry expertise providing a strong platform for the expansion of Absorption’s business in the US and internationally.” Samuel Cohen, VP Sales & Marketing for Absorption added: “Our customers and consumers will be delighted by the new combination where they will continue to work with the same great Absorption team, but now have the additional resources of an $800 million parent company with a successful history in pet products and that is strategically focused on the long-term.”

J. RETTENMAIER & SÖHNE GROUP ACQUISITION OF ABSORPTION CORP FROM KINDERHOOK INDUSTRIES Virtual Data Room Provider

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

CERMAQ ACQUIRES SHARES IN AND SECURES FUTURE CONTROL OF

DRV CorporateCOPEINCA Finance

Virtual Data Room Provider - Vendor Due Diligence Provider

Commenting on the proposed offer, Norman Sorensen, non-executive Chairman of the Board of D.E MASTER BLENDERS 1753 said: “After having carefully and diligently assessed JAB’s offer, resulting in today’s intended offer, the Board fully supports and unanimously recommends this offer to the shareholders for acceptance. The offer price is a clear reflection of the value DEMB represents. “The fact that JAB will use DEMB as a platform for further growth and has guaranteed to keep its headquarters, R&D and major production sites in the Netherlands, gives the Board confidence that this offer is in the best interest Georg Maier-Reimer of employees, shareholders and all other stakeholders.” Led by Dr Georg Maier-Reimer and Dr Harald Gesell, partners corporate, Oppenhoff & Partner advised the Benckiser holding companies on structuring and financing as well as on due Dr Harald Gesell diligence. The firm has a longstanding working relationship with the client. OAK LEAF B.V. MAKE CASH OFFER OF €12.50 FOR ALL ISSUED & OUTSTANDING ORDINARY SHARES IN THE CAPITAL OF D.E MASTER BLENDERS Advisers

Legal Adviser to the Vendor - Tax Adviser - Pensions and Actuarial Adviser

IP Due Diligence Provider

Financial Adviser to the Purchaser

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

Investment Banker for Vendor

82 / May 2013

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

ACQUISITION INTERNATIONAL

DEAL DIARY:

DEMATEC

DRAKE & MORGAN

HELP-LINK

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

l Bowmark Capital, the mid-market private equity firm, is backing the £30 million management buy-out and expansion financing of Drake & Morgan, the fast growing London-based bar-restaurant group.

l NorthEdge Capital, the private equity firm focussed on investing in businesses based in the North of England, has invested in Help-Link Limited, the Leeds-based boiler and central heating installation specialist.

The transaction was closed February 2013. Clover is the global leader in providing resellers, mass merchants and value-added specialty suppliers with total environmental solutions including the recycling and remanufacturing of consumable imaging supplies. Clover is the world’s largest collector and recycler of cell phones, inkjet and laser cartridges. Their innovative recycling programs offer partners an additional revenue stream while ensuring clients the industry’s most advanced and environmentally responsible recycling solutions. Board Advisors acted as the sole corporate finance advisors to the shareholders of Dematec GmbH. Friedrich Graf von Westphalen were appointed as legal advisors to the sellers.

‘‘

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

‘‘

www.boardadvisors.eu contact@boardadvisors.eu

CLOVER ACQUIRES GERMAN BASED DEMATEC

Moore Blatch acted for the Imbiba Partnership and the management team, led by Roger Bailey, Corporate Partner. Moore Blatch has worked with Drake & Morgan since it was founded in 2008 and has seen it develop into one of the best restaurant-bar offerings around. This was a complex deal and we had 10 lawyers working on various aspects of the deal. Complexities included coordinating the exit for the company’s 79 shareholders and providing a platform for future growth, said Mr Bailey. Roger.Bailey@mooreblatch.com www.mooreblatch.com Roger Bailey

John Connell of Imbiba Partnership said: “The performance of Roger Bailey and his team was truly exceptional. They were the stars of the show. They were ahead of the game at all times and were able to anticipate issues and work through them quickly and efficiently, enabling a complex and challenging deal to be delivered.” Michael Fine, Director: Commercial & Operational Due Diligence practice, led the Javelin Group team representing Bowmark Capital. michael.fine@javelingroup.com www.javelingroup.com Livingstone Partners’ Consumer team advised the management and shareholders of Drake & Morgan on the £30 million MBO backed by Bowmark Capital. Leading the team at Livingstone were Simon Cope-Thompson, Partner and Simon Cooper, Deal Leader. “Whilst the deal had its inherent challenges we believe that Jillian and her team found the right partner with Bowmark and we look forward to working with the Business during its next stage of growth,” said Mr Cooper. Michael Fine

Melissa Page

Geoffrey Leaver’s role in this transaction, working with Bowmark’s main solicitors, SJ Berwin, was in relation to the property aspects, conducting all the due diligence for eight properties and input into the warranties so far as they related to property matters. The partner in charge at Geoffrey Leaver was Melissa Page, assisted by Mark Blundell.

BOWMARK BACKS £30M DRAKE & MORGAN DEAL

Clover Acquisition of Dematec Clover Holdings, Inc. USA

The investment, NorthEdge’s third from its maiden £225million fund, backs the growth ambitions of Help-Link and its management team. Founded in 1998, Help-Link is the UK market-leader in boiler installation and maintenance. The company has enjoyed considerable growth over the past three years having invested heavily in its delivery capability and operational platform. This has allowed the Company to offer exceptional customer experience using the best products in the market at an affordable price. NorthEdge’s investment will be used to further accelerate the company’s growth plans to increase its market share of the boiler installations and service market. It will also allow Help-Link to expand its brand further into other areas. Jane Shelmerdine led the transaction working on behalf of North Edge Capital LLP. Jane is a Partner in JLT Specialty’s M&A team and this was the first Yorkshire transaction between both practices. In common with many deals of this nature, it was the ability of JLT’s experienced local team to perform on key deliverables that supported the evolvement of the deal, said Ms Shelmerdine. An understanding of the need to secure certaintysurrounding risk, insurable or otherwise along with the potential costs involved was key. Further, any constraints surrounding confidentiality were alleviated by JLT’s inhouse expertise. Tim Worrall, Partner, led the Diligencia team that advised North Edge on management, in the firm’s first formal assignment for the company. Timing was key for management – we expedited our work and report to ensure we were not on the critical path Tim Worrall to completion, said Mr Worrall. This is an entrepreneurial management team that has added talented and professional people to be in a position to deliver its plan. info@diligencia.co.uk

NORTHEDGE INVESTS IN LEADING CENTRAL

HEATING SPECIALIST DRV Corporate FinanceHELP-LINK Risk & Insurance Due Diligence Provider

Commercial Due Diligence Provider

Management Team Due Diligence Provider Has acquired Dematec GmbH, Germany Legal Advisers to the Vendor

Systems Due Diligence Provider Sole Corporate Finance and M&A Advisor to the Shareholders of Dematec GmbH

Legal Adviser to the Management Team

Legal Adviser to the Equity Provider Legal Adviser to the Management Team Legal Advisors to the Shareholders of Dematec GmbH

Legal Adviser to the Vendor

February 2013

ACQUISITION INTERNATIONAL

May 2013 /

CONSUMER DEALS

Consumer Deals

DEAL DIARY:

Consumer Deals KIDSUNLIMITED

CONSUMER DEALS

l Bright Horizons Family Solutions®, a global provider of employer-sponsored child care and early education, has completed the acquisition of kidsunlimited, a premier operator of nurseries throughout England and Scotland. Founded in 1983, kidsunlimited operates 64 nurseries, including lease/consortium locations as well as workplace nurseries for blue-chip employers such as Cambridge University Hospitals, WH Smith, and The University of Oxford. The network of locations includes a strong concentration of nurseries in the North West, London/South East Region as well as Oxford and Cambridge. “We have long admired the kidsunlimited team and are excited to welcome the children and families they serve as well as their nursery staff and clients into the Bright Horizons® family. Both organisations share a deep commitment to quality early years education and workplace child care, giving us the seamless ability to join forces and making this a natural step for our growth in the region. The combination gives us a well-established foothold providing high-quality care and early education for children throughout England, and solidifies our position as the leader in providing high-quality employer sponsored child care throughout the UK,” said Bright Horizons Chief Executive Officer David Lissy. Niche Midlands commercial firm, Ansons Solicitors, acted for the buyer Bright Horizons. Corporate partner Jas Singh led the Ansons team of eight lawyers. This is the second substantial transaction that Ansons has completed for US based Bright Horizons, which Jasbinder Singh is now listed on the New York Stock Exchange, in twelve months. “The daycare nursery sector has seen significant recent consolidation and Bright Horizons has retained its position as a leading player in the sector in the UK,” said Mr Singh. www.ansonsllp.com jsingh@ansonsllp.com Commercial property partner Simon James and four of his team undertook extensive due diligence on the target group’s substantial property portfolio.

KRONFÅGEL GROUP AND CARDINAL FOODS

LIVESTOCK FEEDS PLC

l CapVest Equity Partners II (“CapVest”) and Lantmännen ek (“Lantmännen”) have announced the formation of the Nordic´s leading poultry producer, with a turnover of more than SEK 5 billion. The new company will be created through the simultaneous acquisition of Kronfågel Group in Sweden and Denmark from Lantmännen, and Cardinal Foods in Norway from CapMan. The new ownership structure positions the business for further development in international markets, as well as opportunities for product development and innovation.

l UAC of Nigeria Plc (UAC), a diversified conglomerate in Nigeria with operations in foods, paints, logistics and real estate, has acquired majority stake in Livestock Feeds Plc, one of the leading animal feeds producers in the country.

The new company will consist of Kronfågel, SweHatch and Skånefågel in Sweden; Danpo in Denmark and Cardinal Foods in Norway. It will be led by a team of highly experienced executives drawn from both Kronfågel Group and Cardinal Foods, and is intended to be headed by Leif Bergvall Hansen as Group CEO.

BGL Plc advised UAC of Nigeria on this deal. As a leading Investment Bank in Nigeria, BGL Plc has a longstanding and cordial business relationship with major blue chip companies including UAC and has advised on several M&A transactions including the unbundling of UAC Foods Limited and the subsequent sale of 49% equity in UAC Foods to Tiger Brands of South Africa.

Commenting on the transaction, Kate Briant, Partner at CapVest and incoming Chairman said: “Food is one of our core investment sectors. It is fundamentally non-discretionary while offering strong potential for consolidation and growth. This transaction combines market leading businesses with an exceptional management team, creating a platform from which to grow and expand both locally and further afield.”

In BGL Plc, a transaction of this nature will not only involve the origination team but also other business units of the group such as the Research team, the sales team in BGL Securities, Asset Management colleagues, etc. in order to enhance the success of the transaction

CapVest will be the controlling shareholder (52%) and Lantmännen will hold a significant minority stake (48%). The terms of the transaction are undisclosed. Completion is subject to Danish, Swedish and Norwegian Competition Authority approval. Further information on the group’s name and structure will be announced in the coming weeks. Debt financing was provided by Nordea and DNB NOR. Advokatfirmaet Haavind AS advised Lantmännen and CapVest in the acquisition of 100% of the shares in Cardinal Foods AS, led by Preben Brecke, Partner in Corporate, and Trond Kildal, Partner in Bank and Finance. The firm has a long standing relationship with Lantmännen.

