Acquisition International June 2012 by AI Global Media

June 2012 /

In this Issue/

DEAL GURU:

SECTOR TALK:

Are you paying too much? Private equity-backed industrials deals

21 SECTOR SPOTLIGHT:

Forming companies & doing business

MANAGING THE TRANSACTION LIFE CYCLE — Acquisition International talks to the Transaction Advisory Services Team at Ernst&Young / 10

www. ACQUISITION-INTL .com

RUBIS ACQUISITION

— of the Turkish M&A navigator / 12

SHIPPING FINANCE 2012

— Acquisition International speaks to Dimitris Gialouris from Marfin Egnatia Bank / 13

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CONTENTS:

June 2012

Editors Comment According to the European Private Equity and Venture Capital Association (EVCA) and Thomson Reuters, ‘Performance Report 2011’, private equity and venture capital performance remained stable during the downturn. The EVCA 2011 Performance Report demonstrated that the net-pooled IRR* of the 1,431 funds included in the study was 8.95%, with a return for buyout funds slightly reduced to 11.4% (12.7% in 2010), while returns for venture funds increased to 1.5% (0.5% in 2010).

CONTENTS — June 2012

Buyout and venture funds in the top quartile remained stable at a net pooled IRR of22.54% (22.81% in 2010). Buyout funds in the top quartile recorded 30.09% (32.2% in2010) whereas venture in the top quartile remained constant at 13.2%. The challenging economic conditions are reflected in negative performance of public market comparators such as Morgan Stanley Euro Equity (MSCI) with -9.72%*** (-3.55% in2010) and HSBC Small Company Equity with -6.20%*** (3.47% in 2010). Vincenzo Morelli, Chairman of the EVCA, commented: “Private equity continues to generate solid returns for investors even during the worst economic downturn in living memory. This stability is core to the asset class’ appeal to pension funds, insurance companies and other investors with long-term liabilities.” “While the overall return from venture capital remains low, it is encouraging to see it is on the rise. With European clusters of innovation now firmly established across the continent, now may well be the time for investors to catch this rising tide.” This month Acquisition International’s explores the globe analysing the deal making environment, asking which region has created the most attractive climate for investment. Enjoy the Issue, Charlotte Abbott, Editor charlotte.abbott@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 - MANAGING THE TRANSACTION LIFE CYCLE: /10

Acquisition International talks to the Transaction Advisory Services Team at Ernst&Young. NEWS: /04

The latest news stories from around the world.

DEAL GURU: /06

Are you paying too much? — How smart companies use FCPA & UK bribery act

ACQUISITION INTERNATIONAL

Forming companies & doing business.

White collar crime report FBL Advogados The trade finance industry 2012 The increasing sig. of Bermuda Hawaii — A domicile for captive Ins. Doing business in Italy

SECTOR TALK: /08 Private EquityBacked Industrials Deals. Powered by Prequin.

Real estate disputes in Hungary The asset based finance industry Banking & investment disputes Marketing the mid-size law firm Doing business in Estonia Doing business around the world Doing business in Australia

ADVISER MAP: /67 Contacts from around the world.

Doing business in Austria Doing business in Cyprus Doing business in Italy Doing business in Switzerland Doing business in Greece Due diligence in Belgium

DEAL DIARY: /56 The latest M&A from around the world.

Publication production by Tabias Ltd.

SECTOR SPOTLIGHT: /43

The Cayman Islands bouncing back Resolving energy disputes Transfer pricing Doing business in Cyprus Strategic due diligence

June 2012 /

/14 /15 /16 /17 /18 /19 /20 /21 /22 /23 /23 /24 /27 /28 /29 /30 /31 /33 /36 /37 /39 /41 /54 /55

NEWS:

from around the world

EQUISTONE PARTNERS EUROPE — takes stake in Fircroft Engineering Services

Equistone Partners Europe (“Equistone”), a leading pan-European private equity firm, has bought a significant stake in Fircroft Engineering Services Ltd (“Fircroft”) in a £140million deal. include future acquisitions in existing or additional sectors, geographies and services. We are looking forward to supporting the management team in executing these exciting plans.” Johnathan Johnson, chief executive of Fircroft since 2005, said: “Fircroft is a global player that provides bespoke services to some of the world’s leading technical industries. We are pleased that Equistone shares our vision for the future and we are delighted to secure the investment and look forward to working with them in the coming years.

Fircroft Engineering Services has demonstrated strong historic growth, becoming a leading international player in specialist engineering recruitment, particularly in the wider energy sector. Steve O’Hare / Director (Manchester Office) Equistone Partners

Fircroft is a leading global provider of recruitment solutions to specialist technical industries, in particular oil and gas, energy and automotive.

transaction, Steve O’Hare will join the Fircroft board as a non-executive director. There will be no other senior management changes.

The company, headquartered in Warrington, UK, has a presence in 25 countries, including offices in Europe, Africa, Australasia and North America. It was founded in 1970 by John Johnson and originally serviced oil and gas companies in the North Sea.

Steve O’Hare, director at the Manchester office of Equistone Partners Europe, said: “Fircroft Engineering Services has demonstrated strong historic growth, becoming a leading international player in specialist engineering recruitment, particularly in the wider energy sector. The market prospects, combined with Fircroft’s service levels and continued geographic expansion, means there remains huge growth potential for the business.

Fircroft is now one of the world’s leading technical recruitment businesses, servicing clients including BP, Chevron, Shell, Exxon, British Gas and Bentley. Current year turnover is expected to exceed £650million. The transaction was handled by Steve O’Hare, Paul Harper and Andrew Backen from Equistone’s Manchester office. Following completion of the

/ June 2012

“The management team, led by chief executive Johnathan Johnson and chief financial officer Michael Cohen, have done an excellent job in developing the business to date and positioning it for the next stage of growth. The strategy may also

We have expanded the business to support our clients, both in the UK and increasingly in overseas markets over the past five to 10 years. We expect this trend to continue and we also plan to open new offices in the coming year to support our organic growth strategy and move into complementary services.

A T

G Fircroft received financial advice on the deal from the Manchester office of international investment bank Altium. Addleshaw Goddard provided legal advice and Deloitte provided financial due diligence. Simon Lord, managing director of Altium’s Manchester office, said: “Fircroft has grown into one of the world’s leading providers of technical recruitment services, primarily to the oil and gas industry, by servicing both established and developing geographical markets. We are confident that the investment from Equistone will help the company to fully capitalise on the anticipated further growth in the industry and the other sectors that Fircroft serves.” Equistone received financial advice on the transaction from DC Advisory Partners. DLA Piper provided legal advice. Commercial due diligence was provided by Calash and tax advice by PwC.

ACQUISITION INTERNATIONAL

Fi co

Fi pr

•

NEWS:

from around the world

SIMMONS & SIMMONS

— Advises Mandarin Capital Partners On Its Joint Venture With Dagong In Italy

International law firm Simmons & Simmons is advising Sino-Italian private equity group, Mandarin Capital Partners (Mandarin) in Milan and Beijing, on its joint venture with Chinese rating agency Dagong. This joint venture between Dagong (60%) and Mandarin (40%) has a total investment valued at approximately €10 million. Following the approval of the European Securities and Markets Authority, Dagong Europe will be operating in Milan, on the main European markets, joining US rating agencies Moody’s, S&P and Fitch.

Simmons & Simmons advised on the documentation, negotiation and finalisation of the agreements between the parties involved the joint venture.

The firm also advised on investment agreement, shareholders’ agreement-voting pacts, shareholder loans and other agreements concerning the corporate governance of Dagong Europe. All documents were written both in English and Chinese. The Simmons & Simmons Sino-Italian team was led by Corporate partner Marco Franzini. The team included Milan associates Moira Gamba and Giorgia Lugli, partner Davis Wang and associates Melody Yang and Geoffrey Mullen in Beijing. Marco Franzini, Corporate partner in Simmons & Simmons’ Milan office, commented: “One of the most interesting aspects of this deal was the need to combine ‘industrial’ and ‘financial’ visions of two international players like Mandarin and Dagong into a unique start-up.

It was significant not only because of the large amount of money invested, but because of the entry of new actors into a developed market such as the European credit rating’s market.” Davis Wang, Corporate partner in Simmons & Simmons’ Beijing office, said: “This deal demonstrates our Sino-Italian work in collaboration with the Milan team. Together we assist Chinese businesses looking to invest and expand into Europe and we are seeing a growing trend in these kind of cross-border outbound M&A deals.” The parties reached an agreement after six months of negotiations. The Simmons & Simmons team based in Milan and Beijing focused on the intense agreement final phases in March and April 2012.

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DEAL GURU:

Are you paying too much?

ARE YOU PAYING TOO MUCH? — How smart companies use FCPA & UK bribery act due dilligence to ensure their deals are valued correctly Oliver J. Armas and Pamela J. Marple. Foreign companies are increasingly a target of FCPA enforcement actions, as the United States attempts to pressure foreign governments into being more proactive in the anticorruption arena. Under the theory of “correspondent bank account” jurisdiction, the DOJ need only establish a tenuous connection to the United States in order to bring a prosecution under the FCPA. It is enough for U.S. dollar funds to have cleared overnight in the U.S. branch of a bank with no other connection to the United States. Eight of the 10 largest FCPA actions of all time were against foreign corporations and in 2010 the six largest actions, accounting for 80% of the fines, were against foreign companies.

There is a global focus on corruption that shows no signs of abating and in fact, is intensifying. Beginning with the adoption of the Sarbanes-Oxley Act in 2002, we have seen an increase in regulation designed to put the brakes on clever accounting and even cleverer “innovative” banking products. Society - and in response government-wants its pound of flesh for the practices of the large corporates like Enron and large financial institutions like Lehman Brothers. Punishment is exacted in the form of increasingly large penalties, occasional jail sentences and ubiquitous demands for ever stricter corporate governance and compliance programs. The most common and effective tools for exacting punishment are the U.S. Foreign Corrupt Practices Act (“FCPA”) and its souped-up sidekick — the UK Bribery Act. The Foreign Corrupt Practices Act In 1977, in the wake of the Watergate scandal, the U.S. Congress enacted the FCPA to halt the bribery and corruption of foreign officials. In addition, it was hoped that the FCPA would lead to more integrity and accountability in business and more efficient and equitable distribution of economic resources. The FCPA created criminal and civil penalties for payments, or the promise of anything of value, by U.S. corporations or U.S. nationals to foreign officials for the purpose of gaining an improper advantage or obtaining or retaining business. The FCPA also applies to foreigners who take part in furthering such bribes while in the United States. The U.S. Department of Justice (“DOJ”) has made prosecuting violations of the FCPA one of its top priorities in recent years. FCPA enforcement is now viewed as a national security issue. The DOJ is focusing its efforts on “industry sweeps” of those sectors it considers to be at high risk of corruption, including energy, mining, banking, insurance, telecommunications, pharmaceuticals, gaming and manufacturing. From 2004 through 2009, the DOJ brought more FCPA prosecutions than in all of the previous 26 years combined since the act was passed. In 2010 alone, the DOJ resolved more than 50 FCPA enforcement actions, with 35 defendants currently awaiting trial on FCPA charges. In November 2011, the DOJ secured a 15-year prison sentence in an FCPA case-the longest ever imposed.

/ June 2012

The UK Bribery Act As of July 1, 2011, companies with any tie to the United Kingdom’s stream of commerce — and not just those with share listings in London — are subject to the tough new UK Bribery Act. Its scope is similar to the FCPA, with three important distinguishing features. First, accepting a bribe from or paying a bribe to any individual is prohibited, no matter where it occurs. For instance, a bribe paid to an employee of a private company is illegal. This is a much broader prohibition than the FCPA, which makes it illegal to offer anything of value only to foreign government officials and employees of international public organizations. Second, a company can be held strictly liable for bribery if the company fails to put in place procedures to prevent corruption. Third, there is no limit on the size of fines, and the potential prison sentences are longer than under the FCPA. Unlike the FCPA, the UK Bribery Act does not have an exception for facilitation payments, such as those used to speed up the process for obtaining a building permit or import license. Impact on Deal Price When you mention the word “compliance” to almost anyone working in capital markets, be they bankers, lawyers or accountants, you almost immediately lose your audience. Compliance is just a cost center, right? Just another hurdle in the way of getting deals done efficiently and cost-effectively, right? Wrong! In the new era of compliance-hungry regulators, who are fighting corruption Clark Kent style, it pays to put these issues at the forefront of every deal. FCPA and UK Bribery Act investigations can have an immediate impact on share price. For example, on March 1, 2011, the Las Vegas Sands Corporation announced that the Securities and Exchange Commission (“SEC”) and the DOJ were investigating its FCPA compliance. By the end of the trading day, its share price had dropped 6.3%, which represented a shrink in market capitalization of $1.67 billion in a single day. Examples of this kind, showing a marked drop in share price and value in response to announcements of alleged corruption, are prevalent among the small-to mid-cap companies. The large-cap companies tend to be hit less hard and to rebound more quickly. Among the possible reasons for this phenomenon are the stronger reputation in the market of many large cap

companies and the less significant impact any ultimate fine will have on the market capitalization of such companies. FCPA fines are steep and are on the increase. In 2010, companies paid in penalties an average of $2.14 per U.S. dollar gained from FCPA violations. This is an 1800% increase from penalties of just $0.11 per dollar in 2007. In 2010, corporate fines and disgorgements for FCPA violations amounted to over $1.7 billion, which exceeded all previous years. And, the six largest actions in 2010 accounted for $1.36 billion of this total. There are also significant “downstream effects” that can far surpass the cost to companies of FCPA fines and drops in share price. These include securities class actions, disbarment from foreign government contracts and restrictions on the ability to import or export goods and services. Corruption has a big impact on the cost and sometimes even the ultimate viability of a deal. The discovery of FCPA and UK Bribery Act violations can unravel potential merger discussions. In 2003, Titan Corporation entered into merger discussions with Lockheed Martin for $1.8 billion. Titan represented in the merger agreement that neither it nor any of its subsidiaries had taken any actions to violate the FCPA. When it was later revealed that Titan had funneled more than $2 million through an agent in Benin toward the election of that country’s president, the merger with Lockheed Martin collapsed. “Successor Liability” Approach to Enforcement Increasingly, the U.S. government has wielded the enforcement powers of the FCPA in a manner that casts the specter of “successor liability” on acquirers for historical violations of acquired companies, even when the acquirer played no role in the pre-acquisition conduct. This approach to successor liability is frequently invoked when the acquirer is seen to have failed to undertake adequate due diligence to inform itself about the violations and allows the prohibited conduct to continue postacquisition after the acquired business has been consolidated with that of the acquirer. For example, in September 1998, Halliburton, through a series of corporate transactions, acquired KBR. It was later revealed that from 1994, prior to its acquisition by Halliburton, and continuing through 2004, KBR and its partners in the TSKJ joint venture had paid bribes to a wide range of government officials in order to obtain contracts worth more than $6 billion to build the Bonny Island liquefied natural gas facility in Nigeria. The SEC subsequently accused KBR of violating the anti-bribery provisions of the FCPA and aiding and abetting Halliburton’s violations and accused Halliburton of conducting insufficient due diligence and failing to design and maintain adequate internal controls when it consolidated KBR’s false financial statements into its own. In enforcing the books and records violations against Halliburton, the SEC used those alleged failures, along with Halliburton’s own lack of post-acquisition vigilance and alleged misconduct, to force a sizable penalty.

ACQUISITION INTERNATIONAL

DEAL GURU:

Are you paying too much?

Halliburton and KBR agreed to pay $177 million in disgorgement to settle the SEC’s charges. KBR also agreed to pay $402 million to settle the DOJ’s parallel criminal charges, $382 million of which was paid by Halliburton under contractual indemnification arrangements with KBR as part of KBR’s spin off as a separate public company in 2006. In addition, as part of the resolution of the SEC investigation, Halliburton agreed to retain an independent consultant to perform a review of its internal controls and record-keeping policies and to adopt any necessary improvements. The idea of successor liability is troubling to many legal practitioners, particularly those practicing in jurisdictions outside of the United States. For instance, in the UK, successor liability is limited to certain torts, such as product liability and environmental breaches, situations involving express or implied assumptions of liability, de facto mergers where the successor is a continuation of the predecessor, or mergers done as a pretext to defraud creditors. In contrast, the U.S. government’s approach to successor liability has become a primary enforcement feature of the FCPA in any type of acquisition, and because the vast majority of cases settle, its legality has not yet been challenged in a court of law. Prophylactic measures To avoid a loss in deal value, an acquirer must conduct careful anticorruption due diligence that is specifically tailored to the company being acquired. First, however, the level of risk should be assessed through a series of key questions. These questions include: 1. Are any employees, owners, or principals current or former government employees or closely affiliated with one? 2. What practices and safeguards are there regarding gifts, entertainment, hospitalities, charitable contributions, sponsorships, donations and other benefits? 3. What is the target’s relationship with intermediaries (distributors, agents, consultants, etc.)? 4. Have there been any past investigations/violations? 5. Does the target operate in a high-risk industry/high-risk country? 6. What is the target’s association with foreign governments? Does it provide them with goods and services? Is it government owned or controlled? Does it rely on government-issued licenses or permits? 7. Does the target have clear policies and procedures in place to detect, report and manage FCPA and UK Bribery Act violations? 8. Is there any suspicion of FCPA or UK Bribery Act violations in the target? 9. What does the Transparency International Corruption Perception Index reveal about the target?

ACQUISITION INTERNATIONAL

Second, the target’s systems and controls should be evaluated in the following areas: 1. Use of agents and outside consultants 2. Expense claims, payments and petty cash disbursements 3. Contracting/contact points with government bodies 4. Fraud response procedures/mechanisms 5. Entertainment and gift practices 6. Record-keeping practices and accuracy of books and records 7. Relationships with state-owned enterprises Coordination with accountants and auditors in conducting pre-merger anticorruption due diligence is vital. Cash is the most prevalent form of bribery worldwide, particularly disbursements to sales people, and so these professionals have a critical role to play in their review of books and records. They should report back regularly to the legal experts, who can make an informed decision on the likelihood of FCPA violations based on what is unearthed by the accountants. In the United States, it is sometimes possible to extend attorneyclient privilege to an accountant’s findings, if the accountant is acting as an agent for the attorney or is retained directly by the attorney to provide services to the attorney’s client. This would, of course, be the best possible outcome. In order to reduce the risk of potential FCPA and UK Bribery Act liability, every acquirer should consider (1) encouraging the target to undertake a compliance investigation prior to any potential investment; (2) insisting on the right to audit the books and records of the target; (3) insisting on anticorruption and compliance representations and warranties; and (4) requiring execution of FCPA and UK Bribery Act compliance certifications. If the due diligence reveals FCPA or UK Bribery Act issues, a buyer has several options available, including (1) negotiating specific indemnification provisions; (2) self-reporting to the DOJ or SEC; (3) adjusting the deal price or walking away from the transaction; and (4) allocating potential fees and fines in the merger agreement. If there is not time to conduct adequate anticorruption due diligence prior to closing, then the acquirer could consider requesting an advisory opinion from the DOJ. Halliburton did this in connection with its recent proposed acquisition of a British company operating in the oil and gas industry in more than 50 countries, some of which were high risk, to ensure that it would not incur any FCPA liability. The target was accepting closed bids with a very limited amount of due diligence allowed in accordance with London Stock Exchange rules. The DOJ advised Halliburton that the transaction itself would not create any FCPA liability and that it would not be prosecuted for any of the target’s pre-acquisition conduct, provided that it disclosed any questionable conduct discovered during a 180-day postclosing period, and that it completed a detailed post-closing due diligence plan.

If, on the other hand, due diligence is conducted but potential issues do not arise until after the merger, then the acquirer should seek thoughtful and expert legal advice as to whether to make a voluntary disclosure of its findings to the DOJ. In addition, if a company agrees to develop evidence against others and provide it to the DOJ and SEC, as many have done, this can mitigate liability. This so-called “cooperation credit” can be very expensive, because it requires a comprehensive internal investigation and then full remediation. There are also significant “downstream effects” that can far surpass the cost to companies of FCPA fines and drops in share price. Compliance Programs Because of the significant risk corruption poses to the success and cost of a deal, it is prudent for companies to establish a “best practices” compliance program to mitigate potential damage from hidden corruption. The UK Bribery Act contains an affirmative defense that allows a company to avoid strict liability only if it can demonstrate that it had in place “adequate procedures” designed to prevent bribery. Although the FCPA does not contain an analogous provision, the United States considers good compliance programs to be an important mitigating factor. In fact, recent amendments to the U.S. Sentencing Guidelines include “monitoring and auditing to detect criminal conduct” and “evaluating] periodically the effectiveness of the organization’s compliance and ethics program” as essential elements of an effective compliance program. Conclusion There can be no doubt: corruption is expensive, it damages corporate and individual reputations, and it can seriously impair — if not kill — a deal. Smart companies, however, turn those negatives to their advantage. They recognize that by performing meaningful anticorruption due diligence they can protect themselves from overpaying for key acquisitions; avoid costly diminutions of share value; and mitigate the risk of successor liability that surely follows a post-acquisition discovery of corruption. These companies put into practice the sage and oft-quoted advice that “the best defense is a good offense,” and by so doing, position themselves to reap the benefits of their best practices compliance efforts for years to come. (Oliver J. Armas and Pamela J. Marple are partners at Chadbourne & Parke practicing in commercial litigation and government investigations. They are reachable, respectively, at 212-408-5399 or oarmas@chadbourne.com and 202-9745657 or pmarple@chadbourne.com )

June 2012 /

SECTOR TALK:

Private Equity-Backed Industrials Deals

PRIVATE EQUITY-BACKED INDUSTRIALS DEALS â&#x20AC;&#x201D; Powered by The industrials sector has been an attractive space for private equity firms to deploy their capital over the years, with the industry receiving $334.3bn of investment since 2006 (as at 20/06/2012), across a total of 4,600 deals, according to data from Preqin. The sector includes companies operating in construction, distribution, engineering, logistics, manufacturing, shipping and transportation.

NO. AND AGGREGATE VALUE OF PE-BACKED BUYOUT INDUSTRIALS DEALS GLOBALLY:

H1 2006 - H1 2012 YTD (as at 20-Jun-2012) Period

No. of Deals

Aggregate Value of Deals ($bn)

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

431 416 509 460 412 304 212 231 271 347 360 366 281

37.2 51.2 62.0 32.3 27.4 10.3 4.5 8.7 12.7 29.0 27.2 18.0 13.9

YTD (as at 20Jun-2012)

The value of deals taking place in the industrials sector peaked in H1 2007, with $62bn invested, up from $51.2bn in H2 2006. Deal flow reached a peak of 509 deals during the same period, up from 416 deals witnessed in the second half of 2006. The onset of the financial crisis caused a large contraction in the sector over the following two years in terms of both deal volume and aggregate value, reaching a trough in H1 2009 when 212 deals took place, valued at just $4.5bn. Since this time, neither the number of deals nor the aggregate value of deals has recovered to the high seen in the boom period. In terms of aggregate value, a post-Lehman high was witnessed in H2 2010 at $29bn, which is more than a 50% decrease in value from the highest level witnessed prior to the onset of the financial crisis. However, the number of deals taking place each half-year period has shown gradual improvement, highlighting the increasing importance of smaller deals in the industrials sector.

NUMBER OF PE-BACKED BUYOUT INDUSTRIALS DEALS BY REGION:

2006 - 2012 YTD (as at 20-Jun-2012) Region

2006 2007 2008 2009 2010 2011 2012 YTD

North America 440 Europe 334 Asia & ROW 73

502 346 121

330 287 99

270 116 57

328 210 80

387 246 93

155 82 44

The regional breakdown of industrials deals shows that North America has attracted the most investment from fund managers active in the sector. From 2006 to present, North America has consistently accounted for over 50% of the total number of private equitybacked industrials deals each year with the exception of 2008, when the proportion of buyout deals in North America fell to 46%. Europe attracts the second largest proportion of deals in the industrials sector, with 29% of deals taking place in this region so far this year. This is followed by Asia and Rest of World (ROW), which attracted 16% of the deals that took place in this period. In terms of aggregate capital, Asia & ROW has seen the least amount of investment this year, with deals totalling $1.6bn taking place in the region. North America accounted for $7.8bn worth of the deals taking place so far in 2012, with Europe accounting for $4.6bn.

BREAKDOWN OF NUMBER OF PE-BACKED BUYOUT INDUSTRIALS DEALS BY REGION:

2006 - 2012 YTD (as at 20-Jun-2012) Region

2006 2007 2008 2009 2010 2011 2012 YTD

North America 52% 52% 46% 61% 53% 53% 55% Europe 39% 36% 40% 26% 34% 34% 29% Asia & ROW 9% 12% 14% 13% 13% 13% 16% Source: Preqin

/ June 2012

ACQUISITION INTERNATIONAL

SECTOR TALK:

Private Equity-Backed Industrials Deals

AGGREGATE VALUE ($BN) OF PE-BACKED BUYOUT INDUSTRIALS DEALS BY REGION:

2006 - 2012 (as at 20-Jun-2012) Region

2006

2007

2008

2009

2010

2011

2012 YTD

North America 47.5 Europe 35.8 Asia & ROW 5.1

52.8 34.7 6.7

11.9 20.2 5.7

6.6 4.7 1.8

20.8 15.8 5.1

16.1 22.2 6.9

7.8 4.6 1.6

Source: Preqin

Of the 1,003 deals made in the industrials sector from 2011 to 2012 YTD, 55% are leveraged buyout (LBO) transactions, contributing 73% of aggregate value. The industry appears to have seen some consolidation over this period, with 304 addon transactions completed. This represents 30% of the total number of deals that took place in this period, but only 11% of aggregate value. In the same time period, growth capital and public to private deals have contributed 11% and 4% respectively in terms of deal volume.

BREAKDOWN OF PE-BACKED INDUSTRIALS DEALS BY TYPE:

2011 - 2012 YTD (as at 20-Jun-2012) Type

No. Aggregate Deal of Deals Value

LBO Add-on Growth Capital Public to Private

55% 30% 11% 4%

73% 11% 7% 9%

Source: Preqin

During the period 2011-2012 YTD, there have been 12 large-cap ($1bn+) deals announced across the industrials sector, with the two highest profile deals occurring in Europe. In May 2011, it was announced that AXA Private Equity, Clayton Dubilier & Rice and Caisse de depot et placement du Quebec would acquire SPIE for €2.1bn from PAI Partners. In February 2012, the secondary buyout of Ahsell was announced with CVC Partners acquiring the company from Cinven and Goldman Sachs Merchant Banking Division for €1.8bn.

THE 10 LARGEST PE-BACKED INDUSTRIALS DEALS:

2011 - 2012 YTD (as at 20-Jun-2012) Firm

Website

Investment Type

Deal Gate

Deal Size

Investors

Bought From/ Exiting Company

Primary Industry

Location

SPIE

www.spie.com

Buyout

May-11 2,100.0 EUR AXA Private Equity, Caisse

PAI Partners

Engineering

France

Ahlsell

www.ahlsell.com

Buyout

Feb-12 1,800.0 EUR CVC Capital Partners

Distribution

Sweden

Husky Injection Molding Systems RAC Delachaux SA MaxamCorp Holding SL

www.husky.ca

Buyout

May-11 2,100.0

Industrial

Canada

www.rac.co.uk www.delachaux.fr www.maxamcorp.com

Buyout Public To Private Buyout

Jun-11 1,000.0 GBP Carlyle Group May-11 1,080.0 EUR CVC Capital Partners Sep-11 900.0 EUR Advent International

Industrial Manufacturing Industrial

UK France Spain

Capital Safety Group

www.capitalsafety.com

Buyout

Nov-11 1,120.0

Kohlberg Kravis Roberts

Industrial

Interline Brands

www.interlinebrands.com

Public To Private

May-12 1,100.0

Goldman Sachs Merchant Banking Division, P2 Capital Partners

Industrial

GE SeaCo

www.geseaco.com

Buyout

Aug-11 1,048.7

Bravia Capital, HNA Group General Electric

Shipping

Singapore

Bravida

www.bravida.se

Buyout

May-12 1,000.0

Bain Capital

Engineering

Sweden

de depot et placement du Quebec, Clayton Dubilier & Rice

USD

Cinven, Goldman Sachs Merchant Banking Division Berkshire Partners, OMERS Onex Corporation Private Equity

USD

USD USD

Aviva plc Portobello Capital, Vista Capital Arle Capital Partners, Electra Partners -

Triton

Source: Preqin

ACQUISITION INTERNATIONAL

June 2012 /

ON THE COVER:

Managing the transaction life cycle

MANAGING

— the transaction life cycle

Müge Öner, a member of the Transaction Advisory Services Team at Ernst&Young, Turkey, speaks to Acquisition International about the company, her work and key issues in a recent transaction with Burgan Bank. stake in Eurobank Tekfen, which is the Turkish arm of Eurobank EFG, in a deal which will help shore up the struggling Greek lender’s capital base. The sale comes as Greek banks, hit by the country’s sovereign debt crisis, look to boost their capital base to cope with a protracted recession and a rise in nonperforming loans. Öner embellishes on the relationship Ernst&Young have with Burgan Bank.

that

“We are global auditors of the Bank and have an ongoing long standing relationship with them. When they raised an interest on Eurobank Tekfen transaction in Turkey, we reacted quickly in collaboration with our Kuwait office and over 48 hours we were able to mobilize the best team in terms of industry experience and client focus. Based on our vast experience in the financial services industry in transactions and our seamless service delivery to Burgan Bank in different parts of the world, we could convince Burgan Bank to engage us as their advisors.” Öner further explains how the right team helped Ernst&Young secure this transaction.

Müge Öner

Müge Öner, a member of the Transaction Advisory Services Team at Ernst&Young, Turkey, speaks to Acquisition International about the company, her work and key issues in a recent transaction with Burgan Bank. As a member of Ernst & Young Global, Ernst & Young Turkey operates with more than 30 partners and 850 staff over four offices located in Istanbul, Ankara, Bursa and Izmir. Ernst & Young Turkey is very well integrated with the global organization and enjoys easy access to EMEIA (Europe, Middle East, India and Africa) centers of excellence, as needed, which enables Ernst&Young Turkey to deliver industry specific and value-added services. For the last seven years Müge Öner has been working with Ernst&Young as a Transactions Advisory Services partner, leading the financial services industry in Turkey. Prior to joining Ersnt&Young, Öner worked in Andersen and in Finansbank across Europe; in Turkey, Belgium and the Netherlands. Öner explains a little more about the company and the work she undertakes.

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“Ernst & Young Turkey Transaction Advisory Services provides all kinds of services during the transaction life cycle, in order to meet clients’ needs from a “one-stop shop.” Our team, supporting clients with their different perspectives and experiences, consists of 80 transaction professionals, offering transaction support, transaction tax, valuation & business modeling, project finance and lead advisory services. Ernst&Young Turkey Transaction Advisory Services has wide connections with 9,200 Transaction Advisory Services professionals in the member firms of Ernst & Young Global in 97 countries and has its own local teams focused on key industries and private equity. We are the only TAS provider in Turkey with a dedicated “financial services industry” team.” Recently, Öner was the Partner in charge of the due diligence services provided to Burgan Bank in relation with their acquisition of Eurobank Tekfen, a medium sized private bank in Turkey. Burgan Bank entered an agreement to acquire a 99.26 percent

Our clients around the world expect to be served by professionals who combine technical capabilities with a thorough understanding of their industry operating processes, growth drivers, regulatory considerations, and market dynamics. “Our increased investment in Industry Sectors strengthens our ability to deploy client service teams around the globe with the specific knowledge and approaches to help our clients address industry issues. In line with this, in this specific transaction, our team comprised of transaction support professionals specialized in banking industry with vast amount of experience in similar transactions, auditors who are working for top ranking banks in Turkey, client relationship team who has worked with Burgan Bank in previous transactions, local tax professionals and IT professionals.

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ON THE COVER:

Managing the transaction life cycle

Istanbul / Turkey

With this “right team” structure we were able to provide full fledge services to Burgan Bank during the process in all the areas they might need our advice. Additionally, our good and long lasting relationship with the legal advisors and the lead advisor led to an effective and well coordinated process in which, information was shared smoothly for all relevant parties decreasing the risk of any missed points.” We have performed indicative analysis to quantify the potential risk to the extent possible with the available information given the very strict deadlines. Our experience with potential risky areas and counterparties was a value driver for the Bank. “We believe that performing the due diligence in a “to the point and well structured” way is only a part of a successful execution. Our real value for our client lies in our presentation of the findings and communication of our advice.”

For us, due diligence is not only about presenting the historical evolution of the target in terms of accounting perspective, together with that, we help our clients with real and valuable advice in operational areas and assist them throughout the whole process. Ernst& Young Transaction Advisory Services employs 9,200 transaction professionals worldwide

and has experience of thousands of different types of transactions across all markets and industries. The following tables illustrate Ernst & Young Global’s performance in due diligence services in terms of number of deals and transaction value;

Company: Ernst & Young Name: Müge Öner Email: muge.oner@tr.ey.com Web: www.ey.com Address: Buyukdere Cad. Beytem Plaza No.22, 34381 , Sisli Istanbul, Turkey Telephone: +90 212 368 5758

Source: mergermarket, based on “announced” deals, period 01.01.2011 to 31.12.2011. own search 06.01.2012

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June 2012 /

ON THE COVER:

Rubis acquisition of the Turkish M&A navigator

RUBIS ACQUISITION — of the Turkish M&A navigator Recently Rubis SCA, the French company engaged in petroleum storage and distribution, acquired 50% of the Turkish oil storage facilities operator Delta Petrol Urunleri Ticaret AS. The news agency was quoting Sami Habbab, chief executive of Delta Petrol, who said that Rubis was investing USD100m (EUR76m). Some of that money went into paying for the shares but part of it will go into other investments, Habbab informed Reuters. Delta Petrol’s facilities are located in the Mediterranean port of Ceyhan, which serves as the terminus for the Kirkuk-Ceyhan and Baku-TblisiCeyhan pipelines. The former transports oil from northern Iraq and the latter brings in crude from Azerbaijan, Reuters added in its article.

“Hergüner acted as Turkish counsel to the purchaser Rubis on this transaction together with its French counsel Heenan Blaikie, with a core team composed of Kemal Mamak (Partner), Esra Okçuoğlu and Zahide Altunbaş (Associates) from the Hergüner team and Pascale Gallien (Partner), Vincent Maufront and Leslie Marinho (Associates) from the Heenan Blaikie team. We enjoyed a very fruitful cooperation with Heenan Blaikie, whereby we acted as one single team and were, thus, able to successfully close the Delta Petrol deal to the benefit of our client.”

Acquisition International speaks to Esra Okçuoğlu, an associate at Hergüner Bilgen Ozeke Attorney Partnership (“Hergüner”) about their role on the deal.

HOW WERE YOU ABLE TO SECURE THE ROLE?

“Founded in 1989, Hergüner is a full service law firm in Turkey with major international clientele, and has working premises in Istanbul, Ankara and İzmir. We draw upon the individual domestic and international experience of our professional staff, practicing in three main practice groups: (1) Finance & Projects, (2) Corporate, and (3) Dispute Resolution. Our team is currently comprised of approximately 90 fee earners, most of whom have completed their education abroad, and with approximately 45 support staff, making it one of the largest law firms in Turkey. Our members have diverse professional backgrounds, including lawyers with international practice experience, as well as experts from various regulatory authorities, such as the Competition Board.” WHICH PARTY WERE YOU REPRESENTING ON THE DELTA PETROL DEAL AND WHAT RELATIONSHIP DO YOU HAVE WITH THE COMPANY? “On the Delta Petrol deal, we represented Rubis Terminal S.A., the French company engaged in petroleum storage and distribution (“Rubis”). Within the framework of the Delta Petrol deal Rubis has indirectly acquired 50% of Turkish oil storage facilities operator Delta Petrol Urunleri Ticaret A.S. (“Delta Petrol”) on 18 January 2012 from Med Energy Holding SAL (“Med Energy”) and established a 50-50% joint venture with Med Energy in a Dutch Holding SPV, namely Rubis Med Energy B.V.” WHAT ROLE DID YOU PERFORM ON THE DEAL? AND HOW DID YOUR APPOINTMENT COME ABOUT?