Livestock Feeds was established in 1963 by Pfizer as a subsidiary to the pharmaceutical business which had been introduced to Nigeria few years earlier. The company’s mission is to be the foremost nutritional products provider in Africa.

The acquisition was done in two parts, via the primary and secondary market. A percentage of Livestock Feeds was acquired on the floor of the Nigerian Stock Exchange, and the balance acquired via a special placement of 800,000,000 ordinary shares of 50 kobo each at N1.13 per share. The Group Deputy Managing Director of BGL Plc, Mr Chibundu Edozie, was the Transaction Director responsible for advising on this transaction, and the Head, Corporate Finance, Mr Dafe Oraka led the execution team as Chibundu Edozie Transaction Manager. Chibundu@bglgroupng.com Dafe.Oraka@bglgroupng.com www.bglgroupng.com

ITS CHILDPLAY! - ANSONS ACT ON 64 SITE UK ACQUISITION FOR US CLIENTS

CAPVEST AND LANTMÄNNEN PARTNER TO CREATE THE NORDIC’S PREMIER POULTRY PRODUCER

UAC OF NIGERIA PLC ANNOUNCES THE ACQUISITION OF 51% EQUITY STAKE OF LIVESTOCK FEEDS PLC

Legal Adviser to the Purchaser

Virtual Data Room Provider

Financial Adviser to the Purchaser

admincontrol Advisers

Legal Adviser to the Vendor

Legal Adviser to the Purchaser

Udo Udoma & Belo-Osagie Environmental Due Diligence Provider - Management Team Due Diligence Provider - Commercial Due Diligence Provider - Systems Due Diligence Provider

Tax Adviser Financial Due Diligence Provider - Tax Adviser

Vendor Due Diligence Provider

84 / May 2013

Buy-Side Valuation Advisory

ACQUISITION INTERNATIONAL

DEAL DIARY:

NECKERMANN B.V.

ROYAL COPENHAGEN

SOUTHERN CROSS BOTANICALS

l Dutch investment company Axivate Capital, through the mediation of a subsidiary, has acquired all the shares in the capital of Neckermann B.V., and thus took over all the Dutch and Belgian activities of the Neckermann group.

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

l Lucas Meyer Cosmetics, a wholly owned subsidiary of Unipex Group, and leading company in the field of innovative active and functional ingredients for the cosmetics industry, has acquired Southern Cross Botanicals, the leading supplier of Australian botanical ingredients. This acquisition will expand the Lucas Meyer Cosmetics product line and is perfectly in line with its corporate vision, which focuses on innovation and client satisfaction.

In July 2012, the German mail order firm Neckermann was granted a provisional suspension of payments in Germany. The Neckermann parent company in Germany was the shareholder of the subsidiaries which handled the activities in the Benelux region. Nonetheless, the activities of Neckermann in the Netherlands and Belgium were still able to continue after July 2012. In the meantime, the Dutch management tried to find a structural solution that would guarantee long-term continuity. That solution was finally put in place on 2 January 2013 with the takeover by Axivate. The Dutch and Belgian branch of the business employs around 250 FTEs. Axivate already has shareholdings in such companies as the tour operator Corendon and a number of other businesses that mainly concentrate on online sales to consumers. Managing Director Bas Rasker is moreover co-owner of the holiday review website Zoover.nl. Kneppelhout & Korthals N.V. advised Axivate Capital on the deal, led by Olaf van Haperen, Head of the Intellectual Property and Technology Practice Group. “It was a complex disengagement from the German mother company (in bankruptcy) both from an intellectual property as well as a technology point of view,” said Mr van Haperen. www.kneppelhout.nl oh@kneppelhout.nl Vestius, led by Helger Kamerman also advised Axivate Capital on the deal. Helger Kamerman

h.kamerman@vestius.com

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

Southern Cross Botanicals, headquartered in New South Wales near Byron Bay in Australia, is recognised as the world’s leading reference for the development of innovative botanical ingredients derived from Australian native plants (botanical extracts, certified organic extracts, active ingredients, essential oils, vegetable oils and exfoliants). Ernst & Young, under the leadership of Australian Transaction Advisory Services Partner Anne-Maree Keane, provided financial due diligence, real estate, IT and taxation services to Unipex Group in relation to its acquisition of Southern Cross Botanicals. Anne-Maree commented: “For a company located on the other side of the world it was important Unipex understood the Australian business and tax environment and was confident in the fundamentals of the Southern Cross Botanicals business. “As Unipex’s global auditor, it was exciting to be able to leverage Ernst & Young’s global reach to bring EY Brisbane and Unipex together on this transaction.” The team from WCA Chartered Accountants was led by the firm’s senior partner Graham Smith. WCA Chartered Accountants have a long association with Southern Cross Botanicals Pty Ltd as the company’s external accountants and tax advisors. WCA Chartered Accountants were responsible for the restructuring of the Group in preparation of the acquisition. WCA Chartered Accountants were also heavily involved in assisting their client through the due diligence process. www.wcagroup.com.au gsmith@wcagroup.com.au

Sebastien David

Also advising on the deal was Advancy, led by Sebastian David, who provided the strategic and commercial due diligence.

AXIVATE CAPITAL ACQUIRES NECKERMANN B.V.

AXCEL SELLS ROYAL COPENHAGEN TO FISKARS FOR EUR 66 MILLION

LUCAS MEYER COSMETICS ACQUIRES SOUTHERN CROSS BOTANICALS

Axivate Capital Advisers

Virtual Data Room Provider

Advisers

Vendor Due Diligence Provider & Tax Adviser

Vestius Lawyers Advisors Neckermann Benelux

Legal Adviser to the Purchaser

Legal Adviser to the Vendor

ACQUISITION INTERNATIONAL

May 2013 /

CONSUMER DEALS

Consumer Deals

DEAL DIARY:

Energy & Resources

ENERGY & RESOURCES

The consideration payable will be 25 million RAU shares at A$0.02 per share (which represents a 43% premium to the last closing price) plus A$100,000 in cash, valuing the total consideration for this transaction at A£600,000. The transaction is subject to the completion of certain conditions precedent. These include the receipt of approvals and consents of relevant Mozambican government ministries and agencies for the transfer of the tenements and sale shares. RAU is in consultation with ASX regarding the application of Chapter 11 of the ASX listing rules to the transaction. ASMoz’s principal assets are three gold exploration licenses situated around the towns of Chimoio and Manica, in the Manica Province of Mozambique, 1,000 kilometres north of the capital Maputo. The area is considered as highly prospective yet under-explored. RAU has completed legal and financial due diligence which included a visit to the tenements in February 2013 by RAU Executive Chairman Ray Shorrocks and Non-Executive Director David King. The visit included appraisal of the projects, the on-site operating team, and also meetings with government officials and stakeholders in Maputo. As part of the transaction, African Stellar executive Mark Gillie will join the Republic Gold board to fill the vacant position of CEO/Managing Director. The Board is pleased that ASH has taken 80% of its consideration for ASMoz in shares of RAU. It demonstrates a vote of confidence in the prospective nature of the tenements and aligns ASH’s interests with all RAU shareholders. RAU has agreed to advance working capital of A$250,000 to ASMoz during the interim period until the closing of the purchase transaction. This funding is advanced as an interest-bearing loan to be repaid if the conditions precedent are not met by the closing date of 26th October 2013.

REPUBLIC GOLD AGREES TO ACQUIRE AFRICAN STELLAR MOZAMBIQUE

BP AND MASANA

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

‘‘

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

‘‘

l Republic Gold Limited (“RAU” or “the company”) has entered into a conditional Share Sale Agreement (“SSA”) to acquire African Stellar Mozambique Limitada (“ASMoz”) from African gold explorer African Stellar Holdings Limited (“ASH”).

ALADDIN MIDDLE EAST

‘‘

AFRICA STELLAR HOLDINGS

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

4D GLOBAL ENERGY $17 MILLION INVESTMENT IN TURKISH E&P COMPANY ALADDIN MIDDLE EAST Murphy Richards Capital LLP Advised the Vendor and Introduced the Purchaser

Legal Due Diligence & Corporate Documentation

Eagle House Law

l BP and Masana Petroleum Solutions (in which BP has a 45 percent stake) announced today that Oryx Energies has agreed to buy their liquefied petroleum gas (LPG) distribution businesses in South Africa. The deal is expected to be completed during the third quarter of 2013, subject to completion of all the required legal and regulatory approvals. BP supplies a wide range of industrial, commercial and domestic customers in South Africa, with annual sales of nearly 40,000 tonnes of bulk, cylinder and aerosol LPG. The Masana LPG business serves large, commercial and industrial consumers, with annual sales of 20,000 tonnes of bulk LPG. Over 45 employees based in Johannesburg, Cape Town, Pretoria and Durban will transfer to Oryx Energies’ local affiliate, Oryx Oil South Africa (Pty) Ltd, on deal completion under Section 197 of the Labour Relations Act. The sale of the businesses follows BP’s global announcement last year of its intent to sell its LPG bottles and bulk business, as well as some of its wholesale LPG activities, in the UK, Portugal, Austria, Poland, Netherlands, Belgium, Turkey, China and South Africa. Abhay Raichoora, Masana Petroleum Solutions Managing Director, said: “This deal signifies an exciting milestone for Masana and Oryx Energies, and will allow our customers to continue to enjoy high levels of service, product quality, and benefit from a renewed focus on growth.” Jonathan Lang, Head of Bowman Gilfillan Africa Group, led the Bowman Gilfillan team advising Oryx Energies on the deal. Bowman Gilfillan is the only leading firm in South Africa with a specialist Oil & Gas team. Bowman Gilfillan provided all the South African and English law advice to Oryx in connection with this transaction, commented Mr Lang.

ORYX ENERGIES TO BUY BP AND MASANA PETROLEUM SOLUTION’S LPG BUSINESSES

DRV Corporate Finance IN SOUTH AFRICA

Legal counsel to Oryx Energies

Financial Adviser and VDD

admin@eaglehousecorporate.com Legal Adviser to the Purchaser Legal Due Diligence

Sal and Caldiera Financial and Corporate Adviser

Paterson Securities

86 / May 2013

Property Valuer

TBS Consulting Legal Adviser to the Vendor

Legal Adviser to the Vendor

Legal counsel to BP

ACQUISITION INTERNATIONAL

DEAL DIARY:

GENSER ENERGY

MOOMBA-TO-ADELAIDE PIPELINE

PETROCHEM CARLESS HOLDINGS

l Vantage Risk Capital, Africa’s leading mezzanine debt provider, has concluded a transaction with Genser Energy Ghana to provide up to $30 million (R280 million) of expansion capital to the company.

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

l H.I.G. Europe, the European arm of global private equity firm H.I.G. Capital, has announced that its portfolio company Haltermann Holding GmbH (“Haltermann”) has acquired Petrochem Carless Holdings Ltd (“PCL”), a leading UK-based refiner and producer of hydrocarbon chemicals with 2012 revenues of over £350m.

IC Securities acted as the sole transaction advisor for Genser Power Africa Inc (“Genser”). The scope of IC Securities’ mandate included: review of Genser’s financials; discuss/ vetting potential investors; coordinating transaction process; providing advice and assistance during commercial, technical and legal due diligence; and providing advice and assistance in the negotiation of key transaction documents including term sheets, loan agreements, share agreements, etc. The team was led by Kwabena Osei-Boateng, a Managing Director and Head of Investment Banking, and John Gadzi, a Managing Director and Head of Equity Capital Markets and Advisory. Mr Osei-Boateng commented: There were no unusual hurdles in this deal. The strong relationship between the client and ourselves helped complete the transaction in a timely manner. The key hurdles were around negotiating key terms with the investor. We resolved these through dialogue and through being clear on where the red line issues and pressure points were. www.icsecurities.com icsecurities@icsecurities.com

Robyn Nathan

KPMG Services (Proprietary) Limited acted for Vantage Mezzanine Fund II Partnership on the deal. KPMG have a long-standing working relationship with Vantage group and have worked on transactions with Luc Albinski from his days at Standard Bank. The team was led by Robyn Nathan, Director, and Angel Lee, Senior Manager, both in International Corporate Tax, KPMG South Africa.

Our scope was restricted to considering the South African and Ghana tax implications for the LPs in the fund, limited solely to those LPs that are tax exempt bodies. The tax landscape in Africa is uncertain. The African continent is not always familiar with complex funding Angel Lee structures. We worked closely with KPMG in Ghana to advise on the tax implications arising from funding and remittance of interest from Ghana, and redemption of participating preference shares, said Ms Nathan. Robyn.Nathan@kpmg.co.za Angel.Lee@kpmg.co.za

Evans & Peck represented QIC, led by David Beckett, Principal. The primary role of the technical due diligence adviser to the buyer in relation to the acquisition of Moomba to Adelaide Pipeline (MAPS) is to highlight the technical risks to which MAPS is currently exposed given its business requirements, including an assessment as to how they might be mitigated, commented Mr Beckett. The challenge includes providing a forecast of the future remaining life of the asset and the expenditure required to maintain the asset in an operable condition. The pipeline is buried and therefore a visual inspection is not possible, the historical data regarding corrosion was limited. This presented some technical challenges requiring a combination of sound experienced judgement and analysis techniques.

PCL has developed a strong reputation in refining niche hydrocarbon streams which it takes in as the condensate by-product from North Sea oil and gas producers as well as from other global suppliers. Its products are used in industries as diverse as downstream chemicals, agrochemicals, oil and gas, consumer goods, printing, and automotive. It has established itself as a pivotal and trusted supplier into these industries and has grown substantially during the past years. Haltermann is a German based producer of specialty hydrocarbons with a particular focus on pentanes, high purity hydrocarbons and test and reference fuels. Together, Haltermann and PCL will form a significant player in the European hydrocarbon speciality landscape.

CQ Partners acted as Energy Adviser for the acquisition, led by Lino Fusco and Ian Tannebring and including Reza Evans, Damian Edwards and Steve Trollope. www.cqpartners.com.au lino@cqpartners.com.au ian@cqpartners.com.au reza@cqpartners.com.au The eastern Australian gas market is undergoing significant changes which are driven by the development of 6 new LNG trains in Queensland. This is proving to be a major challenge for the large gas buyers in this market and it will impact on the future demand for pipeline haulage. CQ Partners worked closely with QIC and its other advisors to assess the potential impacts of these changes and this was an important factor in the success of the acquisition, said Mr Fusco. PWC represented QIC Global Infrastructure on the deal, led by Andrew Weeden, Transactions Services Partner, and Graham Sorensen, Taxation Partner. PWC has advised QIC Global Infrastructure over an extended period on a number of deals including Port of Brisbane and OSU Parking. We are delighted to have made a contribution to another important transaction for QIC Global Infrastructure, said Mr Weeden.

DNV represented PCL Bidco Limited/ HIG on the deal, led by Mark Purcell, Principal Environmental Consultant.

Mark Purcell

“There were a number of interesting environmental issues involved, mainly because of the age of the sites involved,” commented Mr Purcell. www.dnv.com mark.purcell@dnv.com

AT Kearney provided support to H.I.G. European Capital Partners on the commercial and operational due diligence for this deal. A.T. Kearney’s team was led by Phil Dunne and George Smith. RBS, Financial Sponsors, South team were Joint MLA and Agent, in terms of funding we provided (significant) working capital lines. The deal was led by Nick Evans (Nicholas. Evans@rbs.co.uk) who is a Director within the Financial Sponsors team. “We have known Petrochem for some years and it has been a longstanding target of RBS, we also have a relationship with HIG and hence the deal was a good fit. It’s a complex, somewhat unique business, and hence not a straightforward deal, but a high quality business with some strong defensive characteristics - plus a really good fit for Haltermann,” said Mr Evans.

VANTAGE’S FUND II COMMITS UP TO $30 MILLION TO GENSER ENERGY, AN INDEPENDENT POWER

QIC GLOBAL INFRASTRUCTURE ACQUISITION OF MOOMBA-TO-ADELAIDE PIPELINE FROM APA GROUP

COMMISSION APPROVES ACQUISITION OF CHEMICAL COMPANY PETROCHEM CARLESS HOLDINGS BY RIVAL HALTERMANN

Financial Advisor to Genser Energy

Financial Adviser to the Purchaser

Commercial and Operational Due Diligence Provider

DRV Corporate PRODUCERFinance BASED IN GHANA

Financial and Taxation Due Diligence Provider Debt Provider

Tax Adviser

Legal Adviser to the Management Team

Commercial Due Diligence Provider Systems Due Diligence Provider

Legal Advisers to the Debt Providers

Environmental Due Diligence Provider

ACQUISITION INTERNATIONAL

Risk & Insurance Due Diligence Provider

Technical/Environmental Due Diligence Provider

Financial Due Diligence Provider - Tax Adviser

May 2013 /

ENERGY & RESOURCES

Energy & Resources

DEAL DIARY:

Financial Services ARAG INSURANCE

ATLANTIC FINANCIAL GROUP

KEY TRUST COMPANY

l Fonds Cauris Croissance II, a West African fund manager owned by Cauris Management, is to invest 4.1 billion FCFA in Banque Atlantique, the regional banking group, through Atlantic Financial Group (AFG).

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.

AFG will take an equal stake along with the Moroccan banking group Banque Centrale Populaire (BCP) of Banque Atlantique, which owns the subsidiaries created over the past two decades.

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.

With this step the ARAG Group has adapted its corporate structure to future challenges and taken its growing internationalisation into account. ARAG already changed its legal form from an AG to an SE, a Societas Europaea, in December 2011, thereby underlining its self-conception as a European company headquartered in Düsseldorf. After more than 50 years of international business, the family-owned group has grown into an internationally successful and versatile quality insurer.

Fonds Cauris Croissance II is funding the development of the group activities.

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.”

Odvetniki Šelih & partnerji worked as Slovenian legal counsel to the Arag group, in particular with respect to the cross-border merger of the Slovenian insurance company into the German insurance company, and subsequent establishment of a Slovenian branch office. This transaction was the first Slovenian cross-border merger in a regulated industry, and thus required rather complex Slovenian corporate and insurance law advice. Nataša Pipan Nahtigal, a partner, lead the team of Odvetniki Šelih & partnerji for this transaction, and Tilen Terlep was the principal senior associate involved in the transaction. www.selih.si

The partnership Cauris-AFG is the escalation of a business relationship started over five years ago with an investment by Cauris in Moov Togo, owned in majority by Atlantic Telecom, the group former telecom division, now part of Etisalat. I hope this new partnership will also benefit from Cauris proven experience in the banking sector and will generate value for shareholders as was the case with our joint telecoms experience. Africa Capital is representing AFG in the transaction. Mr. Patrick KOUAME, managing director of the Abidjan office, led the Africa Capital (AC) team. He commented: “AC has enjoyed a successful track record in structuring, conducting and closing AFG transactions.

‘‘

Our main challenge was the negative publicity surrounding the group, and its willingness to retain some control over the banks. We therefore focused discussions on the intrinsic value of AFG, its people and its presence on the ground, and ensured throughout the process that all interested parties knew that they were involved in a very competitive bid.

‘‘

The international branches also benefit from the changes as they can now position themselves in their domestic markets with the group’s total business volume – €1.5 billion respectively €703 million from the newly formed ARAG SE (individual financial statement) – and are perceived more directly as part of an internationally successful company. They can also participate more strongly in the planning and strategic processes in the group through the newly established “Group Executive Committee”.

‘‘

Koné Dossongui, chairman, commented:

‘‘

FINANCIAL SERVICES

l The Düsseldorf-based insurance group ARAG has successfully completed a cross-border merger of six of its European units. The former subsidiaries in Belgium, Italy, Netherlands, Austria, Slovenia and Spain with a premium volume of €408 million were merged into ARAG SE one by one last year and transformed into branches. As in the past, they operate independently in their national markets with due regard to their country specifics.

www.africa-capital.com pkouame@africa-capital.com

natasa.pipan@selih.si

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.

ARAG WITH NEW BRANCH STRUCTURE

FONDS CAURIS CROISSANCE II INVESTS IN BANQUE ATLANTIQUE

HAWKSFORD ACQUIRES KEY TRUST

Advisers

Financial Adviser to the Vendor

Risk and Insurance Due Diligence Provider

AFRICA CAPITAL Virtual Data Room Provider File Due Diligence

Financial Due Diligence Provider

Expert Associés (Togo)

Legal Adviser to the Vendor

Cabinet FADIGA (Côte d’Ivoire) Legal Adviser to the Purchaser

Cabinet DOGBEAVOU

88 / May 2013

Legal Adviser

Systems Due Diligence Provider

Sponsoring Brokers

MMC

ACQUISITION INTERNATIONAL

DEAL DIARY:

Financial Services

l National Financial Partners Corp., a leading provider of benefits, insurance and wealth management services, has entered into a definitive agreement with Madison Dearborn Partners, LLC, a private equity investment firm, under which a controlled affiliate of Madison Dearborn will acquire NFP. Under the terms of the agreement, NFP shareholders will receive $25.35 in cash for each share of NFP common stock they own, in a transaction with an equity value of approximately $1.3 billion, which includes the full value of the Company’s convertible debt. The purchase price represents a premium of approximately 26% over NFP’s closing share price of $20.05 on March 12, 2013, the last day of trading prior to press reports that NFP was considering a possible sale of the Company. As previously disclosed, as a result of interest it had received from private equity firms, NFP’s Board of Directors formed a special committee of independent directors to explore a possible sale of the Company. After a thorough and rigorous process, and with the assistance of its legal and financial advisors, the special committee negotiated and recommended this transaction with Madison Dearborn to the full Board. The transaction was unanimously approved by the Board. UBS acted as the sole financial advisor to MDP on the deal and provided committed financing for this transaction. Within UBS, the transaction was led by the Financial Institutions Group (Mike Jamin, Managing Director and Tushar Virmani, Director) in partnership with Leverage Finance (Erwin Mock, Executive Director) and M&A (Christina Bresani, Managing Director) Investment Banking Team. The transaction further establishes the strength of UBS as a leading advisor and financier for complex and/ or large transactions in the Insurance sector.

ACQUISITION OF NATIONAL FINANCIAL PARTNERS CORP.