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Being a top tier law firm together with our previous industry specific expertise, as well as the quality of our work helped immensely in securing the role.

working simultaneously on the transaction and we kept in close cooperation at all times, working day and night until the deal was finalized in a manner most beneficial to our client.” HOW WERE YOU ABLE TO ADD REAL VALUE TO THE TRANSACTION? “In addition to the above, certain assets, properties and employees as well as personal and other types of guarantees of Delta Petrol that we had identified within the course of our legal due diligence exercise, were carved out from the business as it had been conducted by Delta Petrol by way of a spin-off prior to the acquisition in order to have a tailor-made joint venture company that suited the needs of our client the most. Finally the fact that the control of the target Delta Petrol was exercised jointly by Rubis and Med Energy through the Dutch Holding SPV has led the Hergüner team to find creative ways to reflect the governance principles of the Dutch Holding SPV to the governance documents of the target company Delta Petrol to the greatest extent legally possible.”

WHAT PREVIOUS EXPERIENCE DO YOU HAVE ON SIMILAR DEALS, EITHER BY TYPE OR BY SECTOR? “Our experience list is too vast to list here. We have advised oil and energy giants such as Gaz de France, EnerjiSa, Baku-Tblisi-Ceyhan pipeline project, Botaş, BP, Shell, Ros Roca, Inter RAO, Envitec among others, so we have the client portfolio and the experience to match even the largest global law firms.” WHAT WERE THE KEY ISSUES YOU HAD TO DEAL WITH? HOW WERE THOSE RESOLVED? “The complexity of the Delta Petrol deal stemmed from the fact that it involved entities located in different parts of the world, namely Turkey, Lebanon, France and the Netherlands. Also, as the joint venture was structured in a Dutch Holding SPV exercising full control over the target Delta Petrol, the deal envisaged simultaneous closings in two different countries, namely the Netherlands and Turkey. Therefore, in order to ensure a successful, time and cost efficient negotiation and closing, Herguner associates were both present during the negotiations and at the closing in the Netherlands and in Turkey

Company: Hergüner Bilgen Özeke Attorney Partnership Name: M. Kemal Mamak Email: kmamak@herguner.av.tr Web: www.herguner.av.tr Address: Suleyman Seba Caddesi Sıraevler 55, Akaretler 34357 Beşiktaş - İstanbul Telephone: +90 212 310 18 00

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ON THE COVER:

Shipping finance 2012

SHIPPING FINANCE — 2012 Acquisition International speaks to Dimitris Gialouris, Director Shipping at Marfin Egnatia Bank, member of Laiki Bank Group.

During the last few years the shipping industry faced excessive ordering of vessels of all types. Shipping has historically survived bad markets, but in this instance it has to overcome the hangover of the virtually free and easy capital which contributed to an unprecedentent vessel supply growth. Additionally, the wider Eurozone sovereign debt problems and resultant loss of confidence have already hit the appetite and ability of many traditional shiplenders to provide debt facilities, leaving only a handful of (mainly European) banks performing fresh shipping transactions. Pressure on banks’ exposure to sovereign debt is unlikely to ease in the near future; banks continue to face high costs of funds and have limited ability to lend as they strive to meet increased capital requirements. A big portion of lending capacity has disappeared from the shipping market and will not come back. Many banks are reassessing their strategies towards shipping and it will be at least another year before strategies for (re)entering the industry become clearer. Only once the banking industry has finally completed the writing down of all its assets to realistic

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levels, and the financial institutions have been able to rebuild their depleted capital, will a return to normal liquidity in the shipfinance arena be noticeable. Nonetheless, the banks that do stay afloat will eventually use the troubled environment to their advantage and will find plenty of opportunities to invest in well-managed and positioned shipping companies, at conservative levels of advance with rewarding pricing attached over the next few months.

while ignoring the risks associated to the shipping industry. The information or opinions provided or expressed in this article do not constitute professional, financial, investment or other advice or recommendation, and must not be used as a basis for making, or refraining from making, any investment decisions or other decisions. Such information and opinions do not constitute an offer or a solicitation of an offer or a recommendation to enter into any transaction or make any investment or buy or sell any financial instruments or financial products or services or enter into a contractual relationship’.

We, at Marfin Egnatia Bank, member of Laiki Bank Group, managed to avoid being misled by shortterm spikes in rates and asset values, and pay more attention to broader economic growth trends as key indicators for our investments. It is important to mention that history repeats itself in shipping, the most cyclical of industries. Flows seen in the past are bound to re-emerge. What the industry teaches, is the value of conservatism. The excesses of the past years would not have occurred without the “easy money” and “short-term gains” mentality that was so active in the last few years. This was also enhanced by reckless bank lending, which fuelled speculators as they abandoned historical lending practices and chased the fees,

Company: Marfin Egnatia Bank Name: Dimitris Gialouris Email: info@marfinbank.gr Web: www.marfinbank.gr Address: 24 Kifissias Ave., 15125 Marousi, Greece Telephone: +30 210 930 4811

June 2012 /

SECTOR SPOTLIGHT:

White collar crime report

WHITE COLLAR — crime report

White collar crime is defined as a financially motivated, non-violent crime committed for monetary gain and covers fraud, bribery, forgery, insider trading, embezzlement, money laundering, corruption and theft etc. This area of law covers such a vast scope of crimes, the effects of which can often destroy a company, devastate families by wiping out their life savings, or cost investors a lot of money, often all three in many cases. If you are an individual being accused of committing such an offense, you may be subject to a lengthy criminal investigation that can have immensely negative consequences. Your reputation and dignity can be destroyed in the court of public opinion even if charges are never filed against you.

It is therefore of the upmost importance that businesses and individuals alike seek the advice from experts within the field when any suspicions arise to minimise the devastating effects to all those involved. Acquisition International speaks to the experts. To look further into the issues surrounding business crime in modern times, Acquisition International speaks to Nabeel Sheikh, senior partner and co-founder of Neumans LLP – a niche City of London-based practice, which provides cutting edge legal representation to both individuals and corporate entities in high-value, multi-jurisdictional litigation. Here, Nabeel discusses the key case types he deals with regularly, the strength of the UK’s legal framework surrounding business crime law enforcement and defence, as well as his opinions on the UK’s recently implemented Bribery Act. “As head of the firm’s Fraud Litigation Department, I deal with all aspects of litigation, be it commercial, civil or criminal, where there is an underlying element of fraud. My areas of expertise include, but are not limited to, VAT/MTIC fraud; general tax fraud; money laundering; extradition and mutual legal assistance; pharmaceutical fraud; confiscation orders; restraint orders; freezing orders; boiler room frauds; banking fraud; financial services fraud; mortgage fraud; directors’ disqualification; insolvency/bankruptcy as a result of fraud; bribery and corruption; professional discipline and regulatory. In addition, I also deal with non-litigation matters concerning compliance.” WITHIN THE UK, HOW STRONG IS THE LEGAL FRAMEWORK OF BUSINESS CRIME LAW ENFORCEMENT AND DEFENCE? “Generally speaking, the UK has, in my view, a robust legal framework when it comes to enforcement. There are a multitude of Acts Parliament has passed; and together with all

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the sub-legislation, it has sought to capture all hosts of business crime activity. This is exemplified by the recent introduction of the Bribery Act 2010 (the Act), which simply codifies into one place various offences, some of which were covered by common law. In addition to the raft of current legislation, for example, the Proceeds of Crime Act 2002, there are numerous prosecution Agencies such as the SOCA, FSA, CPS, SFO, BIS, HMR & C. The CPS has, in many cases, now assumed prosecutorial control for some Agencies, where they previously held independent control for their cases: a recent example is HMR & C. Business crime offences, dependant on certain criteria, are prosecuted by different specialist Agencies.” HOW DO YOU FEEL LEGISLATION COULD BE AMENDED TO STRENGTH THIS? “At present, there are a myriad of Acts; and numerous Government Agencies are tasked with investigating and prosecuting business crime. In my opinion, this needs consolidation and regularising in a manner which is easily identifiable so each Agency knows its role and division of case work is clear. Currently there is overlap and scope for confusion; codifing the system to a greater degree would provide a much clearer view of the business crime landscape.” WHAT ARE THE MAIN ACTIONS COMPANIES SHOULD TAKE TO PROTECT THEMSELVES?

Having a robust compliance department hosting skilled, wellresourced, and knowledgeable compliance officers is critical. The need to have regular training and monitoring is essential so that information is cascaded routinely. “It is essential that corporate entities do not just pay lip-service to regulation, and implement proper controls with budgets allocating the necessary funds to invest in compliance systems. There needs to be a clear identifiable policy on compliance, and a thorough grasp of the regulations and criminal sanctions that may follow in the event of breaches.”

WHAT ARE YOUR OPINIONS OF THE BRIBERY ACT THAT WAS IMPLEMENTED IN THE UK LAST YEAR? WILL IT HAVE A DRAMATIC EFFECT ON BUSINESS CRIME STATISTICS? “While much of the content of the Act was covered, albeit by the fragmented and complex offences contained in the common law under the Prevention of Corruption Acts 1889 – 1916, the Act seeks to codify and bring into one place the types of conduct that could be regarded as criminal; and the Act creates various offences of bribing another person, receiving a bribe, and bribery of foreign officials, as well as a new offence for commercial organisations of failure to prevent bribery. The main impact of the Act is its requirement for commercial organisations to have adequate procedures in place to prevent bribery: under s.7 of the Bribery Act 2010, a new offence is created in relation to commercial organisations failing to prevent persons associated with them bribing another on their behalf. Arguably this cements the UK’s international reputation for anti-corruption measures. It is difficult to estimate whether the Act itself will have a dramatic effect on business crime statistics. Seemingly, the Act has simply codified much of what was already in existence under common law. I suspect an increase in prosecutions simply because the introduction of the Act is, in itself, symbolic to the extent that the UK has, over the past few decades, noticeably experienced certain conduct which attracted wide-spread public distaste, thus, pressuring Parliament to take a stand. I believe the Act will be enforced stringently and will probably result in an increase in prosecutions, even if it is a politically motivated step.”

Company: Neumans LLP Name: Nabeel Sheikh Email: nabeel.sheikh@neumansllp.com Web: www.neumansllp.com Address: 10-12 Little Trinity Lane, London, EC4V 2AR Telephone: +44 (0) 207 429 3900

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SECTOR SPOTLIGHT: FBL Advogados

FBL

— Advogados

Luís Morais a Senior Lawyer of the Law Firm FBL Advogados. The Firm provided all legal services to the acquisition of an Angolan financial institution, with up to eight subsidiaries, with total assets worth USD 7 billion and net value of USD 600 million. The Firm belongs to LEX AFRICA Network, the most well-known and selective African law firm’s network, which directory is used by all international companies with economic interest in Africa. FBL Advogados is the only Angolan law firm included in this directory. Chambers Global, one of the most renowned international directories, indicates FBL Advogados as a firm “with a successful commercial practice and strong relationship with Angolan Community, providing consultancy services to investments, companies, banks and financial investments”, not forgetting to mention the firm consultancy activities to the public sector. The Firm is thoroughly experienced in the area of finance and banking, and advices on incorporation of commercial banks and insurance companies, drafting bank loan agreements and other financing contracts, carrying out conflict mediation arising from banking and insurance contracts. The Firm has actively participated in the evolution of the natural resources legislation in Angola and has advised leading companies on public procurement processes for the provision of goods and services on the oil and gas sector, drafting and negotiating contracts on the oil and gas sector, providing for the legal support to the licensing of companies on the oil and gas sector and advising companies operating in the mining sector, namely in the diamonds exploration and commercialization. Giving the recent economic growth in the Republic of Angola, the firm has been advising several investment operations undertaken by foreign companies in Angola. The complexity of the investments varies considerably and the Firm is often required to advise foreign investment funds and multinational companies in entering the Angolan market. The firm core clients FBL Advogados are public institutions and private companies, eitherAngolans or foreigners, which main office is located in the Republic of South Africa, Namibia, USA, Brasil, Portugal, France, Netherlands, UK; Japan, china, India and Australia. Those clients work in several fields of activity, namely in the: i) oil and diamond sector; ii) bank and insurance sector; iii) fishing sector; iv) light industry; v) civil construction; vi) tourism and hotels and (vii) services providers. FBL Advogados legal consultancy to the public sector comprises participation in drafting legislation

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teams, which have been responsible for the Economic activities Law, Commercial Companies Law, Regulations on the Commercial Activities Law, Consumers Law and Contracts General clauses Law. Permanent consultancy to the Ministry of Finance, in drafting legislation on acquisitions and public debt, negotiation and implementation of international cooperation agreements and facility agreements, draft of legal opinion on behalf of international lenders. With our expertise and know how from the private and public sector we can easily help and give better advise to the needs of our clients. HOW LONG ARE DEALS TYPICALLY TAKING TO COMPLETE AND HOW ARE THEY BEING FUNDED? It depends on the deals taken by the Firm, clients and all the legal environmental. For business involving foreign investment in Angola we are talking about 90 days including the negotiations with ANIP and the National Bank of Angola and sometimes less. It depends on the discussion of the benefits for the clients and for the Angolan State. HOW DOES YOUR FIRM ADD REAL VALUE TO THE DEAL? AND WHAT ARE THE FIRM’S GOALS FOR THE REST OF THE YEAR? FBL Advogados is an Angolan Law Firm created in the beginning of 2004, as the result of a merger of three other Angolan law offices of smaller dimension, which have been providing legal counsel in Angola for more than 30 years. The Law Firm has been the first law firm structured and organised in a similar way to any other international law firm, complying with international legal services standards. FBL Advogados senior partners are well-known lawyers in Angola and their reputation, together with their professional experience, makes FBL Advogados one of the biggest law offices in Angola. Its main office is located in the capital city of Angola, Luanda’s city centre and recently opened an office in the Province of Benguela and its lawyers have been providing services all over the Angolan territory. FBL Advogados promotes a personal relationship with its clients in an independent, rigorous and prompt manner, repudiating any political, economical,

religious or other kind of bias. The firm promotes a relationship with its clients, in order to provide them global counselling, taking a multidisciplinary approach to the client’s business. FBL Advogados has nowadays 8 partners, five of which are senior partners, with a working experience that ranges between forty to twenty years of practice, and three young partners, with an average of ten to fifteen years of practice. Its team includes also seven associated lawyers, seven trainee lawyers and two consultants. Some of them teach in Angolan Universities legal subjects such Commercial Law, Commercial Company’s Law, Economic law Civil Procedural Law and Criminal Law. FBL Advogados are able to work in English, French and Spanish, as well as their mother tongue, Portuguese. The firm also provides technical translation services. The Firm has also consultants, specialised in different fields, such as economics, statistic, environment and management, which are hired on a non-permanent basis and help FBL Advogados to provide high quality services to its clients. FBL Advogados rigorous work and professionalism is acknowledged not only by its clients but also by the professional associations and the main international law firm’s directories. The Firm works in close cooperation with other law offices located in Africa, Asia, Europe and North and South America. The goal of the Firm is to be the biggest Law Firm in Angola and to render to our clients the best quality service and satisfaction. We aim to have partners in business and not clients!

Company: FBL Advogados Name: Luís Morais Email: luis.morais@fbladvogados.com Web: www.fbladvogados.com Address: Rua dos Enganos, 1, 8th floor Telephone: +244 937 377 807

June 2012 /

SECTOR SPOTLIGHT:

The trade finance industry 2012

THE TRADE FINANCE INDUSTRY — 2012

There is no doubt that world trade is under pressure, but, in spite of all the challenges arising from global financial crisis, some banks have shown a high degree of resilience and are still lending in the sector. Trade finance is crucial for world trade and is still in high demand due to the absence or lack of other readily available sources of funding. There are distinct geographic patterns emerging; demand is expected to increase in Asia and decrease in Europe over the course of 2012, and as European banks withdraw due to the debt crisis, Asian banks are providing an increasing chunk of trade finance – some estimate up to 80% of the global total. Acquisition International speaks to Derick De Zilva Director, Regional Head Transaction Banking, Southern Africa. Has banking lost its shine? In an industry where banks are facing downgrades, credit and complex derivative losses, is there space for the traditionalists? If one looks at the statistics it is clear that ‘good old fashioned’ banking driven by trade finance is still the way to go. Data released recently by the International Chamber of Commerce (ICC) provide empirical evidence that trade finance is a prudent banking activity. Results from data spanning over 5 years covering over 65% of the world’s trade finance transactions show that fewer than 3,000 defaults were observed on over 11.4 million transactions.

Trade Finance extended by banks in select emerging markets has increased proportionally over the past 2 years. Factors However, banking in general has been hard hit from the financial crises. Over-reliance on fast growing investment banking business meant traditional transaction based commercial businesses took a back seat. Banks, who have stuck to their core strategy, balanced their growth ambitions in line with client aspirations have managed to weather the storm better than others. The discipline of funding before you lend is a core basic philosophy to ensure the sustainability of banks in challenging market conditions. Successful trade finance strategies depend on a bank’s understanding of their client’s operating cycle, industry, and the ability to assess and mitigate risks through effective financial structures, collateral and discipline.

Snapshot of findings on Trade Finance Transactions: Source: ICC Trade Finance Register data

and more than 80 percent of its Chromium and Platinum group metals. Rising demand for these natural resources in emerging economies like China and India, now account for more than half of Africa’s total trade. There have been significant investments in the Mining, Oil and Gas and Agricultural sectors to support this growth in demand. Foreign direct investment in Africa has grown from USD9 billion in 2000 to USD62 billion in 2008 – which is comparable to the flow into China relative to GDP measurements. The growth in trade flows resulting from this is visible as much as the fact that African economies that depend on these sectors growing at a phenomenal rate.

Africa’s forecasted average GDP stands to grow by 8.4%* over the next decade (to USD2.4trillion*) compared to the global average of 6.2%, with trade volumes expected to well exceed these growth statistics. 6 of the top 10 fastest growing economies in world are in Africa. (*Extrapolated based on IMF estimates through to 2016).

Crucially, there were relatively fewer losses as well through the global financial meltdown, with less than 500 losses recorded on more than 7.5 million transactions spanning 2008-2010 period. Following the 12% slump in global trade in 2009 due to the adverse impact of the financial crisis, export volumes have since rebounded to the 2008 peak level. Indeed, a record 14.5% expansion in trade volumes for 2010 was followed by a modest 5% in 2011 – a growth level consistent with the average yearly increase between 1990 and 2008. Not surprisingly,

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Trade forms the back bone of any economy. With global trade between nations continuing to grow, smarter banks have invested time and effort to understand these flows, develop products which support clients and leverage technology to deliver holistic client solutions. Industrial growth in markets like China and India has led to demand in raw materials. Indeed, Africa will continue to benefit from escalating global demand for oil, natural gas, minerals, food, arable land, and other natural resources. The continent boasts of 10 percent of the world’s reserves of oil, 40 percent of its gold,

Director,Regional Head - Transaction Banking, Southern Africa.& Segment Head, Local Corporates Africa Standard Chartered Bank Name: Derick De Zilva Email: derick.de-zilva@sc.com Web: www.fthgulf.com Address: 5th Floor, 4 Sandown Valley Crescent, Sandton, 2196 P O Box 782080, South Africa Telephone: +27 (0) 11 217 6786

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The increasing significance of Bermuda

THE INCREASING — significance of Bermuda

With increased regulation and a global emphasis on transparency, some have questioned the future of offshore financial centres, Bermuda however, seems to be defying this movement and has very firmly positioned itself as one of the world’s leading financial jurisdictions.

Hamilton / Bermuda

Blessed with sustained activity in the tourism and insurance industries, Bermuda has enjoyed periods of successive economic expansion. Tourism is on the re-bound and insurance and reinsurance industries are experiencing strong trading with new customers in emerging markets, whose economies continue to develop despite the slowdown in Western markets.

Bermuda offers many opportunities to entrepreneurs and business owners with its wealth of ‘pull factors’ attracting people to do business. The region continues to update and improve its regulatory framework to withstand critical inspection and also endures to strengthen relationships with international financial centres in order to create an attractive business environment. Acquisition International speaks to David Ezekiel , Chairman and MD of Marsh IAS Management Services Bermuda Ltd. Marsh IAS Management Services Bermuda Ltd. has managed captives in Bermuda, a British Overseas Territory, since 1968 and has extensive expertise in defining, designing, and delivering tailored captive

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management services to a wide range of clients. With 120 specialists based on the island and 420 insurance companies under management, Marsh is the largest captive manager in Bermuda. Against a backdrop of ever increasing competition from other domiciles, an insurance market that still shows signs of overcapacity, and a worldwide regulatory regime that gets more challenging every day, Bermuda has worked hard to maintain its status as the world’s largest captive domicile. Beyond captives, Bermuda has also established itself as one of the world’s largest insurance centers. The island now has more insurance companies with capital and surplus in excess of $1 billion than any country in the world except the U.S.

processing of work permits, and the introduction of the 10-year work permit have all been well received. Bermuda has also recognised that putting these changes in place is only the first step—getting the message out to current and potential customers is also essential. Increased representation at major business gatherings and a concerted effort by Business Bermuda, a local trade group, are making an impact. Offshore financial centers have been under increasing pressure and scrutiny over the last five years. Bermuda is adapting to the changing environment and is well positioned to not only survive but thrive.

Bermuda has taken a number of steps to continue to protect its leadership position, including: • taking a leadership role in Solvency II equivalence; • focusing on the captive sector to ensure continued growth with international businesses; and • signing a number of Tax Information Exchange Agreements (TIEAs) with major trading partners. Bermuda’s business community has also engaged the government to ensure that Bermuda continues to be viewed as a domicile of choice for new insurance company formations, and that existing companies remain on the island. Changes in company law, relaxation of the Term Limits Policy, improved

Company: Marsh IAS Management Services Name: David Ezekiel Email: david.ezekiel@marsh.com Web: www.marshcaptivesolutions.com Address: Victoria Hall, 11 Victoria Street, 5th Floor, Hamilton, HM 11 Bermuda Telephone: 441-278-2000

June 2012 /

SECTOR SPOTLIGHT:

Hawaii — A domicile for captive insurance

HAWAII

— A domicile for captive insurance

Over the course of the last thirty years there has been phenomenal growth in the number of captive insurance companies, primarily driven by the expense or lack of certain types of insurance coverage in the commercial market. The number of captives being formed has obviously increased yet also has the number of domiciles available for their incorporation. The aim of this series is to profile the major hubs, identify the key trends and pinpoint the most active and attractive locations. Since its establishment in 1987, the state of Hawaii has become a world-class captive domicile and is now the leading destination in the Pacific Rim. The state is well known in the industry for its reliable regulatory approach and captive-business friendly environment. It is one of the most competitively priced locations in the world – overheads are low and due to the intrinsic value of indirect expenditure from visitors, the taxes and regulatory fees are set low enough to just cover costs. Hawaii is also the only domicile allowing the formation of not-for-profit captives – quite a unique selling point.Acquisition International speaks to Paul B. Shimomoto shareholder, director and officer of Char Hamilton Yoshida & Shimomoto, Attorneys at Law, A Law Corporation. “Our firm was established in 1980. In its earlier years, our firm became well-known primarily for the quality of its workers’ compensation and medical malpractice insurance defense practices. At that time, our family law and insurance regulatory/captive insurance practices areas were still developing. However, over time, the firm gradually shifted away from defensebased practice areas and began to focus on its growing family law and captive insurance businesses. In my early years of practice with the firm, it was routine for me to be working in multiple practice areas simultaneously (general civil litigation, medical malpractice defense, family law and captive insurance). Today, however, I spend approximately 95% of my day working on corporate transactions and captive insurance/insurance regulatory issues. Hawaii’s captive insurance laws and regulations have been designed and crafted to provide a prudent, yet flexible, regulatory framework for the formation and operation of captives. Hawaii has been in the captive insurance business since 1986 and its deep understanding of captives and the interests of their owners/insureds is reflected in its thoughtful and mature regulatory environment. Hawaii’s laws and regulations have been drafted (and will continue to be drafted) with an eye towards balancing regulatory interests with efficient reporting requirements. In point of fact, Hawaii’s regulations are in the process of being updated to allow for electronic filing of certain regulatory reports.

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With a clean application, the formation of a captive insurance company in Hawaii can occur in roughly 30 days. The Hawaii Insurance Division’s ability to quickly analyze and perform its due diligence on a new captive application is largely the result of the collective experience of a large team of captive insurance professionals housed in the Hawaii Captive Insurance Branch. Many of these professionals have been regulating captive insurance companies for many years and they use the breadth of their experience to efficiently process applications for admission. The speed with which new applications are processed and approved is also a result of earlier groundwork having been performed by experienced captive managers, attorneys and actuaries to assemble the new applications.” WHY IS HAWAII ONE OF THE MOST COMPETITIVELY PRICED LOCATIONS IN THE WORLD? “Hawaii’s captive insurance premium taxes are extremely competitive. Hawaii understands that the captive insurance industry provides an important avenue for economic diversification for a state that has historically been dependent upon the hospitality industry. Hawaii’s growing captive insurance industry provides clean, professional jobs to its workforce and brings sophisticated job opportunities to the public and private sectors. Hawaii understands that revenue generation and economic diversification for the State of Hawaii can be achieved not just through premium tax collections, but from indirect spending from its visitor population (including captive insurance clients who come to Hawaii to conduct business and meetings) and indirect tax revenues from the professional jobs the industry creates and maintains.”

captives, limited liability captives, reciprocal captives and risk retention groups. Hawaii also allows the formation of captives as non-profit entities, which is of significant benefit to parent companies that are nonprofit, tax-exempt entities themselves. WHAT IS THE HAWAIIAN GOVERNMENT CURRENTLY DOING TO ENCOURAGE GROWTH AND MAINTAIN ITS STATUS AS A COMPETITIVE DESTINATION? “Hawaii’s regulators and service providers regularly attend, speak and present at captive insurance conferences and seminars all over the world. The Hawaii Captive Insurance Council, a non-profit trade organization comprised of Hawaii captive insurance clients and service providers, also hosts annual seminars and conferences to educate its members and others about the benefits of forming a captive in Hawaii. These seminars have been held at various locales in Hawaii, the US mainland and overseas in Japan.”

At various times of the year, Hawaii’s regulators will also personally arrange visits to existing captive insurance clients at their headquarters, and will meet with new and interested prospects wherever convenient.

DOES HAWAII HAVE A UNIQUE SELLING POINT OVER OTHER DOMICILES? From a philosophical perspective, Hawaii’s captive insurance regulators envision themselves as business partners with the captives they regulate. This unique approach to cooperative regulation results in a more symbiotic relationship between the regulators and the captives they regulate. This generally results in smoother and less eventful regulation over the life of the captive. Hawaii’s captive insurance laws also accommodate the formation and operation of every form/type of captive insurance company known to the industry. This includes: pure (single-parent) captives, protected cell

Company: Pacific Guardian Center Name: Char Hamilton Web: www.charhamilton.com Address: 737 Bishop Street, Suite 2100, Honolulu, HI 96813 Telephone: 808.524.9623

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT: Doing business in Italy

DOING BUSINESS — in Italy

After almost a decade of virtual economic stagnation, Italy’s main banking association has forecasted a 1.4% contraction in GDP this year. This is largely due to the policies prevalent in Italy, which discourage competition and inhibit the nation’s growth.

Milan / Italy

It is also to mentions that, in order to speed up court litigation, the Government has created the so called Company Courts which are sections of the Tribunals and of the Courts of Appeal specialized in commercial litigation.”

clients worldwide include major industrial and financial corporations, commercial and investment banks, highgrowth companies, governmental entities, start-ups and individuals.

Economic growth is expected to return in 2013 by just 0.5% and continue to grow to 1% in 2014 and 1.2% in 2015. The Italian economy is in a destabilized state due to the lack of market reforms, an efficient bureaucracy, high corruption, heavy taxes and a high public deficit. Italy’s debt of 1.9 trillion euro along with its dwindling economy, have made the nation vulnerable to diminishing investors’ confidence even as the government tries to implement parliamentary reforms and restrain public spending.

Orrick opened its Milan office in 2003 and its Rome office in 2004. Today, Orrick in Italy has about 100 lawyers, all highly regarded individuals who rank among Italy’s leading lawyers. Our clients in Milan and in Rome include many of the world’s leading financial institutions, commercial enterprises, private equity funds and public companies.

According to Rome-based National Institute of Statistics (Istat), unemployment is at an 11 year high of 9.3%. Industrial orders declined by 12.3% in February, whereas sales dropped by 1.5%. Italian industrial production plunged 6.8%. Italian business confidence plummeted in April as industrial output shrank 2.3% in the first quarter. Italy’s Prime Minister Mario Monti also conceded that it will not be able to achieve a balanced budget until 2015. The government has decided to curb its public spending by 4.2 billion euros in order to achieve its budget deficit targets. With this move, Italy hopes to avoid the earlier planned VAT hike from 21% to 23%, fearing that such a hike would only aggravate recession. Acquisition International speaks to the experts. Established in San Francisco in 1863, Orrick, Herrington & Sutcliffe is today a law firm of international renown with more than 1,100 lawyers in 23 offices across the United States, Europe, and Asia. Anna Spanò, Partner at Orrick, Herrington & Sutcliffe, she comments: “Our

ACQUISITION INTERNATIONAL

Anna Spanò, a lawyer in the Milan office, is a member of the European Corporate, Energy and Antitrust Groups. Anna has extensive experience in merger and acquisitions and corporate transactions, including joint ventures, acquisition agreements and general commercial contracts. Since the beginning of the liberalization of the market in Italy, she has also focused on the energy sector, with special emphasis on renewable energy.

WHAT INCENTIVES/ METHODS HAS THE ITALIAN GOVERNMENT PUT IN THE PLACE TO PROTECT THE ECONOMY AND BOOST INVESTOR CONFIDENCE? “The Government is working hard to finalize important reforms such as the labour and justice reforms. In addition, it has recently introduced, with the so called Grow Italy Decree (“Decreto Cresci Italia”) some direct measures in order to boost competition, liberalizations and the develop of infrastructures. Such measures include the separation of the gas grid by the current grid operator (ENI S.p.A.), the incorporation of a new Transportation Authority for the liberalization in the transportation system, the reduction of the administrative burdens for the companies and the creation of a Law Compliance Rating for Companies in order to facilitate compliant companies with the access to private credit and public funding.

WHY IS ITALIAN ECONOMY IN A DESTABILIZED STATE? “The pension reform has been a very good start of the Government; however, Italy still need requires deep reforms, first of all, in the labour market and justice. Rigid rules on hiring and difficulties in firing have long been considered discouragements to foreign investment in Italy as well as the unpredictable duration of the trials which is seen as a primary factor in the crisis and failure to grow. However, it is important to the ‘Made in Italy’ together with the Italian fashion brands and Italian food brands, as well as the tourism and energy sectors are only just a few, considering that Italy’s economy is still the fourth biggest in Europe, according to the International Monetary fund, and there are certainly areas in which Italy is currently doing very well and simply needs to improve its performance.”

Company: Orrick Name: Anna Spanò Email: aspano@orrick.com Web: www.orrick.com Address: Corso Matteotti 10 – 20121 Milan Italy Telephone: +39 02 4541 3800

June 2012 /

SECTOR SPOTLIGHT:

Resolving real estate disputes in Hungary

RESOLVING

— real estate disputes in Hungary

Disputes in the acquisition, management and disposal of all types of property are extremely common and the resolution of these disputes is an unavoidable reality in today’s property landscape. is not in the position to fulfill its obligations under the lease agreement. WHAT ARE KEY CHALLENGES WHEN RESOLVING PROPERTY DISPUTES AND HOW CAN THEY BE AVOIDED?

In our opinion the key to solve the dispute as reasonable as possible is to provide our clients with a dispassionate and objective evaluation of the situation and to make it clear that most of the time losses are not to be avoided. Many companies hold property as one of their most important assets, but it’s often not the core focus of the business; so any disputes are often referred straight to an experienced lawyer to save both time and money. Property disputes are intricate, diverse and extremely technical therefore it’s essential to find a legal team that takes the time to understand the business’ needs, but that can also act quickly, offering clear, tactical advice. Acquisition Internationals speaks to François d’Ornano resident partner at Gide Loyrette Nouel Budapest. The Real Estate Team at Gide Loyrette Nouel Budapest assists a wide variety of clients in the real estate sector, including developers, construction companies, real estate funds and other clients seeking assistance in real estate-related issues. The team at the Budapest office has gained experience and specialist knowledge in all fields of real estate law including leasing, sale and purchase transactions, due diligence reviews, construction, zoning, litigation and real estate financing. Members of the Real Estate team are increasingly involved in cross border co-ordination roles for assignments involving different jurisdictions such as Serbia, Bosnia, Croatia, Slovakia and Slovenia. The team successfully handled a number of domestic and cross-border real estate deals for local and international clients looking for advice in property issues. We also work together with major international real estate developers like one of Europe’s largest real estate investment funds, as well as major banks and investment funds. The team was involved in several litigation matters where it worked closely with the dispute resolution team to see through the litigation, arbitration aspects of real estate cases. Unfortunately the property sector is one of the sectors, which

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has suffered the most damages caused by the crisis. This means that some projects turned out to be unsuccessful; others had to be stopped or couldn’t even be started. Alone this factor provides sufficient ground for disputes. A general tendency is that even those companies which used to solve their disputes in an amicable way before the crisis tend now to fight for each cent, as they do not have any other positive project to focus on. WHAT KEY SECTORS DO PROPERTY DISPUTES AFFECT AND WHY? The key areas are the development, the construction, facility management and the leasing sector. The reasons are different in case of the development sector. In this area, the disputes have the root in the fact that developments had to be stopped or could not have been started. In case of the facility management and the leasing sector, the problems are related to the nonpayment or to the bankruptcy of the clients, or the insufficient quality services of the service providers Another large sector is affected by property issues: the banking and finance sector. All non-residential properties and property developments are connected with strong ties to the financing; accordingly these two sectors have a great impact on each other. WHAT ARE SOME OF THE MOST COMMON ISSUES AT THE SOURCE OF CONFLICTS? The most common issue is related of course to payment issues and liabilities. It is more important however to identify the situations where these disputes arise. A typical situation is when the joint venture parties realize that there project is making loss or is not feasible. Another typical situation is related to construction contracts or mandate agreement, where the mandatory is not able or willing to pay. Also financial problems of tenants are often seen, where the tenant goes bankrupt and

We have gathered in the past years a great amount of experiences regarding real estate disputes. Based on this experience we have to state already upfront, that in most cases all of the parties will suffer losses. In most cases it is unavoidable. It is usually not really the fault of any of the parties (like it was before); it is caused by the negative economical effects of the crisis. Accordingly for a successful “out of court” solving of a dispute, all parties have to admit to their selves, that they will suffer losses, even if they have not breached any of their obligations. This requires most of the time the change in the “mind setting” of the clients.

Name: François d’Ornano Resident Partner Email: gln.budapest@gide.com Telephone: +36 (1) 411 74 00 Name: András Csapó Head of Real Estate Email: gln.budapest@gide.com Telephone: +36 (1) 411 74 00

Company: Gide Loyrette Nouel Budapest Web: www.gide.com Address: 1051 Budapest Széchenyi István tér 7-8.

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The asset based finance industry

THE ASSET BASED — finance industry

Once thought of as a last-resort, asset-based financing has become a key source of credit for small and mediumsize companies as well as for some larger, publicly traded companies.

According to a survey by the Asset Based Finance Association (ABFA), after a record year in 2011, the popularity of asset based finance will continue to grow in 2012. The Chief Executive of the Association, Kate Sharp has suggested that “As other forms of finance become harder to secure, the industry is predicting a strong 9% growth rate in total funding as firms look to secure the capital they need”. Further statistics to back this trend have been released by the Finance & Leasing Association and these show that asset finance for investment in plant and machinery grew in Q1 2012 by 26% compared with Q1 2011.Acquisition International speaks to Jonathan Fleisher, partner at Cassels Brock & Blackwell LLP. The asset-based lending industry in Canada has changed dramatically since the 1980’s. In the 1980’s, the industry was typified by a few Canadian commercial finance companies and a few national banks controlling the lion’s share of the market. Interest rates were high and borrowers viewed asset based lenders as a last resort. Times have changed with globalization and amendments to the Tax Act Canada. Non-Canadian lenders now are active participants in the market for small to large transactions competing favourable with their Canadian counterparts. While there are no direct statistics of market penetration, it is estimated that non-Canadian lenders form a significant segment of the market.

ACQUISITION INTERNATIONAL

The acceptance of asset-based lenders among borrowers has grown well beyond lender of last resort status and is viewed as the preferred model for specific industries. Our firm has been retained by many of these non-Canadian commercial finance companies in their entrance into the Canadian market and we have found that the information required was both legal and business We noted that concerns raised by U.S. companies were different than European lenders but both required insights into the Canadian business environment.

Cassels Brock’s focus is to provide advice to the assetbased lending community both nationally and internationally. The advice we have provided has morphed over the decades we have been involved. Lenders while becoming more sophisticated in their knowledge of the industry still require up to date market intelligence whether it is for a discreet transaction or setting up full Canadian operations. One of the sought after information provided to

our clients is the business advice as to the industry, competitive landscape, common practices and practical business advice. Coupled with the business advice is solid legal information with a focus on business professionals. Sophisticated clients need to know how the market differs from their home jurisdiction. Examples of these publications are Alison Manzer’s book published by LexisNexis on asset-based lending and white papers prepared on what differences exist between the Canadian, U.S. and Europe market place from both a business and legal perspective. It is this experience and focus which differentiate us from others. For further information, or a copy of the book or white paper, please contact us.

Company: Cassels Brock & Blackwell LLP Name: Jonathan Fleisher Email: jfleisher@casselsbrock.com Web: www.casselsbrock.com Address: Scotia Plaza, 40 King Street West Suite 2100, Toronto, ON M5H 3C2, Canada Telephone: 416.860.6596

June 2012 /

SECTOR SPOTLIGHT:

Banking & investment disputes

BANKING & INVESTMENT — disputes

Acquisition International speaks to Mr. Shardul Thacker, partner of the leading Indian law firm, Mulla & Mulla & Craigie Blunt & Caroe, one of India’s largest full service law firms, specialising in dispute resolution, shipping, corporate, banking, insurance, energy, employment, infrastructure and all areas of commercial laws. Mr. Thacker has an extensive banking, arbitration and shipping law practice. The firm’s partners have a sound understanding of commercial and current market realities and are familiar with clients’ businesses and the relevant industry sector. This enables the firm to provide legal solutions of commercial value such that the process and effect of resolving the dispute results in the least possible adverse effect to the client’s business. Partners of the firm are on the advisory board of large international banks.

“The firm’s experience and depth in knowledge of the client’s industry coupled with thoroughness and timely practical advice which has real commercial value sets us apart from our competitors.

As recognition of its excellence, the recent awards received by the firm include Dispute Resolution Law Firm of the Year, India 2012 by Global Law Experts, Banking Law Firm of the Year, India – Global Awards 2011 by Lawyers World and Indian Law Firm Awards for Dispute Resolution 2008 and 2010 by India Business Law Journal to name just a few. Mr. Thacker has won several accolades including Leading Lawyer 100 in Banking Law 2012 by Lawyer Monthly, Leading Lawyer in Banking & Finance and Shipping 2012 and 2011 by Chambers Asia Pacific and International Who’s Who of Banking Lawyers 2010. He has contributed to the India chapter in Banking Regulation Review 2011 by Law Business Research UK and the India section in Cross-Border Security, Norton Rose, (Butterworths).

Among our banking clients are ABN Amro, Axis Bank, Bank of India, Bank of Nova Scotia, BNP, Canara Bank, Central Bank of India, Citibank, Citigroup Global Markets, DBS, Den Norske Bank, DVB Group Merchant Bank (Asia), GE Capital, HSBC, ICICI Bank, IFC, KfW Germany, Natixis, Nordisk Investment Bank, Oriental Bank of Commerce, Orix Petro Finance Inc. PNB, RBS, SMBC, Societe Generale, State Bank of India and UOB.

Our dispute resolution practice handles all types of commercial disputes from real estate matters and oil & gas drilling contracts, to supply and licensing issues, etc. Since the firm has a strong shipping and maritime practice as well, in the last decade it has handled over 700 ship arrests in India and 50 arbitrations relating to shipbuilding, oil & gas exploration and charterparties.

/ June 2012

The firm primarily acts for banks and is Indian legal counsel to Indian and overseas banks and lenders for facilities of all types including acquisition, asset and structured finance in major infrastructure projects, LNG, ports, ships etc.

In addition to the regular updating tools such as keeping abreast with online notifications and circulars published by various Indian authorities such as the Reserve Bank of India, partners and lawyers of the firm regularly interact with people in the banking industry and maintain close contact to understand the pulse of the business and the impact of the legal and regulatory developments on the industry. Clients benefit from this information and knowledge during transactions.” CAN YOU PLEASE EXPLAIN THE DISPUTE RESOLUTION STRATEGY WHEN IT COMES TO RESOLVING CHALLENGES AND MEETING CLIENT’S COMMERCIAL NEEDS IN THE BANKING AND INVESTMENT INDUSTRY? “Since the firm usually acts for banks, in cases where the borrower defaults and the asset value may drop, or where there is a delay in payment of interest or installments, banks consider the relationship with its customers in light of market realities. It is not in all cases that banks proceed against the security for the facility since invariably this would lead to a forced or distressed sale owing to high maintenance and other charges to maintain the security. Instead, banks typically rather adopt a business minded strategy involving building a moratorium, taking additional security, refinancing, increasing the interest rate or charging a penalty and prefer such mechanisms to overcome a commercial challenge in order to maintain the relationship with the customer.

By devising sound dispute resolution and litigation strategies, clients benefit in often settling disputes with the assistance of negotiating inputs from our firm. Additionally, our firm encourages clients to adopt alternate dispute resolution mechanisms and consistently represents clients in various international arbitrations (ICC, LCIA, SIAC).” HOW CAN YOU HELP YOUR CLIENTS TO DRAFT THEIR CONTRACTS AND ANTICIPATE DISPUTES BEFORE THEY’VE EVEN HAPPENED? WHAT OTHER ADVICE CAN YOU ASSIST WITH? “In drafting contracts, detailing out the client’s rights and obligations in a manner which reflects an accurate commercial position is key to anticipating disputes. Typically, when entering into a contract, clients do not want to address a possibility of a commercial failure or challenge and they rather concentrate on the business and commercials. Our role is to point out where the cracks could appear from a legal stand point, so mechanisms for handling a commercial challenge with the least possible disruption to business can be built into the contract. Knowledge of the nuances of the industry enables our firm to a assist and advise clients accordingly.” WHAT IS THE CURRENT LEVEL OF RISK FACED BY BANKS AND OTHER FINANCIAL INSTITUTIONS? AND HOW DO YOU PREDICT THIS TREND TO DEVELOP OVER THE NEXT 12 MONTHS? “In the present economy, risks are high in view of the recession in Europe and the US which is also reflecting in India. Banks do not want to take new exposures and therefore continue to review and consolidate their own position to ensure that the banks own value does not diminish.”

Company: Mulla & Mulla & Craigie Blunt & Caroe Name: Mr. Shardul Thacker Email: shardul.thacker@mullaandmulla.com Address: Mulla House, 51, Mahatma Gandhi Road, Flora Fountain, Mumbai 400 001, INDIA Telephone: (+91 22) 2262 3191 / (+91 22) 2204 4960

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Marketing the mid-size law firm / Doing business in Estonia

MARKETING

— the mid sized law firm

Much has been written about the advantageous position that midsize law firms have found themselves in since the onset of the economic downturn; compared to their larger counterparts, they have been able to offer a more cost-effective and personalised service to their clients. As our global economies begin to improve, many midsize firms are hoping that clients, having sampled the benefits, will continue to use their services. But it is true to say that mid-size law firms will continue to practice in a buyer’s market, meaning that lawyers, and most of the services they offer, will be plentiful; hence clients have a wide range of choices of high quality lawyers and law firms to serve them.

Many mid-size law firms do not have the luxury of employing a full time dedicated professional to manage marketing and business development activities; therefore, managing partners need to create a friendly business development and profitable culture from within the firm. Company: C.F H&P law firm Name: Gentjan Mucaj Email: gmucaj@hp-lawfirm.com Address: Rr. Sami Frasheri, Suite 3 Tirana Albania Telephone: +355 42233344

Marketing is crucial for all firms regardless of size and firms need to focus on their efforts to create a strong identity, brand and message.

DOING BUSINESS — in Estonia

Estonia has seen great growth since recovering from the financial crisis in 2008/9. During 2011 the economy grew approximately 8% and this growth is set to continue despite a global economic stagnation. In a recent Global Competitiveness Index Report Estonia was ranked 33rd for international competitiveness. Standard & Poor’s rating agency has expressed confidence in Estonia’s AA- rating and attributed this to a politically stable environment, effective control of public sector expenditures and a low debt burden as well as a flexible private sector. A 5% increase in retail sales along with declining unemployment and an increase in real wages demonstrate the growth and strength of the economy. The largest risk facing Estonia in 2012 is the predicted downturn in the global economy and the financial troubles in Europe. Export is expected to decline as the main export partners of Estonia predict a downturn in trade. As a result of weaker export demand Swedbank has cut its estimated GDP growth for 2012 to 2.7% down from a predicted 3.3%. This downturn is likely to affect the first half of 2012 and improve by the end of the year. The forecast for 2013 is much more positive fostered by domestic demand, environment-related investments and the growing public sector. Armin Karu, Chairman of the Board of Olympic Entertainment Group (OEG), the region’s leading gaming operator that is listed on Warsaw and Tallinn Stock Exchanges, he comments “OEG operates under

ACQUISITION INTERNATIONAL

the Olympic Casino brand in a total of six countries: Poland, Slovakia, Belarus, Lithuania, Latvia and Estonia. Altogether, we operate 61casinos in these six markets. In addition, for two years we have been offering online gaming under the Olympic-Online.com brand. For years, the operations of OEG have been in compliance with the ISO quality standard. In addition, we have won several awards in the field of quality, business management, customer service and social responsibility in our markets. In Estonia, Olympic Casino has been a clear market leader for a long time and in the recent years we have increased our market share to 53%. The success of Olympic Casino is based on the Las Vegas-type casino concept that brings all components – gaming tables and slots, bars and entertainers, shows and convenient lounge areas – together into one area and links them seamlessly into an integrated product offering. Our casinos always offer the latest games and use the most advanced gaming technologies. During the economic crisis, we were faster and more resolute than our competitors in restructuring our business, withstood the crisis better and further increased our market share.The success factors of the Estonian state and OEG are largely similar, including innovation, advanced technology, modern business culture and openness to new trends, and have clearly been a source of positive power.

For characterising the general economic climate, it is important to keep in mind that Estonia continues to do well in international rankings on economic freedom and competitiveness. Estonia’s recent economic success has been largely based on strict fiscal policy, relatively low inflation and low public sector debt, as well as an excellent wage-to productivity ratio. Clearly, that the sudden contraction of world economy and trade created by the global credit crisis had a significant impact on the Estonian economy. In these difficult conditions, Estonia succeeded in maintaining budgetary discipline and took several important steps that helped the country’s economy to emerge from the crisis relatively strongly.”

Company: Olympic Entertainment Group AS Name: Armin Karu Email: info@oc.eu Web: www.olympic-casino.com www.olympic-online.com Address: Pronksi 19, 10124 Tallinn, Estonia Telephone: +372 667 1250

June 2012 /

SECTOR SPOTLIGHT:

Doing business around the world

DOING BUSINESS — in Germany The German economy is expected to grow 0.9% this year and is likely to return to more robust growth of 2% in 2013.

the trend in the rest of the Eurozone and this low unemployment has helped to maintain high domestic demand and consumer spending.

Many believe the worst of the Eurozone crisis is over and investor confidence has been on the rise. Despite the optimism the debt crisis has not yet been overcome and some risk still remains, however Europe is showing signs of recovery.

A possible pent-up demand for labour will keep unemployment stable, especially as the economic outlook improves.

Manufacturing and service sector businesses are getting more confident about both the current situation and the future outlook and business investments are expected to continue to rise. Germany recovered more quickly than others from the 2008/09 financial crisis and has stood strong throughout the European debt crisis. German unemployment has been falling, continuing to defy

German exports have increased and are being driven by stronger than expected demand from nonEuropean nations.

DOING BUSINESS The Spanish economy is in recession for the second time in three years as the damage from the property bust persists. Spain’s GDP contracted 0.3% in the 4th quarter of 2011, but grew 0.3% on an annual basis. Spain appears to be locked in a worsening debt trap, with high levels of debt in both the public and private sectors. Financial markets are beginning to wake up to the fact that the outlook for Spain appears bleak. The Spanish government has recently announced a tough package of fiscal austerity measures in its budget for 2012. Given the dire economic and financial situation Spain is looking to lower its budget deficit to 5.3% of GDP this year.Acquisition International speaks to the experts Alvaro Marco, Partner and Head of the Corporate Dpt. of Adarve Abogados, S.L.P. ADARVE is one of the main mid size practices in Spain. We offer complete and efficient legal services to our clients - companies as well as individuals. We have both a large history as lawyers and a modern and efficient way of tackling the entrusted cases. The prestigious directory Legal 500 recommends us in the EMEA 2012 Edition for Banking and Finance, Corporate and M&A, Dispute resolution, Insurance, Intellectual Property, Real Estate and Tax. We are very competitive because our philosophy and structure allow us to offer high quality services and personal treatment by the Partners directly instead of by junior lawyers. Also, our fees are more competitive than many other firms. Finally, our team is composed by noteworthy professionals, and each

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Imports have also been on the rise contributing to a fall in Germany’s trade surplus from 15.1b euros to 13.6b euros.

Company: BridgehouseLaw Munich Rechtsanwaltsgesellschaft mbH Name: Mr. Oliver Bolthausen Email: oliver.bolthausen@bridgehouselaw.de Web: www bridgehouselaw.de Address: „Karlshöfe“ Karlstr. 35 80333 Munich, Germany Telephone: +49 89 20 60 29 96 0

— in Spain

of them is specialized in his / her area of practice. WHAT FACTORS HAVE CONTRIBUTED TO THE SPANISH ECONOMY FALLEN INTO RECESSION FOR THE SECOND TIME IN THREE YEARS? The current crisis was caused by the insufficient reform of the financial sector carried out up to date. The measures adopted haven’t been sufficient for the credit to the entrepreneurs to flow again, nor for the resulting financial groups to be cleaned up and for the financial entities to be able to leave the depreciated assets out of their portfolios. All this has provoked the doubts of both European authorities and investors.

The main reasons are the brutal slowing down of the construction sector, the huge number of unqualified workers who came during the prosperous years for whom it is hard to find a job now, the lack of a modern productive system, and the current education system, which is obsolete and not adapted to the Spanish work market. WHAT ARE YOUR PREDICTIONS REGARDING THE ECONOMIC FUTURE OF SPAIN? WHEN WILL THE REGION RETURN TO GROWTH? According to the official predictions (FMI, Bank of Spain, etc.) Spain will suffer a flat growth period (till 2014-2015) and then it will grow slightly during some more years.

WHAT IS THE SPANISH GOVERNMENT CURRENTLY DOING TO ADDRESS THE NATION’S ECONOMY AND ENCOURAGE GROWTH? The main reforms have been carried out in the labor and tax fields, as well as in the Spanish General Budget. The first one modifies the exceedingly protectionist status of the workers, in order to impulse – on a short-term basis – new jobs creation. The second reform aims at increasing incomes by means of taxes, and the third one at reducing expenses in almost all the budget allocations. The ultimate purpose is to lower the deficit to the level required by both Brussels and investors. WHY IS SPAIN’S UNEMPLOYMENT RATE IN HIGHEST IN THE EU, CURRENTLY STANDING AT 23.6%?

Company: ADARVE ABOGADOS, S.L.P Name: Álvaro Marco Email: alvaro.marco@adarve.com Web: www.adarve.com Address: Francisco de Rojas, 2 Madrid (Spain) Also, offices in Barcelona, Seville and Valencia. Telephone: +34 91 591 30 60

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing business around the world

DOING BUSINESS — in France PwC Corporate Finance is a market leading M&A network in 62 countries. In the last 10 years we provided financial advice on average 1 deal per day deals globally, valued at more than $382 billion, of which over 40% were cross border. This unique track record of consistent execution across the globe is represented by more than 1,300 M&A professionals including 25 experienced advisers in France. PwC Corporate Finance was ranked 6th Financial advisor in 2011 according to Thomson Reuters French Mid-market ranking with over 30 deals closed in 2011 for a total value of €3.0Bn. Our global network is a key differentiator from our competitors: we provide direct access to companies across the globe and our local experts support CEOs to bridge the cultural gap and bring in the required skills to maximize M&A processes outcome. France is a unique economic territory ranked 5th globally and 2nd in Europe. The French economy leverages its large corporations, 35 of them being ranked in the Fortune Global 500, and its renowned industries amongst which Pharmaceuticals, Aerospace, Chemicals, Food, Telecom and Nuclear. The solid fundamentals of French economy have been key to cope with the current difficult economic environment.

The French economy, despite the deepening of the European debt crisis since mid-year, is estimated to have ended the year with a GDP growth of 1.6%.

The relative attractiveness of the French economy as described above has also encouraged a number of international corporates to continue and even intensify their focus on France. The recent acquisition of Serians by Japanese group Konika Minolta, advised by PwC Corporate Finance, is a recent illustration.

The resilience of private consumption and the limited size of the manufacturing sector have been shields guarding the French economy against the slowing EU demand. However the country’s high exposure to debt in weak euro zone economies and chronically high joblessness are drags to the French economy, not to mention a slew of belt-tightening measures to uphold its fiscal position. This situation has obviously impacted the M&A environment with leaders being more cautious about their growth strategy and a debt market becoming restricted only to first-class assets. Sagemcom and Eismann are two examples of successful LBO transactions, both were advised by PwC Corporate Finance.

Company: PwC Corporate Finance Name: Tarique Shakir-Khalil Email: tsk@fr.pwc.com Web: www.pwc.fr Address: 63, rue de Villiers Crystal Park 92208 Neuilly sur Seine Telephone: +33 1 56 57 14 26

DOING BUSINESS — in Slovenia The already weak recovery ground to a halt at the end of 2011. A slowdown in exports sent industrial growth into reverse and on-going strains in the banking sector restricted finance for investment. Mainly due to the positive first half of 2011 growth reached 0.5%. The country’s economy in 2012 is expected to be heading toward stagnation with growth forecasted to be 0.2% due to the downturn in exports and a decrease in domestic consumption. Slovenia has recently had its credit rating downgraded as a result of the poor outlook in 2012. Slovenia’s parliament has voted in a new government ending months of political instability. The political change should help to consolidate the state’s finances, fostering growth and creating employment. One of the key tasks of the new government is to create a competitive business environment and attract new foreign direct investment. Slovenia is an attractive place to invest, It has good ties with markets in Western and South-eastern Europe, a central position in Europe and good infrastructure. The region has a skilled and highly productive workforce. The country has a positive business climate and benefits from low taxes, simple business start-up procedures and unrestricted transfer of profit and capital repatriation. Luka Podjed, managing partner of Law firm Podjed o.p.-d.o.o., Ljubljana, Slovenia. “Our law firm specialises in business law, being either domestic or international and also includes corporate, M&A, taxes, real estate, bankruptcy and litigation law. At this moment company comprises 5 fee earners all fluent in foreign languages and covering wide interlocal area of central and eastern Europe.

ACQUISITION INTERNATIONAL

“All of our team members have a lot of different experiences in various business projects that were gathered in other larger local offices. Besides that several members of our team have completed masters studies in Germany and Hungary, which also gives them comparative advantage in sense of additional knowledge, experience and networking. Subspecialisation is also crucial and distinctive for our law firm as every lawyer has its own and very specific specialisation, which gives us a head start to other “multitasking” law firms.” WHAT RISKS DOES SLOVENIA FACE IN 2012? WHAT METHODS HAVE BEEN PUT IN PLACE TO PROTECT THE ECONOMY? “Change of government in January 2012 is most important event so far. There is an insufficient bank loan placement activity which causes lack of actual money transactions in the economy. Slovenia was always rather problematic in the aspect of payment discipline and has only fallen deeper as the banks have closed their pipes. Methods of protection of national economy are still yet to be seen as government has only been formed, but one thing is certain that government will tighten the budged belt, which is not necessarily a good thing.” WHAT IS SLOVENIA CURRENTLY DOING TO IMPROVE ITS BUSINESS ENVIRONMENT IN 2012? HAS CONFIDENCE IMPROVED WITH THE INTRODUCTION OF A NEW GOVERNMENT? WHAT MEASURES DO THEY PLAN ON INTRODUCING?

“Confidence with new government has not improved as methods being used are not seen as bright ones. Business environment is still catastrophic as Slovenia has one of the highest tax rates in EU zone. Labour force costs are enormous as are enormous corporate and personal income taxes which can go as high as to 42% as an addition to social and pension transfers that employers are obliged to pay to state funds. Currently exposes plan is to encourage saving and lowering government budged, other plans are to sell certain government-owned companies.”

Company: LAW FIRM PODJED Name: Luka Podjed Email: info@podjed.si Web: www.podjed.si Address: Slovenska cesta 47, 1000 Ljubljana Telephone: +386 1 4300 310

June 2012 /

SECTOR SPOTLIGHT:

Doing business around the world

DOING BUSINESS — in India India is one of the fastest-growing economies in the world. Despite the rising risk of political and economic policies, the overall economic outlook of India in the long run is still intact. A significant bounce in investment will be required in 2012 for India to achieve its targets for its rapidly growing economy. Declining growth in 2011 could be attributed to poor performance in investment which could be largely improved upon. The government needs to adhere to its strategy to further reduce the fiscal deficit to support monetary policy in achieving a sustained reduction in inflation. Acquisition International speaks to Ms. Mona Bhide Senior Partner at Dave & Girish & Co., law firm. Dave & Girish & Co. was founded in the year 1978 by the late Mohanlal Dave who specialized in banking and securities documentation. Mr. Mohanlal Dave was also awarded a citation by the Government of India for translating the Constitution of India into the language of Sanskrit. The firm currently has 5 partners and offices in two cities of India, Mumbai and Bangalore. “Our Team of advocates includes lawyers who have excellent leadership qualities and are young, versatile and energetic. Each of our partners is an expert in diverse practices of law. Success of our client is of foremost importance at Dave & Girish & Co. Assisting our clients, in achieving their business goals and achieving their success is on our foremost agenda. Looking for and mitigating the risks that our clients may face is our fundamental purpose. At Dave & Girish & Co., we believe that the best practice is also one that is most cost-effective. The classic combination of seniority supported with versatile assistants, makes up our excellent team of lawyers. We

always value our client’s foremost interest and this is what we call the “D&G Advantages”.

industries, real estate etc. Thus, returning to a faster economic growth, with greater stability.”

WHY IS THE ECONOMY SUFFERING FROM A LACK OF INVESTMENT? AND HOW CAN THIS IMPROVED UPON THROUGH STRUCTURAL REFORMS?

WHAT ARE YOUR THOUGHTS REGARDING THE PREDICTED RECOVERY IN 2013? DO YOU THINK THIS FEASIBLE?

“As we know International Investments flowing into India, have currently slowed down this financial year. The primary reason for this slowdown is the growing financial crisis in European and continuing debt crisis in the US. Investors from major western economies are shifting investments from India to meet their own financial requirements in their country.

“India was largely insulated from the financial crisis hence there is no question of recovery but only faster economic growth. We except to see a sharp increase in growth percentage if Europe and America are able to recover and show interest in India. Indians believe that increase in growth is definitely going to take place in the Indian economy. “

DOMESTIC INVESTMENT IN INDIA IS AT A RECORD HIGH, SHOWING GREAT FAITH AND STABILITY IN THE INDIAN ECONOMIC GROWTH STORY. CAN YOU PLEASE EXPLAIN HOW THE EXPECTED IMPROVEMENTS TO EXTERNAL CONDITIONS ALONG WITH A PREDICTED FALL IN INFLATION WILL CONTRIBUTE TO A RETURN TO HIGH GROWTH IN 2013? “In 2013, we except that a major part of the crisis in Europe and America would be over and will result in greater economic global stability. If the Indian government along with the Central Bank through its monetary policies is able to control the inflation, we will be able to see greater growth in many sectors of the Indian economy such as the power sector, infrastructure, consumer durables, manufacturing

Company: DAVE & GIRISH & CO., Name: Ms. Mona Bhide Email: mona@davegirish.com Web: www.davegirish.com Address: 1st Floor, Sethna Building, 55, Maharshi Karve Road, Marine Lines, Mumbai -400 002, India Telephone: +91-22-2206 2132 / 92

DOING BUSINESS — in New Zealand With more than a decade of economic restructuring, New Zealand now has a stable and internationally competitive economy and according to the International Finance Corporation (IFC) the country has maintained its third-place world ranking in the Doing Business 2012 report, coming out top in the world for starting a business and protecting investors. Thanks to the privatisation of several utilities and state services the country is now of the most efficient and competition friendly economies in the world. Furthermore, a free and independent media ensures a high level of transparency in the corporate and government decisionmaking processes. Due to a weaker than expected economy, tax revenues were down almost 4% as the three main tax sources -- corporate, consumption and income -- were all below forecast as earthquake-related insurance refunds exceeded expectations and jobs growth remained weak, but according to Prime Minister John Key, recovery is well under way following on from the Christchurch earthquake and the primary focus is now to get New Zealand’s books back into surplus and to make the economy more productive. Acquisition International speaks to Kerry Ayers is the Managing Partner at Helmore Ayers Lawyers and Peter Wyllie is a Partner at Helmore Ayers Lawyers. Helmore Ayers is a boutique New Zealand Law firm specialising in Asset Planning, Trust, Commercial and Property Law. No New Zealand law firm has more expertise and experience in the fields of trusts and asset planning for

/ June 2012

international and New Zealand clients. Established in 1884, Helmore Ayers has an excellent record in handling clients’ affairs and maintain a high degree of ethical knowledge within the Firm. New Zealand has a stable, open and competitive economy, a non-corrupt and business-friendly government, competitive cost structures, low inflation policy and low corporate tax rates. Notably, in the Doing Business 2012 report, New Zealand ranked first for starting a new business and for protecting investors. Both of New Zealand’s major political parties prefer policies that favour reliance on market disciplines. There are few restrictions placed on businesses setting up in New Zealand. There are laws discouraging anticompetitive trade practices and the Commerce Commission is an effective watchdog, ensuring that those laws are enforced.

WHAT ARE THE KEY BENEFITS THAT NEW ZEALAND CAN OFFER THE INTERNATIONAL INVESTMENT COMMUNITY? New Zealand has a stable and internationally competitive economy supported by a strong banking system. The Reserve Bank of New Zealand is independent of the Government and supervises New Zealand’s banking system and implements monetary policy. There are several major trading banks and many other financial institutions. The parents of the four largest banks are all in the Top 20 of the Global Finance World’s Safest Banks index.

HOW HAS THE REGION ACHIEVED A HIGH LEVEL OF TRANSPARENCY IN THE CORPORATE AND GOVERNMENT DECISION-MAKING PROCESSES? New Zealand people value honesty, integrity and fairness and this is reflected in corporate and government policies and practices. New Zealand was rated first in the world in Transparency International’s 2011 Corruption Perceptions Index (CPI). New Zealand has a free and independent media and open access to information relating to administrative decision making at all levels of government.

Company: Helmore Ayers Lawyers Name: Peter Helmores Email: lawyers@helmores.co.nz Web: www.helmores.co.nz Address: Christchurch, New Zealand Telephone: +64 3 3665086

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing business in Australia

DOING BUSINESS — in Australia

Australia is a globally competitive location for business and is predicted to lead the world’s major advanced economies over the next two years. Strong institutions, flexible markets and effective and welltargeted economic policies provide a solid platform for business and political stability and a sound regulatory climate strongly support business growth. The IMF’s latest World Economic Outlook confirms Australia’s strength in the global economy, predicting economic growth of 3.0 and 3.5 per cent in 2012 and 2013, respectively, a trend which is set to continue also through to the following year. M&A activity is set to continue at a strong pace in the region with the mining sector remaining a key driver. Acquisition International speaks to the experts. MGI Melbourne is a medium-sized firm of chartered accountants and specialist advisors. Gary Douglas is Principal at MGI Melbourne Pty Ltd, he comments: “As your business growth advisor, MGI provides services and solutions for medium to large privately owned businesses and their owners, with a particular focus on family businesses. We also cater for the special needs of Australian subsidiaries of foreign companies. Through our international network of 280 offices in over 80 countries. We develop expert and specialist advisory services suited to the specific needs of each individual client.” WHAT GIVES YOU AN ADVANTAGE OVER LOCAL AND GLOBAL COMPETITORS IN YOUR AREAS OF EXPERTISE? “MGI is a business growth advisor specialising in providing solutions for family businesses. The MGI team has the professional experience and specialist knowledge to assist family businesses to meet the challenges of all the phases of their business cycle. MGI regards the advice and service that it provides to clients as comparable to that of the larger international accounting firms. However the advantages for MGI clients over these firms are that they are able to develop closer relationships with the MGI partners and they receive better value for money advice.” WHAT METHODS/ INCENTIVES HAS THE AUSTRALIAN GOVERNMENT PUT IN PLACE FOR THE REGION TO BECOME A GLOBAL COMPETITIVE LOCATION FOR BUSINESS? “Australia’s positive reaction to changes in the world economy that have occurred since the 1970s has now borne fruit. Australia has been able to quarantine itself from the financial difficulties of many of its trading partners during the recent world economic difficulties. The protectionist policies of its past are now long gone and Australia offers a stable investment environment, with low inflation (2% to 3% for the past five years). The Australian economy is very competitive by world standards. Foreign investment is always welcomed in Australia because the success of its economy is dependent upon substantial international trade. There are a number of government incentives available to developing industries and to exporters. Australia is well-placed in relation to the

ACQUISITION INTERNATIONAL

rapidly developing markets of Asia. It has a stable currency and its system of government ensures a continued healthy business environment. With Australia’s proactive approach to encouraging business, all levels of government provide business grants and incentives. Austrade and AusIndustry are two examples of the federal Australian government business grants programmes.”

by the ongoing strength of the Australian dollar and subdued consumer sentiment. Despite a significant cut to interest rates by the Reserve Bank in May, and the likelihood of further cuts, consumers remain cautious. Events in Europe are a likely contributing factor. It will take a turnaround in sentiment for softer parts of the economy to strengthen.

Sean Gregory is Deals Leader at PwC Australia, he comments: “Australia’s economy is regularly reported to be one of the most resilient in the world with a business environment that is flexible while providing a strong legal and regulatory framework. In the past, this together with political stability has been attractive to off-shore investors as economic gravity shifts towards the Asia Pacific region. However, in recent times the business community has been critical of uncertainty created by the proposed mining tax, carbon reduction initiatives and the industrial relations environment.

The Australian Deals business at PwC works closely with both outbound and inbound business to successfully execute on M&A activities. We do this by bringing an integrated and commercial point of view to how they develop their deal strategy, connect with potential investors and realise its full value. The services we deliver cover pre-deal strategy, strong diligence and valuation advice and post-deal integration activities. We do this across all sizes of business both public and private sector and in all key industries relevant to both on-shore and off-shore buyers.”

Over the past 20 years Australia has experienced an unparalleled period of economic growth, recently underpinned by the extraordinary growth of China and its demand for resources. The resources sector will likely continue to dominate Australia’s economic performance and drive further growth. China is also increasingly significant to Australia from a foreign investment perspective. Australia has become one of the largest recipients of Chinese investment, adding to long term interest from Japan. This investment is focused on asset intensive, global industries such as resources, energy and agriculture / food. Investment activity includes an increase in capital project investment as well as direct M&A. It is anticipated that these trends will continue to dominate activity over 2012 and beyond. Australia has also seen increased private equity activity as uncertain conditions in other parts of the economy, particularly retail and consumer brands, provide opportunities locally. Global patterns such as on-line retailing are driving some of this uncertainty. Beyond China, Australia is also well placed to benefit from its exposure to and relationships with the wider Asian region. The primary benefit for Australia beyond trade is that it is, currently, the largest recipient of outbound investment. This strategic advantage comes from a combination of proximity and richness in minerals. However, if Africa were able to scale itself to the needs of Chinese/Asian buyers their mineral richness and low labour costs could counter the proximity advantage held by Australia, regardless of political risk.Australia’s reliance on China is also one of its greatest risks. Our performance is so closely intertwined with China that should their growth soften this is likely to flow through and dampen domestic economic activity. The ‘multi-speed’ economy will continue as areas of weakness remain affected

Company: MGI Melbourne Pty Ltd Name: Gary Douglas Email: gary.douglas@mgimelb.com.au Web: www.mgimelb.com.au Address: Level 10, 600 St Kilda Road, Melbourne, Victoria, 3004, Australia Telephone: 61 3 9521 3000

Company: PwC Australia Name: Sean Gregory Email: sean.gregory@au.pwc.com Web: www.pwc.com.au/ Address: 201 Sussex Street, Sydney NSW 2000 Telephone: +61 (02) 8266 2253

June 2012 /

SECTOR SPOTLIGHT:

Doing business in Austria

DOING BUSINESS — in Austria

GDP is expected to rise 0.6% this year and grow by 1.3% in 2013. Weak external demand has kept growth subdued this year however Austria’s strong competitiveness position means the economy should benefit quickly whenthe external environment gradually recovers next year, with export growth expected to rise to 5.3%. Between 2007 and 2010, 54% of Austria’s exports went to the Eurozone and due to the on-going debt crisis export is no longer the driver for economic growth in Europe. The possibility of a Greek exit from the Eurozone could slow the pace of the recovery across Europe and the future of the Eurozone is still very much uncertain. Weak economic activity in the past three quarters has yet to take its toll on the labour market, but will do so eventually. The unemployment rate is expected to rise, averaging 4.4% this year, and increase to 4.6% in 2013. This combined with persistent external uncertainties, will keep consumer spending growth low at just 0.9% this year, before a likely acceleration to 1.2% in 2013. Driven by the crisis, Austria’s budget deficit climbed to 4.6% of GDP and public debt rose to 73% of GDP in 2010, however both are below the EU average. Acquisition International speaks to the experts. Johannes Willheim is founding partner of WillheimMüller Attorneys-at-Law (WMLaw) based in Vienna, Austria, he comments: “WMLaw is a corporate and commercial law firm which was established in the year 2005. With around 20 fee earners the firm is mid-sized for Austrian standards. WMLaw focuses on high end and high value cases and projects. A considerable portion of the firm´s network has a international aspect Most of the engagements cover the following practice areas: Austria, with its well-developed market economy, skilled labor force, and high standard of living, is closely tied to other EU economies, especially Germany’s. Its economy features a large service sector, a sound industrial sector, and a small, but highly developed agricultural sector. It has a high level of privatization, too. With the rule of law being a fundamental principle and the well functioning law enforcement, Austria is a safe place for foreign investors. Latest data from the WKO show an economic growth of expected 0.4% for 2012 and 1.4% for 2013 (real change of GDP, figures based on previous year prices). Hitting the growth rate of the EU almost with pinpoint accuracy (0.1% in 2012, 1.6% in 2013), Austria lies well below the appealing after-crisesyears 2010 (+ 2.3%) and 2011 (+3.1%). Reasons for the humble growth can be found within the decline in foreign trade, which never hit the optimistic prospects made in 2011. HOW HAS RISING UNEMPLOYMENT KEPT CONSUMER SPENDING LOW? “After a decline of the unemployment rate in 2010 and 2011, it is expected to go well over the 4% barrier and hitting a new peak in 2013 by reaching 4.8% (EUROSTAT – definition). The rather small change in consumption in the year 2011 to the previous year (+ 0.6%) is not expected to turn significantly to the better.” HOW HAS AUSTRIA COPED WITH THE ON-GOING DEBT CRISES IN EUROPE AND WHAT AFFECT THIS HAS HAD ON THE ECONOMY? “After overcoming the financial crises in 2009 the global

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economy growth rate marched back to similar figures as already seen in the pre-crises years, roughly + 5% (WKO 2011). Austria’s government introduced new tax laws to cope with the crises and agreed to the European Fiscal Compact in March 2012 to fight unified against the European sovereign-debt crisis.”