DRV Corporate FinancePARTNERS, LLC BY MADISON DEARBORN

Exclusive Financial Advisor to the Acquirer

NMBZ HOLDINGS l Norfund has agreed invest just under $5million (30 million NOK) in equity in NMBZ Holdings in Zimbabwe. The investment will primarily go to capitalising its largest subsidiary, Bank NMB Bank in Zimbabwe. This represents a 9% stake in NMBZ Holdings, and is the first Norwegian direct investment in the country following the difficult economic and political situation that has characterised Zimbabwe over the past 10-15 years. Norfund will also invest USD 1.4 million in subordinated debt in NMB Bank, which will facilitate additional liquidity to the bank as the bank will on-lend this capital to the market that is starved for liquidity. Led by Brian Njikizana, the Chief Operating Partner, KPMG Chartered Accountants (Zimbabwe) acted as the independent reporting accountants to NMBZ Holdings (“NMBZ”) in the successful transaction that saw NMBZ raise approximately US$14.8million through a share placement with NorBrian Njikizana fund, AfricInvest and FMO. NMBZ is a valued audit client of KPMG.As the independent reporting accountants, KPMG reported on the historical financial information in line with Zimbabwe Stock Exchange listing requirements and the unaudited consolidated pro forma statement of financial position. bnjikizana@kpmg.com www.kpmg.com/zw Grant Thornton Camelsa, which is part of the Grant Thornton International network of firms, was engaged to be independent financial advisors. Brian Hodza, a Senior Manager at Grant Thornton led the engagement with the assistance of Muhammad Umar, a Supervising Senior. “We essentially reviewed the documentation supporting the transaction such as audited financial statements of NMB, circulars of proposed transaction, associated resolutions; and underlying rationale, terms and conditions of the transaction (share consolidation, followed by an increase in authorised share capital and private placement with strategic foreign investors) and concluded on its reasonableness and fairness. To protect interests of minority shareholders, the relative shareholdings of former shareholders of NMB should have been unchanged pre- and post-transaction,” said Mr Hodza.

PEGASUS FINANCIAL SERVICES l H.I.G. Capital, LLC, a leading global private equity investment firm, has announced that its affiliate has completed the acquisition of Pegasus Financial Services (“PFS” or the “Company”), the world’s largest processor of commissions paid by hotels to travel agencies, from Pegasus Solutions, Inc. Founded in 1992 and headquartered in Dallas, TX, PFS’s global payment network and technology solutions serve a large and diverse customer base of leading hotels and travel agencies worldwide. The Company provides a range of services to its hotel and travel agency customers, including commissions receipt and disbursement, foreign currency exchange, and reconciliation and tracking services. H.I.G. is joining Mark Dubrow, Chief Executive Officer, Monica French, Senior Vice President of Business Development, and Jennifer Sampson, Vice President of Product and Client Services in their efforts to transition PFS into a standalone company and strengthen its position as the leading provider of hotel commissions processing worldwide. Todd Ofenloch, Principal of H.I.G. Capital, said, “We are very excited to be working with Mark, Monica, and Jennifer and look forward to successfully carving out PFS and pursuing the Company’s next phase of growth. PFS is the industry leader and has developed strong customer relationships with both hotels and travel agencies worldwide. H.I.G. looks forward to supporting PFS’s growth while continuing the Company’s focus on providing its customers with exceptional services and solutions.”

C. Thompson

Aon M&A Solutions provided insurance risk management due diligence advisory services to HIG for their acquisition of Pegasus Financial Service, led by Christopher P. Thompson, a Managing Director with Aon M&A Solutions and manager of the Boston due diligence team. Aon M&A Solutions have a longstanding working relationship with HIG.

christopher.thompson3@aon.com www.aonamas.com Ernst & Young LLP provided financial, accounting and tax due diligence advisory services on the transaction for HIG.

NORFUND MAKES FIRST INVESTMENT IN ZIMBABWE

H.I.G. CAPITAL ACQUIRES PEGASUS FINANCIAL SERVICES FROM PEGASUS SOLUTIONS, INC.

Reporting Accountants

Accountancy Adviser

Legal Adviser to the Management Team

Legal Adviser

Gill,Godlonton & Gerrans Legal Adviser to the Equity Provider

Kantor & Immerman Independent Financial Advisers

IT Adviser

Performance Improvement Partners Insurance/Benefits Adviser

ACQUISITION INTERNATIONAL

May 2013 /

FINANCIAL SERVICES

NATIONAL FINANCIAL PARTNERS CORP.

DEAL DIARY: Healthcare

AURIS

MEDDAY

l Auris Medical, a company dedicated to the development of novel therapeutics for the treatment of inner ear disorders, has completed a CHF 47.1 mn Series C financing. Two leading venture capital firms, Sofinnova Ventures (Menlo Park, CA USA) and Sofinnova Partners (Paris, France), participated in the financing.

l InnoBio, a biotech fund managed by CDC Entreprises, which is part of the soon to be created BPIFrance1, and Sofinnova Partners, a leading venture capital firm in Europe specialised in life sciences, have announce a joint investment in MedDay for a total amount of €8 million.

The funding will enable Auris Medical to advance its two clinical projects, AM-101 for the treatment of acute tinnitus and AM-111 for the treatment of acute inner ear hearing loss, through Phase III studies and ultimately to market launch. In connection with the fund raising, Jim Healy, MD, PhD, General Partner at Sofinnova Ventures, and Antoine Papiernik, MBA, Managing Partner at Sofinnova Partners, joined Auris Medical’s Board of Directors.

HEALTHCARE

“The Series C financing represents an important milestone on our way to bring safe and effective therapies to the many patients suffering world-wide from tinnitus or hearing loss for whom today no proven drug-based treatment options exist”, said Thomas Meyer, Auris Medical’s founder and Managing Director. “Having established proof of concept in Phase IIb studies, we are now ready to move forward with our clinical development plans. Thanks to this latest financing round our leadership position in the emerging market for inner ear therapeutics will be further strengthened.”

Michel Jaccard

id est avocats acted as Counsel to the Series C Investors Sofinnova Ventures (US) and Sofinnova Partners (FR), led by Michel Jaccard, Partner, and Loïs Hainard, Senior Associate. Mr Jaccard has represented Sofinnova Ventures and Sofinnova Partners in other deals in the past.

Created in 2011 by Dr Frédéric Sedel and Dr Guillaume Brion, MedDay is specialised in the treatment of neuro-metabolic diseases. This investment will finance the development of three compounds all the way through to 2016, including the phase IIb/III studies for a progressive multiple sclerosis treatment stemming from the Assistance Publique des Hôpitaux de Paris. It will also finance the development of an R&D platform in partnership with the Metabolomics Team at the Institute for Biology and Technology, Commissariat à l’énergie atomique (CEA, Saclay). MedDay’s technology platform relies on the work of Dr Frédéric Sedel, a neuroscientist at La Pitié Salpêtrière Hospital (Paris), who has been carrying out pioneering research in neurology to identify rare hereditary metabolic diseases in adults for more than a decade. Dr Frédéric Sedel’s research has led to the identification of new treatments and diagnostic tools for diseases in a field where few treatments, if any, are available. These discoveries are expected to be applicable more broadly in the area of neuropsychiatric diseases. The company is currently incubated at l’Institut du Cerveau et de la Moelle épinière in Paris (ICM).

This is the biggest equity financing in Switzerland of 2013 and the latest of several significant transactions for id est avocats in the past months, acting equally for investors and founders or the company. Such a dealflow is a clear sign of the strength of many promising companies in Switzerland. It also shows our ability, as a boutique firm, to act efficiently for sophisticated clients throughout Switzerland and alongside or opposite much bigger corporate powerhouses, said Mr Jaccard. michel.jaccard@idest.pro www.idest.pro

Rafaèle Tordjman, Managing Partner at Sofinnova Partners says: “We are thrilled to contribute to MedDay’s development and help further Dr Frédéric Sedel’s research. His metabolic approach to neurologic diseases is radically new and will allow for the development of ground breaking solutions in a field which still suffers from significant unmet need”.

AURIS MEDICAL SECURES CHF 47.1 MN SERIES C FINANCING FROM SOFINNOVA VENTURES AND SOFINNOVA PARTNERS

INNOBIO AND SOFINNOVA PARTNERS INVEST €8 MILLION IN FRENCH BIOTECH MEDDAY

Legal Adviser to the Equity Provider

Legal Adviser to the Purchaser

SALMOIRAGHI & VIGANO l Luxottica Group S.p.A., a leader in the design, manufacture and distribution of fashion, luxury and sports eyewear has closed the acquisition of a 36.33% equity stake in Salmoiraghi & Viganò. Salmoiraghi & Viganò is a leading Italian company in the eyewear retail sector and owns approximately 500 stores across Italy. For the fiscal year ended September 30, 2012, the Company posted annual net sales of approximately Euro 170 million. The transaction, which is valued at €45 million, was previously announced on November 27 2012 and aimed at providing Salmoiraghi & Viganò with the resources required to re-establish its financial resources and to support its future growth. “In the last few years, the Italian eyewear sector has undergone many important changes”, commented Andrea Guerra, Chief Executive Officer of Luxottica. “With this investment, we aim to provide the sector’s leading Italian chain with additional resources and allow it to pursue its growth projects. Luxottica will become a financial partner while operations will remain with Salmoiraghi & Viganò. This transaction demonstrates our commitment to finding solutions for our business partners, providing concrete support to the market and looking optimistically to the future of our country”. Luxottica has been supported in the acquisition by Ernst & Young Financial-Business Advisor. Marco Mazzucchelli, EY Head of Transaction Support for the Mediterranean Region, said We strongly believe that there is still large room for Italian excellence in the global market, and we are proud to have acted as financial and tax advisors to connect Luxottica and Salmoiraghi & Viganò. “This partnership,” added Dino Tabacchi, Chairman and major shareholder of Salmoiraghi & Viganò, “represents a great opportunity for our company, with its history dating back over 150 years and a network of approximately 500 sales outlets in Italy, to strengthen our brand in the Italian market. We are extremely delighted to enter into an arrangement with Luxottica, which will allow us to carry on with our company’s development plans”.

LUXOTTICA BUYS 36 PERCENT OF SALMOIRAGHI & VIGANO

Financial and Tax advisor for the buyer

Legal Adviser to the Vendor

FRORIEP RENGGLI

Legal Advisers to the Equity Providers M&A advisor

IP Due Diligence Provider

Legal advisor for the buyer

Bonelli Erede Pappalardo

Legal Adviser to the Vendor

BMC SmartRoom 90 / May 2013

Cabinet Barny ACQUISITION INTERNATIONAL

DEAL DIARY: Industrial

l Advanced Oncotherapy has signed a definitive Share Purchase Agreement for the acquisition of 100% of the share capital of ADAM S.A. (“ADAM”) for a consideration to the vendor of stock and warrants in Advanced Oncotherapy that will be equivalent to 29.9% of the issued ordinary share capital and warrants of the Company prior to the completion of the transaction. The Swiss-Italian Alberto Colussi founded ADAM in 2007 and brought on board a team of experts in accelerator and detector technology from CERN founded ADAM. ADAM aims to capitalise on the know-how and infrastructure that CERN provides to build innovative accelerators for proton therapy and for conventional radiotherapy. ADAM’s research and development activities have focused on two main fields: the design and construction of compact linear accelerators for conventional radiotherapy, and of compact linear accelerators for proton therapy. As a CERN spin-off company, CERN has provided and will continue to provide ADAM with offices and research facilities at the CERN Campus near Geneva. The Company announced on 11 April 2013 a Collaboration Agreement with ADAM and CERN to complete the development of ADAM’s proton beam technology for clinical application in hospitals. Completion of the acquisition of ADAM will take place upon the closing of financing by Advanced Oncotherapy which will, inter alia, fund the completion of the development of ADAM’s proprietary Linear Accelerator based Proton Beam Therapy technology referred to above. RPG Crouch Chapman LLP represented the acquirer, Advanced Oncotherapy PLC, let by Partners Jonathan Brownson and Chris Slater, assisted by Manager Lynley Allagapen. Mr Brownson noted that the main challenge in the deal related to the target being based in Switzerland and the firm’s team requiring fluent French speakers. We believe that the acquisition will be an important step in the growth of the acquirer, he commented.