Austria has passed an austerity budget, introducing capital gains tax on real estate for privately held assets; pushing up retirement-age; reducing public white-clerks; taxing Swiss bank accounts (see above). The austerity budget does not leave much room for measurements to encourage growth.

Robert Schneider is General Partner, Owner of SchneideR’S attorney-at-law LLP, he comments:

WHAT IS AUSTRIA CURRENTLY DOING TO IMPROVE ITS BUSINESS ENVIRONMENT IN 2012? WHAT METHODS AND INCENTIVES HAS THE GOVERNMENT PUT IN PLACE TO MAKE ATTRACT FOREIGN INVESTORS?

“The firm was established in 2003 by Robert Schneider, Austrian lawyer, public accountant and tax advisor, as the sole general partner and family members as limited partners. The firm is still held in family hands and Robert Schneider is still the only professional. Our practice areas are international taxation issues, including indirect taxes and customs, trusts, company and contract law as well as Austrian citizenship and immigration law for high net worth individuals. The extensive professional experience of Robert Schneider (more than 25 years of professional experience in all kinds of positions, including auditing, head of tax and accounting of a listed utility company and positions in three major Austrian law firms) and good contacts to other advisors guarantee a one stop shop approach for the client; the fact that Robert Schneider is the only general partner working with small staff guarantees a direct involvement of Robert Schneider in each case.

The most important thing is to keep the stable image of Austria. At the same time the government tries to make Austria attractive for highly educated immigrants by amending its immigration laws. WHAT METHODS HAVE BEEN PUT IN PLACE TO PROTECT THE ECONOMY IN 2012? AND WHEN DO YOU THINK THE AUSTRIA ECONOMY WILL RETURN TO GROWTH? Direct or indirect public investment in infrastructure projects, in particular railway and public traffic, is still high. As mentioned above, return to growth is expected for 2013.

WHY IS GDP EXPECTED TO RISE 0.6% THIS YEAR AND GROW BY 1.3% IN 2013? “Fortunately enough, Austrian high technology companies still have a competitive advantage due to their know-how and export into countries with high growth rates (mainly in Asia) are booming. This helps Austria to outperform other European countries. 2012 is heavily affected by the resurgent EUROcrises, but hopefully the crises will be tackled in 2013, so that general European growth rates should recover with Austria still above the average due to its export-orientated, technology based companies.” HOW HAS AUSTRIA COPED WITH THE ON-GOING DEBT CRISIS IN EUROPE AND WHAT AFFECT THIS HAS HAD ON THE ECONOMY? As already mentioned Austria’s economy has definitely been affected by the debt crises. However, Austria is still regarded as one of the best standing states within Europe and therefore managed to get along well. Of course the crises forced Austria to pass an austerity budget, the effects of which are not yet fully clear. Definitely, the tax authorities are much more vigorous in collecting taxes, one part is the new tax treaty with Switzerland regarding lump sum taxation of undisclosed bank accounts in Switzerland. WHAT METHODS HAVE THE GOVERNMENT PUT IN PLACE TO REDUCE THE BUDGET DEFICIT AND ENCOURAGE GROWTH?

Company: WillheimMüller Attorneys-at-Law Name: Johannes P. Willheim Email: j.willheim@wmlaw.at Web: www.wmlaw.at Address: Rockhgasse 6, Austria, 1010 Vienna Telephone: +43 (1) 535 8008

Company: SchneideR’S attorney at law LLP Name: Robert Schneider Email: r.schneider@tax-law.at Web: www.tax-law.at Address: Hormayrgasse 7A Top 18 A-1170 Vienna, Austria Telephone: +43 (1) 486 720 900

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing business in Cyprus

DOING BUSINESS — in Cyprus

Banking sector problems, weak tourism from the EU and the need for sharp public sector cutbacks rule out any return to growth this year and a return to recession is now expected. Although deficit reduction targets for 2012-14 will be missed, cost cuts now being enforced will help to revive tourism growth after a bad first quarter, limiting the slide in GDP to just over 1% this year. The government is committed to retaining the 10% corporate tax rate and tax treatment for finance and shipping that ensures a large services surplus. But other tax rates are being forced up and the trade gap means a persistent current account deficit, imposing a financing constraint that will limit GDP growth in 2013-14.

professional and personalised service to the client in a quick, efficient and affordable manner.

Cyprus is connected to Greece through its banking system which has largely been downgraded due to heightened risks in Greece. Cypriot banks are estimated to have €4.2 billion of exposure to Greek sovereign debt and a Greek default would cause serious problems for Cyprus. Monetary conditions are tightening as banks limit lending while they deal with the effects of the Greek debt write-off, and emergency sales will keep the property market subdued. The government budget deficit is estimate to fall to 4% of GDP in 2012 from an estimated 6.5% in 2011, but will be higher than the government’s 2.8% target. Acquisition International speaks to Alexia Aspri,Director CA Advocates (Pourgoura & Aspri LLC) and Celia Pourgoura Director CA Advocates (Pourgoura & Aspri LLC).

“Cyprus enjoys an economy which has proven during its history that can overcome any obstacle which arises, with a business friendly government, and excellent geopolitical relations. Cyprus has always been a strategic platform for trade, politics and investments. Today, this has emerged into professional business service centre especially upon the credibility and legitimacy in being an EU and Eurozone member. Cyprus provides many advantages to the corporate sector, including the lowest corporate taxation rates in the EU (10%) with a broad range of double taxation agreements with almost 50 countries. Some of the non-exhaustive attributes of the business environment in Cyprus are the advanced transport and telecommunications infrastructure, the highly educated, skilled and multilingual human capital as well as a high standard of specialized professional services, including banking, tax, accounting, auditing, business administration, legal, investment and funds management.

CA Advocates (Pourgoura & Aspri LLC) was established in mid2011 by Mrs. Celia Pourgoura and Mrs. Alexia Aspri who had an aspiration to create a progressive commercial and corporate law firm by offering tailor made professional services by directing each client’s needs in a personal and individual way.

Although the Firm advises on all areas of Cyprus law, it focuses mainly on the business side of the legal affairs of investing into and via Cyprus driven by the favourable tax circumstances of Cyprus with core specialisations on commercial, corporate, banking, financing, shipping and real estate law. The Firm is considered a ‘boutique’ law firm consisting of 2 partners and corporate administrators. Our mission and vision is to provide professional and trusted legal services by establishing on-going and long term relations with our clients through commitment, specialisation and the highest level of

ACQUISITION INTERNATIONAL

CAN YOU PLEASE DEFINE THE QUALITY OF THE BUSINESS ENVIRONMENT IN CYPRUS AND THE RISKS IT FACES IN 2012?

Although the credibility of the Cyprus banking system has been affected from the economic crisis in Greece, there is confidence that Cyprus will be able to overcome all the obstacles. Despite the current situation, the reputation of the Cyprus banking system still enjoys the respect of the international community. Cyprus has traditionally had strong ties with a large community of foreign investors, keeping monies on the island. So far, the numbers show that foreigners are not worried. Central Bank data for April show a 0.5% year-on-year increase in total deposits in Cyprus to 71.6 billion euros. Of that figure, a 29% increase in deposits emerges from other euro zone residents. Of the Cypriot banks, Popular Bank is the most heavily exposed to Greek government debt. Popular Bank will be assisted by the Government following the latest parliamentary actions taken in May. Bank of Cyprus has managed to downsize its own capital shortfall of 1.57 billion euros to just 200 million euros, and plans to sell two insurance divisions to bridge the rest. Hellenic Bank seems to be escaping relatively easily, holding only 100 million euros in Greek sovereign debt, which it has already written down. The rest of the Cyprus banks remain safe and sound without any issues of concern.” HOW HAS CYPRUS COPED WITH THE ON-GOING DEBT CRISIS IN EUROPE AND WHAT AFFECT THIS HAS HAD ON THE ECONOMY? PLEASE PAY REFERENCE TO DOWNTURN IN TOURISM. “One should not forget that over 70% of the Cyprus economy is

based on the provision of services, a large share of that arising from tourism. Undoubtedly since the European economic crisis hit, consumers have become more careful and selective with their spending and decision making process and consider their options more thoroughly before making a decision on what choice is best for them to spend their money on. In terms of tourism, Cyprus is lucky in the sense that it has been quite easy for us to market the beautiful landscapes, beaches, weather and all the associated services which follow along. From the UK tourist holiday makers market place there has been an obvious drop in the numbers visiting Cyprus in the past few years, which has been due to the pound (£) exchange rate. This declining trend level has now been stabilised. On the other hand other market places such as CIS visitors have dramatically improved with tremendous increase of numbers inbound to the island. The Russian tourist market also falls into our top 1 or 2 categories of high spenders. Furthermore, the political unrest of the region around Cyprus, inclines tourists to choose Cyprus as the safest destination compared to other places close to us. It is worth noting that the Cyprus Tourism Organisation has been quite busy in attracting new target markets, in the sense that they have worked hard in attracting new airline companies, ones of low cost flights and destination routes. They have also been working closely with tour operators increasing their levels of co-operation and support to bring even more people into Cyprus; not just focusing purely on the summer season, but also opening up and increasing traveller numbers during the winter period of November through to April. Figures show that tourism levels are actually up despite of the prolonged European economic crisis.”

Name: Alexia Aspri Director Email: info@ca-advocates.com Telephone: +357 22 460831 Name: Celia Pourgoura Director Email: info@ca-advocates.com Telephone: +357 22 460831

Company: CA Advocates (Pourgoura & Aspri LLC) Web: www.ca-advocates.com Address: 33 Clementos Street, Office 401, 4th floor, 1061 Nicosia, Cyprus

June 2012 /

SECTOR SPOTLIGHT: Doing business in Italy

GOING BUSINESS — in Italy

Milan / Itlay

It is also to mentions that, in order to speed up court litigation, the Government has created the so called Company Courts which are sections of the Tribunals and of the Court of Appeals specialized in commercial litigation.” Economic growth is expected to return in 2013 by just 0.5% and continue to grow to 1% in 2014 and 1.2% in 2015. The Italian economy is in a destabilized state due to the lack of market reforms, an efficient bureaucracy, high corruption, heavy taxes and a high public deficit. Italy’s debt of 1.9 trillion euro along with its dwindling economy, have made the nation vulnerable to diminishing investors’ confidence even as the government tries to implement parliamentary reforms and restrain public spending. According to Rome-based National Institute of Statistics (Istat), unemployment is at an 11 year high of 9.3%. Industrial orders declined by 12.3% in February, whereas sales dropped by 1.5%. Italian industrial production plunged 6.8%. Italian business confidence plummeted in April as industrial output shrank 2.3% in the first quarter. Italy’s Prime Minister Mario Monti also conceded that it will not be able to achieve a balanced budget until 2015. The government has decided to curb its public spending by 4.2 billion euros in order to achieve its budget deficit targets. With this move, Italy hopes to avoid the earlier planned VAT hike from 21% to 23%, fearing that such a hike would only aggravate recession. Acquisition International speaks to the experts. Luigi Belluzzo is Managing Partner at Belluzzo & Associati (providing accounting, legal and business consultant services). Member of the Italian Chartered accountant institute - International Fiscal Association (IFA) –Member of The Society of Trust and Estate Practitioners (STEP).

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Belluzzo & Associati was established by Umberto Belluzzo in 1982 to advise Clients in all aspects of business activity and development. All our professionals work in synergy to offer interdisciplinary consultancy in the fields of Tax, Legal, Accounting and Estate Planning.

to the core of the Eurozone are the so-called indicators of governance – such as corruption, government effectiveness, and rule of law (Gross (2011). In the 2012 World Bank ranking of the ease of doing business, Italy consistently scores much below other developed economies.

Our Firm has been ranked among leading Firms by Legal 500, Chambers, World Tax, International Tax Review and Citywealth, and has been rated by STEP in the top five nonAnglo-Saxon firms but has been able to keep the boutique interdisciplinary approach that makes the difference with the other leading Firms.

Overall, for the ease of doing business, Italy is ranked 87 against 4 for the US, 7 for the UK, 19 for Germany, 29 for France and 44 for Spain. For more specific indicators such as the ease of paying taxes and the ease of enforcing contracts, Italy is ranked 134 and 158 respectively, versus 24 and 21 for the UK, 58 and 6 for France, 89 and 8 for Germany, 72 and 7 for the US.

After almost a decade of virtual economic stagnation, what factors have contributed to Italy’s main banking association forecasting a 1.4% contraction in GDP this year? Please pay reference to the internal policies that have discouraged growth. With an average growth rate of 1% over the boom years, the Italian economy has visibly underperformed since the introduction of the euro, both relative to its peers and relative to the nineties. Studies show that in the last decade, the three most important measurable growth factors actually improved in both absolute and relative terms (Gross (2011): • Investment in physical and human capital; the former is high and the latter is improving rapidly. • Structural indicators in terms of product and labour market regulation (all improving absolutely and relative to Germany according to OECD indicators). • Investment in R&D (improving).

Company: Belluzzo&Associati Name: Luigi Belluzzo Email: studio@belluzzo.net Web: web.belluzzo.net Address: Via Montenapoleone, 23 – 20121 Milan Telephone: +39 02 365 69 657

The only factors that have deteriorated absolutely and relative

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing business in Switzerland

DOING BUSINESS — in Switzerland

Financial centres have come under a huge amount of pressure from international governments to have a more fair and open approach to business; hence the last few years have witnessed a lot of change and the introduction of regulation.

That said there are still some very appealing reasons to form offshore and a wealth of great opportunities for both companies and individuals. Acquisition International’s offshore series aims to identify the key trends in the major hubs and pinpoint the most active and attractive locations.

reorganisations or transformations, advises on the structure and legal organization of investments, drafts shareholders agreements, assists in corporate asset protection and unfair competition, and advises on employment and social security law.

Switzerland is one of the world’s most stable economies; it has a modern market economy, low unemployment, a highly skilled labour force, a per capita GDP among the highest in the world and its policy of long-term monetary security and political stability has created a safe haven for investors. But even the strongest economies have been subject to the challenges associated with the global financial crisis; Switzerland entered into recession in 2009, largely due to the decline in global export demand and the country continues to fight the effects of the on-going Eurozone crisis, so much so that the government to cut its 2012 growth forecast from 0.9% to 0.5%. Acquisition International speaks to Christophe Wilhelm, partner, head of the Corporate Group of FBT Attorneys-at-law.

FBT is a recognised business law firm with offices in Geneva, Lausanne and Paris. FBT advises its private and corporate clients in Switzerland and abroad with a special focus on France and also on Brazil. Indeed, FBT is specialised in cross-border issues related to France and has therefore decided to open and develop a branch in Paris.

Founded in 1993, FBT is a business law firm with offices in Geneva, Lausanne and Paris. Our firm advises private and corporate clients in Switzerland and abroad with a special focus on France and Brazil. FBT assists its clients with domestic, as well as cross-border transactions in banking, tax, corporate and litigation matters. FBT’s Corporate and Contractual Law Group advises and assists companies, including international companies active in the trading of commodities, and entrepreneurs in a wide range of domestic and cross-border legal issues. Among others, it advises on the most appropriate legal structure for corporate affairs, drafts and helps negotiating acquisitions,

ACQUISITION INTERNATIONAL

As concerns Brazil, FBT has developed over the years a very close relationship with a recognised law firm in Sao Paolo and has thus developed strong connections with the Brazilian legal

business environment. Besides, both partners of the Corporate Group are doctors in law. Christophe Wilhelm currently lectures on the Set-Up, Organization and Finance in Swiss company law in the Graduate Program (LL.M.) of the University of Neuchâtel Law School. Marco Villa used to teach at the University of Lausanne. They can both be considered as experts in their field. In addition they can count on the highly specialised groups of FBT Attorneys-at-law, which is divided in four groups entirely dedicated to their field of competence. WHAT FACTORS HAVE CONTRIBUTED TO SWITZERLAND’S GROSS DOMESTIC PRODUCT PREDICTED TO INCREASE BY 0.8% THIS YEAR AND 1.8% IN 2013? “The first and main factor is related to the fact that Switzerland is outside of the Euro zone.The second factor is Switzerland’s economy oriented towards exportation of highly specialised and technological products and goods. Indeed, Switzerland remains a place renowned for the high quality of the goods it produces and the services rendered.” WHY IS THE EXPORT-LED ECONOMY EXPECTED TO REMAIN SUBDUED AS EUROPEAN DEMAND REMAINS WEAK DUE TO THE SLOWDOWN FROM THE DEBT CRISIS? “We are confident the European demand will resume and thus Switzerland’s economy will be even stronger. Though the European slowdown combined to our strong Swiss currency affects the exportation of certain goods, it does not affect the exportation of high quality goods and services for which Switzerland is renowned.” Contined on next page...

June 2012 /

SECTOR SPOTLIGHT:

Doing business in Switzerland WHAT EFFECT HAS SWITZERLAND’S STRONG CURRENCY HAD ON EXPORTS AND TOURISM? AND WHAT MEASURES HAVE BEEN TAKEN TO COUNTER THIS? “Switzerland’s strong currency has affected exportation of certain goods and tourism. However, the effects the strong currency are being controlled by the Swiss National Bank which has developed an efficient control mechanism that helps mitigate speculation related to Swiss francs.” Kellerhals Attorneys at Law is a Swiss-wide corporate law firm with offices in Berne, Basel and Zurich founded in the 1920ies. Kellerhals offers comprehensive services in all fields of law, including in the notarial field. Our main activities are focused on the areas of litigation, corporate law, M&A as well as transactions. Our clients are companies and entrepreneurs from all kinds of industries and economic sectors as well as individuals. WHAT GIVES YOU AN ADVANTAGE OVER LOCAL AND GLOBAL COMPETITORS IN YOUR AREAS OF EXPERTISE?

Zurich / Switzerland

“Being lawyers with a pragmatic and business-minded approach to the challenges, we understand the pressures and opportunities facing individuals and corporations in the current market. At Kellerhals we combine our technical expertise with considerable practical knowledge to help our clients to create and sustain value, resolve issues and fulfill their objectives.”

the watch industry, was not affected by the crisis. Especially the paper-, textile- and the engineering industries suffered. The tourism sector experienced the crisis due to the reduced demand of foreigners; however, part of the situation is rather a structural problem.

WHAT FACTORS HAVE CONTRIBUTED TO SWITZERLAND’S GROSS DOMESTIC PRODUCT PREDICTED TO INCREASE BY 0.8% THIS YEAR AND 1.8% IN 2013?

Fortunately, Swiss government and parliament are skeptical regarding state subsidies andmeasures. So the most important countermeasure was done by the independent Swiss National Bank to fix the minimum rate of CHF 1.20 per Euro.

“Overall, the Swiss economy survived the most recent economic downfall relatively unharmed, even though the traces left on the GDP growth rates are quite visible. Switzerland too, could not avoid the international decline towards the end of 2011. Furthermore, the rise in the value of the franc caused considerable problems for the country’s export and tourist industry.

Further, in August 2011, the Federal Council decided to invest 870 million Swiss francs in measures to support in particular the knowledge and technology transfer improving the environment and the growth potential of the Swiss economy.”

Due to sings for a stabilization on the European market, the experts changed the projection for Switzerland’s GDP for 2012 in their latest report from 0,5% to 0,8%. Especially private consumption will make the biggest contribution to growth. On the production part the service sectors banking, insurance, real estate, computer science as well as research and development have contributed positively to growth, whereas the value declined in the industry. Stronger global economic dynamics as of the middle of 2012 will probably lead to higher growth by the end of this year and for 2013.” WHY IS THE EXPORT-LED ECONOMY EXPECTED TO REMAIN V AS EUROPEAN DEMAND REMAINS WEAK DUE TO THE SLOWDOWN FROM THE DEBT CRISIS? “Not all in the export industry are affected in the same way by the dept crisis. For example, the watch industry noticed in 2011 a growth of 19%, which is considered as a record year. This is due to the fact that the Euro-crisis had very different effects on the European countries. The sales of watches in Germany for example increased by 60%, while they fell by more than 10% in Italy. Further, there is the Chinese market for watches, which is still growing, especially the luxury section.” WHAT EFFECT HAS SWITZERLAND’S STRONG CURRENCY HAD ON EXPORTS AND TOURISM? AND WHAT MEASURES HAVE BEEN TAKEN TO COUNTER THIS? “The strong currency had generally negative effects on the export and the tourism industry, even if some segments as

/ June 2012

Company: FBT Attorneys-at-law Name: Christophe Wilhelm Email: cwilhelm@fbt.ch Web: www.fbt.ch Address: 60, avenue de Rhodanie, P.O. Box 151, 1000 Lausanne 3 Cour, Switzerland Telephone: +41 21 711 71 00

CAN YOU PLEASE DEFINE THE CURRENT EXPORT MARKET WITHIN THE REGION? AND WHY THEY HAVE REMAINED STRONG DUE TO AN INCREASED DEMAND FROM NON EU COUNTRIES? “The by far most important trading partner for Switzerland is the EU. Within the EU Germany, Italy, France, the Netherlands and Austria are the most important trading partners for Switzerland. The trade in goods between Switzerland and the new EU member states in Central and Eastern Europe has increased significantly above average, especially with some individual states such as Poland and the Czech Republic. With one-fifth of the EU volume the United States is the second most important export country of Switzerland, followed by Japan. The export markets, however, are beginning to shift. Swiss companies are selling more goods in emerging and transition markets such as China, Brazil and India. In the last four years, exports have doubled in China and tripled in India. Still there are unpredictable risks as well as cross-cultural differences and language barriers that come with the investment in emerging markets. Part of good corporate governance is to identify systematically these risks and to minimize them. Especially for small and medium enterprises (SMEs) without representation in the respective countries, it is difficult to assess these risks. In Switzerland, SMEs account for 99.7 percent of all businesses.”

Company: Kellerhals Attorneys at Law Name: Dr. Beat Brechbühl Email: beat.brechbuehl@kellerhals.ch Web: www.kellerhals.ch Address: Effingerstrasse 1, P.O. Box 6916, 3001 Berne, Switzerland Telephone: +41 (0)58 200 35 00

Company: Humatica Name: Andros Payne Email: andros.payne@humatica.com Web: www.humatica.com Address: Forchstrasse 239, 8032 Zurich, Switzerland Telephone: +41 44 955 11 01

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing business in Greece

DOING BUSINESS — in Greece

GDP is expected to shrink 6.7% in 2012 and there is little sign of any improvement. The succession of fiscal austerity measures have plunged the economy into a deep recession, and consequently are extremely unpopular. The outcome of the general elections in Greece has not only left the country in political turmoil, it has also illustrated a massive rejection of the countries austerity measures and has made Greece’s future in the Euro Zone incredibly unclear.

Athens / Greece

Polls show that 72% of Greeks want to remain in the euro, however If the new government fails to implement the agreed reforms, it could lose its bailout financing and be forced out of the Eurozone. All eyes are on Greece at the moment and world stocks plunge as the possibility of a Greek exit from euro is gaining credibility. Despite the private sector debt swap in mid-March, Greek government bonds are still trading at a significant discount to their face value, reflecting continued concerns about the sustainability of Greece’s debt. The debt swap provides Greece with little effective debt relief, as it needs to borrow to fund bank recapitalisation and provide collateral for the swap. Therefore, any medium-term reduction in its debt stock must come from several years of fiscal austerity. Acquisition Inter Panagiotis Drakopoulos is the founder and senior partner of Drakopoulos Law Firm, a legal services company with 3 fully fledged offices in Greece, Romania and Albania, he commented: “Drakopoulos Law Firm is providing consulting and legal services to businesses since 1992.

with high legal skills, who understand their business vision and assist them materializing their objectives in a secure, effective and sustainable way. WHAT FACTORS HAVE CONTRIBUTED TO GREECE’S GDP PREDICTED TO SHRINK 6.7% IN 2012? “No political party having a strong mandate from the Greek people, as well as the anti-austerity movement, hindered growth, and caused the Greek economy to shrink considerably, putting it in a downward spiral for the past three years.” CAN YOU PLEASE DEFINE GREECE’S ROLE IN THE EUROPEAN DEBT CRISIS?

“Not much is currently being done, as everybody is expecting the outcome of the upcoming elections; this uncertainty has also ‘neutralised’ all efforts to attract foreign investment.” WHAT METHODS HAVE BEEN PUT IN PLACE TO PROTECT THE ECONOMY IN 2012? AND WHEN DO YOU THINK THE GREECE ECONOMY WILL RETURN TO GROWTH? “No effective methods are being used to protect the Greek economy; on the other hand, for Greece to return to growth, measures boosting the economy would be required, rather than protective ones.”

“One could argue that the European debt crisis was triggered mainly because of the way Greece’s debt was dealt with by the EU, the IMF, and even the Greek government. For example, more emphasis should have been given to assisting growth, rather than austerity.” WHAT FACTORS ARE CONTRIBUTING TO A RISING RISK OF A GREEK DEFAULT? AND A POTENTIAL EXIT FROM THE EUROZONE?

Amongst the Firm’s clients are major national and international businesses, including multinational companies, and companies listed on major stock exchange markets, as well as Public Authorities, Foundations and Non-Governmental Organisations.

Political instability and governmental apathy have lead things to a halt in the Greek economy. This could lead to EU/IMF financing to stop, which would de facto result in Greece’s exit from the Eurozone.

We provide turnkey solutions to businesses, always keeping in mind that what clients need is not lawyers who just know the law and advice them on what they cannot do, but rather lawyers

WHAT IS GREECE CURRENTLY DOING TO IMPROVE ITS BUSINESS ENVIRONMENT IN 2012? WHAT METHODS AND INCENTIVES HAS THE GOVERNMENT PUT IN PLACE

ACQUISITION INTERNATIONAL

TO MAKE ATTRACT FOREIGN INVESTORS?

Company: Drakopoulos Law Firm Name: Panagiotis Drakopoulos Email: pdrakopoulos@drakopoulos-law.com Web: www.drakopoulos-law.com Address: 332 Kifisias Avenue, 152 33, Halandri, Athens, Greece Telephone: +30 210 6836561

June 2012 /

SECTOR SPOTLIGHT:

Doing business in Greece Nikolas Kondylis, Lawyer, LLM Public Law, is a member of Athens Bar Association and the managing partner of N. M. Kondylis & Partners Law Office, which is located in Athens, Greece. “Kondylis & Partners” is a full service law office, specialized in the practice areas of Commercial – Business Law and Public – Administrative Law, with a long standing and distinguished presence in these areas.

forward to development in their country and are willing to work diligently towards this direction in collaboration with their European partners.

The Greek economy has been suffering from the lack of a long term development plan and vision. During the last two years austerity measures have obviously not worked towards the initial planned direction despite their observance by the government.

Over the last years our Law Firm has significantly grown, operating in various geographical regions and industries, such as pharmaceuticals, renewable energy, financial institutions, media/telecommunications and real estate. Our clients range from individuals and small, closely held companies to banks and public corporations, as well as venture capital firms and private equity funds. CFGA comprises of a team of more than 20 experienced, top-tier attorneys, members of various Bar Associations, (indicatively Athens, London, New York), active participants in various Commercial Law Associations.

The remedy prescribed by IMF and EU has created unexpected trade recession which consequently and unavoidably has led to a further reduction of the country’s GDP during 2012. The results of the enforced fiscal policy which has been followed strictly till now, apart from the current political instability and the rapidly growing anti-austerity movement that has created, are extremely poor and seem to lead to a dead end. The danger of a Greek default and a possible exit of the Euro zone may appear as a possible scenario for the time being according to analysts, although it should be taken for granted that politicians are not expected to take such a risk. They seem to be determined to take any necessary measures in order to protect the interests of the country, taking into account that the overwhelming majority of the Greeks do believe that the country should stay within the European family as they give a definite vote of confidence to the Euro and the European institutions. Therefore, what is really needed for the resolution of the financial crisis, whose end may be close if Europe offers its valuable help in the right direction, is a long term development plan, combined with a proportional dose of austerity. This opinion, which seems to be gaining ground in EU, is the only promising remedy to the problem. A balanced development program based on deep structural changes in the Greek economy and the public sector, an effective use of the European funding and a further reduction of bureaucracy will definitely improve the business environment, attract new investments and lead to a financial rebirth. We should take seriously into consideration that Greece, despite the apparent temporal liquidity problems, is a rich and promising country with a heavy tourist industry, strong agricultural production and innumerous, unexploited mineral and natural resources, inc. gold, gas, oil and solar energy. These indisputable facts under the development remedy and in connection with the exclusive economic sea zone (EEZ), which is planned to be declared in the near future, can create the positive “shock” that the economy needs in order to lead to a long standing financial boom. The current crisis has created many opportunities that foreign investors should evaluate seriously, quantifying the new investment incentives Law, which has established new objectives, procedures and tools towards a healthy and outward-looking business environment. Greeks eagerly look

/ June 2012

CFGA was founded in 1981 in Athens, based on the twin pillars of advisory and dispute resolution, establishing an extensive German clientele and a long-standing collaboration with prominent Law firms in Cyprus.

Our core principal is to provide individualized and high-quality legal services, emphasizing on results, time management and commitment to problem solution. CFGA Attorneys undertake challenging assignments within their field of expertise, endeavouring to adapt to changes in the market and the regulatory landscape, bearing in mind that being proactive and innovative is a key factor to a successful and enduring business. “Greece is beleaguered by a severe financial, political and social crisis. The “bailout recipe” of harsh austerity measures and spending cuts imposed by the IMF, the EU and the ECB, has left no room for growth and business development, dragging the country deeper into recession. Further to this, elections of 6th May showed that Greeks are in political disarray, shifting from mainstream political parties to leftists and far right parties, demonstrating that economic collapse is pushing politics to the extremes.” CAN YOU PLEASE DEFINE GREECE’S ROLE IN THE EUROPEAN DEBT CRISIS? “Greece is a country accounting for less than 3% of the Eurozone’s output. However, Europe is striving to avoid “contagion”, as Greek default could be the catalyst for terminal Eurozone crisis, pulling the trigger for large economies such as Italy or Spain. As Nouriel Roubini said, Greece is just the tip of the iceberg of a sovereign debt crisis.”

George Daoukas, partner at Law Office - George Ar. Daoukas commented: “During the 25 years of actively practicing law since its establishment in 1987, my office has formed a large number of companies, mostly joint stock companies, transformed many small-scaled enterprises and companies into joint stock or Ltd companies and carried out mergers and acquisitions, as well. Evidently, it has large experience in planning and preparing the implementation of business plans and investments as well as in supporting them after implementation. Implementation and support of a foreign investment is a much more demanding and difficult task compared to that of an inland, because the foreign investor is not aware of significant structures and procedures and the lawyer apart from supplying accurate, in depth and analytical information he should be able to take initiatives and guide him in each and every step towards a successful completion.

Company: N. M. Kondylis & Partners Law Office Name: Nikolaos Kondylis Email: info@kondylislawoffice.gr Web: www.kondylislawoffice.gr Address: 8 N. Gennimata St., zip code 115 24, Athens Greece Telephone: (+30) 210-6995792, -93, -94,

Company: CORINA FASSOULI GRAFANAKI & ASSOCIATES LAW FIRM Name: Yolanda Psychogyiou Email: yolanda.psychogyiou@lawofmf.gr Web: www.cfgalaw.com Address: 16 Panepistimiou Str., 10672, Athens, Greece Telephone: +30 210 3628512

WHAT IS GREECE CURRENTLY DOING TO IMPROVE ITS BUSINESS ENVIRONMENT IN 2012? WHAT METHODS AND INCENTIVES HAS THE GOVERNMENT PUT IN PLACE TO ATTRACT FOREIGN INVESTORS? Business development is essential in order to kick start the Greek economy and exit the crisis. There are significant investment opportunities, especially in the fields of renewable energy, shipping and tourism. Successive regulatory measures have been passed the last couple of years including the acceleration of companies’ incorporation, “fast track” projects and investment incentives laws. However, their implementation is discouraged by incomplete enforcement methods and the current political instability.”

Company: Law Office Name: George Ar. Daoukas Email: info@daoukas.gr Web: www.daoukas.gr Address: 19 Fragon Street, GR-546 25 Thessaloniki, GREECE Telephone: +30 2310 538960

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Doing business in Greece

My office has the required know-how and necessary experience to implement and support investment plans as it has dealt successfully for years with investments coming all the way from the Atlantic. Greece is in the centre of the international attention, mainly due to its bad image which, however, does not correspond to the reality since there are many exaggerations. Tax fraud or avoidance, corruption and state administration ineffectiveness are common problems throughout the world. On the contrary and apart from the existing debt crisis, Greece is in a much more favorable position in all sectors than the rest of the countries in the area of southeastern Mediterranean. Greece has serious, extended and reliable infrastructures for hosting and supporting investments such as port and air connections, road and railway network, telecommunications and energy transfer network. Significant reforms have been made in the structure and function of the public sector, thusly facilitating significantly the realization of investments. Through the upcoming alteration of the tax law there will be a simplification in the provisions and application of such law. It requires now only 2-3 days to form a company and the formation and operation of a Private Company has already been institutionalized. The actual working hours of the working force in Greece are the highest ones within the European Union as well in the Euro zone, while the salaries and fees are the lowest ones in the Euro zone and unemployment reaches beyond 20%. The vast majority of the Greek people and the aggregate of the political parties express their wish to remain in the Euro zone as well as in the European Union and will do their best to achieve this goal. It is already internationally recognized, that Greece has made significant effort towards this direction. So I believe that there is no danger for Greece exiting the Euro currency in any way. It is only a matter of short time for Greece to take the right course again. Official estimations expect a decrease in economic depression for 2013. However, this means that the steps to the change of the course of the depression have already begun and some others will take place within this year. My office, within the first five months of 2012 has already formed 7 companies belonging to domestic entrepreneurs, 4 of them joint stock companies, and is currently involved in the formation of some others being due in the summer. In conclusion, I must mention that apart from the political forces in Greece, many European and international politicians, country leaders, chiefs of organizations, personalities and economists are in favor of granting assistance and funds for the commencement of the country’s development. This fact alone, has contributed to the improvement of an investment and business-friendlier attitude with results already apparent as shown above.” Remantas & Linardakis Law Office was originally founded in 1968 and has both developed a wide domestic clientele and established a strong international profile by providing legal services of the highest quality to a series of foreign clients from various sectors of the economy, including large scale multinational companies. Remantas & Linardakis has significant expertise in M&A, corporate, banking and corporate financing, licence and

ACQUISITION INTERNATIONAL

distribution agreements and competition and antitrust law: it is listed in the 2012 Legal 500 Guide as a competition law expert office and has contributed the chapter of Unfair Competition in the Greek Law Digest (http://www.greeklawdigest.gr/), the most complete and comprehensive legal guide that has ever been made in the English language on all the basic regulatory and legal aspects that an investment in Greece may entail. As managing partner of Remantas & Linardakis, our legal team and I personally have dealt with the very core of the Greek debt crisis. The provision of legal advice to multinational Greek government bond holders in the extremely complex “haircut” procedure, the representation of international credit insurance houses in Greece and the successful management of the financing of various projects in such a challenging period has given us a deep insight of the multi-scale impact that this crisis has on the so called “real economy”. The strict austerity measures in combination with the poor productivity of the Greek economy over the last years have led to a deep recession.

Despite the rising popularity of the antiausterity movement and the consequent shift in the political scene, it is widely maintained that the majority of the Greek people are in favour of Greece staying within the Euro-zone. After all, especially after the very recent developments in Spain, which is the 4th biggest economy in the EU, it is clearly illustrated that the boundaries of the crisis exceed those of Greece and the situation calls for a political, EU-wide solution. Katerina Christodoulou is a founding partner of Your Legal Partners, a law firm established in 2008. YLP acts for major Greek and international clients with an emphasis on highend corporate and finance transactions. Our motto has always been to see our relationship with each client as a long term partnership helping client achieve its business plans. Our motto has become our name. WHAT FACTORS HAVE CONTRIBUTED TO GREECE’S GDP PREDICTED TO SHRINK 6.7% IN 2012? Greek economy suffers from an explosive cocktail of long lived deficits and an outstanding sovereign debt exceeding 123% of GDP. In addition even prior to crises during the booming years (2204-2008) Greek economic model was focused on consumption and was based on a oversized public domain and government social protection without producing wealth. Together, all these aspects coupled with mismanaged public administration have driven the country in assuming a massive unsustainable government debt. As a result of the establishment of Economic Adjustment Program, Greece adopted comprehensive fiscal consolidation measures and very severe austerity measures. These measures together with expenditures cuts cannot but have a dampening impact on domestic demand, on economic activity, as well as of the declining disposable income and public spending. Obviously, such time period had been the time for bold political leadership in Greece in order to affect the necessary structural reforms. However, any such measures were restricted to cuts and increase of taxes to achieve budgetary balance instead of

enforcing structural reforms needed, including down size of the public sector. As a result, the population has been exhausted after 5 years of recession and an unemployment reaching 20%, a fact that caused political instability, enhancement of populists and euroskeptics politicians and discouragement of development perspectives. Greece is now walking to its second election in a month hoping for a bold stable government being able to carry out the faith again to both Greek people and the rest of the world. CAN YOU PLEASE DEFINE GREECE’S ROLE IN THE EUROPEAN DEBT CRISIS? Other bailout countries, Portugal and Ireland and recently Spain are also at risk due to their current account deficits and competitiveness problem, as well as the problems of the banking system and real estate bubbles. In addition some argue that Italy is to follow given its deficits and need for fiscal reform. Thus a possible exit of Greece from EMU might cause a contagion, a metastasis to other peripheral countries of South. Even if the financial impact is measurable and bearable the political and social risk is not. WHAT IS GREECE CURRENTLY DOING TO IMPROVE ITS BUSINESS ENVIRONMENT IN 2012? WHAT METHODS AND INCENTIVES HAS THE GOVERNMENT PUT IN PLACE TO MAKE ATTRACT FOREIGN INVESTORS? “There have been major labor market reforms mainly regarding flexible working arrangements and reduction of wage floors. In addition steps were made to ease entrepreneurship, namely “one –stop-shop” for setting up new business, establishment of general commercial registry, fast track processes, abolition of cabotage rules related to cruise vessels flying non -EU flags, establishment of Hellenic Republic Asset Development Fund destined to the development and/or sale of State assets by which some landmark privatizations have already been launched. Finally important steps have been taken in connection with transparency in the public sector expenditure.”

Company: Your Legal Partners Name: Katerina Christodoulou Email: info@yourlegalpartners.gr Web: www.yourlegalpartners.gr Address: 11 Omirou & 1 Vissarionos Street GR-106 72, Athens (1st floor) Telephone: 00302103388831

Company: Remantas & Linardakis Law Office Name: Stavros Linardakis Email: s.linardakis@remlin.gr Web: www.remlin.gr Address: 28 Tsakalof Str., 106 73, Athens, Greece Telephone: +30 210 360 34 16 – 18

June 2012 /

SECTOR SPOTLIGHT:

The exclusive environmental due diligence provider in Belgium

THE EXCLUSIVE — environmental due diligence provider in Belgium Effective due diligence through every stage of an M&A transaction is imperative and being aware of any potential risks right from the beginning can save prospective buyers an awful lot of time and money further down the line.

Belgium

Comprehensive due diligence enables such individuals to better understand what they are buying before bearing the risks of ownership. Traditional due diligence techniques often only verify the history of the target and projects the future based on that history; correctly applied due diligence digs much deeper and considers all aspects of a business. Geert De Buysscher is Benelux Managing Director and Principal at ENVIRON, who specializes in Environmental and health safety (EHS) due diligence. For nearly 30 years, ENVIRON has been recognized as a technical leader and innovator in providing due diligence services to our clients assessing the environmental, health and safety risks associated with a transaction. We understand the pace of deal work and the needs of our clients to manage their business risks confidently. Our global platform of experts represents broad and deep experience across all major industrial sectors. This integrated team works seamlessly to meet tight transactional deadlines with a high-quality, timely, and cost-effective work product that supports decision making. ENVIRON’s consultants are sought after not only for their interdisciplinary technical and scientific expertise, but for their business and transactional acumen as well. We ensure that clients are directly engaged with seasoned Principals and Senior Managers throughout the process, which also facilitates longerterm post-transaction support. We can draw upon our in-house experts in health and environmental science to address complex human health and environmental exposure and damage issues. This unmatched depth and breadth of expertise renders us an invaluable strategic partner in a complex and evolving arena. Our clients include private sector clients including FTSE

/ June 2012

and Fortune 100 companies, major lending, private equity and investment institutions; international law firms and commercial developers. WHY IS EFFECTIVE DUE DILIGENCE IMPERATIVE IN M&A TRANSACTIONS? “Routine assessment and management of potential health and environmental risks is simply good business. ENVIRON can help identify opportunities and implement strategies to reduce identified risks, reduce operating costs and improve stakeholder relations. This may involve developing management systems, preparing CR reports or instituting effective product stewardship practices to address the potential risks associated with the manufacture, use or disposal of products; all of which can improve value and enhance a business on many levels. CAN YOU PLEASE EXPLAIN THE IMPORTANCE OF EHS DUE DILIGENCE AND DEMONSTRATE HOW IT CAN MAKE A POSITIVE CONTRIBUTION TO A TRANSACTION? “Our successful completion of many thousands of assessments ranging from the transfer of small, single-site greenfields to multibillion-dollar global deals has provided valuable insights into the relationship between material risk and liabilities and deal structure and value. We are responsive to time-critical demands, experienced in evaluating options for managing risk, familiar with financial valuation techniques, aware of the importance of an exit strategy, and adept at identifying and implementing opportunities for reducing risk and increasing asset value prior to exit. What methods and strategies do you use to compile a EHS due diligence plan?

“ENVIRON’s consultants have seen firsthand the business impacts of unexpected liabilities that come to light post transaction problems that an appropriately designed due diligence process would address and potentially mitigate. Our due diligence professionals engage with engineers and scientists across the company, enabling us to address a broad spectrum of potential business liabilities including site-related issues, broad EH&S regulatory compliance; occupational safety and health; product stewardship; and sustainability issues WHAT ARE YOUR PREDICTIONS REGARDING THE APPETITE FOR EHS DUE DILIGENCE OVER THE NEXT 12 MONTHS? “The appetite for EHS due diligence in the next 12 months will be highly dependent upon developments in the global economy.”

Company: ENVIRON Name: Geert De Buysscher Email: gdebuysscher@environcorp.com Web: www.environcorp.com Address: Meersbloem-Melden 46 – B-9700 Oudenaarde - Belgium Telephone: +32 55 612 155

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

The Cayman Islands bouncing back

THE CAYMAN ISLANDS — bouncing back

The future looks bright for the Cayman Islands as the Government is projecting that the country will likely bounce back from the last two years of economic contraction to see growth this year and up to at least 2014. Growth is expected to be driven by a strong recovery in tourism and a robust performance from the financial services industry.

The Cayman Islands

According to McKeeva Bush, while the economy contracted in 2010, “based on the forecasts made for the local economy, coupled with the supportive actions of the Government for private sector projects, there is the bright and encouraging likelihood of growth within the Islands’ economy”. Acquisition International speaks to the experts.

THE INDEPENDENT DIRECTOR the Investors Watchdog

Largely ignored or at worst regarded as an unnecessary nuisance for many years independent directors have finally been recognised by all in the hedge fund industry as the key to keeping everything on track, and nowhere is this manifested more so than in the Cayman Islands, the world choice for hedge fund domicile. ACQUISITION INTERNATIONAL

Not the least of those now recognizing their importance are the investors themselves and to such an extent that it is now common practice for institutional investors to visit the Cayman Islands to carry out extensive due diligence on the directors as well as the investment manager. Indeed there is a new burgeoning industry of professional due diligence firms hiring themselves out for a fee to do due diligence on the directors on behalf of the shareholders. Why all of a sudden all this attention? Possibly because, after Madoff, investors realize they may never be able to rely on regulators to safeguard their interests. After all Bernard Madoff managed to defraud investors of over US$50 Billion in one of the most regulated financial markets in the world. If not the regulator - then who? Enter the independent director! Given enough freedom of access and sufficient remuneration to do a good job the independent director should be able to safeguard not only the investors but also act as a steadying influence on the investment managers, lay down proper guidelines for administrators and see that “true and fair view” financial statements are presented to the auditors for audit and final presentation to the shareholders. Much has been written about what to look for when appointing an independent director. Luckily its is not rocket science. In a nutshell the independent director should be qualified and experienced in the fund industry with sufficient years of proven track record in similar roles and with sufficient resources

to be able to provide systems to monitor all the activities of the fund and those to whom functions have been delegated. It is also desirable that he belong to a recognized association requiring him to subscribe to a code of conduct for directors. Above all else he should be completely independent of all the other service providers to allow him to make totally independent decisions in the interest of the fund only. What can the shareholders do to assist the independent director perform his “watchdog” role? Shareholders should ensure the independent director is properly remunerated to be able to properly carry out his fiduciary duties and to put in place any systems or procedures that may be required to enable him to carry out his duties. They should also ensure the fund indemnifies and insures the independent director against any claims against him that may arise as a result of acting in the service of the company. Of course fraud or willful misconduct will be excluded. However the director must be free to act fearlessly on behalf of the fund without feeling unduly fettered by the threat of being financially responsible for expenses or costs in respect of law suits. He must also have sufficient resources available to him that will allow him to engage independent professional advice when necessary. Paul Harris, Chairman - IMS Director Services, a division of International Management Services Ltd, a licensed Cayman Islands trust company established in 1974.

June 2012 /

SECTOR SPOTLIGHT:

The Cayman Islands bouncing back Paget-Brown Trust Company Ltd”s practice areas include company, trust and partnership administration embracing many different aspects of activities including investment holding, property holding, aircraft, ship and yacht registration and fund activities. The company is licensed by CIMA with an unrestricted Trust Licence and a Mutual Fund Administrator Licence. Sydney J Coleman, Chief Executive Officer of Paget-Brown Trust Company Ltd commented: “We are an independent company based in the Cayman Islands, medium sized by local standards but small internationally. As a consequence of our independence, expansion of business has relied upon our own efforts rather than those of a parent or group and this has been achieved by the standard of service provided for almost thirty years. We react quickly to client’s requirements providing services sought professionally and without delay for what we consider to be a fair value for money cost. An integral part of being able to do so is the standard of ability and long term service of many of our employees who have developed strong working relationships with our clients. Growth during the next several years will be determined primarily by factors outside of the Cayman Islands and the state of the world’s economy generally. Cayman has established itself as a highly professional and reputable jurisdiction and has been a frontrunner in establishing KYC/AML standards now required of all countries by organizations such as OECD, FATF and the IMF. Current levels of company and fund registrations reflect an increase over 2011 as they did last year over 2010 and have returned to the 2008 record levels. Whilst offshore financial centers like the Cayman Islands have often relied on two industries, namely finance and tourism, there are initiatives progressing within Cayman for medical tourism, an Enterprise City and further capital developments driven by the Cayman Islands Government and one very substantial developer in particular. Government has been involved in providing incentives through reduced or relaxation of duties, immigration requirements to encourage longer term employment opportunities and permanent residence and promotional activities. The Cayman Islands economy has suffered since the Autumn of 2008 although not to the degree of many countries in the industrial world. Government revenue has diminished as a consequence of lower tourism arrivals and less new business generated in the financial community. Notwithstanding that, much of the business in 2008 has been retained in the financial industry and recent figures reflect small but positive gains in large sectors such as hedge funds, captive insurance and companies incorporated. There are signs of increased activity although not always resulting in new business to date. Through CIMA and the Cayman Islands Government working in conjunction with the private sector, the Cayman Islands has established itself as a jurisdiction willing to consider new initiatives to further activities of a reputable and legal nature and this has been an ongoing process for over 25 years.”

/ June 2012

Sedgwick Claims Management Services, Inc. is the leading North American provider of innovative claims and productivity management solutions. Sedgwick and its affiliated companies deliver costeffective claims, productivity, managed care, risk consulting, and other services to clients through the expertise of nearly 10,000 colleagues in 190 offices located in the U.S. and Canada. The company specializes in workers’ compensation; disability, FMLA and other employee absence; managed care; general, automobile and professional liability; warranty and credit card claims services; fraud and investigation; structured settlements and Medicare compliance solutions. Sedgwick and its affiliates design and implement customized programs based on proven practices and advanced technology that exceed client expectations. For more see www.sedgwick.com.

onshore if pressed, but will often keep a Cayman fund as a part of the structure to ensure efficiency and maximize benefits. As a result Cayman has maintained its dominance in the investment funds market.”

Company: IMS International Management Services Ltd Name: Paul Harris F.C.A. Email: pharris@ims.ky Web: www.imsfundservices.com Address: PO Box 61, Cayman Islands, KY11102 Telephone: 345-916-2445

Sophia Harris is Managing Partner of the Cayman law firm, Solomon Harris. Sophia specializes in hedge funds, trusts, banking and finance as well as immigration and local licensing, she comments: “Solomon Harris is a founding member of the Cayman Chapter of AIMA and plays an active role with AIMA. I am a member of the Cayman Islands Directors Association which is instrumental in acting as an oversight body for the Directors in the jurisdiction, including directors of investment funds. As such they have issued a code of conduct for the profession to ensure those industry standards are maintained. They were one of the first to react and condemn the conduct of the directors from the now notorious Weavering case, it being noted that none of the directors in that case were from or operated from the Cayman Islands. Regarding the business environment in Cayman, back in November 2011 the Financial Stability Board (the supranational body which includes the OECD) made the finding that Cayman has ‘sufficiently strong’ regulatory and supervisory standards in cooperation and information exchange on the global stage. In that same month the G20 cleared Cayman from the ‘tax haven’ list. Cayman has also kept its A3 rating by Moody’s. It is also worth mentioning that the Banker’s latest survey gave Cayman the number one spot for a third year running as the leading specialist finance centre. This attests to Cayman continuing to be a dominant player in the industry. A study released this year which was conducted by Griffith University in Australia, shows that offshore jurisdictions such as the Cayman Islands were much more compliant than those in the OECD or developing countries. The Cayman Islands for instance, was one of only two countries out of 183 that collected all the identity information required by anti money-laundering regulations. The international finance industry players know that the level of expertise needed to establish and operate a fund optimally is readily available in Cayman and time has demonstrated that Cayman remains the jurisdiction of choice. When investment managers are forced by onshore legislation to look onshore to establish their funds, they tend to find that it is not as efficient and more expensive to do so. They may therefore set up

Company: Paget-Brown Trust Company Ltd Name: Sydney J Coleman Email: paget@candw.ky Web: www.paget-brown.com.ky Address: Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman KY1-1102 CAYMAN ISLANDS Telephone: + 1 345 949 5122

Company: Sedgwick Claims Management Services, Inc. Name: Julie Kolibash Email: Julie.Kolibash@sedgwickcms.com Web: www.sedgwickcms.com Address: 6377 Emerald Parkway, | Dublin, OH 43016 Telephone: 614-374-5969

Company: Solomon Harris Name: Sophia Harris Email: Sharris@solomonharris.com Web: www.solomonharris.com Address: 3rd Floor FirstCaribbean House, PO Box 1990, George Town, Grand Cayman KY11104, CAYMAN ISLANDS Telephone: + 1 345 949 0488

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Resolving energy disputes

RESOLVING — energy disputes

The international energy sector is extremely volatile from both a political and economic point of view and with the industry frequently giving rise to complex and high-value disputes; companies operating within the sector are faced with one of the most contentious business environments around.

The energy market is complex and constantly fluctuating and thanks to this inherent nature, many of the disputes that arise are simply unavoidable. When disputes do arise, companies in the energy sector expect the very best from their legal teams because they have so much on the line. The range of conflicts is vast and disputes often involve a multitude of parties – from market players to government departments –therefore effective settlement requires strength in many areas of the law and technical expertise across the full range of traditional and alternative dispute resolution techniques. Acquisition International speaks to the experts. Salman Talibuddin partner at Kabraji & Talibuddin comments: “We have extensive experience of representing both lenders (employing conventional as well as Islamic modes of financing) as well as sponsors (both foreign and local) and project companies” WHY IS THE INTERNATIONAL ENERGY SECTOR ONE OF THE MOST CONTENTIOUS INDUSTRIES OUT THERE? “The energy sector is influenced by a range of factors – political, economic, environmental, technological etc – the interplay between which is essential to the overall performance of the sector. Any difficulty experienced in one factor impacts heavily on each of the others, due to which management of the sector becomes increasingly complex. The industry is not only sensitive to local conditions, but is also influenced by international institutions as well as the relationships between different countries. Locally, IPPs rely heavily on oil provided by Pakistan State Oil (PSO). However PSO suffers an internal deficit due to which it has not paid its debts to the oil refineries. The refineries have in turn reduced their supply to PSO, which restricts oil flow to the IPPs, thereby stalling production at considerably below potential.

ACQUISITION INTERNATIONAL

From the global perspective, governmental instability and weak ties with countries such as India have stalled the development of gas pipelines in Pakistan. This contributes to and essentially fosters the prevailing energy crisis in the country. The economy is hit hard as entire industries are forced to suspend production or even close down. This weakens popular support for the government, triggering civil unrest. The effect is cyclical therefore, as reinvestment in the energy sector becomes heavily compromised.” WHY IS THE INTERNATIONAL ENERGY SECTOR EXTREMELY VOLATILE FROM BOTH A POLITICAL AND ECONOMIC POINT OF VIEW? “In Pakistan, the unstable political environment has inhibited the development of power policies. Coupled with pervasive corruption and dishonesty, this poses the problem of an increasing circular debt and absents effective governance. Without a progressive framework it also becomes difficult to provide targeted incentives for encouraging investment in the sector. In addition, weak tax enforcement regimes and non-payment of electricity bills have also contributed to the staggering economy. As a result there is a poor allocation of funds directed towards skill, technology, infrastructure and research development in the sector. The cost of generating electricity also remains high, particularly as Pakistan is yet to determine a workable composition of energy supply and there is close to no environmental regulation. This has created a wide gap between

the generation capacity of the country and the extent to which it is exploited, thus fuelling the existing shortage.” DR. KLAUS OBLIN, LL.M. RECHTSANWALT ATTORNEYAT-LAW commented: “Many clients who rely on our dispute resolution expertise are energy producers and marketers. They produce, source, process, refine, transport, store, finance and supply energy and energy-related products respectively. “The international energy sector one of the most contentious industries out there because the development of energy resources is one of the most contentious political issues as it creates opportunities yet at the same time poses threats (eg to the environment).” IN YOUR OPINION WHICH METHOD OF ADR IS MOST THE COST-EFFECTIVE AND SUITABLE TO THE ENERGY SECTOR? AND HOW DOES THIS CHOICE VARY ACROSS INDUSTRIES AND DIFFERENT TYPES OF DISPUTE? “Parties in arbitration should assume that the award will be Continued on next page...

Company: Kabraji & Talibuddin Name: Salman Talibuddin Email: salman.talibuddin@kandtlaw.com Web: www.kandtlaw.com Address: 64-A/1 Gulshan-e-Faisal, Bath Island, Karachi, Pakistan Telephone: +922135838874-76

June 2012 /

SECTOR SPOTLIGHT:

Resolving energy disputes final. In court, the loser may appeal. Ordinarily, the loser will have no such right in arbitration. Arbitration is generally faster. An arbitrated dispute can be resolved in a matter of months.” Tade Oyewunmi heads the Energy & Natural Resources Law Practice at Kola Awodein & Co. Lagos, Nigeria. He obtained his LL.M in Oil & Gas Law from University of Aberdeen, UK and specializes in energy transactions and regulations. Tade was engaged as a legal aide to the Oil and Gas Sector Reform Implementation Committee, which reviewed Nigerian oil and gas laws and drafted the Petroleum Industry Bill (PIB) 2008/2009. Kola Awodein & Co. is a full service commercial law firm with over twenty-seven (27) years experience in providing legal services in Nigeria. The Firm’s four main areas of practice are: Banking, Finance and Infrastructure; Energy and Natural Resources; Business Advisory and Corporate Restructuring (Mergers & Acquisitions); and Dispute Resolution (Litigation, Negotiation and Arbitration).

Based on a clear understanding of our clients’ business and the industry in which they operate, we provide pragmatic and efficient legal solutions to their structural, regulatory and commercial challenges. Our lawyers are involved in several energy transactions and advising private investors in the Nigerian power sector privatization process. The Firm is advising a lender on a US$90,000,000.00 facility for the acquisition of participatory interests in an Oil Mining Lease and was one of the retained legal advisers to the Central Bank of Nigeria in the Nigerian Banking Sector Reform. “Our clientele includes private business interests, individuals, foreign and local companies, banks and financial institutions, federal and state government agencies such as: the Central Bank of Nigeria, Securities and Exchange Commission, Ocean Energy Nigeria Limited, Devon Energy Corporation, USA, Skye Bank Plc, Fidelity Bank Plc, Stanbic IBTC Bank Plc and G. Koepeke & Co. GmbH (Germany).” WHY IS THE INTERNATIONAL ENERGY SECTOR ONE OF THE MOST CONTENTIOUS AND VOLATILE INDUSTRIES OUT THERE? The international oil and gas industry is structurally susceptible to price fluctuations due to the forces of demand, supply and risks associated with geopolitical and geo-economic factors. For example after three consecutive monthly gains, the OPEC Reference Basket declined in April, 2012 to settle at $118.18/b, representing a decline by $4.79 or 3.9%. Furthermore, the fact that industry operators and corporations execute agreements (usually long term) based on incomplete information as to the future political or economic environment in which obligations are to be performed, breeds unpredictability. The volatility can be due to political and legal risks arising from changes in government policies and underlying regulatory frameworks such as in Iraq (PostSaddam Hussein), Peru (1980 – 1985), Repsol-YPF Ecuador S.A. and the Republic of Ecuador.

/ June 2012

The introduction of new regulations can also boost private investments. For example, the enactment of the Nigerian Oil & Gas Content Development Act, 2010 and Government policy dispositions have led to the emergence of stronger ‘Nigerian’ oil and gas companies albeit with considerable support of foreign capital. Such corporations include First Hydrocarbon Nigeria Limited, SEPLAT Petroleum Dev. Co. Ltd. and Neconde Energy Limited.” WHY ARE SO MANY DISPUTES SIMPLY UNAVOIDABLE WITHIN THE ENERGY MARKET? “Disputes remain unavoidable because, the process of aligning the divergent interests, while ensuring agreements and contracts remain ‘facilitative’ rather than rigid formal documents is quite onerous and sometimes impossible. My advice will be for contracting parties to fully comprehend the value of their business relationship and objective(s) during negotiations. Furthermore, clauses dealing with disputes and renegotiations should be drafted to play a facilitative and adaptive role in relation to the interest of parties.”

WHY ARE SO MANY DISPUTES SIMPLY UNAVOIDABLE WITHIN THE ENERGY MARKET? “Due to the differences of legal systems and legal realities, foreign clients need to have a close and intense working relationship with their Indonesian counsel to better understand any legal impact and options available under Indonesian law (which might not be similar to the impact and options in their own jurisdictions in the same situation), so that results and options can be realistically analysed and also commercially “translated”. Considering this, we work with our client to help them make a realistic analysis of the legal position and how Indonesian courts would decide the relevant legal issues. And, in case a dispute does arise, ensure that the client is involved, and obtains reports, on all stages and developments of the proceedings in order to issue instructions as and when needed. Whilst, the traditional approach adopted by Indonesian litigation firms was, and more often than not still is, that once the lawyer has been instructed, reports are very rare and the lawyer will act as he deems necessary based on his own discretion, and might as a result commit clients to legal liabilities without further, or confirming, instructions.”

Mohamed Idwan (‘Kiki’) Ganie is the Managing Partner of Lubis Ganie Surowidjojo (LGS). He graduated from the Faculty of Law of the University of Indonesia and holds a PhD in Shipping Law from the University of Hamburg. Dr. Ganie has more than 30 years of legal experience, and specializes in commercial transactions and commercial litigation, including alternative dispute resolution and has acted as an expert in a number court and arbitration proceedings. His expertise covers general corporate/company law, banking law, finance, bankruptcy and restructuring, mining, investment, acquisitions, infrastructure projects/project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance. Dr. Ganie is a Chairman of the Association of Indonesian AntiTrust Lawyers, a member of the Regional Panel of the Singapore International Arbitration Centre (SIAC), a Chairman of the Indonesian Sports Arbitration Body, and a fellow (FSIarb) of the Singapore Institute of Arbitrators. He is also a Member of the Asia Pacific Bar Association.

In our more than 27 years of service, we are experienced in representing a diverse range of clients from domestic to multinational corporations, public and private companies, to government instrumentalities and state owned enterprises, and we work with our clients to understand their problems, determine their needs, and arrive at a practical solution that is both cost-effective and viable over the long term.

Company: OBLIN MELICHAR Name: Dr. Klaus Oblin, LL.M. Email: klaus.oblin@oblin.at Web: www.oblin.at Address: Josefstaedter Str 11, 1080 Wien, AUSTRIA Telephone: +4315053705

Company: Kola Awodein & Co Name: Tade Oyewunmi Email: tade.oyewunmi@kolaawodeinandco.com Web: www.kolaawodeinandco.com Address: 6th Floor, UBA House, 57 Marina Lagos Island, Lagos, Nigeria Telephone: +234 1 7929122

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

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Transfer pricing and its impact on M&A transactions

TRANSFER PRICING

— and its impact on M&A transactions

Mergers and acquisitions raise a whole host of transfer pricing issues from tax compliance aspects to business model alternatives. In M&A transactions, the interaction between transfer pricing and accounting can play a critical role in determining the allocation of the purchase price among the target group’s legal entities. Transfer pricing can also play an important role in setting up an arm’s length financing structure for the proposed transaction.

M&A deals can often provide opportunities to harmonize existing transfer pricing policies. In developing consistency across the organization, a number of factors should be considered in determining which policies should be implemented. It can be difficult enough for acquirers to extract value for their shareholders from transactions and is harder still when due account is not taken of transfer pricing issues. It is therefore of the upmost importance for such companies to seek advice from leading experts to advise them best in this way. Acquisition Internationals speaks to the experts. David Slemmer Director at J.H. Cohn LLP comments on transfer pricing in the US market: “Cross border M&A transactions can create numerous transfer pricing challenges and also present tax planning opportunities. Generally, various jurisdictions around the world require cross border transactions between related parties to be conducted at arm’s-length. Failure to comply with this basic principle can lead to taxing authorities reallocating income and imposing taxes, interest and penalties on such income. Dealing with transfer pricing issues during each phase of the M&A process is a critical step. The target company’s historical transfer pricing policies can create material tax exposure and risks.

ACQUISITION INTERNATIONAL

Understanding the target’s transfer pricing positions is important as aggressive or unsupported transfer pricing positions can lead to back taxes, interest and significant penalties.

at J.H. Cohn work hand in hand to provide innovative and commercially practical advice as well as a coordinated approach throughout the advisory process.

Also, improper pricing on related party transactions can distort a company’s financial information and profit level indicators. Analyzing the target’s transfer pricing positions is important in understanding the actual economical value of the target.

J.H. Cohn can provide valuable expertise in analyzing transfer pricing issues that arise during the M&A process and also can provide compliance and planning support post transaction.

Proper documentation for transfer pricing positions is necessary in providing documentary support and penalty protection. In addition, planning opportunities for global supply chain structuring and ownership of valuable intangible property may reduce the worldwide effective tax rate. An acquisition often provides a business purpose to revisit the transfer pricing policies of both parties to align such policies in light of changed business circumstances resulting from the acquisition. With economists, attorneys and accountants, the Transfer Pricing and International Tax Departments

As a member firm of Nexia International, one of the largest providers of audit and advisory services in the world, J.H. Cohn has a deep network of highly qualified transfer pricing advisors in many non-US jurisdictions to provide the best worldwide support.” Continued on next page...

Company: J.H. Cohn LLP Name: David Slemmer Email: dslemmer@jhcohn.com Web: www.jhcohn.com Address: 1212 Avenue of the Americas, New York City, U.S.A. Telephone: +1 646 625 5732

June 2012 /

SECTOR SPOTLIGHT:

Transfer pricing and its impact on M&A transactions

Norbert Raschle and Carl Bellingham both partners at PwC commented on Transfer Pricing and M&A Transactions in Switzerland:

Transactions involving cross-border mergers and acquisitions are usually complex and challenging. A major objective of such transactions is very often to achieve synergies and/or competitive advantages. This typically entails appropriate operational restructuring.

“Hence, transfer pricing should be an integral part of any pre- and post-merger restructuring process in order to avoid tax risks, minimise transaction costs and to capitalise on tax optimisation opportunities. “Critical issues in this context (e.g. the transfer of functions, profit potential, business opportunities etc.) are actively pursued by tax authorities in several jurisdictions. These themes are also echoed by the OECD, where a report on the Transfer Pricing Aspects of Business Restructurings was issued and included as an updated chapter to the Transfer Pricing Guidelines for Multinational Companies (TPG) in 2010. The result of the current OECD project (expected in 2013) on Intellectual Property (IP) in which the definition and valuation of IP are important issues, should bring increased clarity on the interface between purchase price allocation and transfer pricing structuring in the context of IP treatment.

/ June 2012

Switzerland does not have explicit TP regulations. However, Swiss tax authorities have formally accepted the TPG. Hence, TPG principles are being applied to assess the adherence to the arm’s length standard involving cross border intercompany transactions resulting from business restructurings.

PwC’s well integrated and established M&A, Transfer Pricing, Indirect Tax and Value Chain Transformation practice has extensive experience in efficiently supporting multinationals in M&A transactions.”

In order to have up-front certainty it is advisable for Swiss multinational tax payers to consider a unilateral (ruling) or bilateral advance pricing agreement (APA) with the Swiss tax authorities for any restructuring that involves operations in Switzerland. An acquisition is a natural window of opportunity to simplify company structures and processes. In this regard, a tax optimised centralised (principal) business model could play an important role. Switzerland with its favourable tax environment and financial and political stability has been chosen by numerous multinationals from around the world as their regional European or global principal (headquarter) location. Critical elements to make such principal structures sustainable include: aligning operational structures and transfer pricing models; ensuring that the group’s transfer pricing characterisation of legal entities is consistent with the group’s operational value chain; and performing regular post implementation reviews to ensure that originally implemented processes and structures are consistently followed.”

Switzerland with its large community of sizable multinational groups is very often part of large scale M&A transactions and the preferred location to manage strategic investments into Europe.

Company: PricewaterhouseCoopers AG Name: Norbert Raschle Email: norbert.raschle@ch.pwc.com Web: www.pwc.ch Address: Birchstrasse 160, 8050 Zürich Telephone: +41 58 792 43 06

Company: PricewaterhouseCoopers AG Name: Carl Bellingham Email: carl.bellingham@ch.pwc.com Web: www.pwc.ch Address: avenue C.-F. -Ramuz 45, 1001 Lausanne Telephone: +41 58 792 81 29

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Forming companies & doing business

FORMING COMPANIES — & doing business

2012 is looking good for entrepreneurs who seem to be making the most of opportunities despite the economic climate; with the highest levels since 2007, record numbers of new companies have been formed in many of the most popular locations around the world.

The formation business is booming and the nature of it means that most companies in the industry service an international client base of entrepreneurs and business owners. It’s one thing to read about the advantages of an offshore/foreign company but actually completing the paperwork to register one is completely different and it’s often most effective to engage an experienced corporate services firm that has the knowledge, experience and contacts to manage the processes. Search online for ‘company incorporation’ and a wealth of options are returned, so how to determine the right one? It’s incredibly important to select the right firm as company incorporation requires knowledge and experience to effectively build a corporate structure and achieve business objectives. Acquisition International speaks to the experts. Rola Tabsh Jaroudi is presently the head of the corporate department and a partner at Alem and Associates, he comments: “Generally, my practice encompasses corporate, corporate governance, mergers & acquisitions, restructuring, tax issues and real estate law. “I regularly advise local, regional and international clients on identifying the best legal and tax structures for companies and groups of companies, as well all aspects of real estate law.” WHY DO YOU THINK SOME REGIONS ARE WITNESSING SUCH LARGE GROWTH IN FORMATION LEVELS DESPITE THE ON-GOING DIFFICULT CLIMATE? “Influenced by the changes to the economy and local

ACQUISITION INTERNATIONAL

industries and attracted by the recent challenges created by the globalization trends and entry of countries in the World Trade Organization, the EuroMediterranean Agreement between the European Union and some countries in the region and other global partnerships that are setting new competitive standards in the whole area, multinational and international firms as well as regional and local enterprises are currently wishing more and more to invest and to have interests in various fields within the Middle East , through establishing companies, branches and subsidiaries.

businesses. Therefore the procedures for companies’ incorporation are easy and the registration process is prompt. Moreover, the law offers moderate registration fees as well as a judicious and a fair taxation system. Furthermore, there are no restraints on the acquisition of shares by foreigners in some companies such as holding companies, off shore and limited liability companies.”

Hence, some regions such as Lebanon are attracting new investments despite the difficult political situation since these countries are strategically well placed and constitute a base for the whole region.”

“In order to encourage and promote the foreign and Lebanese investments in Lebanon, the Lebanese legislator has promulgated the law No 19 dated 5/9/2008 which facilitates the incorporation and registration of the off shore company on one side, Continued on next page...