PROPOSED ACQUISITION OF ADAM S.A, A CERN SPIN OFF

BSM VALVES

DUPLOMATIC OLEODINAMICA

l Aalberts Industries N.V. has reached an agreement to acquire 100% of the shares of BSM Valves B.V. in the Netherlands. BSM Valves specialises in high performance valves, mainly for the oil and gas market. The acquisition will take effect after all the formalities for the acquisition have been completed, which is expected to take place early January 2013.

l AXA Private Equity, the leading European diversified private equity firm, has signed a binding agreement with Progressio SGR, on behalf of the Fund Progressio Investimenti II, to sell its majority 88% stake in Duplomatic Oleodinamica.

BSM Valves develops, manufactures, assembles and tests tailor-made valves for the onshore and offshore oil and gas industry, the chemicals and petrochemicals industry and the energy market. In these markets products are needed that can be exposed to the most extreme conditions and that can withstand temperatures from minus 196ºC to plus 850ºC and high pressures. Through its acquisition of BSM Valves, Aalberts Industries Flow Control is taking an important strategic step by adding a wide product portfolio of special high-grade valves (particularly ball valves, gate valves, needle valves, check valves and globe valves) with an excellent brand name and service. There are many opportunities for cross-selling. At Flow Control, BROEN is already active in the oil, gas and petrochemicals industries particularly in Eastern Europeand Russia. Through bundling BSM Valves’ and BROEN’s product portfolios, growth in these markets and countries can be further accelerated. In North America, BSM Valves can employ the strong sales channels of Conbraco, which with its Apollo® Valves product portfolio occupies a strong position in the oil and gas market and various other industrial markets, such as the energy market, mining, pulp & paper and the chemicals industry. In Central and South America there are also many opportunities for collaboration, especially in Brazil. BSM Valves’ results will be consolidated from 1 January 2013 and will contribute directly to the earnings per share. The acquisition will be financed from existing credit facilities. The team of Eversheds Faasen was lead by Rob Faasen (M&A Partner). He commented: I do have a longstanding relationship with the Seller and their representatives. It was a very straight forward deal where the strategy of Aalberts Industries has an excellent fit with the strategy of the company. Peter Besseling of BSM Group were remained on board to help integrating BSM into the Aalberts Industries group and grow the business further.

AALBERTS INDUSTRIES STRENGTHENS FLOW CONTROL’S POSITION IN THE

DRV Corporate OIL ANDFinance GAS MARKET

Based in Parabiago, Milan, Duplomatic Group is a producer of hydraulic valves, pumps and oil-pressure activated systems which are mainly utilised in industrial applications for industries such as energy, machine tools, construction machineries, rubber and wood industry as well as naval and agricultural industry. AXA Private Equity acquired the majority of the Group in 2008 with the objective of strengthening its market position. The firm implemented a growth strategy, working alongside the management, based on refocusing on the core business and international expansion. In line with this plan, in 2011 AXA Private Equity helped Duplomatic acquire Continental Hydraulics, a U.S. company with headquarters in Savage (Minnesota). In 2012, Duplomatic Group achieved a turnover of approximately €46 million, 70% of which was generated outside Italy, with an EBITDA of approximately €6.8 million. Progressio Sgr has been supported in the acquisition by Ernst & Young Financial-Business Advisor. The EY team was led by Marco Mazzucchelli, Head of Transaction Support for the Mediterranean Region. With more than 15 years’ experience, Marco Mazzucchelli specializes in providing expert strategic and financial advice to PE houses. Having advised on more than 200 transactions over the course of his career, Mr. Mazzucchelli has developed a deep understanding of the market dynamics and challenges. Paolo Bergonzini, Managing Director and Head of AXA Private Equity’s Italian Small Market Enterprise Capital team, said: “With our guidance, Duplomatic has executed an international growth strategy which has allowed the Group to double its sales within five years. In keeping with AXA Private Equity’s strategy, we used our international network to help the Group expand into new markets outside Italy.” Roberto Maddalon, CEO of Duplomatic Oleodinamica, added: “I thank AXA Private Equity for its continued support over the last five years, which helped us achieve our ambitious growth targets. Now we are ready to face new challenges with the expertise and network of Progressio SGR.”

AXA PRIVATE EQUITY SELLS DUPLOMATIC OLEODINAMICA TO PROGRESSIO SGR Financial and Tax advisor for the buyer

Accounting Adviser

Advisers Financial Advisors for the Seller

Legal Advisors for the Seller Legal Adviser

DRV

Corporate Finance

Fiscal Advisors for the Seller

CBA Studio Legale e Tributario Structure Adviser for the Buyer

Studio Salom, Riccardi; Tedeschi ACQUISITION INTERNATIONAL

May 2013 /

INDUSTRIAL

ADAM SA

DEAL DIARY: Industrial

GEBR BRINKMANN GMBH

LABORATORIUM ZEEUWS-VLAANDEREN

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

l Eurofins Scientific, the global leader in food, environment and pharmaceutical product testing services, announces the acquisition of Laboratorium Zeeuws-Vlaanderen (LZV), the reference agricultural testing laboratory in The Netherlands. LZV also offers testing services for the food and environmental sectors, and is renowned for pesticides testing in the local market.

LEAX acquires the company as part of its global expansion strategy. The factory will essentially continue with its current product range and technology and will employ some 80 people.

Founded in 1991, LZV employs over 90 staff and generates revenues of over EUR 10m. It operates a large laboratory in Graauw, in the south of The Netherlands, and the Altic agricultural laboratory in Dronten, in the north, enabling nationwide coverage. LZV’s strong reputation in agricultural testing is underpinned both by its breadth of service offering, and the quality of its analyses. It has long standing relationships with the largest food growers and producers, as well as environmental agencies in The Netherlands. Eurofins is active in agricultural testing in the Nordic region, and in the UK; and LZV provides the Group an opportunity to accelerate its roll-out of this competence in continental Europe. The acquisition should also allow Eurofins to expand its market share in agricultural testing by leveraging its increased scale.

The German business in Detmold, south-west of Hannover, will strengthen LEAX´s capabilities on gears and gearboxes. Moreover it gives LEAX increased access to the German market also for services made available by other LEAX Group companies. “Acquiring Brinkmann is of great importance for LEAX´s growth in continental Europe. The German facility opens up new possibilities for us to grow our business”, said LEAX´s President and CEO, Roger Berggren. “Our long term ambition is to grow in Germany. We want to increase the business with German companies both in Germany and globally.”

INDUSTRIAL

TIGGES Rechtsanwälte in Düsseldorf provided legal assistance to the LEAX Group on the an asset deal. Dr Michael Tigges was responsible for the corporate-law part of the transaction, while senior partner Michael Niermann took care of the deal from an employment-law perspective; associate Marius Rosenberg assisted with the due diligence and drafting the contracts. TIGGES was instructed by a Board member of the LEAX Group AB with whom Dr Michael Tigges had already maintained business relations for many years. A focal point of the transaction, which was effected with extraordinary speed, consisted of the complex negotiations with the union and works council about the reduction of the personnel from 145 to c. 90 people. Michael Niermann’s longstanding experience in assisting with such negotiations contributed to the ability ultimately to find a solution which was acceptable to all of the parties.

LEAX ACQUIRES GERMAN COMPANY AS PART OF ITS EXPANSION

Mike Wolf of Wolf Legal acted as seller’s sole legal counsel.

Mike Wolf

Mr Wolf is an experienced M&A lawyer, acting as managing partner at Wolf Legal. The seller’s advisory team further consisted of Gerard Baalhuis as corporate branch specialist and Robert Dikker as financial adviser.

The key challenges were translating complex legal concepts into down-to-earth Dutch entrepreneurial wording and making the sale of their hand-built business more acceptable to the highly company-dedicated family, said Mr Wolf. The deal was a success mainly because of the solid mutual trust between Eurofins, specifically Griet Evens and Dirk Bontridder, and Jos Heijens.

EUROFINS REINFORCES MARKET LEADERSHIP IN DUTCH FOOD AND FEED TESTING MARKET WITH THE ACQUISITION OF LZV

SLM SOLUTIONS l Funds advised by DPE Deutsche Private Equity GmbH have acquired a majority of the shares in plant engineering specialist SLM Solutions GmbH. CEO H.J. Ihde and Commercial Director H. Schöneborn will remain significant shareholders in SLM and continue to lead the Company’s operations to ensure a continuous and sustainable development of the Company. SLM, headquartered in Lübeck, Germany, has more than 10 years’ experience in laser-based metal additive manufacturing (“Selective Laser Melting”) and is one of the pioneers in the development of this technology. In this manufacturing process, microscopically thin deposits of metal powder (e.g. titanium, steel, aluminium or gold) are successively welded together by high-precision lasers to create solid metal parts. Currently, the technology is mainly used for prototyping as well as single and zero series production of highly complex parts that cannot be manufactured by traditional methods. SLM introduced selective laser melting to the market in 2002. In 2006, SLM was the first company to use aluminium and titanium in this manufacturing process. Today, SLM is a global leader in the production of additive manufacturing production systems for prototypes and serial parts, as well as for vacuum and metal casting machines. FMG worked closely with SLM Solutions’ owners HansJoachim Idhe and Henner Schöneborn to define the company’s growth strategy and then design, launch and manage the capital raise, this included corporate finance strategy, valuation, preparation of the investment memorandum, investor communications and negotiations and due diligence. The process was jointly led by FMG Managing Directors Adrian Williams and David Schofield, who commenting on the transaction said, FMG were very pleased to be selected by SLM Solutions to be their adviser, they are clearly a leader in Additive Manufacturing and we expect that together with DPE they have a great future. www.futurematerialsgroup.com Adrian.williams@futurematerialsgroup.com David.schofield@futurematerialsgroup.com CMS Hasche Sigle advised SLM on all legal aspects of the investment by DPE via a team led by corporate law expert Dr Sebastian Orthmann.