HOW DOES REGULATION IN YOUR JURISDICTION BENEFIT BUSINESS GROWTH? WHAT CAN YOUR JURISDICTION OFFER TO PROSPECTIVE COMPANIES? “Recently, the laws are facilitating for companies and enterprises the hiring of manpower in a secure and legal environment. At the same time they are striving as well to protect the interests of the employers and the employees in the best possible manner.” CAN YOU PLEASE EXPLAIN LOCAL REASONS FOR INCORPORATION? “Generally, the main purpose of the new laws in the country is to encourage the promotion of a healthy environment for more investments and new

CAN YOU HIGHLIGHT THE KEY CHALLENGES OF INCORPORATING OFFSHORE/FOREIGN COMPANIES?

Company: Alem & Associates Name: Rola Tabsh Jaroudi Email: rola.tabsh@alemlaw.com Web: www.alemlaw.com Address: 126 Foch Street, Beirut Central District Beirut 2012 6609, Lebanon Telephone: +961 1 999717

June 2012 /

SECTOR SPOTLIGHT:

Forming companies & doing business as well as increasing the scope of its activity on the other side, in addition to better taxation and financial benefits for off shore companies. Based on the above, it is obvious that the offshore companies shall have the possibility of working in a larger and wider scope. Moreover, said companies shall have the capacity of doing the activities of the holding companies related to the administration and loans of companies in which they hold shares. In addition to said scope, the maritime transportation activities have been included in the activities of offshore companies, the thing that cancels the monopoly that was only granted to Lebanese in such kind of activities. Therefore, and in the light of the said changes to law No 19, it appears to us that the main amendments to this law confirm its importance in encouraging the capital owners to invest in Lebanon. This will make Lebanon an essential base for off shore companies in the Middle East and thus shall help in finding better job opportunities and promote the Lebanese economy.” AS WE SLOWLY RECOVER FROM THE ECONOMIC DOWNTURN, DO YOU HAVE ANY PREDICTIONS FOR THE NEXT 12 MONTHS IN TERMS OF DOING BUSINESS IN YOUR JURISDICTION? “The entry of Lebanon in the World Trade Organization, the Euro-Mediterranean Agreement between the European Union and Lebanon shall all have a good effect on doing business in the region despite the economic recession.” Cadine Rhamdas is Administrative Director at Alpha Services Limited, she comments on Company Formation and Administration of International Business Companies:”An IBC may do any business, which is not prohibited under the laws of Belize and it should be licensed to do banking, insurance, and collective investments. An IBC will be able to purchase its own shares and redeem its own shares. An IBC cannot own land in Belize nor carry on business as a registered office for companies in Belize. Neither can the IBC carry on business with residents of Belize. An IBC must have registered office and Registered Agent in Belize.” WHY DO YOU THINK SOME REGIONS ARE WITNESSING SUCH LARGE GROWTH IN FORMATION LEVELS DESPITE THE ON-GOING DIFFICULT CLIMATE? “Belize is seen as a tax haven. The Offshore Company or International Business Company (IBC) as it is called in Belize is a tax-free and exchange-controlfree limited liability company, incorporated under the Laws of Belize, but conducting all its profit-earning activities outside Belize” HOW DOES REGULATION IN YOUR JURISDICTION BENEFIT BUSINESS GROWTH? “Customer friendly regulations, minimum requirements for formation of companies, no taxes on profits of International Business Companies, minimum requirements for formation of companies, minimum annual requirements for administration of companies, anonymity of ownership of International Business Companies, the ability to use nominee directors and nominee shareholders.” WHAT CAN YOUR JURISDICTION OFFER TO PROSPECTIVE COMPANIES?

/ June 2012

“The provisions of the IBC law in Belize are specifically designed to save you costs. This is accomplished firstly by ensuring that the registration fee is the most competitive in the offshore world. Secondly, by ensuring that the costs of maintaining your IBC are kept to a minimum. For Trust once a trust is created under the laws of Belize, a Belizean Court cannot vary or set aside the trust. Nor can a Belizean Court recognize the validity of any claim against the trust property pursuant to the order of a foreign court in respect of marriage or divorce, succession or claims by creditors in insolvency. The effect of this is to protect the trust even against the Bankruptcy Law and the Reciprocal Enforcement of Judgments Law or the law relating to fraudulent transfers that could - if your trust was not in place - be used to reach such assets.”

I also focus on litigation and represent companies in court and arbitration proceedings. At Ambruz & Dark/ Deloitte Legal I lead the team focusing on the new Code on Corporations governing functioning of business entities in the Czech Republic (to become effective as of 1 January 2014) and its implementation in the practice of our clients. Ambruz & Dark / Deloitte Legal provide full-scope legal advice in connection with starting a business in the Czech Republic, extending the business or moving the business to the Czech Republic. We advise our clients on the most suitable legal form for the provision of business activities in accordance with client`s specific needs and conditions and in accordance with the most suitable tax scenario prepared in co-operation with our colleagues from Deliotte.”

HOW EASY IS IT TO DO BUSINESS IN YOUR JURISDICTION?

WHAT ARE THE LEGAL REQUIREMENTS WHEN IT COMES TO SETTING UP A COMPANY IN YOUR JURISDICTION?

“Any non-resident in their personal name or in the name of a Belize IBC or LLC can easily open an offshore bank account at either of the seven International Banks of your choice as long as the due diligence requirements and business activities are satisfied and be eligible for credit facilities.” HOW DOES THE INCORPORATION PROCESS DIFFER WHEN DEALING WITH DIFFERENT SIZED COMPANIES? WHICH COMPANY STRUCTURES ARE IN THE GREATEST DEMAND? “The incorporation process does not differ. The number of shareholders and directors do not affect the incorporation process.” CAN YOU HIGHLIGHT THE KEY CHALLENGES OF INCORPORATING OFFSHORE/FOREIGN COMPANIES? “The key challenge of incorporation offshore /foreign companies is conducting thorough due diligence on the beneficial owners/directors of the companies. Hence, we require notarized copies of the passports (id page) of the beneficial owners/directors, Utility Bill (original or certified copy), Bank or Character reference from an attorney or accountant and the completion of a due diligence form prior to incorporation of the offshore companies.” AS WE SLOWLY RECOVER FROM THE ECONOMIC DOWNTURN, DO YOU HAVE ANY PREDICTIONS FOR THE NEXT 12 MONTHS IN TERMS OF DOING BUSINESS IN YOUR JURISDICTION? “Business and the incorporation of companies will continue to increase over the next 12 months as Belize has and continue to be one of the top jurisdiction for incorporation and with the new LLC Act in place Belize will be a jurisdiction of choice as providing a variety of attractive vehicles for tax planning and asset protection purposes.”

Lenka Navrátilová is an attorney at law and Legal Senior Associate at Ambruz & Dark / Deloitte Legal, she comments: “I specialize in companies law with a focus on management liability and contractual issues. I worked on number of restructuring and other corporate projects for prominent international companies.

“The establishment of a company in the Czech Republic and its registration in the Czech Commercial Register is a complex process with many rules, obligations, deadlines and documents which have to be collected. The process varies and the rules and obligations differ depending on the type of the legal entity or branch of a foreign legal entity to be established. For example the obligation to have the registered capital and the amount of the minimum obligatory registered capital differs in single types of legal entities. Generally, legal entity is founded on the basis of a deed of association, signed by all of the founders. In case of a limited liability company or a joint stock company the deed of association has to be executed in a form of a notarial record. Thereafter, the established company has to select premises where it will locate its seat and apply for the trade licence(s) corresponding to the activities which shall be carried out by the company in the Czech Republic. The company comes into being

Company: Alpha Services Limited Name: Cadine Rhamdas Email: info@alphaservicesltd.com Web: www.alphaservicesltd.com Address: 84 Albert Street, Belize City, Belize Telephone: +501 227 1847

Company: Ambruz & Dark Name: Lenka Navratilova Email: lnavratilova@deloiteCE.com Web: www.ambruzdark.com Address: Nile House, Karolinská 654/2, 186 00 Praha 8 – Karlín, Czech Republic Telephone: +420 246 042 867

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Forming companies & doing business on the day as of which it is registered in the Czech Commercial Register. The registration is carried out by the regional courts and there is a deadline of 5 working days in which the court has to decide on the application for registration. Although the above described process may seem to be lengthy and time-consuming, many of the processes within the establishment and registration of the company can be done concurrently. Hence the establishment and registration process of a branch or an LLC can be completed in three weeks.” Czech Republic continuously works on facilitation of the legal environment and on simplifying of the process of establishment and registration of a company. Recently the completely new Civil Code and completely new Code on Corporations were adopted. These new Codes will as of 1 January 2014 among others govern functioning of business entities in the Czech Republic. The new regulation was adopted with the aim to simplify and make the civil law in the Czech Republic more lucid. Therefore, we believe that since 1 January 2014 establishing of legal entities, their day-to-day operation and generally doing business in the Czech Republic will be much more easy and “user friendly”. Also the Act on Criminal Liability of Legal Entities came into effect as of 1 January 2012. This Act stipulates the conditions of criminal liability of legal entities and the sentences which can be imposed on such entities. The sentences comprise for example the winding-up of legal entity, forfeiture of property, monetary fine, prohibition of activity, prohibition of participation in public tenders, acceptance of incentives, etc. Whereas there is not yet any practical experience with application of this Act we hope it will lead to elimination of the dishonest legal entities and thereby to “clean-up” of the Czech business environment. Glench Wilson is president at Broadway trust consultancy services limited, a company that offers ibc’s and llc’s governed by belize legislation, he comments on why do you think some regions are witnessing such large growth in formation levels despite the on-going difficult climate... “High net worth individuals are always looking for ways to mitigate tax, especially where tax rates are rising. belize is benefiting because of its sympathetic legislation and efficient swift service.” HOW DOES REGULATION IN YOUR JURISDICTION BENEFIT BUSINESS GROWTH? WHAT CAN YOUR JURISDICTION OFFER TO PROSPECTIVE COMPANIES? “Sympathetic and efficient legislation together with the approachability of the ifsc are factors that encourage prospective users of ibc’s and other services.” CAN YOU PLEASE EXPLAIN LOCAL REASONS FOR INCORPORATION? “As previously stated the legislation is sympathetic as are the authorities, easy of incorporation together with the speed with which incorporations can be undertaken. The staff quality is another factor and zero tax on ibc’s is obviously a factor.” HOW EASY IS IT TO DO BUSINESS IN YOUR JURISDICTION? “Local banking is very efficient offering multi-currency accounts. all usual banking services are offered,. law firms are part international networks and have

ACQUISITION INTERNATIONAL

correspondents in most major jurisdictions.” HOW DOES THE INCORPORATION PROCESS DIFFER WHEN DEALING WITH DIFFERENT SIZED COMPANIES? WHICH COMPANY STRUCTURES ARE IN THE GREATEST DEMAND? “Size does not matter, due diligence is perhaps a major factor and the larger the organisation the more hoops there will be.” CAN YOU HIGHLIGHT THE KEY CHALLENGES OF INCORPORATING OFFSHORE/FOREIGN COMPANIES? “I think the due diligence requirements can offer challenges which are not too difficult to overcome. we have to establish bona fides otherwise we will taint the jurisdiction, we cannot afford to have any future problems.” AS WE SLOWLY RECOVER FROM THE ECONOMIC DOWNTURN, DO YOU HAVE ANY PREDICTIONS FOR THE NEXT 12 MONTHS IN TERMS OF DOING BUSINESS IN YOUR JURISDICTION? “I can only see a rosy future we have survived and grown during the bad times, the good times can only aid growth. Revision of legislation to accommodate changes in other jurisdictions will enable further growth, coupled with Innovative new products such as llc’s can only help.” ATHANASE RAUX is Attorney-Partner at RAUX, AMIEN & Associates, he comments:“RAUX, AMIEN & Associates is a lawyers firm run by lawyers with many years of practice and a wealth of experience in different areas of law. “Our company is organized into 2 (two) units:The unit of Litigation and Dispute Resolution (1)The unit of legal advice (2). The unit of litigation and dispute resolution is in charge of monitoring trial courts judicial, disciplinary and arbitration proceedings. It prepares the trial and defends the interests of clients before those courts. The unit board over the processing of all consultations and legal advice which our firm is seized. This unit also provides legal assistance to clients in the negotiation, drafting and conclusion of contracts and other legal acts. It performs the missions of legal audit, tax and social security for which our society is mandated. Our firm is based, if necessary, on external collaborators who have a thorough knowledge and proven expertise in their fields of activity. This synergy of skills allows us to offer our clients complete and appropriate services and solutions. Our assets: our availability, taking into account the concerns of customers. Our areas of expertise and extend to the following matters: (i) Litigation and Dispute resolution - Civil and Commercial Law (litigation of contract or tort, debt collection etc.) - Social (litigation of individual and collective dismissals, litigation relating to labor regulations) - Collective proceedings for wiping off debts. - Criminal and penal law cases (we intervene as plaintiff or defense related to economics offenses.) (ii) Corporate law. - Creation and Drafting of Company articles (statutes, minutes AG Constitutive and Other), Transfer of shares.

- Legal Secretary. (iii) Intellectual Property. - Registration of trademarks, patents, copyrights, designs with OAPI and national institutions. - Legal proceedings in cases of unfair competition and trademark infringement. (iv) Legal and tax Audit. - Analysis and evaluation of procedures and legal acts in accordance with law. (v) Contract law Negotiation, drafting and conclusion of contracts. The Ivory coast has opted for economic liberalization. As such and to encourage direct private initiative to industry, the country has adopted an investment code that responds to the concern of the regime to adapt to the new private investment in the economy including prospects growth. It has been preceded by a serie of tax relief measures, aimed at increasing the competitiveness of the Ivorian economy. The new investment code is particularly attractive, transparent and easily accessible. On the tax, the investment code provides for numerous tax advantages, in particular of tax and customs exemptions.In terms of technology, it would be fair to note that the Ivory Coast was a huge delay due to the socio-political crisis that has lasted over 10 years.In terms of the qualification of the workforce, as regards the management jobs, the country is filled with competent managers trained in Western universities. Regarding labor working, ie the workers, it is not very skilled and relatively more expensive compared to Asian countries. It is not always obvious and easy to do business in our country. There is a cultural and mental environment that can be to face real obstacles to the development of the business. In most cases you Continued on next page...

Company: Broadway Trust Consultancy Services Ltd. Name: Glen CH Wilson FCIS TEP Email: md@broadwaytcsl.com Web: www.broadwaytcsl.com Address: The Matalon Business Center 5th Floor, Suite 501, Coney Drive, P.O. Box 2130 Belize City, Belize Telephone: ++ (501) 223-1756

RAUX, AMIEN & ASSOCIATES

Company: RAUX, AMIEN & Associates Name: ATHANASE RAUX Email: athanaseraux@hotmail.com Telephone: 00 225 22 41 76 72

June 2012 /

SECTOR SPOTLIGHT:

Forming companies & doing business have to import technology needed and face to non qualified workers etc.Regarding access to bank loans, banks are not very quick to lend to businesses and to assist them in development. Most banks are more deposit banks as banks. Donald Vella is Senior Associate at Camilleri Preziosi, he comments: “Company formation services are carried out through Equinox, the Corporate Services arm of Camilleri Preziosi. These include: Registration of Companies; Registration of a branch or a place of business of an Oversea Company; Nominee and Trust Arrangements; Corporate Support Services; Company Secretarial Services; Registered Office Services. A limited liability company is formed by means of capital divided into shares which are held by its members and validly constituted in terms of a memorandum of association. The liability of such members is limited to the amount unpaid, if any, on the shares held by them. A certificate of registration will be issued by the Registrar of Companies upon filing of this memorandum and the fulfilment of other requirements for incorporation. Such memorandum of association may be accompanied by the articles of association which is a document containing the internal regulations of the company. Every company registered in Malta must have a registered office in Malta. A company can be formed for any lawful purpose and can take one of two forms: private or public. The vast majority of companies registered in Malta are private limited liability companies. It is also possible to set up single member companies. Registration of Companies can be made in a relatively short period of time which in most cases does not exceed 48 hours. With respect to the fees involved in setting up the company, apart from depositing in the bank the issued share capital of the company (minimum of approx €1,200 of which 20% must be paid-up), registration fees are payable to the Registry of Companies. The amount of such fees depends on the authorised share capital and range from €245 (if the share capital does not exceed €1,500) to €2,250 (if the share capital is of €2,500,000 or more). The annual registration fee paid upon filing of annual returns is also calculated on the basis of the company’s authorised share capital.” WHY DO YOU THINK SOME REGIONS ARE WITNESSING SUCH LARGE GROWTH IN FORMATION LEVELS DESPITE THE ON-GOING DIFFICULT CLIMATE? “In difficult times companies seek alternative routes for their business. Benefits may be derived from regions such as Malta as it offers a relatively low-cost opportunity as well as tax planning and regulatory benefits.” HOW DOES REGULATION IN YOUR JURISDICTION BENEFIT BUSINESS GROWTH? WHAT CAN YOUR JURISDICTION OFFER TO PROSPECTIVE COMPANIES? “Malta offers consistently updated and innovative legislation (fully EU compliant) and an attractive fiscal system. The business environment benefits from a single regulator for all sectors within the financial services industry. This enhances the efficiency of the regulator which also offers a pro-active approach and

/ June 2012

is also very accessible to the public.” CAN YOU PLEASE EXPLAIN LOCAL REASONS FOR INCORPORATION? “Malta is also an attractive jurisdiction for backoffice operations due to a highly trained workforce in financial services, developed telecommunications infrastructure and the multilingual ability of Malta’s labour force. Malta’s regulatory framework is efficient yet highly flexible offering a wide range of structuring opportunities at a relatively low cost. One must also mention Malta’s Mediterranean climate, beautiful landscape surrounded by the sea and optimal quality of life.” HOW EASY IS IT TO DO BUSINESS IN YOUR JURISDICTION? “Malta endeavours to maintain a pro-business approach in the financial services industry. The regulator and other players in the market are aware of this and strive to provide accessible and efficient systems for promoting business in this sector. Malta’s tax regime provides fiscal benefits whilst its institutions deliver an efficient mechanism for allowing business to happen. ” Emine Basci Devres, member of Istanbul Bar Association, founder and senior partner of “Devres Law Office, she comments: “Amongst wide range of services that Devres Law Office provides, corporate practice is one of the major fields that Devres Law Office is specialized in depth. Its corporate practice covers giving legal advise on mergers and de-merges, acquisitions, fusions, transfer of businesses and shareholdings, establishment and operation of joint stock companies, limited partnerships, branches and liaison offices as well as establishment of joint ventures and consortiums between foreign investors and their local business partners.”

“As business growth can only be secured through investment, Turkey’s regulations encourage investment both on foreign and domestic basis. As the Republic of Turkey is a market in which domestic and foreign investments and incorporations densely coexist, Turkey’s regulation foresees a smooth procedure for formation of companies. Provided that all required documents are submitted to the Trade Registry Office, a company can be incorporated in the Republic of Turkey even in one day. In addition hereto, foreign investors can also form companies in Turkey just like a Turkish-national by following the same procedure. Accordingly, regulation in the Republic of Turkey benefits business growth by providing equal treatment to both domestic and foreign investors.” CAN YOU PLEASE EXPLAIN LOCAL REASONS FOR INCORPORATION? “One of the main local reasons for incorporation is Turkey’s fast developing economy and its correspondent large domestic market. Having a large population of about 70 million with a demographic structure of young people making up 60% thereof, highly competitive, inexpensive, young and productive labour and workforce plays an essential role for domestic incorporation. Further, the Republic of Turkey can also be recognized as a base for production of any sort and at any level and also offers ready-to-purchase market in almost every sector for domestic investors. Communication and transportation facilities coupled with an expanding market due to Turkey’s unique location are highly appellant for domestic entrepreneurs and they are mostly integrated to this economy through formation of incorporations. Having a legal presence in the Republic of Turkey provides a transparency in transactions and allows benefiting from the incentives that are being granted by government.”

WHAT ARE THE LEGAL REQUIREMENTS WHEN IT COMES TO SETTING UP A COMPANY IN YOUR JURISDICTION? “As pointed out in Section 8 hereunder, joint-stock companies and limited companies are mostly preferred formulation types of incorporation in the Republic of Turkey. Recently, on 01.13.2011 the Republic of Turkey enacted a new Turkish Commercial Code numbered 6102 that shall be in effect as of 07.13.2012. Turkish Commercial Code numbered 6102 is actually a “longed for” revision in Turkish legislation which brings a totally new approach to the currently applicable Turkish Commercial Code numbered 6762, introducing brand new formulations to major legal acknowledgements including the legal requirements of formation of joint-stock companies and limited companies. As Turkey is going through a transaction period in order to fully adapt and comprehend Turkish Commercial Code numbered 6102, it is wise to analyse the formation procedures of joint-stock companies and limited companies, as these are the mostly used instruments of formation, comparatively in consideration with the Code numbered 6762 and Code numbered 6102.” HOW DOES REGULATION IN YOUR JURISDICTION BENEFIT BUSINESS GROWTH? WHAT CAN YOUR JURISDICTION OFFER TO PROSPECTIVE COMPANIES?

Company: Camilleri Preziosi/Equinox Name: Donald Vella Email: donald.vella@camilleripreziosi.com Web: www.camilleripreziosi.com Address: Level 3, Valletta Buildings, South Street, Valletta Telephone: +356 21 2389 89

DEVRES LAW

Company: Devres Law Office Name: Emine Basci Devres Email: emine@devres.net Web: www.devres-law.com Address: Halaskargazi Cad. No:118/6 Osmanbey – Sisli ISTANBUL Telephone: +90 212 291 59 33

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Forming companies & doing business The H&P Trust Group is a highly regarded provider of trust and corporate services in multijurisdictional tax planning, asset protection and tax-efficient exit structures for private clients, entrepreneurs and family-owned businesses. The firm is an international trust boutique with offices in key locations worldwide, including Switzerland, the Netherlands, Cyprus, Malta, Luxembourg, Liechtenstein, Czech Republic, Austria, Hong Kong and the Caribbean.

Subsequently she commenced to study Tax Law at the University of Rotterdam during which she joined a leading international tax consultancy firm in the Netherlands.

be held by one or more UAE National(s). However, the law permits profit and losses to be distributed disproportionately to the shareholding ratio that is outlined in the LLC Memorandum of Association.

She assists high net worth families and active entrepreneurs with the creation and implementation of international tax efficient corporate structures. Furthermore she is part of the Structured Solutions group.

Limited creditors’ rights as the bankruptcy laws are not developing as quickly as the economy. However the proposed change in the insolvency law is set to decriminalize the bankruptcy process and move away from a court-driven insolvency procedure.

The partners and senior staff of the H&P Trust Group consist of well-experienced tax advisors, lawyers and accountants with a broad knowledge of international tax planning, asset protection structures and the fiduciary services industry.

Helene Mathieu is Founder/Owner at Helene Mathieu Legal Consultants, he comments:

Inheritance law can be a challenge for foreign nationals especially those of Muslim faith as Sharia Law will be used to distribute your assets situated in the UAE after your passing. This can sometimes not represent the decease’s wishes.

The H&P Trust Group is closely connected with Henley & Partners, the world’s leading specialists in international residence and citizenship planning. Services: Finance / Taxes Corporate Services, fiduciary services, trust services, international estate planning, international tax planning, exit-structuring. Legal Set up and managing of structures involving holding, IP, licensing, trading, financing. International Accounting Main focus on private clients with family-owned businesses. Tax Consulting / Tax Optimization Bookkeeping. Cees Jan Quirijns is an international tax and estate planning specialist and the managing partner of the H&P Trust Group. After graduating in Corporate and Tax law at the University of Maastricht in the Netherlands, he worked at a leading international tax consultancy firm in the Netherlands and the Netherlands Antilles. He subsequently joined the management team of the Swiss operations from a global fiduciary services firm. He is specialized in the incorporation and management of tax efficient corporate structures and the creation of trusts and family foundations. He is the managing partner of the H&P Trust Group and he deals with complex planning issues for affluent and international oriented families. Hans Fraats is an international tax and estate planning lawyer and a Partner at the firm’s Zug office as well as a member of the board of H&P Trust Group. He is responsible for the Structured Solutions business, which focuses on the facilitation of tax efficient exit-scenarios such as transactions with cash rich companies as well as other structured finance transactions. After graduating from the University of Maastricht in Business Economics and Tax Law, he started his career in 1997 as a tax consultant and worked several years for a leading corporate trust services provider. As a member of the board on a group level he is also responsible for Marketing and Sales. Fréderique van Gelderen is an international tax Structuring Advisor with the H&P Trust Group, located at the firm’s Zug Office. She started her career in the financial services industry with a leading global fiduciary services firm in the Netherlands.

ACQUISITION INTERNATIONAL

“Helene Mathieu Legal Consultants incorporate Limited Liability Company (LLC), Professional Licenses, Free Zone Companies, Establishments and/or Branches, and we are UAE representative for Mossack Fonseca for the incorporation of offshore entities. We draft various forms of corporate documents including but not limited to shareholder agreements, Broad Resolutions, POA, Memorandums, etc.” WHAT ARE THE LEGAL REQUIREMENTS WHEN IT COMES TO SETTING UP A COMPANY IN JURISDICTION? “All businesses, whether industrial, professional, trading or services, must be licensed to operate within the UAE. Licensing procedures vary from emirate to emirates but the Commercial Companies Law and the Trade Agencies Law constitute the primary federal legislative framework that controls the commercial activity in the UAE. A LLC can be formed by a minimum of two and a maximum of fifty persons and the minimum capital requirements vary from each Emirate, for example Dubai requires AED 300,000 whereas Abu Dhabi requires AED 150,000. A UAE National must own at least 51% of the company’s equity and the remaining 49% can be distributed to Foreign National(s) or entities. Free Trade Zones are governed by their own regulatory authority and have their own rules and regulations. The regulations for establishing a business entity in a free zone is less rigorous compared to LLC step up and the foreign national or entity can own 100% of the business equity. The free zones also provide a choice of establishing a company, establishment, or branch.” WHY DO YOU THINK SOME REGIONS ARE WITNESSING SUCH A LARGE GROWTH IN FORMATION LEVELS DESPITE THE ON-GOING DIFFICULT CLIMATE? “In regards to the UAE, its strategic location between Asia, Europe and Africa is a major advantage for many different business entities. Particularly, the country’s proximity to some of the world’s fasting ground economies in Asia. In addition, the UAE infrastructure is compared to none in the region as international and thriving business hub.” CAN YOU HIGHLIGHT THE KEY CHALLENGES OF INCORPORATING OFFSHORE/FOREIGN COMPANIES? “Under the Commercial Companies Law, foreign investors are allowed to hold up to 49% equity ownership in the company and 51% of equity must

There will always be some inherent risks to the region of geopolitical concerns because where the UAE is situated on the map.” AS WE SLOWLY RECOVER FROM ECONOMIC DOWNTURN, DO YOU HAVE ANY PREDICTIONS FOR THE NEXT 12 MONTHS IN TERMS OF DOING BUSINESS IN UAE? “There have been signs of improvements with both LLC and free zone setup. The economy crisis has forced many companies to seek new markets and to get out of their comfort zone. Since the UAE is the business hub for the MENA and Sub-Continent regions with attractive tax regimes compared to other GCC markets, this attracts many foreign companies to expand their reach inside its stable market.” Continued on next page...

Company: H&P Trust Holdings AG Web: www.henleyglobal.com Address: Poststrasse 6, 6300 Zug Switzerland Telephone: +41 41 729 67 05

Company: Helene Mathieu Legal Consultants Name: Helene Mathieu Email: info@hmlc.ae Web: www.hmlc.ae Address: Suite 402, Bank Street Building, May 2012 / Khaled Bin Al Waleed Road, Bur Dubai, Dubai, UAE, P.O. Box 28845 Telephone: +971-4-352-5303

June 2012 /

SECTOR SPOTLIGHT:

Forming companies & doing business Alex Martin is the director of Martin Howard Associates S.L. - accountancy and company formation firm specialising in Expatriate clients based in the centre of Barcelona, he comments: “We principally offer the incorporation of Spanish Limited Liability companies S.L. s with registered and virtual office services from our address in Calle Aribau 177 Entresuelo Barcelona supported postincorporation with accounting and tax compliance services from €275 per quarter. We consider our all-inclusive package for small company incorporations (3 or fewer shareholders and one or two directors) at €950 (including notary, mercantile register fees and VAT) to be the most competitive in our marketplace, and we will have the company incorporated, with your choice of name and a tax registration (VAT) number within 1 week of the process starting and the company will have an active bank account in 10 working days. In addition we have a very efficient system for incorporating subsidiaries of non-Spanish holding or parent companies and manage the process from start to finish. We also offer off the shelf companies but rarely recommend them because of the extra costs, filing requirements, notary process and new bank compliance procedures in Spain which results in there being virtually no advantage in terms of speed. We are also able to incorporate Sociedades Anominas (S.A.s), the equivalent of a UK PLC in a range of other jurisdictions such as UK, Cyprus, Panama, Seychelles, Belize and the BVI.” WHAT ARE THE LEGAL REQUIREMENTS WHEN IT COMES TO SETTING UP A COMPANY IN YOUR JURISDICTION? “The minimum paid up share capital for an S.L. is €3000, minimum 1 shareholder and 1 director, both the shareholder and the director need to obtain a NIE (tax registration number) which for European Union passport holders is easy, but is harder and more time consuming for non E.U. nationals. At least one director must be a Spanish resident. The company is also required to have a registered office in Spain and once formed will be subject to quarterly VAT and income tax returns and annual corporation tax, accounts presentation and VAT, Intrastat and Income tax summaries.” WHY DO YOU THINK SOME REGIONS ARE WITNESSING SUCH LARGE GROWTH IN FORMATION LEVELS DESPITE THE ON-GOING DIFFICULT CLIMATE? Spanish company formation has fallen in recent years in Spain as a direct result of the economic crisis but there is still activity as people who have been made redundant take the plunge to start their own business. “Also with the waive of new tax legislation a company can be a tax effective way of operating, with directors paying a fixed rate of social security per month.” HOW DOES REGULATION IN YOUR JURISDICTION BENEFIT BUSINESS GROWTH? WHAT CAN YOUR JURISDICTION OFFER TO PROSPECTIVE COMPANIES?

/ June 2012

“Unfortunately the regulatory environment in Spain does not encourage business growth, although that appears to be changing albeit slowly, with labour laws and unemployment indemnity being the principle causes of inertia. However, company law and the taxation environment are uncomplicated especially compared to other Mediterranean states.” Nimrod E. Mkono is managing partner at Mkono & Co., Advocates in Association with SNR Denton, he comments: “We bring an extensive track record of representing businesses across a broad range of industries on all matters concerning the formation, licensing and postformation activities of new companies. We also have substantial expertise in company secretarial services dealing with all statutory compliance requirements of companies. The author of this document is an English-trained Chartered Secretary and a practicing Chartered Secretary, who is also, a FCIS (Fellow of the Institute of Chartered Secretaries and Administrators) – formerly the Chartered Institute of Secretaries – since 1986. The name of the proposed company will have to be cleared by the Companies Registry to ensure that there is no similar name in the Registry or that the name is not unsuitable on public policy grounds. On clearance of the name, the Memorandum and Articles of Association, Statutory Form 14a and Form 14b need to be filed with the Company Registry along with the required statutory fees. The statutory fees for registration of a Tanzanian company are capped at TShs 300,000.00 for companies with share capital of more than TShs 30 million. The filing fee is TShs 45,000.00 for the whole company registration and Tshs 1,200.00 for stamp duty. The Companies Act, 2002 prescribes a minimum requirement of two directors and two shareholders for a company registered in Tanzania. Foreign ownership of companies is generally not restricted and most business sectors are open to foreign investors. In a few sectors, such as in shipping, insurance, telecommunications and broadcasting, ceilings have been placed on foreign shareholdings by licensing authorities. Every Tanzanian company must have a company secretary who will perform a variety of tasks that are crucial to the smooth running of the company, which includes ensuring that the company’s statutory obligations are complied with.

“Despite the ongoing global economic crisis, Tanzania, East Africa’s second largest economy, appears to be experiencing strong formation levels due to a number of reasons. While foreign direct investments (FDIs) into Africa experienced a 9 percent overall decline, FDI in Tanzania rose 8.5 percent in 2010 to $700 million, largely driven by tourism, manufacturing and agriculture. Historically, the main beneficiaries of FDI in Tanzania have been tourism, mining and agriculture. However, the telecommunications, energy, manufacturing, financial services and transport sectors appear to be attracting rising investor interest. Moreover, Tanzania’s strategic location makes it a natural East African hub for investors seeking to exploit not only the country’s vast resources, but also a growing market of 527 million consumers in East and Southern Africa.” CAN YOU PLEASE EXPLAIN LOCAL REASONS FOR INCORPORATION?” The key local reason for incorporation is the overall pro-business environment in Tanzania. Indeed, the Government of Tanzania (GoT) has maintained a positive disposition towards business and FDI. There are no laws or regulations that limit or prohibit foreign investment, participation or control. Foreign investors are generally accorded national treatment, although certain laws prevent foreign companies from engaging in certain activities that are reserved for Tanzanian citizens. Also, Tanzania has adopted trade development instruments including Export Processing Zones (EPZs), Investment Code and Rules and Export Development/Promotion and Export Facilitation, all of which provide significant benefits to both domestic and foreign investors. The Export Processing Zones Authority (EPZA) oversees incentive packages including exemption of corporate tax and withholding

Company: Martin Howard Associates S.L. Name: Alex Martin Email: alex@mhasoc.com Web: www.mhata.com Address: Aribau 177 Ent 1a 08036 Barcelona Telephone: +34 93 202 2534

Registration with Tanzania Revenue Authority (TRA) is mandatory for all business structures. The TRA normally issues a taxpayer with a unique taxpayer identification number (TIN). Registration with TRA for VAT purposes is mandatory if a company’s estimated gross annual turnover will exceed Tsh40,000,000.00 (Approx. US$25,000). Any person carrying on business for gain must obtain a business licence. A temporary business licence is usually obtainable within a week and a permanent business licence within 2 months.” WHY DO YOU THINK SOME REGIONS ARE WITNESSING SUCH LARGE GROWTH IN FORMATION LEVELS DESPITE THE ON-GOING DIFFICULT CLIMATE?