DPE INVESTS IN SLM SOLUTIONS GMBH Financial Adviser to the Vendor

Legal Adviser to the Purchaser - Human Resources Adviser - Financial Due Diligence Provider - Human Resources Due Dilligence

Consultants Laboratory Zeeland BV and BV ALTIC

Legal Adviser to the Purchaser

Financial Due Diligence Provider

Debt Providers - Financial Adviser to the Purchaser

Advisors Eurofins Scientific Group

Legal Adviser to the Vendor Legal Adviser to the Purchaser Commercial Due Diligence Provider

92 / May 2013

ACQUISITION INTERNATIONAL

DEAL DIARY: Real Estate

CAN FIRST

CHICAGO RIB SHACK

INDUSTRIAL PROPERTY IN LAVAL

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

l Rockpool Investments has completed a first close of a planned GBP1.675m investment in Chicago Rib Shack.

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

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

DUNDEE INDUSTRIAL REIT TO ACQUIRE INDUSTRIAL PORTFOLIO FOR $151.5 MILLION

The new Chicago Rib Shack format is based on operating barbecue-themed restaurants in shopping centres in the UK. The first unit opened in the “world food court” at Westfield shopping centre in Stratford, East London in September 2011. A second unit opened recently at West Quay, Southampton. A new site at the Trinity shopping centre in Leeds will be the next to close. Rockpool recently announced that two leisure sector entrepreneurs, Julian Coppock and Stephen Thomas, will both be joining the board. Julian joins as non-executive chairman and Stephen as a non-executive director. Julian is an experienced director and successful entrepreneur in the restaurant sector. Following a profitable exit in 2012, Julian is now building a portfolio of private investments, focussing on housing, retailing and fast-casual restaurants. Stephen is the chief executive of No Saints Group, a rapidly growing operator of live music venues and dance venues. He is both an existing investor in Chicago Rib Shack and a Member of the Rockpool Network, and was instrumental in bringing the current investment opportunity to Rockpool. Stephen is also investing in the current funding round. Alexander Rosse, Chartered Accountants and Corporate Finance Advisors were delighted to have been appointed by Rockpool Investmentsto carry out the financial due diligence of Chicago Rib Shack Limited. Rashesh Joshi, Corporate Finance Director, commented CRS has carved out an interesting Rashesh Joshi niche in this sector. Specialists in accounting, tax and corporate finance for SMEs, we utilised one of our subject matter experts in the food and hospitality sector to assist in the due diligence process. www.alexanderrosse.co.uk rjoshi@alexanderrosse.co.uk

ROCKPOOL INVESTMENTS COMPLETES FIRST CLOSE OF A PLANNED GBP1.675M INVESTMENT IN CHICAGO RIB SHACK

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

DRV Corporate Finance INDUSTRIAL BUILDING Legal Adviser to the Purchaser

Commercial Broker Financial Due Diligence Provider

Alexander Rosse Legal Advisor to Purchaser

Debt Providers

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

Financial Advisor to Purchaser

DREAM

ACQUISITION INTERNATIONAL

Legal Adviser to the Vendor

Property Valuer

May 2013 /

REAL ESTATE

The CanFirst Portfolio comprises 1.6 million square feet of gross leasable area wholly located across the Greater Toronto Area (“GTA”) in key industrial markets and along major transportation corridors providing direct highway access.

The EIS-qualifying investment was taken up by members of the Rockpool Network and investors in Rockpool’s EIS portfolio service, and will be used to open new restaurants in the UK.

DEAL DIARY: Real Estate

KARSTADT DEPARTMENT STORE

ROSENGAARDCENTRET

WHITE SQUARE OFFICE COMPLEX

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 The ECE European Prime Shopping Centre Fund acquired Rosengårdcentret in Odense (Funen), the second largest shopping center in Denmark, from private investors.

l The investment company O1 Properties, one of the largest owners and managers of a portfolio of high quality office properties in Moscow, (purchaser) and a consortium between leading developer AIG/Lincoln, leading Russian investment bank VTB Capital and global private investment firm TPG Holdings (sellers), have completed an investment transaction involving White Square, a class A office centre in Moscow. It was the largest single asset office real estate investment transaction ever completed in the Russian market.

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.

‘‘

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

‘‘

REAL ESTATE

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.

CEO Per Nyborg Thomsen (pn@icp.dk) and Director Jens Chr. Petersen (jcp@icp.dk), lead the team at ICP Denmark A/S (www.icp.dk).

‘‘

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 Ernst & Young Tax team, lead by Transaction Tax Partner Morten B Dalsgaard, provided detailed support to ECE focusing mainly on tax due diligence and tax structuring services. The project, stretching over several months, provided us with a unique insight in the ECE business model, which provided Ernst & Young with a fantastic opportunity to assist ECE in designing a tailor made acquisition structure fitting for one of the largest real estate transactions ever conducted in Denmark. The direct and excellent communication between ECE and Ernst & Young throughout the entire project was key in achieving the desired objectives. The financial team was led by Executive Director Lasse Fredborg.

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

The seller consortium was advised by Jones Lang LaSalle and CBRE. The acquisition and its financing was arranged by O1 Properties with Sberbank CIB. Linklaters LLP and Clifford Chance acted as legal counsel for the seller consortium and O1 Properties, respectively. Herbert Smith acted as legal counsel for Sberbank CIB. The deal has been approved by the Federal Antimonopoly Service of the Russian Federation. White Square Office Center consists of three office buildings comprising approximately 76,000 sq m of rentable area. Completed in 2009, the complex is the first of two phases co-developed by AIG/Lincoln and Coalco, a Russian development company. Coalco sold its holdings in the White Square project to a consortium of major international financial investors led and arranged by VTB Capital and TPG Holdings in May 2011. White Square is widely recognized as Russia’s premier office development and occupies a commanding site in Moscow’s Central Business District with outstanding prominence at Belorusskaya Square and the Church of St. Nicolas. Clifford Chance advised O1 Properties on this acquisition led by Marc Bartholomy, Clifford Chance partner, Head of Corporate practice and Head of Real Estate group. It was not the first O1 Properties transaction supported by Clifford Chance; Marc Bartholomy previous transactions include the acquisition of Ducat Place III, Moscow’s premier class “A” office building and the acquisition of Silver City, a class “A” office building in the centre of Moscow. www.cliffordchance.com moscow.office@cliffordchance.com

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

ECE FUND TO ACQUIRE ROSENGÅRDCENTRET IN ODENSE

O1 PROPERTIES ACQUIRES WHITE SQUARE OFFICE CENTER IN MOSCOW (RU)

Debt Providers

Advisers

Legal Advisor to the Management Team

Legal Adviser to the Purchaser & Tax Adviser Debt Provider - Financial Advisor to the Management Team Legal Adviser to the Vendor

(Environmental) Technical Due Diligence Provider

Realkredit Danmark A/S

Legal Advisor to the Debt Provider

Property Valuer

Commercial Due Diligence Provider

94 / May 2013

Legal Advisors to the Vendor

ACQUISITION INTERNATIONAL

DEAL DIARY:

Support Services

The investment by both Patron and Legal & General illustrates their confidence in the Group’s future prospects and provides CALA with a strong platform for growth, through greater balance sheet capacity and the funds to add significantly to its existing land bank. This platform will enable the Group to build on the positive momentum it has generated in recent years, with a medium term aim of increasing the size of the Group substantially. www.cala.co.uk Lloyds Banking Group has a long standing relationship with CALA and is delighted to have provided a £100m debt package to support the transaction. The house building sector is of vital importance to the UK economy which Lloyds Banking Group is committed to supporting. The provision of the facilities for the CALA transaction was led by Simon Sweeney, Andy Edwards and Andrew Dickson of Lloyds Commercial, Mid Markets.

Richard Cordy

Drawing extensively on his 30 years experience with several leading house builders, Richard Cordy, founder of Vantage Point Consulting, was appointed to review and ensure Cala Group’s systems and procedures were robust and in line with industry best practice.

EMC TALOTEKNIIKKA

l Fexco Pacific, a leading money transfer and foreign exchange provider in New Zealand and the Pacific, has acquired the licensed Bureau de Change and Western Union outlets of ChangeGroup New Zealand. The transaction completed on 27th March.

l Vaaka Partners has agreed to sell EMC Talotekniikka to Royal Imtech N.V. (IM-AE, technical services provider in and outside Europe). With 580 employees, EMC Talotekniikka realises over 100 million euros in annual revenue. The acquisition price is in line with Imtech’s previous acquisitions in Finland and will be paid in cash.

Speaking about the acquisition, Chris Wilby, Group General Manager, Fexco Pacific, said: “This acquisition significantly enhances our dedicated network in Auckland and Rotorua, giving our customers much greater convenience. By adding eight excellent locations and a well-trained team, this acquisition provides a strong platform for expansion of our network in New Zealand.” Fexco Pacific is part of FEXCO, Ireland’s leading privately owned financial services company, employing over 1,700 people across its operations in Europe, the Americas, the Middle East and Asia Pacific. Over its 30 year history, FEXCO has become an internationally recognized specialist provider of financial transaction processing, foreign exchange and outsourcing services. ClarkeKann acted for The Change Group Australia Pty Ltd, led by Bernard Tan, Partner. Based in Sydney and Brisbane, the firm acts for The Change Group in its national business operations in Australia and New Zealand. ClarkeKann Lawyers acted for The Change Group Australia Pty Ltd, the vendor, in all legal aspects of the sale of its New Zealand operations to Fexco Pacific including contract preparation and negotiations, transfer of IP rights, arranging for lease transfers and liaising with landlords and attending to all completion matters. Bernard Tan

The transaction not only involved the transfer of multiple sites, assets and employees, but also the exit from several sites which were not part of the sale. ClarkeKann assisted The Change Group, not only in the sale, but a successful exit from the New Zealand business market, said Mr Tan. ClarkeKann was assisted by New Zealand firm, Grove Darlow, in the transaction. b.tan@clarkekann.com.au www.clarkekann.com.au

EMC Talotekniikka is owned by funds managed by Vaaka Partners Ltd, Etera Mutual Pension Insurance Company, Finnish Industry Investment Ltd and the management team. The company was created in 2007 through a merger of four medium-sized technical services providers with 12 subsequent add-on acquisitions further strengthening the company’s geographical reach, competencies and service offering. Today EMC Talotekniikka is a top-5 player in the technical services market with national coverage through 11 branches. The company offers multi-disciplinary technical projects, including electrical services, plumbing, mechanical services (air, climate, air-conditioning), security and telecommunications, both in new-build and renovation. EMC Talotekniikka is one of the strongest players in the growing field of renovating technical and energy infrastructure in older apartment complexes, delivering dozens of large projects each year utilizing the company’s proprietary Silotek® prefabrication solutions. In addition the company has a substantial maintenance and technical services business as well as significant special competencies in project management, energy solutions and building automation.

‘‘

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

Challenges included a recently installed IT system, and a very tight report deadline - which was achieved with the support of Patron’s efficiently orchestrated team, and full co-operation of the Cala directors. richard@rcordy.wanadoo.co.uk

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

CALA ANNOUNCES NEW INVESTMENT PARTNERS, PATRON AND LEGAL & GENERAL TO ACQUIRE THE GROUP

FEXCO PACIFIC ACQUIRES THE NEW ZEALAND OPERATIONS OF CHANGEGROUP

EMC TALOTEKNIIKKA SOLD TO ROYAL IMTECH N.V.