Company: Mkono & Co. Advocates in association with SNR Denton Name: Nimrod E. Mkono Email: nimrod.mkono@mkono.com Web: www.mkono.com Address: 8th Floor, Exim Tower, Ghana Avenue P.O. Box 4369, Dar es Salaam, Tanzania Telephone: (+255 22) 211 8789/90/91

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Forming companies & doing business taxes on rent, dividends and interest remission of customs duty, value-added tax (VAT) and other taxes on raw materials and capital goods, as well as exemption from VAT on utilities, wharf charges and levies imposed by local authorities for up to ten years.” Anthea Wong is Tax Partner at PwC China, she comments: “I joined the China practice in 1993, and I lead a national team specialising in providing China regulatory consulting and implementation services, ranging from market entry solutions, structure setup, and foreign exchange solutions to restructuring solutions, such as equity transfer, mergers and liquidation. Each client has their own unique China entry or growth strategy that’s most appropriate for their needs. They might be considering greenfield operations, mergers and acquisitions, wholly foreign-owned entities, joint ventures or organic growth. Based on their decision and objectives, we’ll explain the different set of challenges and opportunities that we’ll then work with them to tackle. Our dedicated team will help each client develop and implement a strategy, bringing with us our wide range of professional services, large pool of assurance, tax and advisory professionals and our geographical reach in China and globally. We offer a full range of business advisory services to foreign investors in China throughout the business lifecyle, including the following: • Advice on market entry to companies include general business advice, market research, market analysis, strategy studies, structure set-up, joint venture identification and negotiation, establishment and registration of offices and personnel, feasibility studies, due diligence, business valuation, capital verification, tax structuring and planning, completing audits and management systems and processes. • Our operational support includes business effectiveness, amalgamation and restructuring of joint ventures, IT systems advice, corporate, personal and indirect tax advice and risk management, labour practice compliance, cash repatriation strategies, management and head-office reporting and statutory auditing services. We help clients understand the local market and the competitive industry structure. We also help them formulate effective strategies for market entry and their expansion plans, and provide a wide range of professional services instrumental to proper planning and execution of their China business strategy. At PwC, we are committed to creating a continuous stream of new, effective and efficient business solutions that can adapt to the fast-changing business environment in China.” HOW DOES REGULATION IN YOUR JURISDICTION BENEFIT BUSINESS GROWTH? WHAT CAN YOUR JURISDICTION OFFER TO PROSPECTIVE COMPANIES? “Government policy—outlined in China’s 12th FiveYear Plan—is supporting the business agenda as China transitions from a production-export market to

ACQUISITION INTERNATIONAL

a domestic-consumption-driven economy. As one of the key tools used by the Chinese government to direct foreign investment into the country, the 2011 Catalogue for Guidance for Foreign Investment outlines sectors where foreign investment is encouraged, restricted or prohibited. Those sectors not listed in the Catalogue are considered to be permitted. For the developed regions of China, the goal of the catalogue is to steer foreign investment towards: 1) Investment in high-value-added, non-labourintensive businesses 2) Investment in technically advanced manufacturing, and 3) Investment in low pollution and energy saving technologies. Foreign investors are also encouraged to invest in inland provinces, as well as modern services. The intention of the Chinese government towards foreign investment is clear. Foreign investment is intended to support China’s manufacturing sector by providing access to modern advanced technology. Foreign investors should take this into account as investing in China according to the policy trend is one of the important factors to ensure success. “And while industrial consolidation is encouraged for steel, automobile, shipbuilding and cement businesses, the government does not welcome further investment in the saturated solar and wind farm industries. While the real effects of China’s industrial policies are a matter for debate, investors should calibrate business plans accordingly.” Carlos Manuel Martinez, Partner, Corporate Legal Services. PwC Mexico commented: “The requirement for the incorporation of a company within the Mexican territory in accordance to our jurisdiction varies depending on the type of company. However, according to the most commonly used type of Companies which will be mentioned herein some of the requirements to incorporate a Mexican Company are: • Minimum number of Shareholders The minimum number of shareholders required to incorporate a company varies depending on the type of Company. The most common type companies such as the Sociedad Anonym de Capital Variable (S.A. de C.V.), Sociedad Anonima Promotora de Inversion (S.A.P.I) and Sociedad de Responsabilidad Limitada de Capital Variable (S. de R.L. de C.V.) require a minimum of 2 shareholders. • In order to comply with tax requirements, the company is obliged to have a Mexican Tax Domicile registered before the corresponding tax authority. • As a mandatory obligation, the payment of contributions made to the capital stock of the Company shall be subscribed and duly paid in the terms established by law. • Appointment of Sole Administrator / Manager Director or of the Members of the Board of Directors / Managers, as the case may be, who will be in charge of the management of the Company. • Appointment of a Statutory Examiner who will be in

charge of reporting to the Shareholders of the Meeting the accuracy of its financial statements, if applicable. • Incorporation of the Company by means of a Public Attester. • Registration of the Incorporation Instrument before the corresponding Public Registry of Commerce. • Any other additional regulatory matters required depending of the amounts of the investments, corporate purpose of the company and/or origin of the investment. HOW DOES REGULATION IN YOUR JURISDICTION BENEFIT BUSINESS GROWTH? WHAT CAN YOUR JURISDICTION OFFER TO PROSPECTIVE COMPANIES? “Mexican legislation has notoriously been modernized in the past 30 years with the incorporation and promotion of the foreign investment in Mexican companies, adapting to regulatory and international environments in which the manufacture, touristic, and service industry, among others, have emerged to be an ideal area for investment. The regulatory processes are a priority for the Mexican governments; therefore there has been a pronounced tendency to facilitate the incursion of foreign investments in Mexican companies.” CAN YOU PLEASE EXPLAIN LOCAL REASONS FOR INCORPORATION? “Depending on the characteristics of the investment, (amount of the investment, transfer of technology, job creation, location of the investment, environmental effect, among others) the government in some states offers different incentive to investors. Continued on next page...

Company: PricewaterhouseCoopers Consultants (Shenzhen) Limited – Beijing Branch Name: Anthea Wong Email: anthea.wong@cn.pwc.com Web: www.pwccn.com Address: 26/F Office Tower A, Beijing Fortune Plaza, 7 Dongsanhuan Zhong Road, Chaoyang District, Beijing 100020, P.R.C. Telephone: +86 (10) 6533 3352

Company: Pricewaterhouse Coopers, S.C. Name: Carlos Manuel Martinez Email: carlos.manuel.martinez@mx.pwc.com Web: www.pwc.com/mx/es Address: Ave. Rufino Tamayo 100, Colonia Valle Oriente, San Pedro Garza García, Nuevo Leon, Mexico, C.P. 66269 Telephone: +52 (81) 81 52 2043

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SECTOR SPOTLIGHT:

Forming companies & doing business Likewise, other funds were created to incentivise research and development of such investments. We offer to perform analysis, made on a case by case basis, to determine the incentives that can be applied since they vary from if whether they are federal, state or municipal. Likewise, Mexico is strategically located to serve the NAFTA region and is quite competitive to serve the emerging South American region. Finally, Mexico has qualified Managerial and Blue Collar workforce.” HOW EASY IS IT TO DO BUSINESS IN YOUR JURISDICTION? Mexico has developed a very friendly environment to do business for national and foreign investors. Banking and credit facilities are available regardless of the origin of the investment, either national or foreign. (In fact, most banking institutions have foreign investment). Rajkishore Bhagwatsaran is the founder and head of the law firm Rajkishore Associates, he comments: “ Having over 20 years of legal practise, I advise foreign companies mainly on the incorporation aspects of their Indian business, entry and exit strategies, foreign investment, joint ventures, foreign collaborations, taxation, foreign exchange and foreign trade. WHAT FORMATION SERVICES DO YOU OFFER? “We provide services to incorporate limited liability companies in the form a wholly owned subsidiary or a joint venture company. We also assist in the formation of a limited liability partnership. Post incorporation we provide an entire gamut of services to ensure that the incorporated entities are compliant with the law and regulations.” WHAT ARE THE LEGAL REQUIREMENTS WHEN IT COMES TO SETTING UP A COMPANY IN YOUR JURISDICTION? “There are no restrictions in foreign companies entering business in India. Except for a handful of sectors which are reserved for government owned companies, all major business areas have been thrown open for foreign investment. Percentage of foreign investment in key business areas such as banking, insurance, telecommunications etc. are though restricted and are not open for 100% foreign investment.” WHY DO YOU THINK SOME REGIONS ARE WITNESSING SUCH LARGE GROWTH IN FORMATION LEVELS DESPITE THE ON-GOING DIFFICULT CLIMATE? “Economies such as India, China and Brazil are still emerging economies and have immense potential waiting to be exploited by foreign companies entering these jurisdictions. The consistent year on year growth of these economies is the primary reason for further investments fuelling large scale growth. Both manufacturing and service industries having been doing well in these economies when compared to European and American region sustaining high growth and justifying large scale investments.” HOW EASY IS IT TO DO BUSINESS IN YOUR JURISDICTION?

/ June 2012

“On a scale of 1 to 10 (10 being the most easy), I would rate India as 6. Foreign companies have to be careful about the plethora of regulations and the maze of bureaucracy in which they could be easily lost. Nevertheless, entry into the Indian economy is comparatively easy when compared to the pre-liberalisation era (1991 and before) but the government could still do a lot more. Credit facilities by banks are hard to come by as banks don’t lend to newly established entities due to absence of a balance sheet and track record for the new entity. Corporate taxes have been reasonable (33% on profits) and remained pretty much the same for quite some time and I don’t foresee any reduction in the rates in the near future. However capital gains tax (payable when a foreign investor sells its investment in the Indian company) are slowly beginning to become a nightmare for foreign investors due to frequent changes in legislation more so with the changes taking retrospective effect and also with the introduction of general anti-avoidance rules (GAAR). This singularly can affect large scale investments in India.” HOW DOES THE INCORPORATION PROCESS DIFFER WHEN DEALING WITH DIFFERENT SIZED COMPANIES? WHICH COMPANY STRUCTURES ARE IN THE GREATEST DEMAND? “Size does not matter in the incorporation process in India as the procedures are the same. The form of a private limited company is in great demand for small and medium sized investments and also for wholly owned subsidiaries, whereas a public limited company (which can access the general public) is preferred for large scale investments. Between the two forms, the latter takes a little longer as the company needs to obtain a Commencement of Business Certificate in addition to the Certificate of Incorporation, to commence business. Though a new entity called limited liability partnership (LLP) is in vogue for the past few years, foreign investment is not routed through this entity as the FDI is limited to 51%.” CAN YOU HIGHLIGHT THE KEY CHALLENGES OF INCORPORATING OFFSHORE/FOREIGN COMPANIES? “The main challenge is the time taken for incorporation and the prerequisites involved prior to the commencement of incorporation process. As is always the case foreign companies expect the incorporation to be completed within a week or ten days, so that they could get down to business quickly. The requirement of a Director Identification Number (DIN) for every person intending be a director in an Indian company and also the compulsion to have a Digital Signing Certificate (DSC) which would enable the incorporation documents to be uploaded electronically slows down the incorporation process (though in actual terms this has eliminated long delays in physical scrutiny of incorporation papers, experienced ten years back) and hence a realistic time frame of 3 or 4 weeks must be borne in mind. Further the requirement of the documents being notarised and further apostilled at the home country delays the process of incorporation. These challenges are normally met by quick responses to our overseas clients explaining the documentation required and the step by step procedures involved.

Reinier W.L. Russell is managing partner at Russell Advocaten, he commented: “The Netherlands is a perfect business location for entrepreneurs. The well-developed logistic and technical infrastructure, its highly skilled, multilingual and flexible work force, its favourable tax regulations for businesses, its stable political climate and its high standard of living make the Netherlands the ideal place to start a business. Establishing a business The most common business entity in the Netherlands is the ‘Besloten Vennootschap met beperkte aansprakelijkheid’ (“B.V.”: private company with limited liability). The key aspect of the B.V. is that shareholders are only liable for their share in the company. Managing directors, on the other hand, are in principle not liable for debts of the company. They could be liable if serious negligence can be proven. A B.V. is established by a deed of incorporation and registration at the Chamber of Commerce. For this procedure a Dutch civil law notary must be involved, who can be provided by Russell Advocaten. Furthermore, a minimum share capital of € 18,000 is needed. Both the involvement of a notary and the minimum share capital will no longer be required in the future. Unlike some jurisdictions, Dutch law allows foreign directors to take seat on the management board and no restrictions are made for establishing foreign companies in the Netherlands. This underlines once more that the Dutch market is open to foreign investments.

Company: Rajkishore Associates Name: Rajkishore Bhagwatsaran Email: rajkishore@rajkishoreassociates.com Web: www.rajkishoreassociates.com Address: 5B1, 5th Floor, J.P. Tower, 7/2, Nungambakkam High Road, Chennai – 600034. Telephone: 91-44-45008545

Company: Russell Advocaten Name: Reinier W.L. Russell 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

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Forming companies & doing business Other options for doing business As an alternative to the incorporation of a B.V., foreign entrepreneurs can appoint a distributor, an agent, a franchisee or they can establish a branch office in the Netherlands. A branch office can also be established as a foreign entity. It needs to be registered with the Chamber of Commerce. Other important issues Foreign employers in the Netherlands must be aware that labour law protects the interests of employees. There are, among others, provisions regarding holidays, minimum wages, working hours and the employment of disabled employees. Russell Advocaten is highly experienced in rendering legal advice on labour law issues, particularly for foreign companies. Moreover, foreign entrepreneurs might want to lease business accommodation in the Netherlands. Generally, the lease period is five years with an option to renew the lease for another term of five years. At this stage it is impossible to provide all the specific legal lease pitfalls. Therefore, we advise foreign entrepreneurs who would like to lease property in the Netherlands to contact us. If a foreign entrepreneur decides not to lease accommodation in the Netherlands, a trust office could provide the (fiscally) required postal address. Russell Advocaten cooperates with several high quality trust offices. The Netherlands is an appealing place to conduct business. At Russell Advocaten, we have highly skilled specialists to assist you in successfully entering the Dutch market and we render legal support to your day-to-day business operations.” Mr. Jean Louis is partner at Thetabiz S.A, he comments why are we different and why are we the Market Leader: “I am often asked how do you create a leading Premium Brand and the truth is there is no secret to it. It is sheer dedication a passion to succeed and appointing a Senior Management Team that do not work just 9 to 5. Blood Sweat and Tears – are the key elements - Your team must work with you not for you. When you have the above to a fine art do not concentrate on what works and is right, concentrate on what is wrong and why we went wrong and most importantly why did we did not get it right the first time. Starting a business is a huge amount of work, requiring a great deal of time, so you better make sure that you enjoy what you are about to do or just don’t do it at all. When I started Europe Emirates from an initial idea, I did not set out to build a the best service provider organization in the UAE, the initial idea was that it would cover expenses, so indeed there was little strategy and little thought but only that. The name was thought up in a matter of minutes but little did I know that there was a plan in the back of my mind, the name in itself signified what was about to be built and still to this date signifies the same, we bridge the cultural areas that we work in and provide an ever

ACQUISITION INTERNATIONAL

familiar European Service standard to our operations in the Middle East.

international tax planning, investment holding and trading structures.”

This is the secret of how Europe Emirates became the Leading Corporate Services Provider in Dubai, by delivering a fist class service.

Michel Bots Director, Global Business Development – TMF GROUP, he commented: “TMF provides the full range of back office and compliance services to companies leaving clients to focus on their core business. With our presence in more than 100 offices in over 75 countries worldwide we are specialised in each jurisdiction’s local rules and regulations and can act accordingly. We partner with our clients and facilitate from incorporation to dissolution and everything in-between.

We are a service company and we provide the best service at value for money prices and this is what sets us above from the Crowd. We do not provide a so-called Luxury Service at exorbitant pricing, we provide a Premium Service at a reasonable price and our service is equal or above what others who describe themselves as luxury. Europe Emirates is all about doing something to be proud of, bringing qualified dedicated people together and creating something that makes a real difference to other people’s lives, it is not easy to start a company and to survive, you need to do something different to make it’s a success and this is what we have done we have covered a void in the market to provide real premium service by establishing a team of true professionals who are as passionate about the brand as we are and engaging in constant innovation. As a leader I know what I want to achieve but to achieve this my team also need to know and want to achieve the same thing. That’s why, my motto is – Do not give me a problem, give me the solution. This empowers the team to actually be able to think and implement their thoughts, in fact it is not even a team it’s a family. I try to make sure that we appoint key personnel who share the same vision and in this way we can run a large group of companies in the same way a small business owner runs a small family business.” Europe Emirates Consultancy is part of the Europe Emirates Group, which is an International corporation offering a full range of legal and financial services at local and international levels. “As an independent service provider, we ensure the highest level of confidentiality and efficiency in all operations. Europe Emirates Consultancy is formed by a group of International business strategists and professionals, with total customer-focused vision, aiming to understand, evaluate, design and implement solutions that best meet the needs of our demanding clientele, which typically operate in highly complex fiscal, legal and financial environments but we also have a large client base of small start-up operations.

WHY DO YOU THINK SOME REGIONS ARE WITNESSING SUCH LARGE GROWTH IN FORMATION LEVELS DESPITE THE ON-GOING DIFFICULT CLIMATE? “It will take a long time for domestic and business demand in the West to recover, pushing companies there to join Asian companies venturing outside their national borders and target better growth opportunities in Asia. In addition, globalization has been the key driver for business and in recent years it has become a hugely positive force for entrepreneurs. With national economies becoming increasingly intertwined, entrepreneurs have started their new business ventures globally right from the start. The internet and growing digital economy have led to the creation of lean start-ups that require smaller amounts of capital than traditional companies. Transnational entrepreneurs are moving back and forth between countries, using their business relations as leverage within other markets. As access to global markets becomes easier due to massive innovation in communications and transportation technologies – the rise of the digital economy, it only makes sense to start a business utilizing the strengths of international markets – e.g. the massive growth that is happening in Asia Companies now want access to growing markets like China, Vietnam, India and Indonesia. Singapore and Hong Kong act as gateways to these markets and we help clients tap into these markets quickly and efficiently.” Continued on next page...

“Our ethos is one which does not draw distinctions on how we treat our clients based on how large or small they are, additional to this our pricing methods are also regulated and we can proudly state these are the most competitive on the market. We Define Our Services: “Europe Emirates provides professional corporate solutions and advice to businesses seeking to trade and invest beyond their own national borders. “We offer sophisticated international corporate structuring and arrange superior banking services to meet the demands of international businesses and entrepreneurs. We have developed a reputation for providing a diverse and attractive range of

THETABIZ S.A Company: Thetabiz S.A Name: Jean Louis Email: support1@thetabiz.com

June 2012 /

SECTOR SPOTLIGHT:

Forming companies & doing business HOW DOES THE INCORPORATION PROCESS DIFFER WHEN DEALING WITH DIFFERENT SIZED COMPANIES? WHICH COMPANY STRUCTURES ARE IN THE GREATEST DEMAND?

Regarding a growth profile, Latin Focus Consensus Forecast expects that by 2012 the Peruvian GDP will rise 5,7% while by 2013 it is expected a greater business activity.

“In general the incorporation process does not differ whether the operations are big or small. In the above mentioned ease of doing business test, Hong Kong excels when it comes to the ease of setting up a company. Only business complexities will affect the incorporation process to the extent of the M&A. However, this is a given fact in any jurisdiction. We encounter a wide variety of company structures; Hong Kong operations, regional headquarters and investment holding companies entering into China. With a declining global economy we encounter a significant number of clients who intend to reach the growing Chinese consumer market. We facilitate the first step in Hong Kong and subsequently involve one of our numerous China offices in order to provide a smooth integrated service.”

Thus, the local economic growth would be higher than Colombia, Brazil; Mexico and so on would reach.”

AS WE SLOWLY RECOVER FROM THE ECONOMIC DOWNTURN, DO YOU HAVE ANY PREDICTIONS FOR THE NEXT 12 MONTHS IN TERMS OF DOING BUSINESS IN YOUR JURISDICTION? “Asia Pacific is the driver of global economy and the recovery from the downturn starts here. We are in the right place at the right time to make full use of this opportunity as we help our clients to enter the most dynamic markets globally like China, Indonesia, Vietnam and India. We have significant presence in Singapore & Hong Kong, the two financial hubs of Asia that serve as the point of entry to Asia for most companies. In this complex and uncertain environment, companies need to focus on their core business – what made them successful in the first place. That is where we step in by helping companies globalize. We take care of your local set-up initially and your auxiliary functions. We help you set up the company, we take care of your compliance requirements, your accounting, payroll etc., leaving you free to focus on making your business grow in a new and dynamic market. Increasingly, this is the way that companies will adopt in the future, focus on their strengths and outsource non-core functions to partners like TMF. My bet for the future would be increased outsourcing, companies moving to shared platforms for greater efficiency and more companies growing from Asia to global MNC status.” Alejandro Castro Angulo, General Manager of ANGULO, CASTRO & GARCIA CONSULTORES, he comments on why some regions are witnessing such large growth in formation levels despite the ongoing difficult climate...

HOW EASY IS IT TO DO BUSINESS IN YOUR JURISDICTION? “In the new general ranking of “Enabling Trade Index 2012” made by the World Economic Forum, Peru raised 10 positions from the previous report 2012. “In the new list showed in Geneva, Peru is in top 53 with a score of 4.34 among countries that offers more facilities in commerce, which this year incorporates to 132 economies of the world. Enabling Trade Index measures the level in which the economies of the worlds have developed policy institutions and service that make it easy the flow of goods across borders and on target markets, Moreover, it indentifies and brings put the aspects to improve. Blackrock, one of the world´s preeminent asset management firms, reported that Peru is in second place in Latin America, with better security to invest due to the appropriate macroeconomic management, greater confidence with the new administration, solid tax accounts and appropriate flows of capital. According “The Blackrock Sovereign Risk Index (BSRI), Peru is in place 17 worldwide.” AS WE SLOWLY RECOVER FROM THE ECONOMIC DOWNTURN, DO YOU HAVE ANY PREDICTIONS FOR THE NEXT 12 MONTHS IN TERMS OF DOING BUSINESS IN YOUR JURISDICTION?

Company: TMF Hong Kong Limited Name: Michel Bots Email: Michel.Bots@tmf-group.com Web: www.tmf-group.com Address: 36/F, Tower Two Times Square, 1 Matheson Street, Causeway Bay, Hong Kong Telephone: +852 28220104

“The Peruvian Central Reserve Bank (BCR) raises for this year its national economic growthestimation and does make out vital changes in its current position of currency policy in short term due to little global uncertainty and to a solid internal demand. The projection base scenario considers, as well as the Inflation Report of December, that the currency policy position will be not substantially different too the present day in the short time”, stated the report of the BCR.”

Company: ANGULO, CASTRO & GARCIA CONSULTORES Name: Alejandro Castro Angulo Email: info@acgconsultores.com.pe Web: www.acgconsultores.com.pe Address: Edificio Reducto Business Center, Av. Paseo de la Republica 6010 Of. 303, Lima 18 Telephone: (511) 242-9811 / (511) 446-9176

“Peru will be the country with the lowest inflation in Latin America in 2012 and 2013 and will report the biggest economic growth in these years at regional level, reported the Latin Focus Consensus Forecats consultant. Based on the last survey on May that compiles the influence of local and international economic analysts, the consultant holds that Peru will have an inflation rate of 2,9% in 2012 and 2,6% in 2013, those estimations are within a target range (between 1% and 3%) of the Peruvian Central Reserve Bank.

/ June 2012

Company: Union Andina De Patentes Sac Name: Hernán Castro Email: gerencia@unionandina.com Web: www.unionandina.com Telephone: (511) 242-9811 / (511) 446-9176

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Forming companies & doing business

FORMING COMPANIES & DOING BUSINESS — Case Study

St. Vincent and the Grenadines – Truly a Jurisdiction of Choice for the International Investor

Since 1997, Wilfred Services Ltd. has been a Registered Agent and Trustee in St. Vincent and the Grenadines (SVG) servicing clients worldwide. Our firm prides itself in developing strong working relationships and alliances with local and international professionals as we are able to truly add value to any client desirous of wealth creation and asset protection in any jurisdiction based on our extensive network. However, our focus in this piece is presenting SVG as an attractive international financial services jurisdiction and we have identified some of the salient points as to why SVG should be anyone’s jurisdiction of choice: • A SVG International Business Company (IBC) can be utilized to purchase real property in SVG and residency if the client so desires; • Some of the lowest government fees of any international financial services jurisdiction; • Zero taxation of international entities therefore no annual reporting requirements ; • Joint supervision/regulation of international banks by the International Financial Services Authority (IFSA) and the Eastern Caribbean Central Bank (ECCB) where required; • Excellent professional service base of registered agents, trustees, lawyers, accountants inter alia; • A stable, secure and well regulated operational environment;

ACQUISITION INTERNATIONAL

• Not listed on any Organization for Economic Cooperation and Development (OECD) list (i.e. black, grey); • Culture of Anti Money Laundering (AML) Compliance and Combating Proceeds of Crime and Terrorism through the establishment of a fully operational and staffed Financial Intelligence Unit (FIU); • IBC Incorporation within 48 hours; • Bearer Shares are provided by this jurisdiction subject to strict immobilization regulations. In recent times, two areas attracting considerable interest from international investors are: • Hybrid entities • Series LLC’s A hybrid corporate vehicle is one which is a company that is limited by guarantee but which also has a share capital. Such a company is normally structured with at least two classes of members – shareholding members and guarantee/beneficiary members.

LLC umbrella. Each Series, company or unit has a separate purpose and those members have different rights, powers, privileges and duties. The Series LLC offers greater benefits to a new investor such as tax flexibility, choice of investment structure, versatility or less exposure to legal liability. In sum, it is a combination of SVG’s low cost of doing business vis-à-vis other jurisdictions, an ongoing drive to enhance its offerings whilst maintaining the highest international standards from a legislative and regulatory standpoint that will render this jurisdiction one to be seriously considered by any international investor in the short term and beyond. Look out for great things to come from St. Vincent and the Grenadines!

Shareholding members may own ordinary voting shares, preference shares, or both. Conversely, Guarantee members undertake to contribute to the debts of the company up to certain specified maximum amount in the event of its liquidation. Therefore, a guarantee member holds an obligation as opposed to a shareholding member who holds a stake in the company. The Series LLC permits a single limited liability company to own multiple subsidiary LLC’s each of which owns a single asset business. This LLC can establish a “Series” or units under the same

Company: Wilfred Services Ltd. Name: Merma DeFreitas Email: info@wilfredinternationalservices.com Web: www.wilfredinternationalservices.com Address: Suite 305, Griffith Corporate Centre Box 1510, Beachmont, Kingstown Telephone: 784-456-2970

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SECTOR SPOTLIGHT:

Doing business in Cyprus

DOING BUSINESS — in Cyprus

Acquisition International speaks to George Themistocleous is the Managing Director of AuditChart Limited, a firm of Certified Public Accountants based in Cyprus.

Limassol / Cyprus

“Our business started 15 years ago as a sole practitioner firm, while late 2004 this undertaken by the Company. The main practice areas are Auditing and Accounting, Tax advisory services including International tax planning and VAT, Management and Consultancy services, as well as Corporate and Secretarial services. As you can see we provide full range of services, giving at the end the feeling of one-stop shop. One of our main advantages, which we try to keep always on a really high level, is the personal attention we give to our clients. In AuditChart we do believe that all clients’ requests are unique and it is always our duty to listen, examine, plan and assist on the adoption of the solution given to all of them. Each client can have personal communication with the management of our firm and all incoming emails are replied within the next 24 working hours. CAN YOU PLEASE DEFINE THE QUALITY OF THE BUSINESS ENVIRONMENT IN CYPRUS AND THE RISKS IT FACES IN 2012? Definitely financial crisis, especially Greece problems, affected business environment in Cyprus a lot. The most significant risk created from the exposure Cyprus’ banks had into the Greek dept and the hair cut negative effect. Although that, banks in Cyprus are still healthy and offer a stable banking solution to all their clients, irrespective of the different downgrades they had from different credit rating agencies. It is important to mention here that the banks in Cyprus reported profits for the first quarter of 2012, irrespective of the negative environment they had to cope with. HOW HAS CYPRUS COPED WITH THE ON-GOING DEBT CRISIS IN EUROPE AND WHAT AFFECT THIS HAS HAD ON THE ECONOMY? PLEASE PAY REFERENCE TO DOWNTURN IN TOURISM.

/ June 2012

Although debt crisis in Europe came to the island little bit late, this affected a lot the local economy. Certain parts of the Cyprus economy, like tourism, had been negatively affected. Cyprus tourism loses part of its competitiveness, revenues decrease and increase of unemployment. Facing all the above, the new policy measures which are applied includes foreign investment, diversification of tourist product and quality improvement. Some of these measures had been already implemented with positive results. WHAT METHODS HAVE THE GOVERNMENT PUT IN PLACE TO REDUCE THE BUDGET DEFICIT AND ENCOURAGE GROWTH? The Cyprus Government, with the positive contribution of all Political Parties, adopted various tax incentives aimed at promoting growth and strengthening the economy. For example certain measures which were passed by the House of Representatives (Parliament) and which are analysed on our most recent Newsletter (please visit http://auditchart. com/2012/06/01/tax-laws-amendments-aiming-towards-theencancement-of-growth/). WHAT METHODS AND INCENTIVES HAS THE GOVERNMENT PUT IN PLACE TO MAKE ATTRACT FOREIGN INVESTORS? “As explained above, Cyprus is working towards the improvement of its business environment in 2012. While foreign investment into Cyprus was always important, some of the measures are designed to attract further foreign investment into Cyprus, like the 50% exception from taxation on remuneration earned by individuals who were resident abroad and started their employment in Cyprus after the 1st January 2012. The exemption is offered for 5 years and for incomes over €100.000.

WHAT METHODS HAVE BEEN PUT IN PLACE TO PROTECT THE ECONOMY IN 2012? AND WHEN DO YOU THINK THE CYPRIOT ECONOMY WILL RETURN TO GROWTH? “The Cyprus Government and the Ministry of Finance, having the support of the House of Representatives (Parliament) all the social partners (unions and professional societies) are trying to implement measures towards increase of productivity and growth, but also the permanent reduction of the state expenditure. Everyone recognizes that Cyprus need macroeconomic stability which will give a clear message that the country will remain a major financial centre, with competitive advantages including low taxation. Already the Cyprus Government committed for a fiscal deficit for the year 2012 will be lower than 2,5% and everyone is working towards this target.

Company: Auditchart Limited Name: George Themistocleous Email: george@auditchart.com Web: www.audicthart.com Address: 131 Gladstonos str, Kermia Court, 2nd floor, PC 3032 Limassol, Cyprus Telephone: (+357) 25.204 000

ACQUISITION INTERNATIONAL

SECTOR SPOTLIGHT:

Strategic due diligence for the media & information sector

STRATEGIC DUE DILIGENCE — for the media & information sector Effective due diligence through every stage of an M&A transaction is imperative and being aware of any potential risks right from the beginning can save prospective buyers an awful lot of time and money further down the line.

London / England

Comprehensive due diligence enables such individuals to better understand what they are buying before bearing the risks of ownership. Traditional due diligence techniques often only verify the history of the target and projects the future based on that history; correctly applied due diligence digs much deeper and considers all aspects of a business. Claus Werner is Ocean Strategy’s Director with responsibility for the strategic due diligence practice and has overseen the majority of the £8BN cumulative deal value that Ocean has participated in since foundation in 2000. Ocean is the leading specialist media and information strategy consultancy. We advise investors seeking to buy media companies and provide strategic advisory services to leading media owners internationally. Deep insight and operational experience, combined with the very best in analytics, captures the firm’s approach to strategy and M&A for the media and information sector. Total sector immersion makes Ocean rare in a market of generalist providers and enables the company to provide the deep industry knowledge well known to their international client base and the driver of four consecutive years of strong growth. WHY IS EFFECTIVE DUE DILIGENCE IMPERATIVE IN M&A TRANSACTIONS? WHAT ARE THE KEY BENEFITS TO POTENTIAL BUYERS? “Of course the basic confirmation of the market and the business is key to any strategic due diligence, but Ocean’s approach is to really challenge the proposed strategy in the business and add value to the transaction by optimizing the growth strategy in

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the asset. Ocean can do this because of our deep insight into the sector and ongoing experience working with media owners directly to find and prove growth strategies”. CAN YOU PLEASE EXPLAIN THE IMPORTANCE OF COMMERCIAL DUE DILIGENCE AND DEMONSTRATE HOW IT CAN MAKE A POSITIVE CONTRIBUTION TO A TRANSACTION? “The answer to this question is most clearly indicated by the numerous occasions in which Ocean has led to potential acquirers deciding against proceeding. On the positive side when acquired, especially where Ocean have had the opportunity to participate in implementation, they have seen their strategy work transform Private Equity owned assets.”

WHAT METHODS AND STRATEGIES DO YOU USE TO COMPILE A COMMERCIAL DUE DILIGENCE PLAN? “While we take insight across media and geographies, and have more than a decade of experience in commercial due diligence, every process is tailored to suit the needs of the buyer.” WHAT ARE YOUR PREDICTIONS REGARDING THE APPETITE FOR COMMERCIAL DUE DILIGENCE OVER THE NEXT 12 MONTHS? “Slow growth in mature markets, some forced sales due to debt burdens and financial pressures, ongoing uplift in high growth markets. Quality of diligence will continue to grow in importance may favour sector specialists like us.”

WHAT ARE SOME OF THE MOST COMMON PROBLEMS THAT CAN ARISE WHEN STEPS ARE MISSED IN THE DUE DILIGENCE PROCESS? In Ocean’s experience, this is the key piece of work in any acquisition. While in part it plays a role confirming the market the target operates within, and the position it occupies, Ocean’s approach emphasises the assessment of the growth strategy for the business, typically challenging the existing strategy for the target and developing an optimised growth strategy for the buyer. As such, good strategic due diligence, with the right implementation post acquisition (where Ocean also often participates) can be transformational.”

Company: Ocean Strategy Name: Claus Werner Email: Web: www.oceanstrategy.com Address: 19 Buckingham Street, London, UK, WC2N 6EF Telephone: +44(0)20 7451 3720

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DEAL DIARY: Deal index

DEAL DIARY — Deal index 57

ALAIN AFFLELOU ACQUIRED

NG INFRA OÜ ACQUIRED

MEYN HOLDING B.V DISPOSAL

WEENER PLASTIK ACQUIRED BY LINDSAY GOLDBERG VOGEL

IBA AND SK CAPITAL PARTNERS CREATE IBA MOLECULAR IMAGING

PIPELIFE STAKE DISPOSAL

ARGOS ACQUIRES A SWISS SCHOOL

STIRLING SQUARE CAPITAL PARTNERS ACQUIRES SAR AS

DPA GROUP ACQUISITION OF BENKIS INTERIM PROFESSIONALS

SORTERA NORVESTOR VI LP INVESTMENT

AVEVA ACQUISITION OF BOCAD

SARGARD ACQUISITION OF STOKOMANI

EPURON ACQUISITION OF COTTBUSER HALDE WIND PARK

TELE COLUMBUS ACQUIRED FOR $786 MLN

DUROBOR AND SOBODEC MERGER

SCAW SOUTH AFRICA ACQUIRED

ACQUISITION OF MAJOR STAKE IN RUSSIAN POWER PRODUCER ENEL OGK-5

WEENER PLASTIK ACQUIRED BY LINDSAY GOLDBERG VOGEL

LEAPFROG INVESTMENTS ACQUISITION OF EXPRESS LIFE INSURANCE

EADS ACQUISITION OF VIZADA

INDUSTREA LIMITED ACQUIRED

ACQUISITION OF HANSEATISCHE CHOCOLADE

HOMAIR VACANCES REORGANISATION

CORPFIN CAPITAL ACQUISITION OF KIWOKO

JONCOUX GROUP ACQUISITION OF MK

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DEAL DIARY:

M&A from around the world ALAIN AFFLELOU ACQUIRED

AMr. Alain Afflelou alongside funds advised by Bridgepoint, and funds managed by Apax Partners France and Altamir Amboise, announce that an agreement has been reached whereby Lion Capital has been granted a period of exclusivity for the purposes of reaching a definitive agreement to acquire European optical retailer ALAIN AFFLELOU by Lion Capital alongside Mr. Alain Afflelou and management of the Group. For this transaction, Bridgepoint was advised by Rothschild and Latham & Watkins and Lion Capital was advised by Lazard, J.P. Morgan, Citi and SJ Berwin. Financing is being provided by Citi, UniCredit and Alcentra. Alain Afflelou was advised by Jean-Didier Lange and management was advised by Scotto and Banque Privee 1818. Alcentra advised by Jennifer Hinge acted as Global Mezzanine Mandated Lead Arranger of the €110 million mezzanine tranche, and funds advised by Alcentra Ltd underwrote €100 million of the €110 million mezzanine tranche. Pascal Meysson, Alcentra Limited led the team, he commented:

Providing certain funds financing within the agreed deadline, and agreeing on an intercreditor legal documentation that satisfy both mezzanine investors and other stakeholders in the context of the French double Luxco double system were the key challenges. Julien Berger, Managing Director and Founder of INDEFI led the team acting on behalf of Alain Afflelou and its shareholders Bridgepoint and Apax Partners. Berger commented on the challenges of the deal:

The challenge for us was to capture the strong specificities of the health care system in France in general and in optical care in particular in a rapidly moving environment. More specifically, we had to analyse ALAIN AFFLELOU ACQUIRED the development of optical care networks, originated by insurance companies in France and to enlighten future Debt Providers investors of opportunities and risks at stake for optical Legal Adviser to the Purchaser chains in general and Alain Afflelou in particular. www. indefi.eu

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Thanks to its track record in specialized retail and its knowledge of the optical market, OC&C Strategy Consultants was appointed by Bridgepoint and Apax to support the sale of their participation in Alain Afflelou.