Advisers

Legal Adviser to the Vendor

Virtual Data Room Provider

Strategic Advisers

Legal Adviser to the Vendor Tax Adviser

Tax Adviser Other Advisers Virtual Data Room Provider Risk & Insurance Due Diligence Provider

Financial Adviser to the Vendor

Cavendish Corporate Finance ACQUISITION INTERNATIONAL

Management Team Due Diligence Provider

May 2013 /

SUPPORT SERVICES

l CALA Group Limited (“CALA” or “The Group”), the UK’s premium major home builder, today announces that it has reached an agreement with Patron Capital Partners (“Patron”), the private equity group, and Legal & General Group plc (“Legal & General”), the insurance, savings and investment management company, under which they will acquire the Group.

CHANGEGROUP

‘‘

CALA

DEAL DIARY:

Support Services IPES

MICRO LIBRARIAN SYSTEMS

SEATAINERS GROUP A/S

l Silverfleet Capital, the European private equity firm has agreed to buy Ipes, one of Europe’s leading providers of fund administration and outsourcing services to the private equity industry, in a £50 million transaction, from RJD Partners. Completion is subject to obtaining regulatory clearances. Silverfleet Capital and management’s plans are to develop the business both organically and through acquisition with an emphasis on international expansion.

l ISIS Equity Partners is pleased to announce the sale of Micro Librarian Systems Ltd (“MLS”) to Capita Plc. MLS is the leading provider of library and resource management systems to the UK education sector. ISIS invested in MLS, on behalf of its clients the Baronsmead VCTs, in July 2006 to fund a secondary MBO.

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.

The acquisition of MLS, for an undisclosed sum, fits with Capita’s strategy of developing capability in their target markets. MLS will continue to operate on a stand-alone basis with support from Capita to invest in new solutions to meet the ever-changing needs of schools.

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.

Ipes was founded in Guernsey in 1998 and today employs 130 staff, administering in excess of $50 billion of assets from four European offices in Guernsey, Jersey, London and Luxembourg. Ipes has over 90 clients and administers 230 funds. Ipes provides a wide range of fund administration & outsourcing services to the closed ended asset class with a particular specialism in private equity. Ipes also supports clients with compliance, banking and the administration of carried interest, co-investment schemes as well as listed funds. Kinetic Partners was selected by Silverfleet, a long standing client, to carry out regulatory and compliance due diligence on Ipes across multiple jurisdictions, including Guernsey, Jersey and the UK. An experienced global team of ex-regulators and industry specialists, led by Monique Melis and Claire Monique Melis Simm, provided an in-depth assessment of the firm’s compliance infrastructure, operations and controls. An assessment was also given of the firm’s understanding and preparedness for upcoming regulatory changes, including AIFMD and FATCA.

SUPPORT SERVICES

With stricter regulation and increasingly aggressive regulatory regimes becoming more commonplace, regulatory and compliance due diligence is critical. This is particularly true when transacting in regulated entities in the financial services sector. Not only does this type of due diligence highlight potential regulatory red flags and associated costs, it also gives another view on the firm’s Senior Management and organisation-wide control environment culture. This is communicated as a clear risk to regulated firms from many global regulators, and also a key component of a strategy to grow any business. In the area of compliance risk, prevention is always cheaper than cure, said Ms Melis. www.kinetic-partners.com Monique.Melis@kinetic-partners.com claire.simm@kinetic-partners.com

SILVERFLEET CAPITAL BACKS £50 MILLION BUYOUT OF PRIVATE EQUITY FUND ADMINISTRATION BUSINESS - IPES Regulatory Adviser

Established in 1982 MLS has a history of developing new and innovative products centred on engaging students, parents and teachers to improve reading and literacy. Since investment by ISIS, MLS has successfully executed an impressive growth strategy which has seen the company take market share, launch innovative new products and start building a global footprint. Since 2006 turnover has almost doubled, with the company values, culture and dedication to providing best in class systems and services being maintained throughout. The exit yields a multiple of 2.8x and an IRR of 20% to ISIS clients the Baronsmead VCTs. Bevan Duncan, Investment Director, ISIS Equity Partners, said: “MLS has been a successful investment for ISIS and we have thoroughly enjoyed working alongside Andy and his team. Over the past six years, the business has maintained its relentless focus on enhancing its range of products to ensure they continue to be at the forefront of the library automation market. Profits have built strongly at MLS and future growth prospects look promising. Capita offers a good home for the business and we are confident they will ably support the next part of the MLS journey.” Adam Pang, Director, International DataSite commented: “This deal came to us through Gateley, a leading U.K. law firm who I have worked with successfully on many occasions. We were able to produce closure media within two hours and met the client’s tight deadline.”

MICRO LIBRARIAN SYSTEMS

ACQUIREDFinance BY CAPITA PLC DRV Corporate

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

Virtual Data Room Provider

Legal Adviser to the Purchaser

Financial and Tax Due Diligence Provider

Legal Adviser to the Equity Provider

Financial Adviser to the Equity Provider

Financial Due Diligence Provider Legal Adviser to the Equity Provider - Legal Adviser to the Vendor

Legal Adviser to the Vendor Vendor Due Diligence Provider

Legal Adviser to the Purchaser

Financial Due Diligence Provider

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

96 / May 2013

ACQUISITION INTERNATIONAL

DEAL DIARY: TMT

ALEDIA

ATIA

AUPEO

l Aledia, a developer of LEDs based on disruptive microwire GaN-on-Silicon technology, has made its first LEDs on 8-inch (200mm) silicon wafers. The cost of Aledia’s LED 3D chips based on microwires is expected to be four times less than traditional planar (2D) LEDs. Additionally, Aledia has announced its first-round financing totalling €10 million (approximately $13M) with leading US and European investors, which was closed in 2012.

l MeetingZone, the global independent audio and web conferencing and collaboration service provider, has acquired Atia Communications, a leading provider of Unified Communications (UC) services and one of the first Microsoft Lync accredited specialists.

l Panasonic Corporation of North America and its division company Panasonic Automotive Systems Company of America today announced the acquisition of Aupeo GmbH, a leading content and audio streaming service and technology platform provider, based in Berlin, Germany. Aupeo has global reach providing consumers with a unique content experience, and its acquisition will further enhance the leading-edge technology and customer relationship tools Panasonic is able to offer its automotive customers.

Investors in Aledia’s first-round financing included Sofinnova Partners, a leading European venture capital fund and an active investor in energy; New-York based Braemar Energy Ventures, a leading US energy technology investor with various investments in the LED and illumination area; Demeter Partners, the largest France-based cleantech investor; and CEA Investissement, the venture capital arm of CEA, France’s Commissariat à l’Energie Atomique et aux Energies Alternatives. Leading the team at Marks & Clerk France were Christian Nguyen-Van-Yen and Sophie Esselin (Co-Managing Partners). Marks & Clerk France worked with the investors (Sofinnova, Demeter and Braemer) and the founders to “clear the path” through third party patents, commented Mr Nguyen-Van-Yen. Doing so, we have demonstrated that the technology was innovative enough not to depend upon them. The question around Intellectual Property is key for any startup with a strong technology differentiation, in particular in a sector such as LED lighting, where universities and big companies have filed many patents. www.marks-clerk.com/fr/en/home/

ALEDIA RAISES €10 MILLION IN FIRST-ROUND FUNDING

The acquisition enables MeetingZone to build on its UC portfolio of products and services to address the rapidly growing market with Microsoft Lync solutions in addition to its current capability to deliver UC via Cisco’s WebEx range of services. “This makes perfect sense for all parties concerned. MeetingZone is currently providing UC solutions adding our high quality service wrap to the Cisco WebEx suite of products for a wide range of customers for whom an enterprise solution is the best approach,” commented Gandy. “Our acquisition of Atia complements this by broadening our UC offering enabling us to provide Microsoft solutions such as Lync for those customers that wish to embrace UC by building on their Microsoft platform.” Initially Atia will retain its own identity and brand, but both MeetingZone and Atia will be actively promoting each other’s services. MeetingZone’s shareholders include senior management and GMT Communications Partners, an independent TMT focused private equity group who have actively invested in the European marketplace for the past 20 years. Matt Martin, head of the Corporate Team at Manches LLP, assisted by Tom Phillips and Sarah Havers acted for the shareholders of Atia Solutions Limited on its sale to Meetingzone Limited. The telecoms reseller was sold for £4.2 million in a mix of cash, earn out deferred consideration, loan notes and shares in the purchaser group of telecoms companies. The deal was backed by GMT, the telecoms and media finance house and Clydesdale.

“Aupeo was founded with a clear vision to deliver online and seamless content services to internet-connected devices,” said Holger G. Weiss, CEO of Aupeo. “At that point, we saw the car as our most important focus. It is exciting to become a part of the Panasonic family as our industry continues to grow rapidly and mature. Aupeo and Panasonic remain deeply committed to providing current and potential customers in all industries with leading global music and audio streaming services and technologies.” Aupeo is licensed to operate streaming services in more than 40 countries, offering consumers a rich personalized music experience. Aupeo also offers consumers more than 6,000 channels of terrestrial radio, podcast streaming and other services and will continue to rapidly deploy new products to meet the demands of end-users.

Robert Manger

PwC Legal represented Panasonic Corporation of North America (PNA) as purchaser. The relationship resulted from a referral by PwC USA to the Japanese Business Group led by Nikolaus Thoens. The transaction was led by Robert Manger (Partner PwC Legal) and Patrick Nordhues (Senior Manager PwC Legal) for corporate/M&A advice and Nikolaus Thoens (Partner PwC Tax) for tax advice. Together with colleagues from PwC Tax and Accounting, PwC Legal offered seamless advice for all transactional questions.

PwC Legal is one of Germany’s leading law firms with over 180 lawyers and Patrick Nordhues part of PwC Legal’s global network covering 75 countries. robert.manger@de.pwc.com www.pwclegal.de/en/people/manger_robert patrick.nordhues@de.pwc.com www.pwclegal.de/en/people/nordhues_patrick www.pwclegal.de

MEETINGZONE EXPANDS UC OFFERING WITH ACQUISITION OF MICROSOFT UC SPECIALIST ATIA

PANASONIC AUTOMOTIVE ACQUIRES BERLIN-BASED AUDIO STREAMING STARTUP AUPEO

Legal Adviser to the Vendors

Legal Adviser to the Purchaser - Tax Adviser - Financial Due Diligence Provider - IP Due Diligence Provider

IP Due Diligence Provider

Legal Adviser to the Purchaser/Equity Provider

Legal Adviser to the Purchaser

Financial Adviser to the Vendor

Financial Due Diligence Provider Legal Adviser to the Vendor

Legal Adviser to the Equity Provider

Tax Adviser

ACQUISITION INTERNATIONAL

Virtual Data Room Provider

May 2013 /

TMT

Aledia solves the important cost issue in the very large and growing LED market. The continued integration of LEDs into new applications, such as general lighting, depends on LEDs becoming available at substantially lower prices than today. Aledia’s microwire technology enables the steep cost reduction that is vital for the further transition to LED. The Aledia LED technology, made on large-size silicon wafers and with very low materials cost, represents a cost-disruptive solution to this problem. Furthermore the new LED technology is compatible with silicon CMOS technology and will be manufactured directly in existing high-volume silicon foundries.

“This is MeetingZone’s third acquisition in eighteen months and demonstrates our commitment, following our own acquisition by GMT Communications Partners, to become a major European UC provider,” explained Steve Gandy, MeetingZone’s CEO.

DEAL DIARY: TMT

COLLECTIVE BIAS

GENTICEL

l Collective Bias®, the leader in social shopper media, has completed a Series A investment round led by Updata Partners for $10.5 million.

l Genticel, a biopharmaceutical company developing innovative vaccines for patients infected with human papillomavirus (HPV), announced today that it has raised EUR 18.2 million (USD 23,7 million) in additional capital.

l NorthEdge Capital, the private equity firm focused on investing in businesses based in the North of England, has backed the growth investment of Apple and creative IT solutions provider Jigsaw24.

Wellington Partners, based in Munich, Germany, led the round which included all current institutional investors i.e. IDInvest Partners, Edmond de Rothschild Investment Partners (EdRIP), InnoBio fund*, IRDI and Amundi Private Equity Funds. Dr. Rainer Strohmenger, General Partner at Wellington Partners, joins the Supervisory Board of Genticel.

Jigsaw Holdings Ltd, whose wholly owned subsidiary Jigsaw Systems Ltd trades as Jigsaw24, offers IT solutions to businesses across the UK and has particular expertise in Apple, Adobe and creative solutions. The company, founded in 1992, has an impressive 21-year track record of year-on-year growth and has capitalised on the growing popularity of Apple products, mobile devices and development of associated apps for the workplace.

The new funds will be used to advance Genticel’s key product candidates, i.e., two therapeutic HPV vaccines.

The deal is the second transaction by NorthEdge following the investment in FPE Global, the high-growth specialist engineering firm, in February.

“The commitment from Wellington Partners, one of the most reputable life science investors in Europe, is further endorsement of Genticel’s therapeutic HPV vaccine development,” said Benedikt Timmerman, founder and CEO of Genticel. “The Wellington life science team members are bringing outstanding clinical development and medical expertise to our shareholder base, both from therapeutic vaccines and from cervical cancer screening. They have immediately understood the unique properties of our lead product ProCervix. This investment will allow us to take ProCervix through a multi-centre multinational phase II program. It will further strengthen our database supporting the efficacy and safety of this highly novel, curative treatment for high-risk HPV-infections.”

NorthEdge, which is based in Manchester and Leeds, has acquired a majority stake in Jigsaw24 and the investment will accelerate growth plans both organically and through acquisitions. The business has a loyal customer base in the UK’s creative and education markets and has moved into other sectors, including commercial and public sector.

The company concluded 2012 with its third consecutive year of triple-digit growth, along with validation from major Fortune 500 companies. This funding round represents the opportunity to accelerate key business initiatives including expansion to international markets. “We believe that social shopper marketing is the evolution of shopper media, and supplants tired traditional media like FSI’s, retail circulars and digital display advertising,” said John Andrews, co-founder and CEO of Collective Bias. “This investment round provides Collective Bias with runway to extend our four year leadership role in this new media category. We will employ these dollars to robustly enhance our Social Fabric® content management platform, enter new markets and grow our team.” With Technorati’s 2013 Digital Influence Report indicating that “consumers are turning to blogs when looking to make a purchase,” Collective Bias continues to grow on the insight of Andrews and co-founder Amy Callahan that advertisers could create greater engagement with their shoppers through the channels in which they engage today – be it Facebook, Twitter, Pinterest or a simple, pre-shop search. Collective Bias operates Social Fabric®, a proprietary community of over 1,400 shopping-focused influencers, blending members’ shopping experience and product usage through engaging stories that are published online and shared with like-minded friends and followers. With an aggregate multichannel reach of more than 50 million, the Social Fabric community represents a true extension of the Collective Bias team, providing continuous, valuable feedback that has redefined the relationship between brands, retail clients and consumers. The financing process was facilitated by Gridley & Company, LLC, a New York-based boutique investment bank that provides financial advisory services to companies in the digital and information services industries.

COLLECTIVE BIAS RAISES $10.5M SERIES A TO PUSH ITS SHOPPING BLOGGER-POWERED

DRV Corporate SOCIAL MARKETINGFinance MODEL INTERNATIONALLY TMT

Technology Due Diligence Provider

Casalonga & Associés acted as the IP advisor of Wellington Partners. Their team consisted of Gérard Dossmann, Partner and Murielle Robert-Le Meur PhD, French and European IP attorneys. Gérard Dossmann said: Our task was to give our opinion on the freedom to operate the HPV vaccine and its possible developments, The main challenge was the complexity of the matter, the number of documents examined within a rather short time frame, which was possible due to an efficient in-house team.

GENTICEL INKS OVER $20M LED BY WELLINGTON

JIGSAW24

Jigsaw24 will use the funding for significant expansion in these growing sectors and in its application development and managed services offerings focused around the Apple ecosystem. The deal was led by NorthEdge partner Ray Stenton. NorthEdge’s managing partner Grant Berry and investment manager Tom Rowley have joined the Jigsaw24 board as non-executive directors. Debt facilities for the deal were provided by Lloyds, while a team from Deloitte’s Manchester office, led by Oliver Tebbutt and Iain Marlow, provided corporate finance advice to NorthEdge on the transaction. Transcend Corporate advised management and Cooper Parry advised the vendor. Deloitte (commercial) and PwC (financial) provided due diligence to NorthEdge and Management. Legal advice was provided by Gateley (NorthEdge), Heatons (Management) and Browne Jacobson (vendor).

NORTHEDGE INVESTS IN LEADING SPECIALIST APPLE AND CREATIVE IT SOLUTIONS PROVIDER JIGSAW24 Legal Adviser to the Purchaser

Advisors to Wellington Partners

Legal Adviser to the Vendor Legal Adviser to the Equity Provider Legal Adviser to the Vendor

Financial Due Diligence Provider

Legal Adviser to the Vendor

Legal Adviser to the Vendor Background Investigation Legal Adviser to the Vendor

98 / May 2013

ACQUISITION INTERNATIONAL

DEAL DIARY: TMT

LILIEN

l The Zühlke Group, an independent service provider for product and software engineering, management consulting and start-up financing, has invested in Leman Micro Devices SA, a Swissbased medical technology firm.

l Sysorex Global Holdings Corp., a leading information technology solutions and services company, has acquired Lilien LLC, an enterprise IT infrastructure solution provider with over $40 million in annual revenue, through a combination of stock and cash from debt financing.

Leman Micro Devices is a start-up that will provide a module associated apps and services to extend the capabilities of future smartphones and other mobile devices by enabling them to accurately measure all five “Vital Signs” (remote temperature, pulse, respiration rate, blood pressure and blood oxygen). Due to the patented measurement technique, this module is small enough to include in smartphones without increasing their dimensions or reducing screen size. In addition, its simplicity enables a volume manufactured, tested and calibrated module cost of less than $2. Zühlke is an independent service provider for product and software engineering, management consulting and start-up financing. Zühlke provides added value as a result of the experience gained through more than 8,000 successful international projects, as well as continued investment in business and technology knowledge and understanding. Founded in 1968, the Zühlke Group today has local teams in Austria, Germany, Switzerland and the United Kingdom. In 2012, the Zühlke Group grew its revenues by 20% to a record €82m. The Zühlke Group also grew the number of services staff at all of its eight locations and at the end of 2012 employed more than 550 people, a growth of 10% year on year. In the United Kingdom, Zuhlke Engineering Ltd revenues grew 50% whilst the number of employees increased by 30%.

Acquiring Lilien expands Sysorex’s depth of enterprise service offerings, including Big Data services and advanced analytics, while providing premier partnership status with leading vendors in IT infrastructure. Lilien provides the people, processes and technology to develop and implement infrastructure for mission-critical enterprises. They provide comprehensive solutions that enable customers to solve the most complex and important IT challenges and objectives while driving the greatest business value. “The acquisition of Lilien greatly increases our service and product offerings,” said Nadir Ali, President of Sysorex Global Holdings Corp. “Lilien is an award winning and long established company that brings our organization multiple benefits including highly qualified and dedicated staff, deep technical expertise, premier technology certifications, and key manufacturer partnerships. We look forward to incorporating their leading-edge solutions, including Big Data and analytics, onto our extensive Government contracts. Sysorex plans to continue to expand through strategic acquisitions and organic growth to fulfill our plan to become a leading provider of IT services and solutions to government agencies and businesses globally. Lilien is the first acquisition and offers a tremendous platform and team to build on.”

Chuck Doyle

Business Capital was engaged by Sysorex (SYRX) to secure capital for a Leveraged Buyout of Lilien, LLC. Chuck Doyle, Managing Director, quickly developed an understanding of the complexity of the client’s situation and worked with a carefully selected funding source to structure and package a solution that was a combination of stock and cash from debt financing to complete the acquisition.

Acquisition Financing is not “one size fits all” and often involves layers of capital. Business Capital’s thorough evaluation of both companies and ability to uncover value beyond what was reported in the financial statements was instrumental in successfully securing smart capital for the Leveraged Buyout, said Mr Doyle. cdoyle@bizcap.com www.bizcap.com

ZÜHLKE HAS INVESTED

IN LEMAN Finance MICRO DEVICES DRV Corporate

SYSOREX COMPLETES ACQUISITION OF LILIEN

NEONET l Hay Tor Capital LLP and KAS BANK N.V’s acquisition of a majority shareholding in Neonet from Nordic Capital has closed following approval from the Swedish Financial Supervisory Authority. Neonet’s mission is to deliver a truly transparent and independent execution service to the trading community, with an optimized balance of quality and cost. The execution service includes advanced smart order routing, trading algorithms, a comprehensive execution management system and a trading and customer service desk operated by qualified execution specialists. Neonet does not engage in proprietary trading or any other financial activity that could result in a potential conflict of interest. Neonet serves clients in over 20 countries. “We have been extremely impressed by the Neonet team’s relentless focus on excellence and customer service and see major potential to broaden the market presence of the business. We believe that the new regulations and structural changes in the financial markets are driving increased demand for the services that a dynamic and focused firm like Neonet provides to its customer base,” said John Ashdown, Managing Partner at Hay Tor Capital LLP. At a general meeting held on February 8, 2013, the new owners elected the following Board of Directors: Peter Melbi, Chairman; Stellan Abrahamsson; John Ashdown; Alasdair Haynes; Neil Scarth; and Mark van Weezenbeek. “The addition of these new Board members will further diversify the talents and wide-ranging experience that our members already bring to Neonet,” says Peter Melbi, Chairman of the Board, and continues. “Their combined global perspective, depth of experience and industry knowledge will be a great asset as we continue to develop Neonet’s high-quality offering and execution services.” Merlin Piscitelli, Director, International DataSite, who was involved in the transaction, stated that the due diligence took slightly longer on this deal, due to difficult market conditions. All in all though, this was quite a straightforward deal and all parties involved were very happy with the outcome.

HAY TOR CAPITAL AND KAS BANK’S ACQUISITION OF NEONET FINALIZED TMT

LEMAN MICRO DEVICES

Virtual Data Room Provider

Legal Adviser to Leman Micro Devices

Legal Adviser to Hay Tor Capital

Acquisition of Legal Adviser to the Vendor

Adviser

ACQUISITION INTERNATIONAL

Legal Adviser to the Vendor

May 2013 /