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The team has been led by Jean-Michel Cagin partner in the Paris office which had extensive experience in this field and strong relationships with the company management. Jean-Michel Cagin elaborated:

The work clarified the value proposition, the business model and the success factors that make Alain Afflelou a leader in the optical distribution with still a high potential for growth.

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TAJ Strategic Advisor to Afflelou Financial Due Diligence Provider & Tax Adviser

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June 2012 /

DEAL DIARY:

M&A from around the world MEYN HOLDING B.V DISPOSAL Altor 2003 Fund (”Altor”) has reached an agreement to sell Meyn Holding B.V., parent company to Meyn Food Processing Technology B.V. (“Meyn”), the global leading poultry processing solutions company, to CTB, Inc. (“CTB”), a subsidiary of Berkshire Hathaway Inc., and a leading designer, manufacturer and marketer of agricultural systems and solutions. Nonwovens as such and within this industry especially spunlaced (hydroentangled) nonwovens are a high growth industry in all major markets worldwide. Spunlaced nonwovens are increasingly finding their markets outside of the traditional disposable wipes market. Norafin is regarded by industry experts as the innovation leader in nonwovens especially through the sophisticated approach to spunlacing. The participation by Pinova Capital (which Gherzi has accompanied as technical advisor) will allow Norafin to expand their spunlace capacity and thus extend their share in this promising market. Altor Equity Partners contacted Savills Valuations to act on behalf of Coöperatieve Meyn U.A. to value the 2 real estate assets that are part of this transaction. This was the first instruction for Savills Valuations from this client. Patrick Oudshoorn is an Associate Director of Savills Valuations and is responsible for Transaction Advisory within the valuation team in the Netherlands led the team, he commented:

The instruction was under extreme time pressure which made it challenging. Therefore we had several conference calls to discuss questions and the progress. This has lead to a quality product which was delivered on time. Sequoia advised CTB, Inc., a Berkshire Hathaway company. It has been the first time for CTB, Inc. to retain an M&A advisor and to participate in a competitive auction. The relationship has been successful and both parties do not rule out future cooperation. On Sequoia side former Partner Pieter Stor and Elmer Jutte (Director) led the team. Other Sequoia team members involved were Peter van Leersum (Vice President) and Kevin Koppen (Associate). Stor commented:

It has been a notable sale process given it’s one of the few sizeable closed transactions in the Netherlands this year involving both competitive financial and trade bidders with CTB, Inc. as surprising and best new owner for the business. Van Doorne acted on behalf of Altor and Meyn in this sale process. We have a long-standing relationship with these parties, which started with Altor’s acquisition of the Meyn Group in 2005 and which was followed by a series of subsequent transactions and restructurings over the past seven year. The Van Doorne team was lead by Onno Boerstra (partner and head of Corporate) and Joost Kolkman (senior associate Corporate).

CTB ACQUISITION OF MEYN HOLDING B.V Legal Adviser to the Purchaser

Like any auction also this transaction had its challenges, which were overcome by an efficient and close co-operation between the responsible teams of Altor, Nomura and Meyn, as well as our thorough understanding of their business and market.

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SEQUOIA Financial Due Diligence Provider

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Ewald van Hamersveld, Partner, KPMG Transaction Services and winner of the Best Transaction Advisor award at the Dutch M&A Awards 2011 led the KPMG deal team, he commented:

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We were asked by the vendors to prepare the financial vendor due diligence report based on our experience in the sector and proven VDD experience. Contact Details

Onno Boerstra, Partner and head of Corporate / t. +31 (0) 20 6789228 / e. Boerstra@vandoorne.com Joost Kolkman, Senior associate Corporate / t. +31 (0) 20 6789533 / e. Kolkman@vandoorne.com

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DEAL DIARY:

M&A from around the world IBA AND SK CAPITAL PARTNERS CREATE IBA MOLECULAR IMAGING

Ion Beam Applications and SK Capital Partners, a US-based private investment firm, have entered into an agreement to create IBA Molecular Imaging, a jointly-owned new company derived from IBA’s molecular imaging division. SK Capital Partners will own 60% of the new company while IBA will have a 40% stake. The parties have also agreed to equally share the development cost of the current pipeline of new molecules and, in recognition of IBA past investment, their resulting profits will benefit for 60 % to IBA and 40 % to SK Capital. The enterprise value used as the basis for the transaction is approximately EUR 180 million on a debt- and excess cash-free basis.

Linklaters advised IBA with a core team consisting of Arnaud Coibion (lead – corporate partner, Brussels), Henk Vanhulle (tax partner, Brussels), Nicolas Gauzès (managing sssociate, Luxembourg) and Géraldine Hanotiau (associate, Brussels). The Brussels, Luxembourg, Paris and New York offices of Linklaters were involved. Morgan Lewis represented long-time client, SK Capital Partners, in this transaction. The Morgan Lewis team was led by Steven Cohen (M&A) with assistance from Roland Montfort (Paris), Richard Zarin (Tax), Donald Silverman (Nuclear Regulatory) and Howard Young (Health Care Regulatory).

IBA AND SK CAPITAL PARTNERS CREATE IBA MOLECULAR IMAGING

ENVIRON acted as technical environmental adviser to its client SK Capital Partners in this transaction. The ENVIRON team was led by Fred Loneker, an ENVIRON Principal and senior M&A due diligence practitioner based in the US.

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Technical expertise in the area of radiological hazards and regulatory compliance was provided by a multi-national team led by Jason Miller (Principal; Arlington, VA USA), Thomas Perrier (Senior Consultant; Aix-en-Provence, France) and Erik Sinno (Senior Consultant; Paris, France), with project support provided by staff throughout Europe (Belgium, Germany, Italy, Spain).

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DEAL DIARY:

M&A from around the world ARGOS ACQUIRES A SWISS SCHOOL Private equity firm Argos Soditic has completed the management buyout of Swiss education business ASC International House. As well as providing language training to the general public and to many of the region’s leading companies and organisations, ASC provides private school education in English. The company owns the British School of Geneva, which includes Geneva Primary School, Geneva Secondary School and the A-Level College, and also runs a bilingual programme with Institution Jeanne d’Arc in France. Argos Soditic’s investment plan is to grow the education business in Swiss Romande by offering private education to the local community where demand for private education, particularly for ex-pats, exceeds supply. Des Gouttes & Associés acted on behalf of the seller, with whom they have a long-standing working relationship. Arun Chandrasekharan, Partner and Leila Hawa, Counsel led the deal team.

DPA GROUP ACQUISITION OF BENKIS INTERIM PROFESSIONALS The Dutch staffing firm DPA Group NV (DPA:AEX) has reached an agreement with the shareholders of Benkis Interim Professionals Ltd, which grants the 100% acquisition of the shares in Benkis by DPA. Benkis is a recruitment specialist that achieved a turnover of €9.4 million in 2011. DPA said that this acquisition fits into the overall strategy of the firm, which is focusing on growth in niche markets and widening activities in this sector. In a press release, DPA said that the acquisition will be formalised “as soon as possible.” But Benkis Interim Professionals Ltd will remain involved in operational and commercial activities at least until 1 January 2014. Benkis Interim Professionals was founded in 2007 by Jan Sjirk Rodenboog and Bert Janssens, specialising in the secondment of finance professionals. It operates primarily in the north and east of the Netherlands. In a news release today the firm said it had chosen DPA because of its “quality and culture.” JanssenBroekhuysen Advocaten represented the Seller and its two ultimate shareholders in this deal. The firm was introduced to the client through the corporate finance adviser that the Seller retained for this transaction. Mariëlle Broekhuysen, partner at JanssenBroekhuysen Advocaten led the team. She was assisted by Jurriën Duijker, associate at JanssenBroekhuysen Advocaten. Mariëlle Broekhuysen commented: “The transaction structure of this deal includes an earn-out arrangement. For a seller it is always important that determining the objectives of the earnout and how this amount will be determined, is cut clear. Various elements may influence the outcome of an earnout. It was my job to identify all these issues and to draft a proper mechanism.”

AVEVA ACQUISITION OF BOCAD AVEVA (LSE:AVV) has announced the acquisition of the Bocad group of companies (“bocad”). This strategic acquisition includes all companies in the Bocad group, bringing to AVEVA all IPR, employees, contracts and assets. AVEVA will establish a new Structural Design Centre of Excellence across Bocad’s two main offices in Bochum, Germany and Ocquier, Belgium where it will continue to develop and support the Bocad software products. The software developed through the Centre of Excellence will be tightly aligned with the AVEVA PDMS and AVEVA Marine solutions and will be sold through the AVEVA global sales force. The new combination will create a worldclass engineering design offering for the plant, marine and fabrication markets. Extensive evaluation by AVEVA identified the Bocad software solutions as the most versatile structural design applications on the market today. The flexibility, capability and richness of functionality make it the first choice for a number of industrial design markets. Richard Longdon, Chief Executive, AVEVA commented, “I am delighted to welcome the Bocad team and software solutions to AVEVA. We are continually looking to strengthen our product portfolio with industry-leading solutions and Bocad easily demonstrated best-in-class. This acquisition further extends AVEVA’s position as a leader in the 3D design market and will be excellent news for our customers and expand AVEVA’s opportunity to capture even greater market share from our competitors.”

Niels Kloppenburg and Antony Jonkman led the Jonkman Kloppenburg Advocaten team.

ARGOS ACQUISITION OF ASC INTERNATIONAL HOUSE

DPA GROUP ACQUISITION OF BENKIS INTERIM PROFESSIONALS

AVEVA ACQUISITION OF BOCAD

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ALCAP

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DEAL DIARY:

M&A from around the world EPURON ACQUISITION OF COTTBUSER HALDE WIND PARK

DUROBOR AND SOBODEC MERGER

Epuron, which is backed by Impax, has acquired the 28MW wind park Cottbuser Halde from Danish group Green Wind Energy.

H2 Private Equity Partners has acquired and merged Durobor and Sobodec GroupH2.

Impax New Energy Investors II L.P. (INEF II), the owner of the Hamburg and Paris-based EPURON, has provided the necessary funding for EPURON to acquire Cottbuser Halde wind farm. INEF II is an investment fund administered by Impax Asset Management Limited, one of the leading administrators of listed and private equity funds for environmental investments on the market.

Equity Partners (H2) is an independent private equity firm founded in 1991, with offices in Amsterdam, Munich and London, whilst Sobodoc Group is a glass decoration company and Durobor is a glass manufacturing company.

The total installed capacity of the Cottbuser Halde wind farm is 28MW, comprising 14 Vestas V90 wind turbines and has been in operation since the beginning of 2009. Long-term project financing is in place with Deutsche Kreditbank. EPURON develops finances, builds and operates wind farms in Germany and France. The acquisition of Cottbuser Halde wind farm is an important investment for EPURON, as it more than doubles EPURON’s existing German operating wind portfolio from 23MW to 51MW. Chris Beckmann, Director at Merrill DataSite Germany, led on the provision of the virtual data room used in the deal, which was instrumental throughout the due diligence process. Chris has a history of working in the finance industry and has assisted sellers, buyers, law firms, banks and advisors in many transactions over the past eight years with Merrill, and has previously worked with Gorrissen Federspiel, the law firm on this deal, on a number of international transactions. Chris’ role in the project was to facilitate creation of a secure, online, fully searchable document repository that hosted thousands of confidential documents necessary to the successful completion of the Cottbuser Halde wind park sale.

The group Durobor – Sobodec realizes sales of 50 million and employs more than 300 assistants in Belgium and in France. ABV Environment is an environmental consulting firm, based in Brussels who acted on behalf of H2 and Sobodec on the deal. The project was led by Jean-Marc Lambert (pictured), Head of Department at ABV Environment, he commented: “As part of the due diligence in this transaction, ABV Environment analyzed the level of soil contamination and the costs of its remediation, and advised on the environmental arrangements to the transaction. The engagement was carried out successfully in a highly compressed time frame, thanks to the strong commitment of ABV Environment team, and a swift co-ordination of the field teams. It was the first time that ABV Environment acted for H2 and Sobodec.”

ACQUISITION OF MAJOR STAKE IN RUSSIAN POWER PRODUCER ENEL OGK-5 A private equity consortium comprised of the Russian Direct Investment Fund (RDIF), Xenon Capital Partners’ Rusenergo Fund, AGC Equity Partners and the Macquarie Renaissance Infrastructure Fund (MRIF) has completed the purchase ofa 26.43% stake in leading Russian power producer OJSC Enel OGK-5. The investment by AGC Equity Partners, a private equity firm whose investors are Middle East institutions, represents the largest private equity investment in Russia by a Middle East investor to date. Rusenergo Fund and AGC Equity Partners have each invested $175 million in the transaction, while the RDIF and MRIF have invested $137.5 million each for a total deal value of $625 million. The structure of the transaction allows foran additional payment to the seller, though this is contingent on the investment generating an attractive level of returns for the investor consortium. In addition to the largest Middle East investment into Russia, the transaction represents the largest-ever private equity deal in the Russian power sector. The consortium of investors becomes a partner of Italian energy company Enel, the controlling shareholder in Enel OGK-5. The Moscow office of Morgan Lewis & Bockius acted as deal counsel to the consortium of investors.

Bech-Bruun’s German Business Group, which is the name of BechBruun’s interdisciplinary, international team focusing on German/ Danish legal issues, has assisted EPURON in the acquisition of the Cottbuser Halde wind farm in Brandenburg, Germany. M&A Corporate specialists, Ole Nørgaard (partner) and Sarah Weber (associate) led the transaction, with assistance from Carsten Ceutz, corporate recovery partner, and Arne Riis, tax partner.

EPURON ACQUISITION OF COTTBUSER HALDE WIND PARK

H2 PRIVATE EQUITY PARTNER ACQUISITION OF DUROBOR AND SOBODEC

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PRIVATE EQUITY CONSORTIUM ACQUISITION OF ENEL OGK-5 Legal Adviser to the Vendor

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M&A from around the world LEAPFROG INVESTMENTS ACQUISITION OF EXPRESS LIFE INSURANCE Insurance-focused private equity funds Leapfrog Investments have acquired a majority state in Ghana’s Express Life Insurance Company for USD5.5m. Leapfrog did not disclose how much of the company they now own. Express Life targets a low-income demographic with products that cost less than USD10 a month. The acquisition in Ghana is the fourth investment since the fund was set up in 2008. Other portfolio companies are South African AllLife, East African Apollo, and Indian Shriram CCL.

INDUSTREA LIMITED ACQUIRED

ACQUISITION OF HANSEATISCHE CHOCOLADE

GE (NYSE: GE) announced today that it is pursuing acquisitions of two underground mining equipment manufacturers in support of the global expansion of its mining business. GE has entered into an agreement to acquire 100 percent of Australia-based Industrea Limited (ASX: IDL, OTCQX: IULTY), a provider of safety and productivity-enhancing mining equipment and services. The transaction is valued at approximately A$700 million, which represents a 5.5x EBITDA multiple based on fullyear financial data as of Dec. 31, 2011. The company also signed a binding Letter of Intent (LOI) to acquire Fairchild International, an independently owned and operated underground mining equipment manufacturer located in Glen Lyn, Virginia. Terms of the agreement were not disclosed.

DC Advisory is pleased to announce the acquisition of Hanseatische Chocolade by Toms Gruppen. All shares in Hanseatische Chocolade have been acquired by Toms Gruppen from the two owners and Managing Directors Hasso Nauck and Wolf Kropp-Büttner. The transaction is the final result of an extensive search and selection process throughout Europe for potential acquisition targets to Toms Gruppen. DC Advisory and Danske Bank Corporate Finance acted as exclusive financial adviser to the buyer for this transaction. Buyer’s legal advisers include Freshfields and Blaum Dettmers Rabstein Rechtsanwälte & Notare for the sellers. Further, KPMG Transaction Services in Copenhagen, Denmark, acted as adviser to Toms Gruppen by performing financial, tax and commercial due diligence in relation to the acquisition of Hanseatische Chocolade.

The combination of the two entities expands GE’s product offering to address approximately 35% of the underground mining value chain. Industrea Ltd. and Fairchild International together are well positioned in dynamic growth regions for mining, including Australia, China (Industrea), and the United States (Fairchild). GE will enable these regionally focused enterprises to reach a global customer base with enhanced products based on GE’s clean propulsion systems, energy storage offering, and world-class system integration capabilities. Both Industrea Ltd. and Fairchild International will benefit from GE’s lean manufacturing and effective global supply chain management.

Hanseatische Chocolade is one of the leading premium chocolate manufacturers in Germany with a substantial product portfolio under the two brands Hachez and Feodora. The company is located in Bremen in Germany with a turnover of approx. EUR 48m in 2011 and employs more than 400 employees. The two former owners will continue as Managing Directors under the new ownership. Read more about the two brands on www.hachez.de and www.feodora.de.

Both companies will become part of GE Transportation’s global mining business which utilizes the people, technologies, and products from across GE to help its customers solve their toughest mining challenges. GE helps mines work better by providing innovative solutions in critical areas such as power, water, and productivity.

Hanseatische Chocolade fits perfectly into the growth strategy of Toms Gruppen sharing the same production concept from “bean to bar”, strong premium brands and a good position on the large German market. Toms Gruppen is the leading confectionery manufacturer in Denmark with a range of leading brands within both chocolate and sweets. The brand portfolio includes Ga-Jol, Galle & Jessen and the premium chocolate brand Anthon Berg. Toms Gruppen is headquartered near Copenhagen in Denmark, has production in Denmark, Sweden and Poland and has a broad network of international sales units and distributors. The combined Toms Gruppen’s turnover was about EUR 235m. Toms Gruppen is owned by the trust Gerda & Victor B. Strands Fond. Read more about Toms Gruppen on www.toms.dk

LEAPFROG INVESTMENTS ACQUISITION OF EXPRESS LIFE INSURANCE

GE ACQUISITION OF INDUSTREA

TOMS GRUPPEN ACQUISITION OF HANSEATISCHE CHOCOLADE

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DEAL DIARY:

M&A from around the world HOMAIR VACANCES REORGANISATION HOMAIR Vacances announces a reorganisation project of its shareholding structure pursuant to which the current participations held by the funds managed by Montefiore Investment, (i) directly up to approximately 37% of HOMAIR Vacances’ share capital and 42.3% of its voting rights, and (ii) indirectly through Iliade up to approximately 24.8% of HOMAIR Vacances’ share capital and 26.3% of its voting rights, would be totally held through Iliade. Easton acted as the sole financial advisor of Homair’s main shareholders, led by Montefiore Investment. As we had a long standing relationship with Montefiore Investment and frequenlty discussed their strategy in the campsite management business, we were deeply convinced of the quality of Homair as a European leader in its segmen and impressed by the skills of the management team. Within the team, Laurent Camilli (Managing Director of Easton) was the team leader along with Thomas Gaucher (Executive Director), Nicolas Saint Pierre (Manager), Julien Choppin (analyst) and Charlotte Trin-Duc (Analyst). Camilli commented: “In a very adverse economic context, combined with a lack of debt, our mandate consisted in identifying the potential partners able to fulfil Montefiore Investment requirements. As Naxicap demonstrated a strong interest, we negotiated with them the valuation pf the company in the view of factoring in the fast path of growth the company was able to prove. Along with Montefiore legal advisors, we conceive and put in place the legal structure designed to match both Naxicap and Montefiore requests.”

CORPFIN CAPITAL ACQUISITION OF KIWOKO Corpfin Capital has acquired a majority shareholding interest in the company Masquepet, S.L., which commercializes under the brand name Kiwoko, a Spanish pet care retailer, from Prince Capital Partners. Kiwoko, which is headquartered in Madrid, has 30 stores and 150 employees. Founded in 2007, it operates in five regions across Spain and sells some 2,000 products for dogs, cats, reptiles and fish. The investment will enable the company to consolidate its market position and roll out new stores. Kiwoko expects to have more than 100 stores within the next five years. April was a busy month for pet care deals. Pangea Investors took a majority interest in Austria Pet Food for €25m, LDC sold its stake in Cranswick Pet Products and Vendis Capital backed Yarrah. Prince Capital Partners will retain a stake in Kiwoko. ALEMANY, ESCALONA & DE FUENTES has acted as legal counsel for Corpfin Capital. The legal team was led by José Antonio Escalona and Antonio Conde, partners of the Corporate Department. This has been a deal particularly challenging due to time restraint and to certain special features derived from the transaction structure, as one of the former investors group has left the company but another investors group (Prince Capital Partners) as well as the management team have remained as shareholders of the company.

Venue©, the RR Donnelley proprietary solution, was mandated by Montefiore Investment via Easton Corporate Finance to provide the Virtual Data Room for the deal. The project was handled locally by the Paris based Venue team. The point of contact was Greg Tringat, Sales Manager, along with the dedicated Project Managers.

JONCOUX GROUP ACQUISITION OF MK Joncoux Group has acquired the Polish company MK and become the only real pan-European metal chimney producer established on 4 big markets. After acquisition, Joncoux group will have 60 M€ consolidated revenues with 400 employees. “This acquisition gives us the opportunity to create a real pan-European group, active on four domestic markets (France, Benelux, Germany, and Poland) with interesting perspectives in Northern and Eastern Europe.” With manufacturing sites in each zone and local managing directors, the Group is in the best position to offer outstanding service to its customers with high quality chimney flue systems adapted to each market. All subsidiaries of the Group will benefit from the acquisition, by increasing the product range offered to the customers, and the Group as a whole will benefit from an unrivaled capacity for innovation” said Jacques-Olivier Joncoux, chief executive officer and main shareholder of the group. CM-CIC Capital Finance, shareholder of the group since 2001, is contributing in the development of the group with a 4 M€ investment in equity. Caroline Pasquet, Director at CM-CIC Capital Finance, is very confident in the future of the Joncoux Group managed by a young, dynamic and reliable CEO. “The Joncoux Group did successful acquisitions in the past and has succeeded in remodeling its internal operations, sales and IT systems to be in a position to make further acquisitions.”

HOMAIR VACANCES REORGANISATION

CORPFIN CAPITAL ACQUISITION OF KIWOKO

JONCOUX GROUP ACQUISITION OF MK

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M&A from around the world NG INFRA OÜ ACQUIRED The leading Estonian IT company Net Group and the Leading Nordic and Baltic IT infrastructure company Atea have entered into the agreement where Atea will aquire IT Infrastructure company of Net Group – NG Infra OÜ.The agreement will be accomplished after approval by the Competition Board of Estonia. During the last 13 years Net Group has been continuously developing its IT Infrastructure business and today is the leader of this market segment. With this acquisition Atea establishes a solid presence in Estonia and becomes the largest IT Infrastructure company in each of the Baltic countries. “We have been looking for a suitable partner offer the last 2 years and Atea suited to be the best to further develop the NG Infra”, said Mr. Priit Kongo, Chairman of Net Group. “Through this acquisition we will improve our presence in Estonia and leverage our competences as well as services in all three Baltic countries even more effectively,” said Arūnas Bartusevičius, the CEO of Atea Baltics.

WEENER PLASTIK ACQUIRED BY LINDSAY GOLDBERG VOGEL

PIPELIFE STAKE DISPOSAL

Private equity firm Lindsay Goldberg Vogel GmbH has acquired German plastic packaging manufacturer Weener Plastik AG.

Solvay and Wienerberger have completed the sale of Solvay’s 50% stake in Pipelife, one of the world’s leading suppliers of plastic pipe systems, to Wienerberger.

The deal, which is pending approval from anti-trust authorities, will help Weener pursue its global expansion plans, according to a news release from the Weener, Germany-based company.

For Solvay the deal represents an Enterprise Value of about EUR 257 million for its 50% stake when taking into account assumption of liabilities, including pensions and other debtlike items, for about EUR 85 million.

The company makes sealing caps, valve caps, beverage caps, plastic bottles, jars, dispensers and dosing systems. Their products are designed and produced for home care, chemical, pharmaceuticals, personal care and food and beverages.

Solvay received in total EUR 172 million in cash for the shares including a special dividend of EUR 10 million.

maconda was mandated by Lindsay Goldberg Vogel as advisor for commercial due diligence and strategic analysis. From the side of maconda the team was led by Bernard Gudowski as project manager. He commented: “The global market for consumer packaging in general is dominated by low value commodity products, while Weener is focused on high value customized plastic caps and closures for leading FMCG producers. In order to assess the addressable size of the market segment, its drivers, the expected development and differences between various end-markets. maconda leveraged on its intimate knowledge of consumer goods and an extensive network of industry experts and market participants.” “As a supplier of closures for leading FMCG producers, Weener operates a number of subsidiaries all over the world. To better understand its regional positioning, maconda assigned a team of specialist native speakers who conducted dozens of interviews with local associations, producers and customers, in Germany, Brazil and Russia.”

Pipelife is one of the world’s leading suppliers of plastic pipe systems. With 29 production plants and headquartered in Vienna, Austria, the company employs about 2.600 employees in 27 countries and realized about EUR 800 million in sales in 2011. Wienerberger is the world’s largest brick producer (Porotherm, Poroton, Terca) as well as the market leader for clay roof tiles (Koramic, Tondach) in Europe and for concrete pavers (Semmelrock) in Central-East Europe. In pipe systems (Steinzeug-Keramo ceramic pipes and Pipelife plastic pipes), the company is one of the leading suppliers in Europe. With a network of 232 plants, Wienerberger generated revenues of EUR 1,555 million and operating EBITDA of EUR 214 million in the first nine months of 2011. Alix Frank Rechtsanwälte GmbH acted on behalf of Wienerberger Group on the deal, reinforcing a long lasting relationship spanning 25 years. Senior Partner Alix FrankThomasser led the team consisting of Franz J. Heidinger (partner), Zuzanna Noetstaller (junior partner) and Georg Schuh (associate).

ATEA ACQUISITION OF NET GROUP

GOLDBERG VOGEL GMBH ACQUISITION OF WEENER PLASTIK AG.

WIENERBERGER ACQUISITION OF PIPELIFE STAKE

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M&A from around the world STIRLING SQUARE CAPITAL PARTNERS ACQUIRES SAR AS

SORTERA NORVESTOR VI LP INVESTMENT

Stirling Square Capital Partners [“Stirling Square”], the leading panEuropean private equity firm, today announces the acquisition of SAR AS [“SAR”], the leading provider of total waste management solutions for the Norwegian offshore oil & gas industry, from AR Incoronato AS and Westco AS who have developed the business over the last fifteen years. The acquisition, for an undisclosed sum, is the sixth from Stirling Square’s second fund, its second in the oil & gas sector and its first in Norway. SAR services the oil & gas industry through the handling and treatment of oil contaminated drill waste, hazardous and industrial waste from offshore oil installations and tank cleaning through its nine bases strategically located along the Norwegian coastline. As a requirement for operating on the Norwegian Continental Shelf, North Sea standards prevail, the highest standards globally within the oil & gas sector with respect to environmental treatment, operational protocol and safety regulations. Using its proprietary processes and industry-leading reputation, SAR is now developing its operations internationally as oil majors seek to operate at North Sea standards in other offshore oil and gas locations. SAR has secured contracts in India and Jordan and the further development of its international operations will be a focus for the management team going forward.OC&C represented Stirling Square Capital Partners. Mark’s relationship with SSCP dates back to 2007. The OC&C team was led by Mark Jeynes, a Partner in OC&C’s Services Practice. Mark also oversees OC&C’s private equity group in London, he comments: “There were some key strategic issues relating to the structure of the market for drilling waste management and related services in Norway. Through an analytical, data-driven approach, using both primary and secondary research, OC&C was able to address these issues and validate Stirling Square Capital Partner’s investment thesis.”

Norwegian private equity firm Norvestor invests in Sortera Norvestor VI LP, a fund advised by Norvestor Equity AS (Norvestor), has agreed to team up with the founders of Sortera Skandinavien AB (Sortera),one of the leading companies in the Stockholm region within construction related waste. By investing in Sortera, Norvestor will support the continued development of one of the fastest growing companies in the waste handling business in the region, with core business within collection and sorting of waste in heavy duty builder bags. Norvestor and the founders believe in strong market growth through increased use of the more efficient and flexible builder bags.

URS provided environmental and health & safety due diligence services to Stirling Square Capital Partners to support the acquisition of SAR AS. URS prioritised and visited selected SAR facilities in Norway and undertook a detailed dataroom review. URS’ UK and Nordic operations provided consolidated support on the deal and brought extensive knowledge of potential risk issues associated with offshore waste management facilities, placing these into commercial context for consideration in the transaction. The URS due diligence team was led by Dr Phil Tyson, Associate Director; Nicholas Howard, Transactions Practice Leader; and Lynn Morgan, Principal Transactions Consultant. Wahlberg acted as strategic adviser and facilitator for the vendors in this deal. There have been no big challenges in the deal, but one challenge has been the financing package, due to the bank crisis in Europe. The team leader from Wahlberg has been the funding partner and CEO Mr. Jan Arild Wathne

“We are very excited and pleased about the transaction and to have Norvestor on the team with their significant experience from the waste management sector and Nordic expansion”, says Henrik Westöö, CEO of Sortera, who founded the company together with his childhood friend Conny Ryk. Sortera started up in 2006 with just one employee in addition to the founders. Today the company has approximately 47 employees and revenues of SEK 80 million in 2011. Sortera has since the inception experienced strong growth, and become one of the leading building waste management companies with emphasis on the builder bag segment in the Stockholm region. Camelot WMC acted on behalf of Norvestor Equity on deal. Staffan Nyberg, Waste Management Consultant led the team, he commented: “The most vital issue was possible constraints to a roll-out by replication in primary and secondary Nordic waste arenas. It turned out that this depended not only on the obvious, such as waste flows and competitive context, but also on more intricate characteristics such as downstream diversity and regulatory structures. In addition the buying rational of the service was by far as straightforward as assumed up-front.” “We observe today another type of competition in waste management, where traditionally purely local providers have challenged the major waste management companies on price, but where the major force now rather is skilled and dedicated niche companies, which optimize a certain sub-spectrum of services, which enables them to outperform the general suppliers on both customer value and cost efficiency. This applies directly to Sortera, who has also entered the scene at a moment when construction waste recycling promises to take off.”

SARGARD ACQUISITION OF STOKOMANI Sagard, Jean Jacques Namani (President of Stokomani) and his management team have signed an agreement to acquire, from Advent International, Stokomani, the leading French discount wholesaler of leading brands. This transaction should be finalised by June 2012. The value of the transaction was undisclosed. For over 50 years, Stokomani has been the leading French specialist discounter of end-of-line products. Through its network of 37 stores, Stokomani offers a large range of constantly renewed brand name goods at attractive prices in the clothing, sportswear, beauty and healthcare, home ware or toy sectors. It is based on this unique concept, developed by Jean-Jacques Namani, the son of the company’s founder, that the group has achieved strong performance, doubling its size in five years and, today has sales of nearly 200 million euros. Frédéric Stolar, Partner at Sagard, declared: “We are delighted to accompany Jean-Jacques Namani in this new phase in the group’s development. We particularly appreciate the relevance of Stokomani’s model in the current economic environment, where consumers are seeking quality goods at attractive prices. In unfavourable conditions for specialised distribution, Stokomani has increased its turnover by over 15% per year, thanks to a remarkable management team and a permanently renewed offer. We are also delighted to be able to finalize this transaction in a difficult LBO market – evidence of the confidence that Stokomani and Sagard hold with senior and mezzanine lenders who are financing the transaction and thank them for that.”

The vendors decided to perform a Vendor Due Diligence(VDD), and Wahlberg presented the case including the VDD to the largest banks in Scandinavia on an early stages in the selling process, to secure that there was a financing package available for any potential buyer.

STIRLING SQUARE CAPITAL PARTNERS ACQUISITION OF SAR AS

NORVESTOR INVESTMENT IN SORTERA NORVESTOR VI LP

SARGARD ACQUISITION OF STOKOMANI

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M&A from around the world TELE COLUMBUS ACQUIRED FOR $786 MLN German cable company Kabel Deutschland has acquired regional player Tele Columbus for about 618 million euros ($786.2 million), including accrued interest.

SCAW SOUTH AFRICA ACQUIRED Anglo American plc has completed the $1.4-billion divestment of Scaw Metals Group with the sale of integrated steelmaker Scaw South Africa to a consortium led by South Africa’s State-owned Industrial Development Corporation (IDC) and Main Street for $440-million. Main Street’s shareholders include Izingwe, Southern Palace Group of Companies, and Shanduka Resources. The debt-and-cash-free transaction follows the sale of Scaw’s international businesses, Moly-Cop and AltaSteel, to Onesteel in December 2010 for $932-million, also on a debt-and-cash-free basis. In aggregate, the total consideration achieved from the sale of all Scaw’s businesses has amounted to $1.4-billion. The sale of Scaw brings the total announced proceeds from Anglo American’s divestments of noncore assets to $3.7-billion since 2010. Macquarie First South Capital (MFSC) acted as sole financial adviser to the Buying Consortium. MFSC’s team was led by Johan Schutte and supported by Andrew Swan, Albie Alant and Grant Rothlisberger. Schutte commented: “A unique aspect of this transaction was advising such a large consortium. Retaining sufficient flexibility and responsiveness as well as strong communication skills between each of the consortium members as well as their advisers was essential in order to be successful in this competitive auction process.” ENS was the legal advisor to the Buying Consortium. ENS has a long standing relationship with both the IDC and Main Street. The ENS team was led by Witness Makhubele and Jason Valkin, both of whom are directors / partners at ENS. Witness commented: “The transaction had to be negotiated and concluded over very tight timelines. There were other conditions to the transaction which were at the instance of the acquirers and which had to be completed on or before the conclusion of the transaction agreements. The transaction was challenging and interesting on a number of fronts - the subject assets are in various countries throughout the world –in Africa, Asia, Europe and America. This entailed ensuring compliance with laws in these various countries, particularly anti-trust laws. Accolades should also be given to the parties as well as the advisers for their hard work, dedication and commitment is ensuring that the transaction is concluded within the set agreed time lines. ” Nedbank represented the Buying consortium on the deal. Commented by Graeme Auret, Managing Executive: Nedbank Corporate Banking: “Certain of the consortium members were already invested in Scaw Metals and through that as well as other banking relationships with some of the members, we have enduring relationships. We are primary banker to some of these parties. In addition, Nedbank has a strong relationship with the IDC, and have prior and existing mandates to provide Debt Capital Market advisory to them as well as other banking relations. This transaction is excellent for South Africa to keep an asset in the hands of South Africans as well as for the advancement of strong Black Economic Empowerment.” Contact Details: http://www.nedbank.co.za/website/content/corporate/index.asp

KABEL DEUTSCHLAND ACQUISITION OF TELE COLUMBUS

INDUSTRIAL DEVELOPMENT CORPORATION ACQUISITION OF SCAW SOUTH AFRICA

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“One of the key challenges in the due diligence was the lack of direct access to Scaw South Africa management.

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Nisha Dharamlall, Partner at Deloitte Corporate Finance, led the Buying Consortium’s financial due diligence on Scaw South Africa. Nisha comments:

However, Deloitte’s extensive due diligence experience combined with a thorough understanding of Scaw’s business enabled the team to produce a high quality report with sufficient information to enable the consortium to understand and address all issues.

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THE OIL & GAS INDUSTRY

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